IFI governance

Background

Meeting between UK NGOs and Susanna Moorehead, UK World Bank Executive Director

25 March 2009

20 April 2009 | Minutes

Participants

  • NGOs: Helen Tugendhat (Forest Peoples Programme); Jesse Griffiths (BWP); Ama Marston (BWP); Peter Frankental (Amnesty International UK); David McNair (Christian Aid); Hetty Kovach (Oxfam GB); Mel Evans (Plan B); Rebecca Wallace (CAFOD); Melissa Hall (ActionAid)
  • HMG: Susanna Moorehead (UK ED); Oliver Keetch (DFID)

Minutes

It was agreed to aim to hold these meetings quarterly, as in the past, either with the ED or the alternate. Susanna Moorehead (SM) said she would be happy to meet with UK NGO representatives when they were in Washington, or for her office to arrange meetings with advisers.

SM said that the intention continues to be to publish UK objectives before the Spring and Annual Meetings; they will endeavour to do so if practicable.

SM said that the switch to annual reports rather than 3-4 year Institutional Strategy papers and annual reports reflects the need to report more regularly. The forthcoming White Paper will cover international institutional reform.

1. The financial crisis: Bank response

Main points raised by NGOs:

  • Welcomed the analysis of the impacts of the crisis by the Bank, and its role in raising attention to the impacts on developing countries.
  • Said the small size and the lack of clear additionality of the UK contribution to the vulnerability fund was disappointing.
  • Highlighted the following crucial issues of implementation of emergency financing:
    • Need to ensure that no economic policy conditions are attached to crisis response funding – in line with UK government policy
    • Need for transparency, particularly for southern citizens
    • Need to establish effective and equitable methods of governing the various proposed funds – main concern at the moment is danger that developing countries don’t have representation on governing boards.
    • Should support grants not loans – don’t want to build up unsustainable debt
    • Should learn lessons of past emergency financing particularly on impact and responses on women and environment
  • Highlighted that what is funded is crucially important. Important, for example to ensure don’t lock countries into outdated models of development, and use opportunity to build green economies.

SM Response

  • The Bank’s response has been swift – trebling IBRD allocation for middle income countries (there has been significant take up, expectation is that IBRD lending will double this year), frontloading IDA, vulnerability fund etc.
  • There is still a lot of uncertainty about the exact nature of the impacts on different countries. Could explain why there has not yet been significant take up of the offer to fast track IDA lending.
  • On additionality of emergency financing, said it is additional to resources the UK has already provided to the Bank, and the allocations to UK country programmes have not been affected. However, all governments are facing unprecedented calls on their resources; ODA will be no exception. UK recognizes that demand on the vulnerability fund will be greater than the £200m the UK has pledged, but sees this as an ‘open resource’ – efforts will be made to get other countries to contribute, and when the money runs out, will look to see how to get additional funds. The UK is pushing on gender impact of the financial crisis.
  • On governance of the funds, said it is still under negotiation. No decision yet on developing country membership of governance boards. She will feed our concerns in, and NGOs should continue to do so. Compromise is always required in multilaterals. Don’t want to overcomplicate governance. Not appropriate to reopen IDA governance discussions now – there’s a mid-term review in November.
  • On grants vs loans, said that funding will currently be in the form of loans, but Bank is watching debt sustainability.
  • On green impact – said she agreed with Zoellick’s approach to ‘bake sustainability into everything’ – so would hope that this approach is followed as appropriate for emergency financing too.

2. Other issues

2a. Governance reform

NGOs main points

  • Crucially important to signal support for a more legitimate, effective Bank based on partnership by supporting the G24’s call for parity of voice and vote – will the UK support this.

SM Response

  • UK doesn’t support parity; don’t think current ideas are achievable and wouldn’t support UK’s main objectives.
  • Keen to see any new positions from NGOs as governance reform still a work in progress – likely to know more after G20 meeting.

2b. World Bank disclosure policy review

NGOs main points

  • Welcome Bank’s moves to open this up to consultation and to seek a more comprehensive, accountable approach
  • Timing of disclosure is vitally important – for example to ensure disclosure right throughout the project cycle so affected communities have a real chance to influence World Bank projects.
  • Not clear in consultation draft that third party information will be included; it should be part of agreement between Bank and third parties that disclosure is assumed when working with the Bank.
  • The policy should also cover ICSID – not clear at the moment whether this is intended.
  • Does the UK support disclosing board minutes and government positions on the board?

