14 December 2004
In attendance: Tom Scholar, Dorothea Lee (IFID), Camilla Bowen (IFID)
Emily Caruso (FPP), Bandula Kothawala (TUC), James Leaton (WWF), Simon McRae (FoE), Geoff Nettleton (PIPlinks), Jeff Powell (BWP), Robin Robison (QPSW), Patrick Watt (ActionAid)
Opening remarks from the Executive Director:
Board agenda focused on “2005 issues”: IDA XIV replenishment negotiations, March High-Level Forum on Harmonisation, Global Monitoring Report, Sachs report, UN GA special session on MDGs + further multilateral debt relief, IFF, conditionality
Opening remarks from BWP: Consultation overload is pre-empting effective civil society engagement – management is blaming board. Pleased with steps that Hilary Benn committed to on increased transparency and accountability at the evidence session of the International Development Committee – urge that HMT take similar steps.
TS: On consultation pressures, board feels pressure from management, management tells board that this pressure “comes from outside”. On transparency: On release of UK interventions at the board, the UK “probably wasn’t allowed” by WB Legal to release its intervention on the Extractive Industries Review, and “probably won’t be allowed to do so on an ongoing basis”; however “our mind is on the new UK Freedom of Information legislation”. (N.B. BWP to follow-up by sending relevant transcript where Secretary of State commits to releasing transcripts of UK interventions at the board.) On HMT’s lack of strategy for Fund: it is “embedded in the annual report”.
IFC safeguard policy review
TS: “Our sense is that something had gone wrong.” Found IFC resistant to change. IFC insisted that they wanted to have process finished by FY 06 (July) and that this was driven by Equator banks need for closure. IFC claimed that interpretation notes were not something that was “typically consulted on”. Board had sympathy with points that civil society were raising – esp. need for availability of interpretation notes. Hoped that the IFC would announce this week that they will extend the consultation period. He had pushed for clear dates on this, and for clear dates on publication of the interpretation notes, but they were not available yet. Hoped that since the IFC had moved that NGOs would move as well.
JL: On Baku-Ceyhan pipeline: trade and industry cmte has launched investigation of ECGD backing; NGOs calling for IDC to look into WB/EBRD oversight failure
SM: Lack of confidence in private banks’ uneven implementation of Equator Principles. Private banks disclosure requirements are weaker due to client confidentiality concerns.
EC: (Gave Scholar copies of NGO matrix comparing WB OP with IFC proposed performance standards and an FPP paper on implications for forests and indigenous peoples). Gave example where performance standard weakens existing policy.
TS: Too much weight on policy as compared to outcomes. As with EIR, there is a need to demonstrate that things claimed about a policy (added value, poverty reduction) are true. Hopeful that an outcome-based approach where companies develop their own standards might do this. However, needs to be a framework to monitor evaluation. IFC has given a “money-back guarantee” that standards will not be weakened.
Indigenous Peoples Policy – Revised draft
GN: Moving from concrete to vague language i.e. What is “broad community acceptance”? Needs to be a process of interaction with the IP community. No clarity on whether IP can “blow the whistle” and say that this isn’t what they agreed to. Needs clarity on free, prior, informed consent/consultation. EC: Lack of clarity in both text and footnotes. Will UK take active role in ensuring that final policy is acceptable to affected peoples?
TS: Reaching judgement on FPIC depends on practice in implementation. Board has asked management to give them an example of what they consider best practice FPIC. What does “acceptable” to affected peoples mean? If you mean unanimity, then no, but will work towards this.
Inclusion of trade unions
BK: Why lack of WB/IMF willingness to consult trade unions?
TS: It is there at level of policy, but doesn’t happen enough in practice. There has been improvement, but still further to go. Some mission chiefs not as open as we would like them to be. Tell us where there are problems and board will raise with management. Some countries are extremely sensitive about WB/IMF talking to anyone beyond the executive.
Nam Theun 2 (planned dam in Lao PDR)
JP: Board vote expected in March. Beyond env/soc concerns previously discussed, there is an economic analysis by Thai economists which suggests that benefits have been overstated. No competitive bidding on procurement contracts. Overarching concern remains that this project can not be about poverty reduction given the record of the regime in Lao PDR.
TS: End November there was a board technical briefing on the economic analysis – will try to share that with you. There is no DFID office in Lao PDR, so Bangkok office and Asia team will be informing decision on this project. (Dorothea Lee to clarify who we should speak with.)
Use of country systems
JP: Broad agreement on principle of reducing burden for recipient countries in maintaining multiple systems for monitoring social and environmental policies of different donors. Not convinced that there is need to judge equivalence between country systems and an ‘annex’ rather than the full body of operational policies (gave copy of civil society analysis). In London consultation with WB OPCS past week, they agreed several points. Civil society not able to see revised paper and annex before board vote in February:
- Need to face costs – who will pay for higher pilot costs? Longer-term whose responsibility?
- Need for greater clarity on what would be appropriate for piloting (risk-taking) and roles for civil society in selection, monitoring and evaluation of pilots
- More is needed on how equivalence will be judged
- Current language on use of ‘planned improvement’ to systems is deeply problematic and violates principle that a project must be in compliance with WB policies when presented to board
Conditionality, debt and PSIA
PW: Conditionality review concerns: Bank review not “reading across” to Fund review; scope is limited to prior actions and triggers. Where is discussion of options on use of IMF gold for multilateral debt cancellation? Thoughts on US proposal on debt sustainability?
RR: PSIA – progress in IMF applying more broadly?
TS: Conditionality review – ultimate focus should be on aggregate impacts – this is intention by Annual Meetings. Will follow-up on scope issue. Debt and gold – no progress. Debt sustainability framework – not finalised. PSIA – small, relatively new unit – conditionality review should provide “lots of hooks” to move forward PSIA work.