Safe in Bank hands? World Bank safeguards review launched

6 December 2012

The World Bank finally launched the two-year review of its environmental and social safeguard policies in October. Whilst the Bank committed to a robust outcome, CSOs have highlighted concerns that the emerging framework will replace existing safeguards with “vague principles and non-mandatory ‘flexible’ implementation standards”.

The review’s stated main objective is to “strengthen the effectiveness of the safeguard policies in order to enhance the development impact of World Bank-supported projects and programmes” with a view to creating an “integrated framework” to address future environmental and social risks. The Bank also aims to “renew [its] partnership with borrowers” to “leverage their capacity to “identify and manage” these risks. It will cover the eight Bank environmental and social safeguard policy areas: environmental assessment, natural habitats, pest management, indigenous peoples, physical cultural resources, involuntary resettlement, forests, and safety of dams (see Update 82).

In September, members of the US Congress, including the Democratic leader Nancy Pelosi, called on Bank president Jim Yong Kim and US Secretary of the Treasury, Timothy Geithner, to refrain from “ tak[ing] any actions to dilute its social and environmental safeguards including the protection of indigenous people and the sustainable use of natural resources.” Vinod Thomas, director general of independent evaluation at the Asian Development Bank also warned of the unsustainability of high growth without “confront[ing] environmental and social ills”.

More than 120 Indonesian civil society groups signed a statement in October calling on the Bank to “avoid simply serv[ing] the narrow interests of public and private sector borrowers in weakening the Bank’s existing social and environmental standards.” Titi Soentoro from the Indonesian NGO Aksi, reminded that safeguards “emerged in large part as a result of pressure from communities suffering from negative social and environmental impacts of projects and programmess funded by the World Bank and other international financial institutions.”

The review process will consist of three phases of consultation, concluding in March 2014, during which the Bank has asked to hear from “communities directly affected by World Bank-funded projects”. Nevertheless, at the first consultation meeting in Washington in November, Stephanie Fried from the US-based NGO ‘Ulu Foundation, criticised the consultation’s “move away from transparency”, and other NGOs highlighted the risk of marginalised groups, particularly women and disabled people, being excluded.

Reforming broader Bank lending instruments

Although Bank president Jim Yong Kim stressed the Bank has “no intention of diluting the safeguards” at the Bank’s annual meetings in mid October, civil society organisations have raised concerns that they will have limited application. In a November submission to the Bank, more than 20 CSOs recommended that the new safeguards framework should apply to all types of Bank-supported activities, such as Program-for-Results and development policy loans (see Update 82). The Bank has continually stated that the review will be “separate but parallel” to its investment lending review (ILR) (see Update 82) which has examined procedures relating to the provision of project loans and emergency disbursements. Mark Rentschler of the Bank Information Center said: “if the review of the investment lending policies is any indication, the safeguards review will weaken current environmental and social policies and procedures. The proposed revisions to Bank investment lending will significantly change requirements for the way projects are evaluated and supervised.”

There were signs that the Bank is looking to integrate the reviews’ findings.  In advance of a November board meeting the final version of the ILR paper, published in early November, stated that the Bank would consider integrating the safeguards policy review outcomes into “a single IL operational policy”. A meeting report from UK-based Forest People’s Programme (FPP) revealed that the Bank’s safeguards team offered to ask the Bank’s executive board to widen the review’s remit to include other lending instruments. Expanding the mandate of the review to address Programs-for-Results (PforR), country systems and development policies lending (DPLs) should therefore be “a priority ask”, according to FPP.

Human rights under threat

NGOs have repeatedly stressed the danger of the Bank’s lending policies eroding the human rights of indigenous and community groups. Citing a Bank-endorsed project in Ethiopia that indirectly funds forced evictions of indigenous peoples and other marginalised ethnic groups as an example (see Update 82), Jessica Evans from US NGO Human Rights Watch commented “the World Bank has long ignored the importance of free speech, assembly, and association and other basic human rights…[it] needs to recognise that human rights are critically important to its efforts to reduce poverty”.

Building on a September joint letter to the World Bank (see Update 82) the November submission of 20 CSOs called for “an overarching human rights policy” which proactively addresses labour, disability and women’s rights.The Bank and its borrowers should be required to implement due diligence, identifying “all potential impacts on human rights for every project or program that the Bank finances”. This coincides with a call by Martin Sheinin, of the Italian-based European University Institute for the establishment of a future World Court of Human Rights to reexamine the way global human rights abuses by international organisations are adjudicated.

As the consultation process continues in December with meetings in Paris, Evans urged Kim to look to his “legacy on human rights” and not to “miss a key opportunity to show the Bank will change for the better under his leadership”.