"World Bank accused of razing Congo forests"

The World Bank encouraged foreign companies to destructively log th world's second largest forest, endangering the lives of thousands o Congolese Pygmies, according to a report on an internal investigation b senior bank staff and outside experts. The report by the independent inspectio panel, seen by the Guardian, also accuses the bank of misleading Congo' government about the value of its forests and of breaking its own rules

Congo's rainforests are the second largest in the world after the Amazon, locking nearly 8% of the planet's carbon and having some of its richest biodiversity. Nearly 40 million people depend on the forests for medicines, shelter, timber and food.

The report into the bank's activities in Democratic Republic of Congo since 2002 follows complaints made two years ago by an alliance of 12 Pygmy groups. The groups claimed that the bank-backed system of awarding vast logging concessions to companies to exploit the forests was causing "irreversible harm".

It will be discussed at board level in the World Bank within weeks and may lead to a complete rethink of how forestry in the DRC is practised.

It is particularly embarrassing for the British government, which is a development partner of the bank and its third largest financial contributor. It encouraged the bank to intervene in the Congo forests with export-driven industrial logging and has earmarked £50m for further Congo basin forestry aid.

When the bank moved back into Congo in 2002, after years of war which cost up to 4 million lives, it said industrial forestry could contribute most strongly to the country's recovery. In its rush to reform the economy it devised new forestry laws, divided the county into zones and aimed to create a favourable climate for industrial logging.

But although the bank is legally committed to protecting the environment, and trying to alleviate poverty, the panel found that the policies it imposed on the Congo were having the opposite social and environmental effects:

· An area of 600,000 square kilometres (232,000 square miles) of forest was earmarked for logging companies.

· The bank failed to address critical social and environmental issues.

· It ignored between 250,000 and 600,000 Pygmies believed to be living in the Congolese forests, even though their presence was well known and documented.

· It put the Pygmies in serious potential harm.

Criticism is made of the forestry reforms that the bank imposed in return for loans of more than $450m. Initially, said the panel, "the bank provided [to the government] estimates of export revenue from logging concessions that turned out to be far too high. This encouraged a focus on reform of the forestry system at the expense of pursuing sustainable uses of forests, the potential for community forests and for conservation.

For the most part foreign companies, or local companies controlled by foreigners, have been the beneficiaries of this," the report said...

One Pygmy leader told the panel: "We are being made poor in every aspect ... the [logging] company prevents us from going into the forests." Another said that the company had bought the land so that people could no longer live in the forests.

"Roads are going ever deeper into the forests, opening it up. We are increasingly deprived of our foods and drugs. We have never seen anything from the bank except promises," said a third...