In May of 2010, just four days after their family was resettled in Battambang province, two children, accompanied by their sister-in-law, walked to a pond. Stories differ as to why they were there. Rights groups say they went to bathe and collect water. Police claim they were collecting snails.

Either way, only the sister-in-law came back.

“While at the pond, one of the children fell into distress and the other went to his rescue,” describe the authors of a scathing, 169-page report that exposes the failures of the Asian Development Bank (ADB) to ensure the just resettlement of families affected by the rehabilitation of the country’s national railway.

“The sister-in-law was unable to help and hastened back to the relocation site to call for help,” the report, obtained by the Post this week, continues. “When she returned with help, both children had drowned in the pond.”

At the time of the incident, the report says, people at the resettlement site sought alternative sources of water in lieu of a functioning supply, and “the pond in question was one such ready source”.

In a comparable case, a boy was hit and killed by a bus not long after his family was resettled in Poipet town. The distance he travelled to his new school was greater than where he had previously lived.

These stories are some of the most devastating examples highlighted in the report by the ADB’s internal watchdog, the Compliance Review Panel (CRP), which picks apart in encyclopaedic detail how the development bank, which advised the government on the railway project, got it wrong for thousands of Cambodia’s poorest families. The report, dated January 14, is marked “for official use only”.

While exhaustive, the thrust of the report can be summarised in one sentence: On the whole, the CRP says, most of the families affected by resettlement are worse off now than before the move. More than 4,000 families have been displaced by the project, according to rights groups. For the ADB, whose role it was to ensure the government carried out the resettlement appropriately, the report is a stark revelation that one of the country’s largest development partners failed to uphold its own safeguards.

“After thorough examination, the CRP concluded that the problems had resulted from failure to implement ADB’s operational policies and procedures,” the report states, laying the blame at the feet of its own organisation.

In 2010, as part of the resettlement, families began moving to make way for the project, a $143 million venture to revitalise the country’s dilapidated railroad. Still unfinished, the tracks are supposed to create a working train path from Sihanoukville port in the south all the way to Poipet town on the Thai border.

Those living along the planned railway route have been paid to leave their homes and moved to new communities throughout the country, including in the capital. The original plan mandated that all sites were to be no greater than five kilometres from displaced peoples’ homes. Pursat province, the report says, has the only site abiding by that obligation.

By its own standards, the ADB says resettlement should be a development opportunity to advance those most vulnerable. But in this case, except for some “success stories”, as the report puts it, the evidence suggests the opposite occurred.

Ouk Sophea and her daughter sit in front of their house in Trapeang Anhchanh village in Phnom Penh on Wednesday. Scott Howes

The CRP investigation found that compensation for those relocated was not enough, homes were undervalued and not even scant support was given to cover income lost as part of the transition. It also revealed that many families went into debt trying to get their lives back on track, and many continue to go without work.

The criticisms go on: basic facilities at resettlement sites were subpar and in many cases took far too long to install; access roads were in poor condition and many land plots were damaged by flooding. On a visit to the Phnom Penh site, the CRP described the medical facilities as “appalling”, with just one bed and no doctor.

In 2006, a resettlement plan was drawn up and agreed to between the ABD and the government. The plan was flawed to begin with, according to the CRP, but was nonetheless used as a base for further iterations down the road. Compensation paid from 2010 to 2011 was inadequate, as rates did not account for inflation, the report finds.

In 2012, the ADB commissioned an independent study from resettlement expert Michael Cernea. Outside of the recommendations, Cernea’s findings were covered up, the Post reported last year.

A request in August of 2012 by rights groups to the ADB’s compliance panel triggered this latest investigation.

In late 2013, after delays caused by the election, members of the CRP came to Cambodia and met with affected communities, rights groups, the government and ADB staff to carry out their investigation, which resulted in the devastating report obtained this week, labeled as the final version.

“This investigation report is a vindication of years of struggle. While it is very frustrating that it took this long for ADB to accept responsibility, we are optimistic that the bank is now required by its board of directors to solve the many problems faced by affected communities,” Eang Vuthy, executive director of Equitable Cambodia, said.

While the children’s deaths were distinct tragedies, what happened to Ouk Sophea in 2011 was far more typical. She and her family of seven moved to the Phnom Penh resettlement site, called Trapeang Anhchanh, some 20 to 30 kilometres from their old lives.

When she arrived, her plot of land was underwater. A good chunk of the $600 in compensation went to reinforcing the soil, and the remainder was not enough to fix up her home. She took a loan, which she now can’t pay back, and her husband had to move away to take a job in construction.

“In this land, I owe others a lot of money,” she said.

Sophea is not alone. Community leaders said that more than 140 families resettled at the Trapeang Anhchanh site were in debt and had members who had lost their jobs – problems observed by the CRP in several communities.

The panel is recommending that the bank create a compensation fund of up to $4 million to pay for errors with a loan to the government. Rights groups advised of the findings called that passing the buck.

“If the ADB and its staff who oversaw this disaster don’t have to pay any penalty for their gross negligence, they will continue to treat their safeguard policies as an afterthought,” said David Pred, managing director of Inclusive Development International, which has worked for years with affected communities along the railway.

The ADB and several government officials declined to comment yesterday, but a statement on the bank’s website on January 31 acknowledged non-compliance, and said that it was working with the government on an action plan to be completed in the next 60 days.

At the resettlement location in Battambang where the children drowned, a neighbour, Duk Veasna, said yesterday by phone that the pond was dug out for soil to help build the site. It wasn’t fenced off and the children were unaware of the dangers: “They didn’t know the pond was really deep.”

ADDITIONAL REPORTING BY MAY KUNMAKARA AND HOR KIMSAY