West Bank landfills acting as pits for foreign aid

In a valley of wheat fields near the village of Rammun, east of Ramallah in the central West Bank, a quiet territorial war is raging.

Territorial wars are the norm for this holy strip of land between the Jordan and the Mediterranean – call Rammun’s fight a territorial skirmish instead. They aren’t fighting for religion, history, or vengeance; nothing so grand or ephemeral. They’re fighting for a pit between the hills that might someday be a landfill, a fight as hidden by the geopolitical war around it as its corrupt but troublingly universal business practices are hidden by the comforting rhetoric of international development.

There are many people losing already in this fight: the residents of Rammun, certainly, whose agricultural land will be stripped from them if the landfill project moves forward, and who fear that the smell and environmental damage will empty the village.

The rest of the Ramallah governorate is losing as well, stuck with unsanitary and unregulated waste disposal options while progress on the new dump is held up by the Israeli Civil Administration. Even the Joint Service Council of Ramallah and Al-Bireh (JSC) – the office of the Palestinian Ministry of Local Government overseeing the landfill project - is in a tough spot, caught between the legal ire of the townspeople, nearby Israeli settlers who demand to use the landfill too, and the bureaucratic might of the Civil Administration.

Only two groups are clearly coming out ahead, no matter the outcome: Germany’s development agencies and private consulting firms backing the landfill, which stand to make millions on a decade-long aid project bound for failure.

In this sense, the Rammun landfill is like many other foreign aid projects in Palestine, where donors often use predetermined or systematically weighted contracting methods to return, by some reports, up to 70 percent of their development money to their own private sectors. Where philanthropy is a business, and millions of dollars are up for grabs by Western contractors with little tangible benefit to the country ostensibly receiving the funds.

The beginning of all this is simple – Ramallah needs a landfill.  Right now, the governorate and its 320,000 inhabitants have no sanitary waste disposal system; trash collects in 36 unregulated dumpsites around the district and piles up in the alleys and vacant lots of the area’s three major cities – Ramallah, Al-Bireh, and Beituniya.

The governorate’s titular city produces the most waste per capita of any municipal area in the Palestinian Territories – more than two kilograms per person per day, twice that of runners-up Gaza City and Jenin – and all of it ends up heaped in these random, unsanitary dumps or burned in steel dumpsters by garbage pickers looking for scrap metal to sell.  The biggest of the dumpsites can be smelled from kilometers away.

The proposed landfill for Ramallah has been a Palestinian national priority for quite some time; the JSC was founded in 2007 to shepherd permit applications and oversee the building of the landfill.  Five years later, the landfill was listed among three “national priority project[s], which will... improve the currently deteriorated environmental situation” in a progress report on the PA’s National Development Plan.

But the real story of the Ramallah landfill starts almost a decade earlier, 2,000 miles (3,200 kilometers) away. In Frankfurt, Germany, to be exact, where most of the money for the landfill comes from, and where most of it returns.

“With the funding of the German Bank for Development...”

Frankfurt, a sprawling city of two and a half million people on the Main river, is the largest financial center in mainland Europe, home to both the European Central Bank and the German Bundesbank.  It also houses the headquarters of Kreditanstalt für Wiederaufbau (KfW), the German government’s development bank, which first proposed a landfill for Ramallah to the Israeli Civil Administration in 2003.

In 2004, KfW and the PA Ministry of Local Government started looking for potential sites for the landfill. They identified seven possibilities, and in 2006 received preliminary approval from the Israeli Civil Administration to start conducting feasibility studies on the potential locations and select a final site.

The Joint Service Council was founded the following year.  At its head sat a man named Abed Jabaieh, who in 2005 had been elected to the town council of one of the possible landfill locations identified by the Council, a small village in Ramallah’s eastern hills called Rammun.

While the Civil Administration isn’t directly involved in implementation of the landfill, the site near Rammun ultimately chosen for the dump lies in Area C – the 61 percent of the West Bank that remains under full Israeli security and civil control. As with any construction in Area C, the JSC needs a building permit from Israel to move forward with the landfill.

These building permits aren’t impossible to obtain, but they’re far from easy. According to a 2013 World Bank study on the economic impacts of Area C regulations, less than 6 percent of the permit requests made between 2000 and 2007 were approved.

The ICA was scheduled to issue a decision in November 2013 about whether to grant a zoning change to make the site usable for landfill construction – the final step in a long process before a building permit could be approved. They haven’t announced their ruling yet, and there have been no indications about when they will.

