Executive Directors (EDs) were present from the Netherlands, Italy, UK, Austria and Switzerland. Alternates or advisers were present from most of the remaining European constituencies. 15 NGO representatives were present from 9 European countries, as well as guest speakers from the US, Zambia and Zimbabwe.
IFC safeguard review
Knud Voecking of Urgewald Germany and Andrea Durbin, independent US consultant, presented civil society concerns about the IFC safeguard review process. Procedural concerns were foremost (see Update 42). It was indicated to the EDs that several networks had already decided to boycott the process and more were considering doing so. Substantive suggestions were made as to how to improve the use of ‘performance standards’.
An adviser from the German office responded. She assured NGOs that there would be no weakening of existing safeguards. On process, she skirted the point which had been made, asked NGOs instead to let EDs know if any group had felt excluded from the consultation process. The implementation guides, which operationalise the new ‘performance standards’ will be posted in October, at which point NGOs should assess definitions to ensure that safeguards are not weakened. There was disagreement between the adviser and NGOs present about whether or not the new standards are mandatory. NGOs relayed concerns expressed by the private banks in the Equator initiative that the new standards do not provide clear guidelines. If IFC is to play a leadership role, rules must be of the highest standards and unambiguous.
The Italian Executive Director, Biaggio Bossoni, was more telling in his urging that safeguards not be too rigid. “Soft rules” would allow the IFC to align private sector interests and collective development objectives. The “imperfect involvement” of the IFC is “better than none”. More effective monitoring is needed, according to Bossoni.
Debt cancellation and the new sustainability framework
Jack Zulu Jones of Jubilee Zambia expressed concerns that HIPC debt relief is being undermined by conditionality. Max Lawson of Oxfam GB called for an independent review of aggregate Bank-Fund conditionality. He asked EDs for their opinion on whether 100% multilateral debt cancellation was desirable and whether needs-based calculations towards reaching the MDGs should form the basis of financing decisions.
UK ED Tom Scholar said that while HIPC was “not perfect”, that it was a significant step forward. The initiative needed to be fully financed and the World Bank and IMF need to do more to push bilateral and private creditors to take similar steps. He agreed the need to examine conditionality, and called for better and more transparent impact assessment.
In terms of any further multilateral debt cancellation, Scholar insisted that this must satisfy four conditions:
- Does it bring new resources?
- Does it support the long-term sustainability of poverty reduction efforts? (ie. No running down of IDA resources)
- Does it ensure equity for non-HIPCs?
- Does it support progress towards the MDGs?
Moving “off-message”, Scholar described the UK proposal for further debt relief. The UK will meet 10% (approximately the UK share) of debt service payments owed to IDA by borrower countries. The UK supports the use of gold to repay debts owed to the IMF.
Meeting participants also described the European network on the IFIs to allow EDs to better understand how NGOs work on these issues. This came at the request of the EDs. Austrian ED Kurt Bayer asked for a verbal assurance that meeting participants would be selected in a way “that would not cause problems for us”.
Dutch ED Ad Melkert called suggestions for an additional meeting to take place in Brussels between EDs and civil society representatives “a very good idea”, especially if eastern European participants were better able to attend. Beyond accessibility, NGOs stressed that a meeting in Brussels when EDs report to the development commission would increase accountability.
With the meeting likely to be held in January, issues could be addressed which could form part of the agenda of the next spring meetings. This initiative will be followed up by Brussels-based European Network on Debt and Development (EURODAD).