The World Bank broke its own rules and contributed to the suffering of hundreds of Kosovans who were forced from their homes to make way for a coalmine, a leaked report reveals.

The giant state-owned Sibovc mine has swallowed communities as it expanded. It would supply the only coal power plant on earth the World Bank is considering backing.

The report, finalised in September by the bank’s Inspection Panel and seen by Prishtina Insight and Climate Home, investigated two waves of bungled, incomplete resettlement in the village of Hade in 2004-5 and 2012.

More than a decade after the appropriations began, the fragmented community continues to be insecure and frustrated, the report said. While the World Bank was not the primary agent, the panel found failings on the part of the bank contributed to “real and often severe harm” over a “prolonged period”.

Their report has been passed to the World Bank board, which will meet to discuss it in December. Marco Mantovanelli, the bank’s country manager for Kosovo, said he could not comment until the report was made public, to “preserve the integrity of the Panel’s processes”.

Just a fragment of the original village of Hade remains, perched on the lip of the state-owned Sibovc mine. Coal often spontaneously combusts in the mine below, sending dust and smoke billowing through gardens and homes. The noise of the constant digging grates on the nerves, according to families still living there.

Ragip Grajcevci is one of those waiting for the day they are cleared out. Since 2004, he has watched his village disintegrate around him. He helped to organise the complaint that precipitated the visit of the inspection panel.

“The World Bank and the Kosovo government have repeatedly lied to us when they promised they will improve our livelihoods by moving villages,” said Grajcevci. “We have become poorer as a result of the lack of care from these institutions who claim to be doing all this ‘economic development’ in the name of fighting poverty.”

Land in Kosovo has been dearly bought. In 1999, the 51-year-old was a guerrilla fighter in the Kosovo Liberation Army. He lost an eye and a finger.

The panel investigators visited Grajcevci in Hade in early 2016. “The lives of these people are in limbo which is, without doubt, taking a heavy toll,” said their report. “In addition many of them suffer environmental consequences from the mine, such as dust and noise.

In a July response to the complaint made by Hade’s villagers, the bank rejected the allegation that it had failed to follow procedure or contributed to their grievances. But it did recognise the problems faced by the community and committed to addressing them in future development plans. The finding of the panel will pile pressure on the bank to make good on that promise.

Prishtina Insight and Climate Home reviewed two leaked documents – the executive summary and full report.

Overall, the panel was at pains to point out the bank was working in an “extraordinarily challenging” environment in Kosovo. The nascent post-war institutions have been highlighted by numerous international agencies as corrupt and dysfunctional. Much of the harm was found to be the responsibility of the United Nations Interim Administration Mission (Unmik) and the government of Kosovo.

But its report did identify specific instances in which the bank had contributed to the suffering. The panel concluded:

The bank had no role or responsibility for the forced relocation of 664 people from Hade in 2004. That decision was made by Unmik. But the panel noted that bank officials were aware of the ongoing failure of the government to provide suitable new homes. The panel said that the bank, with its expertise, “could have done more to help”.

A special economic zone which has frozen development for thousands of households since 2004 was far too large and “not in line with international practice”. While ultimate responsibility for this lay with Unmik, the bank again neglected an opportunity to influence the situation for the better.

The bank had been directly involved in the 2012 resettlement of 320 residents from Shala, a neighborhood of Hade. It had financed and overseen the planning.

In the latter case, the panel found that the bank had failed to test the resettlement process against its own guidelines. As a result, the panel said, the Shala resettlement was deficient in the following ways: the community was excluded from the planning and not kept informed; the plan did not estimate of the size of the population affected; nor did it value the assets of the people of Shala; no arrangements were made for civil works, funding or contingency measures; and there was no timeline beyond the start date.

This “contributed to significant delays experienced during resettlement. Community members remained in temporary housing for a prolonged period which caused harm by creating uncertainty about their future and disruption in their lives”.

Rob Doherty, a spokesman for the panel, said that until then he could not comment on the contents of the leaked report.

“It remains confidential until the Board has had the opportunity to formally consider it,” he said.

Mantovanelli said: “The World Bank Group has internationally recognized social and environmental protections, and we take very seriously reports from people who feel they have been negatively affected under a project we have financed…

“We have an independent panel to assess complaints on compliance with our high standards and the panel makes recommendations on how to fix problems and ensure people maintain their quality of life – including the ability to earn a living and enjoy a healthy environment.”

Ten kilometers from the mine is “New Hade”, the relocation site for hundreds of people from the villages close to the mine. It was to have a school, a medical clinic and a cemetery, but none of these have been built.

Most of New Hade is still a bare field. Just 22 families have moved here and half of the built homes appear empty. Only the main road has been sealed. On a recent visit, a stream of sewage flowed beside the homes.

Haqif Shala moved to New Hade in November 2014 after spending two years in temporary housing. He said those who remain in rentals should refuse to move into the new village until it was complete.

“The promised infrastructure that should have been finished by the Ministry of Spatial Planning with the World Bank support is not ready. We lack electricity, while roads and the sewage system are not finished,” he said.

“I could keep cows in my previous home [in Hade], I had a garden. Here it’s not allowed,” Shala says. “We can’t even keep hens.”