In the meantime, the wheat keeps growing at the proposed landfill site halfway to Jericho along Allon Road, down a dirt path off the highway where a stone sign still warns about the entrance to a now-defunct Israeli army base.

People from Rammun express hope that with the heightening tension between Israel and the PA since the announcement of the Fatah-Hamas unity agreement and the June abduction and murder of three Israeli teenagers in the southern West Bank, the ICA will delay until the JSC and their German funders have to call off the project. The townspeople argue that the landfill site proposed by the JSC would sever Rammun’s connection to its agricultural past.

“This is our land, our roots, our home, our history,” says Rabah Thabata, one of the leaders of the Community Society, the Rammun landowners’ association opposing the landfill. “How can we make it just a landfill?”

Rashid (not his real name), another member of the Community Society who requested anonymity for fear of retribution from the Palestinian Authority, says it’s good for the townspeople “in a way” that the land is in Area C, because it makes legal recourse possible. “It means you can go to court,” he says.

“If the case [were] in Palestinian hands only,” Rashid adds, “it would have been yes a long time ago... even if the whole village says no.”

Rammun: a farming town of millionaires

Rammun is an unusual spot. Like many West Bank villages, it’s an ancient town with an agricultural history - mostly wheat farming and shepherding. The site selected for the landfill lies on an especially fertile wheat field in a valley between the hills southeast of town. The furthest east of the surrounding ridges overlooks the dunes of the Judean Desert stretching down to Jericho and the Dead Sea.

Insular, loyal, and fiercely proud of their pastoral heritage, many residents of modern Rammun have nevertheless become startlingly rich off the real estate investments and remittance of an large group of diasporic Rammun-ians in the United States. There are 5,000 people now living in the town, and 9,000 more people from Rammun in the US. Of the 5,000 remaining, half have American citizenship. Two hundred are millionaires.

Rammun’s wealth has been a powerful weapon in the townspeople’s fight against the landfill project. When landowners from Rammun decided to sue the Palestinian government to stop progress on the project, they quickly raised $50,000 - an enormous sum in Palestine where the per capita income was just over $1,600 in 2012 - to help the cause.

The money of the Community Society has afforded the residents of Rammun the opportunity to fight the landfill more forcefully than Palestinians are generally able to resist land expropriation - especially in Area C, much of which has been declared state property of Israel under a reinterpretation of Ottoman land laws. Rammun’s farmers have also opposed the project at the ballot box; in 2012, they voted Abed Jabaieh out of office, feeling that he had betrayed the town’s residents by allowing the landfill project to move forward on the Rammun site.

Rammun’s financial position has also helped lessen the incentive for landowners to sell their plots to the JSC, even as the offered price has skyrocketed to $10,000 per dunam (or square kilometer, a measurement commonly used in the West Bank). The landowners say they won’t sell at any price, claiming the landfill would ruin their agricultural industry and cause massive public health problems.

“It will kill us,” says Fadi Abu Amad, a young resident of the village.

They’re especially worried by the similarities between the Rammun proposal and an extant landfill in the northern West Bank. In 2007, the Zaharat Al-Finjan landfill opened for the Jenin governorate with a $9.5 m loan from the World Bank. By 2008, conditions at the landfill had degraded to the point that nearly 80 percent of health care workers in the district said that hazardous medical waste was rarely or never treated at the landfill. 94.5 percent called further education and training for workers in the waste disposal field a “desire[d] need.”

That training never materialized. In 2009, the World Bank ended its involvement in the $14 m project, turning operation of the Zaharat Al-Finjan site over to Jenin’s JSC. Thabata says that the site only got worse after that.

“They told people it will be a garden.  It will be a park,” he said. “Now, two months ago when we went there, it’s a very, very big disaster.”

Zaharat Al-Finjan is one of two operational landfills in the Palestinian Territories. Another landfill in Abu Dis, an area of East Jerusalem on the West Bank side of the Separation Wall, was closed in 2013, and in early 2014 the Al-Minya landfill for the southern West Bank was closed as well. Construction of Al-Minya had begun less than three years earlier.

In a disquieting parallel to Jenin, the German backers are scheduled to end their engagement with the Rammun landfill project in 2016, one year after the site is supposed to open.  While €3 m (about $4 m) of KfW’s money is intended for training the contracted managers’ Palestinian replacements, townspeople say they don’t trust that the training will be sufficient to prevent Rammun’s landfill from becoming like Jenin’s.

“They even promised recycling [in Jenin], and they were misled on all of that. So there’s nothing to guarantee us here,” said Mustafa, another member of the Community Society who asked to be identified only by his first name. “Our concern is that they’re not going to do things like they do in the US or in Europe.”

