Two decades of environmental and social protection policies at risk

21 September 2004

Bank watchers fear that a new plan to harmonise Bank environmental and social safeguard policies with national rules will sacrifice years of hard-won policy provisions “in one big sweep”. In conjunction with the proposed weakening of private sector safeguards (see below), this represents an unprecedented assault on the last line of defence for project-affected peoples. US NGO International Rivers Network (IRN) has raised alarm bells after examining a leaked copy of an issue paper which was discussed at the Bank’s board in mid-September entitled Issues in using country systems in Bank operations.

The issue of the use of country systems has been raised in the context of discussions on donor harmonisation since 2002 and more recently in the Bank’s new middle-income country (MIC) strategy (see Update 40). At a board meeting on the MIC strategy in March, a number of serious concerns around the use of country systems were raised. The current issue paper was prepared in response to a request from board members for a “fuller exploration of the issues”. Their concern arose after Bank management proposed in May to push ahead with pilots of the use of country systems.

The Bank argues that the increased use of country systems to measure and alleviate the environmental and social impacts of projects will improve development impact. Backers of the plan say that increased ownership will lead to greater project sustainability. After an initial increase in costs, in order to establish and monitor the use of national safeguards, backers say that the move “will eliminate the need for borrowers to set up programme-specific systems” leading to cost savings. In its issue paper, the Bank commits to “ensuring that policies are not diluted” and not altering the role of evaluation and complaint mechanisms.

when peoples' lives are at stake, what matters is what's actually taking place, not what is promised or planned

Despite these claims, NGOs argue that dilution is exactly what the proposed plan amounts to. In determining the ‘equivalence’ of national standards with existing Bank policies, the Bank proposes using a summary which it claims captures the principles of the policies. Under closer examination, the Accountability Project has found that, in relation to resettlement issues, there are serious gaps between this summary and the actual policies themselves.

The Internaitonal Accountability Project is worried that “planned improvements” in country rules may be considered as equal to existing Bank policies: “when peoples’ lives are at stake, what matters is what’s actually taking place, not what is promised or planned”. Governments may be allowed to self-assess the equivalence of their safeguards to the policies of the Bank; an obvious conflict of interest according to critics.

Also missing from the proposal are any concrete plans on how country safeguards will be assessed by the Bank, and what efforts will be made to increasing the capacity of borrowers to take on these new responsibilities. The Bank itself admits, for example, that there will likely be more use of country environmental assessments than social ones since such policies “are typically much less developed”.

In June, 186 NGOs from 60 countries sent a letter to the board protesting the proposed weakening of safeguard policies. In his response letter, president Wolfensohn assured NGOs that “we are determined that this move towards using country systems will not weaken our existing safeguard policies, which our Board of Directors adopted on the basis of considerable experience and extensive consultation with our member governments and others, including international civil society”.

The issue paper is to be posted on the Bank’s website for a two-month comment period. A final version of the paper is expected spring 2005 for presentation at the global meeting on donor harmonisation in April in Paris. If the paper is approved by the board, a two year programme consisting of 8 – 12 pilot projects is proposed, after which the use of national systems will be mainstreamed into all Bank project lending.

Bank issue paper on the use of country systems available on request from the Bretton Woods Project