The government has dismissed these concerns. Arben Citaku, the secretary of the Ministry of Spatial Planning, told a parliamentary hearing “the ministry has resolved the problem of the new location and defined the further steps that needs to be worked on… we believe the same economic status of villagers that moved to [New Hade] has been preserved, even though we might not have improved that status”.

Requests to the government to comment on the report were ignored.

Since 2011, the World Bank has been a formal advisor and financier to six different Kosovo governments. In general, the inspection panel found the bank had had a positive impact on Kosovo’s troubled energy sector, 97% of which is fuelled by the country’s lignite – the fifth largest in the world.

Lignite is the dirtiest form of coal and plants in Kosovo are implicated in high rates of lung cancer, skin conditions and respiratory problems such as asthmatic bronchitis. According to the Health and Environment Alliance and Association of Pulmonologists of Kosovo, the country’s two creaking Tito-era coal plants create a medical burden that costs between €70m and €169m per year.

“I am tired of living under dust, noise, of seeing people die of cancer around me and not being able to plan our futures here because of the dirty coal that is being dug right next to our doorstep,” said Grajcevci.

Kosovo Ombudsperson Hilmi Jashari is also investigating the community’s claims. Standing on top of a ridge with people from Hade and Shipitulle, another affected village, he looks down into the dusty maw of Sibovc.

“You might as well change the name of this place to Balkan Chernobyl,” said Jashari. “These sort of living conditions are [comparable to] 19th century standards; unacceptable to be living under in 21stcentury Europe.”

Yet chronic power shortages have lead to a concerted push for new coal generation from within the Kosovan government and the World Bank. The bank is weighing a proposal to underwrite the construction of the Kosovo e re (New Kosovo) power station.

Kosovo e re is the only coal plant in the world the bank is considering backing.

This month, World Bank president Jim Yong Kim said slowing down the proliferation of new coal plants in the developing world was vital to ensuring global climate targets were met. The bank’s policies restrict its involvement in new coal projects to exceptional circumstances.

The new plant has undergone constant delays and revisions. But preparations – including the expansion of the mine and resettlements – have continued.

Dajana Berisha from the Forum for Civic Initiative, a Prishtina-based grassroots organization, prepared the formal complaint to the bank on behalf of the Hade community. The complaint argued that the villagers had suffered a “loss of land, livelihoods and wellbeing as a result of the bank’s non-compliance with its own policies in its technical assistance to prepare a framework designed to forcefully resettle us to make way for a Bank financed new coal power plant”.

Berisha thinks it unlikely the panel’s decision will result in any concrete action. But after years of having their grievances ignored, the community has been vindicated.

“We hit big,” she said. “When I met these villagers they were smart and strong and willing to go very far to get their rights set straight, but they lacked information about their rights and felt intimidated by the arrogance of the officials from Kosovo’s institutions and the World Bank who would occasionally visit them.

“Now, the community can not be looked down and ignored by anyone, this decision proves they were right all along. It is a moral victory that gives the community an upper hand in the debate about building the third coal power plant that the World Bank is planning to support during the following year.”

The finding that the resettlement in 2004 was never completed is particularly damning for Unmik and the US mission in Kosovo. Diplomatic cables released by Wikileaks reveal the callous way the displaced villagers were viewed by those in charge in Kosovo during the transition to independence.

US chief of mission Philip Goldberg reported in 2006 that the resettlement process was completed.

“In May Unmik finally took action to remove the remaining squatters near Hade village in Obilic municipality, the site of an accessible, massive lignite coal seam. The residents had interfered with mining operations for six weeks to demand employment with KEK despite the [provisional government] already relocating and compensating them for the expropriation of their land,” he said.

Unmik did not respond to a request to comment. The US state department said it would not comment on the leaked diplomatic cables.

Ted Downing runs the International Network on Displacement and Resettlement. He has studied the case of Hade and claims the World Bank and Kosovo government are playing people against profit, asking them to absorb the cost of development in their own lives, livelihoods, budgets and social-psychological stress.

“There is a game going on, a vicious horrible game with people’s lives where the cost of displacing them [by international standards for resettlement] is being pushed back and pushed down and because if they are not paying that cost, the profitability of the mine increases,” said Downing.

In September, the state energy company Kosovo Electric Company (KEK) began a new round of negotiations with several hundred more village inhabitants, who have to be displaced in order to make way for new excavations for coal digging.

“If we don’t start mining in the new mining field by the end of the next six months, we will run out of our coal reserves to feed the current existing plants,” said Adil Jonuzi, the head of coal division in KEK.

Looking at a pair of dormant excavators, he said: “My heart sinks when I see these two beauties lying still and not in function.”

A few hundred yards away in Hade, life is also frozen. Schools have emptied of children and basic foodstuffs, such as bread, are no longer available. Grajcevci, like most of Hade’s men, is employed by the mine that has destroyed his village.

“Kosovo is independent, the war is finished, but my battles for a dignified life in this country are ongoing because now we have an enemy that is killing us slowly even in peacetime,” he said.

“Now, we have learned a lesson that if we don’t unite as a community we will be trampled upon, we will be tricked and become poorer. As a result we will not allow them to divide and rule us. We’ve had enough.”

Jeta Xharra is country director in Kosovo for the Balkan Investigative Reporting Network.