Democratic Republic of Congo (DRC): Transitional Support for Economic 

Recovery Credit Operation (TSERO) and Emergency Economic and Social 

Reunification Support Project (EESRSP) – Inspection Panel Investigation Report 

and Management Response 

U.S. Position 

The Panel has raised serious and legitimate safeguards policy-compliance issues arising 

from these two operations. The U.S. reaction to the Panel report and Management’s 

response is framed by the following key issues: 

• The enormous community-level, national, and global stakes related to how the 

DRC’s forests are managed. These stakes clearly encompass traditional 

livelihoods of indigenous communities; biodiversity; and the “global public good” 

of the enormous carbon sink represented by DRC’s forests. 

• The Panel’s report and Management’s response are being discussed by the Board 

as we also consider the Mid-Term Review of the Bank’s Forest Sector Strategy 

and the recent launch of the Forest Carbon Partnership Facility. 

• The Panel’s findings have implications for how the Bank applies safeguard 

policies in other emergency and budget-support operations. 

• The Bank bears a sizeable reputational risk among external stakeholders if it is 

perceived as not taking concerted and effective action to address the issues arising 

from this investigation. 

In this context, the U.S. agrees that the Panel’s findings should not be seen as an 

argument for the Bank to exit from the sector. In fact, the Panel “recognizes that it is 

important for the Bank to remain engaged in the forest sector in DRC”. As such, the 

critical question is what form that engagement should take going forward, and how to 

incorporate the “lessons learned” from the Inspection Panel’s findings and 

recommendations. Further, the U.S. is in general agreement with Management’s 

response to the Panel’s findings. However, we would welcome greater specificity on 

how the rights of the local affected communities will be addressed in the legal review 

of the forest concessions. It is appropriate for the Bank to experiment with a variety 

of different models for sustainable forest management if: 1) it is able to resist 

understandable pressures to mainstream any of them before adequate governance 

capacity is in place, 2) culturally-appropriate consultations with local communities 

and thorough environmental and social assessments have first been conducted, and 3) 

the Bank has established conditions for terminating the experiment with a particular 

model should it be demonstrated to be unviable or ineffective. 

As further context for the above views, the U.S. abstained on the TSERO when it 

came to the Board primarily because of concerns over the lack of an assessment of 

the DRC’s macroeconomic performance and insufficient controls to address potential 

fiscal leakages and corruption. However, the U.S. statement also noted that “In this 

high-risk context, the Bank needs to be willing to make mid-course corrections in its 
approach if necessitated by the unfolding evidence on the ground, and take special 

care to engage forest-dependent peoples in culturally-appropriate consultations before 

investing...in a specific reform model.” We also requested assurances that the 

operation meet all relevant safeguard policies, and expressed concern in our statement 

that the prescriptions in the project document might be based on an overly optimistic 

assessment of the prospects for reform. In this regard, the Inspection Panel raises a 

highly valid concern as to whether a Development Policy Loan was the appropriate 

instrument for engagement in this sensitive sector. Further, although the U.S. 

supported the EESRP, we expressed concern to staff over the delayed preparation of 

an environmental assessment. 

Although these two operations cover a much broader reform agenda than the forest 

sector alone, the Bank used them to engage in a difficult and chaotic situation in the 

DRC’s forests. While the state of these forests is arguably better than it would have 

been absent the Bank’s involvement, stepping into a risky post-conflict situation does 

not justify or excuse short-cut adherence to safeguard policies. With respect to plans 

for training activities that will sensitize staff across the Africa region to the Bank’s 

safeguards and issues unique to the rights and concerns of indigenous peoples, this 

training should ideally be offered Bank-wide, and not be limited to the Africa region. 

The U.S. looks forward to the completion of the Forest Sourcebook (referenced in the 

Mid-Term Review of the Forest Sector Strategy), which includes a chapter on 

indigenous peoples and the social dimensions of forest sector operations. This is a 

critical recognition of the scope of issues surrounding the Bank’s work in forests – 

not just in DRC – and the need to build the Bank’s capacity to understand these issues 

and apply the appropriate safeguards consistently. 

The recently distributed World Bank co-authored report “Forests in Post-Conflict 

Democratic Republic of Congo: Analysis of a Priority Agenda” takes fuller measure 

of the pressing range of social and environmental issues beyond just the trees in these 

forests. This recognition is also reflected in the new Country Assistance Strategy 

(CAS) for the DRC, which the Board discussed in late 2007. With a transport 

operation and a forest sector operation among the projects proposed in the CAS, the 

U.S. would argue that this Inspection Panel discussion should have preceded the 

Board discussion of the CAS. As these two operations are being prepared for 

presentation to the Board in the coming months, we cannot overemphasize the 

importance of meaningful consultations with the affected communities and the need 

to take note of all relevant safeguards. In this regard, we are interested in seeing the 

results, when they become available, of the forest policy compliance review requested 

by Management in the wake of the Cambodia Inspection Panel. 

The U.S. supports Management’s plans for a progress report on implementing its 

responses to the Panel one year from now, and we recommend that this progress 

report be made publicly available. In formulating the action plan to address the issues 

raised, we expect the Bank will conduct full consultations with requesters and the 

Congolese authorities.