SM Response

  • Support the move to improve disclosure at the Bank; should build on the work of the GTI and national freedom of information legislation. No board discussion of this recently.
  • Presumed there would be legal hurdles that prevent disclosure of third party information.
  • UK doesn’t support disclosure of board minutes – concern that conversations would just move elsewhere.
  • Follow up action: SM to provide more information on the specific points raised.

2c. Internal review of the indigenous peoples policy.

NGOs main points

  • Will there be a chance for external input into the current internal review?
  • Is the UK pushing for free prior and informed consent (FPIC) within this review (as they have for the ADB)?

SM Response

  • Don’t yet have a position on FPIC for this, but statements made to the regional multilateral banks will be part of process of developing our position.
  • There is space for external comments on the implementation of the policy, although it is unclear if there will be formal space to comment on the WB review report.
  • Happy to receive comments on the review.
  • Follow Up action: Forest Peoples Programme will contact DFID to request input into the draft report once the report is circulated.

2d. Support for the Forest Carbon Partnership Facility (FCPF) and understanding of legal framework for the FCPF

NGOs main points

  • Concern that RPINS and RPLANS that are emerging (a) are not all following World Bank safeguards (b) not in line with FCPF charter; and (c) breaching international conventions; UN concerns.
  • Follow up action: FPP will send SM further information on specific cases including Indonesia, Guyana and Panama cases

SM Response

  • Most concerned about getting RPLANS right as these are implementation strategies.
  • Distinction between operational procedures that the Bank must follow and the standards that must be met when other actors such as governments draw up plans.
  • Should be a matter for tripartite discussion at country level between the Bank, the UN and the government – probably best to raise concerns at country level with UK staff.
  • Happy to follow up on specific cases.

2e Climate Investment Funds (CIFs)

NGOs main points

  • Asked whether UK had decided amount of money it planned to contribute to CFT
  • Asked whether the UK position was likely to alter as a result of the US decision not to fund the CTF – would it now make sense to put the money into the SREP instead given the ongoing concerns over the inclusion of coal financing in the CTF.
  • Will Forest Investment Programme (FIP) be developing specific guidance on land tenure issues.

SM Response

  • Haven’t made a final decision. New US administration policy still developing.
  • Follow up action – will provide further information on all issues above.

2f. Illicit capital flight

NGOs main points

  • Is the UK pushing the Bank to speed up and increase research in this area?
  • Important that research focuses on both tax evasion and tax avoidance.

SM Response

  • This issue has moved right up the global agenda.
  • DFID is in close contact with the Norwegian-funded World Bank research that is expected to produce results by September.
  • DFID has commissioned research on corruption and tax evasion – Piers Harrison is the person to contact.
  • Overall, however, best to look at research priorities in the round rather than pushing for specific issues out of context of overall strategy.

2g. Procurement policies

No time to cover – BWP will follow up by email.

3. AOB and next meeting

  • SM asked if there have been changes in NGO thinking on strategic relationship with the Bank as a result of the financial crisis.
  • Hetty (Oxfam) said it represented a real chance for change in IFIs. There is likely to be far more NGO scrutiny of the Bank and the Fund as a result of their increased roles.
  • Ama (BWP) said the models of sustainable development and the notion of the Bank as a ‘green bank’ likely to be under increasing scrutiny given the Bank’s bad record on, for example, carbon emissions.
  • Jesse (BWP) said that likely to be a focus on (a) process of reform – how to make it inclusive and legitimate; (b) governance of IFIs; and (c) have they changed their policies, or are they still pursuing an outdated economic model. The evidence from IMF emergency funding is very worrying so far – suggesting nothing has changed.
  • SM – would welcome ideas on the future of international institutions. Agreed that this is a moment for reform.
  • SM – suggested that future meetings could either concentrate on detailed, specific questions – in which case advance notice would enable her to respond fully to specific issues – or focus on more strategic issues. (or some combination of two).
  • Follow up action – BWP to help convene a strategic discussion with NGOs around the time of the Annual meetings.