How the World Bank broke its promise to protect the poor

SANTA CRUZ BARILLAS, Guatemala — Cecilia Mérida still vividly recalls the day government troops swept into her small town in northern Guatemala and took her common-law husband away.

It was 2012, and years of protests by indigenous villagers opposed to a World Bank Group-financed program to build a hydroelectric dam had come to a head.

Tensions mounted between protesters, many of whom said they worried the project would push them from their homes, and security forces after a local activist was found dead. Protesters, suspecting state security forces were behind the death, reacted by storming a military base. The government responded by sending in troops who stormed into homes and, according to villagers, arbitrarily arrested dozens of people, including Mérida’s husband, Rogelio.

This week, Mérida is in Washington, D.C. to confront the group she partially blames for what she considers her husband’s wrongful arrest: the World Bank Group.

An investigation by the International Consortium of Investigative Journalists and other media partners, including Fusion, examined World Bank records and other public data. The report by more than 20 news organizations found that dams, power plants, conservation programs and other programs and projects sponsored by the World Bank Group have pushed at least 3.4 million people out of their homes and threatened their livelihoods.

According to official complaints and interviews, in some cases governments that received the group’s money have arrested, beaten and even killed people who objected to being forced from their homes.

Here’s an overview of the investigation:


“I am here to talk about the suffering of the people and families, men and women and children who had to live in terror,” Mérida told Fusion in Washington, D.C. days before she was scheduled to appear in front of a World Bank Group panel to discuss the impact of the bank’s policies on indigenous communities.

Her husband has since been released but she said there are other “political prisoners” still sitting in jail.

The investigation provides a look at the broader impact on communities when the World Bank Group bankrolls big development projects.

“What we are finding is that all over the world the bank has got a serious problem on its hands,” said Kate Geary with Oxfam, an international anti-poverty group that helped bring Cecilia to the United States.

Top Countries Affected by the World Bank

The World Bank said it has learned from its past mistakes and now uses safeguards to resettle and compensate displaced and affected families.

“The World Bank has released a plan that will improve the oversight and management of resettlement practices to ensure better protection of people and businesses affected by bank-funded projects,” World Bank spokesman David Theis said in a statement in response to the Consortium’s investigation. “We must and will do better.”


As part of the investigation, Fusion traveled to Guatemala, where many people live on $2 a day, to look into the proposed multimillion-dollar dam project that was intended to provide power to thousands.

The project was funded by the International Finance Corporation or IFC, a commercial member of the World Bank Group that deals solely with private investors.

The IFC is supposed to uphold the strict standards of the World Bank when it relocates people to build projects. But Merida said that was not the case in her hometown, where she claimed the project was launched “without consulting” many community members.

First announced in 2008, the hydroelectric project faced immediate resistance from the residents of Santa Cruz Barillas. IFC provided more than $8 million in loans through the Inter-American Infrastructure Finance Corporation (CIFI), one of the World Bank’s private sector lenders, for construction of the dam on the Cambalam River, in northwestern Guatemala, close to the border with Mexico.


Years of protests culminated in May 2012, when thousands of residents took to the streets to denounce the project, and it was put on indefinite hold.

President Otto Perez Melina declared a state of siege after several hundred men armed with machetes and guns took over a military base in the area. He accused the invaders of being linked to a drug trafficking cartel, but many residents saw it as a move intended to snuff out dissent against the dam project.

For weeks, government authorities effectively occupied the town. With martial law in effect, security forces searched homes without warrants. Dozens were arrested.

Guatemala, a nation of nearly 15 million, has a long history of conflict between hydroelectric companies and indigenous groups that are often forcibly removed to make way for projects. Resistance to a 1980s hydroelectric dam project that was financed by the World Bank resulted in the Rio Negro massacre, in which some 400 people were killed in northeastern Guatemala. The project was also backed by the Inter-American Development Bank.

“Our people couldn’t oppose the project because if they did, they’d be killed,” said Jose Sucup, a survivor of Rio Negro. He blames the bank. “They’re the real culprits. The bank didn’t pressure the government to stop killing people.”

Back then, “the bank had an involuntary resettlement policy as an Operational Manual Statement,” World Bank spokesman David Theis explained in an e-mail statement to Fusion. “Guidelines for the protection of Indigenous People were first issued in 1982.”

The Rio Negro massacre occurred during the height of a decades long civil war in Guatemala that ended with the 1996 peace accords.

Eduardo Cuevas, the IFC country manager for Guatemala, said the IFC and World Bank need to do more to improve conditions for these communities.

“We’ve helped, but there’s still many things to be done,” he told Fusion.

A recent letter submitted by an independent panel of experts in the United Nations High Commissioner for Human Rights to the head of the World Bank singled-out the IFC “for not pursuing other sources of information” involving alleged reports of human rights abuses.

“The bank is, in that regard, not only responsible for what it knows, but also for what it should have known,” the report stated.


Last year, another IFC-funded hydroelectric dam riled up villagers in Monte Olivos in northeastern Guatemala.

Many local leaders Fusion spoke to expressed support for the Santa Rita dam in Monte Olivos. But project manager Jorge Manrique said that support is bogged down by history.

“It’s a ghost from the past that is coming in,” says Manrique. “It’s presenting itself as the ‘we are going to become the same thing.”

When pressed on whether the current standards were working in communities where people were arrested or even killed, Cuevas said: “I am not the government. I am not in charge or making judgement or decisions of what happens.”

This year at least four transactions were dropped or put on hold “pending improvement of the client’s environmental and social performance,” an IFC spokesperson said in a statement via e-mail.

But the spokesperson refused to disclose which projects, citing an IFC policy that prevents the group from sharing commercial information.

Mérida said she hopes her trip will shed light on those who are waiting for justice back home.

“An innocent man. That is what takes me to Washington,” she said. “Something good has to come from this.”

Roberto Daza
Suzette Laboy
Romina Ruiz-Goiriena
Enrique Acevedo
Additional Research
Alice Brennan
Darwin Phillips
Tina Pachecho
Director of Photography
Roberto Daza
David Mercer
Geneva Sands
Kent Hernández
In collaboration with Fusion Investigates