The money

In February 2012, KfW signed a deal with two PA ministries and the JSC to provide €14 m ($19 m) to build a landfill in the Rammun area.  But their development aid has hardly seen Palestinian hands. So far, KfW’s money has gone almost exclusively to international contractors - especially German consultants - working on the landfill project.

While KfW’s financial support to the JSC began with its agreement in 2012, its sister organization GIZ, the German government’s developmental consulting and technical assistance agency, had been involved monetarily in the project for years.

Financial records of the JSC, of which the office has only made public those between 2010-2012, show almost 2 m New Israeli Shekels (about $550,000) in “donations in-kind” to the JSC from GIZ during that period, as well as 490,000 NIS ($140,000) in cash donations in those three years.

According to a source inside the GIZ with knowledge of the organization’s role in the landfill project, the “donations in-kind” largely represent the salary of one man: Albrecht-Wunder, GIZ’s consultant in the office of the JSC.

The numbers bear this out – consulting services from GIZ across the three years are listed at 1,771,155 NIS ($518,097), representing the overwhelming majority of the 1,963,639 NIS ($574,416) total donations-in-kind from GIZ over that period. By contrast, the combined salary of the Palestinian staff of the JSC from 2010-2012 was 543,093 NIS ($158,869), less than a third that of GIZ’s consultant.

Husain Abuoun, executive director of the JSC, disputes the numbers if not the principle. He says the contracts of the two firms consulting on the environmental impact assessment - one Israeli, one US/UK-based - are included in the GIZ donation totals.  However, he admits it’s likely that Albrecht-Wunder, as a GIZ employee, makes at least as much as the rest of the JSC staff put together, if not three times as much.

“Definitely, yes,” says Abuoun. “Their salaries are higher than ours.”

Jacob Abraham, director of AYGL - the Israeli consulting company that worked on the environmental report - did not respond to a request for information the source of financing for his company’s contract.

MEE’s source in GIZ requested anonymity because he was not authorized to speak publicly about the project.  After a short phone call and email exchange with Thomas Eisenbach, director of KfW’s Palestine office, they along with GIZ stopped responding to requests for comment.

'It’s a competition at the end of the day'

The GIZ source and Husain Abuoun have each confirmed a further troubling detail about German financing of the landfill: from €3 m ($4 m) of KfW’s funding allocated so far, about €2 m ($2.7 m) has gone to German private contractors for consulting services with the JSC.

A listing of the project on the website of AHT Group AG, one of the German companies contracted by the JSC with funding from KfW, shows a contract value of just under €1 m ($1.36 m), which lines up with the figure provided by both Abuoun and Middle East Eye’s anonymous source in GIZ.

The tender request issued by KfW in 2011 further states that the money provided by KfW for the project comes as a loan to the JSC, which would require the Palestinian government to pay back €14 m to the German development agency even after the bulk of the money may already have been sent to German contractors.  Abuoun says this was a clerical error, and his copy of the funding agreement with KfW, seen by MEE, does treat the money as a non-repayable donation except in instances of administrative failure by the JSC.

Although the bids were selected via a public process from the JSC, the GIZ source says that KfW and the development agency both steered the selection of the winning bids. He says that German companies were intentionally chosen because GIZ and KfW didn’t trust Palestinians to manage the project.

“It makes a better picture,” the source told MEE. “When we involve our partners, it shows everybody that they will do this the proper way.”

If the project gets approval from the ICA and moves into construction, the source says that GIZ’s “target is that a Palestinian company builds the landfill”.  However, he notes that the JSC’s tender request will again be steered by GIZ with help from Fichtner, and there’s nothing to guarantee that German and other foreign companies won’t again win the contracts.

If the Civil Administration denies permission to use the site, however, Abuoun told MEE that KfW would withdraw funding from the project. In that case, the €3 m spent largely on international consulting contracts will be the last money they give to the site. Only the comparatively small Palestinian salaries and administrative costs would ever find their way to the Palestinian economy - the economy that the project was, at least on paper, designed to support.

This happened at the Al-Minya landfill in the southern West Bank as well, run by a Greek consortium of companies until the site’s closure by the Civil Administration in January 2014.  “They contracted an international company to do the operation on the ground,” says Abuoun. “So the money goes to a Greek company”.

