Consultation extended for IFC safeguard review: doubts remain

2 January 2005

In response to a global civil society boycott launched in September(see Update 43), the International Finance Corporation (IFC) has extended the timeline for public consultation on the review of social and environmental safeguards and the information disclosure policy. The revised timetable was to see the publication of an “indicative draft” and guidance notes (formerly know as “interpretation notes”) end January. Public comment on the disclosure policy will be received until 31 March, and on the safeguard policies until 29 April. The IFC expects the performance standards, which will replace existing Bank safeguard policies, to come into effect in January 2006.

In spite of high-profile boycotts, the IFC claims to have received “substantial and diverse input” from various stakeholders throughout the consultation period from September to December 2004. It also asserts that the indicative draft and guidance notes will show the “weight of comments received so far through consultation”. A number of civil society position papers have been published in response to the safeguard review: the Platform for rights, rules and responsibilities for the IFC’s safeguard policy review ,signed by over 220 organizations and networks, representing over 1000 NGOs from fifty-three countries, and Proposals for embedding human rights principles and requirements into IFC’s policy on social and environmental sustainability and performance standards. Civil society groups have withheld comment on the revised process until the contents of the indicative draft and guidance notes have been made public.

Country systems update

Meanwhile, at the close of the public consultation period of the WBG’s country systems approach to social and environmental safeguards (see Update 40, 42), NGOs in both north and south have protested against what may effectively result in a weakening of Bank safeguard policies. The country systems approach would see the application of a borrower government’s social and environmental policies rather than the Bank’s policies in select cases where the country policies are judged to be”equivalent” to those of the Bank. Following consultations with CSOs globally, including in London, Brasilia and Washington, a revised version of the country systems paper will now be sent to the Board, which if approved will see the new approach tested in 8-12 pilot projects in different middle-income countries over the next two years.

NGOs have protested against what may effectively result in a weakening of Bank safeguard policies

While NGOs have always supported a strengthening of national and corporate social and environmental standards and capacities and the ownership of development policies and projects by Southern countries (including civil society), they assert that international actors need to comply with international standards. The World Bank should not become involved in projects unless it respects such standards.

Flexible principles

A report by US organisation Environmental Defense outlines the evolution of the World Bank’s environmental and social safeguard policies. A few decades ago, under pressure from civil society, the World Bank Group established a set of policies to protect people and the environment against the most harmful impacts of Bank projects. Yet internal and external evaluation has revealed how in many cases implementation of such policies has been inadequate. Rather than deal with this institutional failure, the Bank has begun to shift from “explicit, mandatory policies, to which it can be held accountable, to flexible principles or national standards, permitting the investor and/or the borrowing government to determine the project’s social and environmental requirements”. This is illustrated most clearly by the on going reviews of the IFC’s safeguard policies and the piloting of the use of country systems by the World Bank. The report includes key concerns in relation to both reviews and lists specific recommendations for the World Bank Group and other IFIs. In response to these trends, civil society organisations have reiterated their commitment to strong, transparent, specific, mandatory social and environmental standards that ensure the World Bank and other financial institutions are held accountable for the impacts of their projects.