IFI governance


Greening the Bank: next steps

15 December 1998

In September over 50 NGOs from 15 countries made recommendations to the World Bank on the environment. The statement, coordinated by Friends of the Earth US, argues that

  • “The World Bank Group’s approach to addressing environmental issues is inadequate and fails to ensure that environmental sustainability is achieved at a local, national and international level. The World Bank Group has not mainstreamed environmental considerations into its general economic development work.
  • Many loans continue to go on projects that involve unsustainably managed natural resource extraction, or pollution generating projects, such as coal-fired power plants or highways and roads when more environmentally sound alternatives are feasible.”

Institutional re-structuring and re-organization has weakened the role and purpose of the Bank’s Environment Department. Country departments must now pay for environmental expertise and advice, while the Environment Department has suffered cutbacks and staff reductions.

The paper proposes specific benchmarks for sustainability under three headings:

a) Establish positive environmental lending goals by sector, ie for energy, forests, water, transport and agriculture.

b) Update and expand the list of projects the Bank’s will not back, for example to rule out finance for: projects in frontier or primary forests, extractive projects (oil, gas, and minerals, timber), projects involving the commercial manufacture or use of ozone-depleting substances or the persistent organic pollutants, and gold mines that use cyanide.

c) Integrate the Environment Department more closely with operations staff to foster implementation of social and environmental policies and improve the quality of the portfolio.

The Bank’s Vice President for Environmentally and Socially Sustainable Development, Ian Johnson, replied positively at the annual meetings, but has indicated that some recommendations will not be implementable for practical reasons. Others, such as ruling out certain types of investment projects, go against the Bank’s intention to remain in risky and difficult sectors, on the premise that it will improve them. A follow up process to discuss these issues has been promised by the Bank.

Contact Andrea Durbin, Friends of the Earth US, 1025 Vermont Avenue, Suite 300, Washington DC 20005, USA, andread@foe.org