Eisenbach declined to comment on what would happen to the extant contracts with Fichtner and AHT, which both began in early 2013 and are scheduled to run through 2016, if KfW’s funding were withdrawn. Much of the €1 m ($1.3 m) for each contract remains to be paid; Abuoun says that the contracts would be severed if the funding dried up, but Eisenbach’s assessment was more ambiguous.

“We are not commenting on potential future decisions of KfW,” he told MEE. “This will be decided if such situations arise.”

The general contracting conditions of KfW leave the issue of payment in extraordinary circumstances that halt performance of the contract to case by case conditions laid out in individual contracts.  According to GIZ’s general regulations, however, “if GIZ terminates the contract for a reason which is not the fault of the contractor, the contractor shall be entitled to demand the agreed remuneration.”

'The occupation as an income-generating project'

The situation in Rammun is nothing new for Palestine.  Hassan Abdel-Jabbar, advisor to the Palestinian Authority’s Minister of National Economy, didn’t seem surprised that the bulk of the landfill’s money was returning to Germany. “Some of the donors or development agencies have a condition that the contracting or implementing body should be a national company,” said Abdel-Jabbar.

“A big chunk of the overall funds goes to those companies who are implementing as running costs, as travel expenses, for the international consultants, etc,” he added. “And the rest is spent on the projects itself.”

According to a 2011 report from the Bisan Center for Research and Development, a Palestinian NGO, much of foreign aid in the Palestinian Territories commonly returns to the countries that provide the money.  The report alleges that conditions on EU aid necessitate that equipment and experts be brought in from Europe for funded projects, and that these costs frequently encompass 70 percent of the total aid granted.

Oftentimes, governments have specific regulations and standards that must be met by any companies bidding on their development projects. Companies from those countries are frequently able to prequalify, making them much more likely than other international or Palestinian companies to be able to bid on and receive the contracts.

Nor is this elaborate feedback loop of an aid system confined to the Europeans. The American US Agency for International Development is one of the development agencies most successful at returning their donated dollars to their home country’s economy.

“Most of USAID projects have US companies implementing the projects,” said Abdel-Jabbar. “Of course, those subcontract local companies, but the main one usually is a US company.”

According to data from the State Department, the US provides about $500 m per year to the West Bank and Gaza.

Naseef Muallam, director of the Palestine Center for Peace and Democracy, a Palestinian NGO advocating for the establishment of a secular democratic Palestinian state, cites another tie between USAID donations and money removed from Palestine. After Jerusalem was closed to Palestinians from the West Bank in March 1993, USAID funded a new road called Wadi al-Nar to connect Ramallah and Bethlehem - two major Palestinian cities on opposite sides of Jerusalem.

Before the closure, the trip was 28 kilometers long; the current Wadi Al-Nar route is 60 km.  According to Muallam, 35,000 cars travel the road every day, and the extra gas expenditures amount to $1 bn per year, 10 percent of Palestine’s GDP. The fuel supply comes from Israel.

“This is the occupation as an income-generating project,” says Muallam.

While USAID has strict rules that their money go to contracts with US companies and US-produced materials, KfW has its own prequalification requirements for the submission of contract tenders as well.  Prequalification, the requirements for which differ slightly from country to country, eases the way for companies from the developer nations to bid on contracts offered by their development agencies.

Four of the seven companies that qualified to bid on the contract ultimately won by Fichtner were German consulting firms. None were Palestinian.

Abuoun says that in the case of Rammun, Palestinian consulting companies don’t have enough expertise to offer the quality of service that European consultants could. “There’s no Palestinian company that has enough experience to apply for this tender,” he says. “They cannot apply, because they will lose in the tendering process.”

“It’s a competition at the end of the day,” says Abuoun.

One high-ranking Palestinian government official working in international aid, who spoke with MEE on the condition of anonymity, noted that while construction work is often subcontracted to local companies, many projects have prerequisites that the technical consultants involved come from the donor country. “The assumption is that the capacity is lacking here, which is not necessarily true,” the source told MEE.

Hassan Abdel-Jabbar expressed ambivalence when asked if foreign donors contracting with their national companies kept the money from effectively developing the Palestinian economy, and whether that defeated the purpose of foreign aid. “To a certain extent, that’s right,” he said.  “But also we are hoping that local Palestinian companies will benefit from subcontracting or technology transfer.”

Itiraf Remawi, director of the Bisan Center, told MEE that the allocation of foreign aid to national companies of the countries providing the aid keeps the Palestinian economy from developing to be able to survive without foreign donations.

“There is no value creation,” says Remawi. “Every year, the Palestinian situation is more dependent on the donors.”

These foreign donations comprise a huge part of the Palestinian economy. The PA alone averaged $1.4 bn in foreign aid per year from 2007-2009, about 15 percent of Palestine’s GDP.

“I fault more the Palestinian Authority than I do the donors,” says Sam Bahour, a prominent Palestinian-American businessman and analyst. “Donors come with agendas.  Donors are not here because they love Palestinians.”

“We haven’t had that kind of courage on the Palestinian side to be able to clearly define our development needs and turn away donors when their desires don’t fit our needs.  That’s ultimately what has to happen,” Bahour told MEE.

The BMZ, Germany’s development ministry which oversees GIZ and KfW, has never been shy about the financial motives of development aid. In a 2010 brochure, German Development Policy at a Glance, the BMZ proudly notes that “development cooperation benefits not only the recipients but also the donors".

“Every euro spent on development in our partner countries adds 1.8 euros to German export revenues,” the brochure continues.  “So development policy is informed by both our values and our interests.”

The anonymous Palestinian official in international aid noted the connection between national contracting and the economic advantages of development.  “All of these agencies are accountable to their governments and their budget is approved by the governments,” she told MEE. “All development is at the end supposed to be for mutual benefit.”

Anti-corruption shield

Part of the reason that foreign development agencies are given so much control of the money in these projects is that they are designed to act as a shield against Palestinian corruption.

Along with advising the JSC on technical matters, GIZ performs an oversight role into the effective spending of KfW’s funds. They are responsible for alerting KfW if the JSC or one of the contracted consultants is mismanaging the money or failing in their responsibilities.

Such oversight of European foreign aid in the Palestinian Territories has gained greater prominence in the wake of revelations late last year of substantial misconduct and negligence by the PA in administering EU aid.  An article from Britain’s Sunday Times in October 2013 exposed an unpublished European Court of Auditors report that the auditors had “little control” of how £1.95 bn ($2.5 bn) given to the PA between 2008-2012 was spent.

The final report released in December detailed “inadequate legislative scrutiny of the [PA] budget” and revealed that many civil servants on the PA payroll in Gaza who weren’t working continued to receive salaries from EU aid. It also noted that some €90 m ($122 m) paid by the EU in VAT and excise duties on fuel for Gaza couldn’t be accounted for.

On the heels of the European report, the Middle East Monitor, a UK-based media outlet focused on the Palestinian Territories, released an investigation of corruption in the PA that detailed misappropriation of funds, bribery, and corruption dating back to the administration of Yasser Arafat. Alongside specific instances of embezzlement, the report notes broad corruption in the private sector, “as business deals became a means for pressure and temptation of Arab and foreign countries... in order for the Palestinian people to remain indebted to the countries where these businessmen are based.”

MEE’s anonymous GIZ source said that the intention of the agency’s oversight is to protect against the possibility of JSC corruption. “For [KfW], it was important that the JSC makes the contract with the consultants, but also that there’s a reporting system between the consultants and KfW.  So [GIZ] is a control institution,” the source told MEE.

“We make sure the money from the German taxpayers goes the right way,” he continued.

“This is part of what we do in this big game.”

So far, GIZ has seemed happy enough with the JSC staff. In fact, the executive director of the Council prior to Abuoun, a woman named Reem Khalil, moved to GIZ as the manager of the Fund for Policy and Reform Advice after she left the JSC. According to the GIZ website, the Fund is designed to assist the PA in creating “a rolling series of political programmes and development plans to improve its governance".

With each passing day, it becomes less likely that anything will be built in Rammun.  Officials from the PA Ministry of Planning and Administrative Development say the project is on hold, and Abuoun says that KfW will have to rethink its involvement if the Civil Administration hasn’t approved the dumpsite by the end of the year.

If the project fails in Rammun, the Germans will pack their bags and fly back to Frankfurt. The money will stop flowing to the contractors, and Fichtner and AHT will open new applications to consult on other development projects elsewhere. The JSC will start looking for a new site, and the people of Rammun will plant their wheat in peace in the valley on the edge of the Judean desert. The next time a foreign development agency comes to Palestine with a big idea and a bigger budget and sends out requests for bids from consultants and construction companies, Palestinian firms won’t apply. They won’t have the requisite experience.

In the meantime, the trash will keep piling up in the alleys and vacant lots of Ramallah.

- Ben Hattem is a freelance journalist based in Ramallah. His work has appeared in The Daily Beast, Mondoweiss, Al Jazeera English, and VICE.

Photo credit: Rubbish disposal is a serious issue in the West Bank (AFP)