IFI governance

Background

UK Civil Society Meeting with Minister of State Rt Hon Alan Duncan MP

1 October 2012

18 February 2013 | Minutes

This was a meeting on 1 October 2012, between the Minister of State of the UK’s Department for International Development (DFID) and civil society representatives, focusing on the World Bank.

Please note that these minutes have not been approved by DFID.

Attendees

DFID: Alan Duncan (Minister of State), Poppy Whitfield
IFID: Shaila Khan (Head of International Finance Division), Paul Healey (Head of team), Siobhan Clifford (Policy Adviser)
NGOs: Peter Chowla (Bretton Woods Project), Petra Kjell (Bretton Woods Project), Nuria Molina (Save the Children), Joanne Green (CAFOD), Hannah Stoddart (Oxfam), Owen Tudor (TUC), Tom Griffiths (Forest Peoples Programme), Mike Davis (Global Witness)
Apologies: Meghna Abraham (Amnesty International)

Agenda

  • Annual Meetings agenda
  • Safeguards
  • Land grabs

1) Annual Meetings agenda

a) World Development Report (WDR) & jobs, including Doing Business Report (DBR) review

NGOs made the following points:

  • Welcome decoupling of labour markets and employment, and the suggestion that absence of labour market regulation can harm quality of jobs, but we are worried about the anti public sector bias.
  • We think the good jobs for development focus is good, but it should refer to ILO concepts and not try to reinvent the wheel.
  • There is a concern that there is no implementation plan (which there is for the gender WDR), this would be useful and DFID could press for this.
  • It would be useful to talk about what DFID is doing for quality jobs. It would also be good to have an event on the review in London, DFID could push for this.

The Minister of State made the following points:

  • Agree that quality of jobs is pivotal, had a good meeting with ILO last week.
  • Met new World Bank president Jim Yong Kim in NY in July – he is impressive and open, a breath of fresh air. He is for a process of engagement, so could try to get him over for a conference.
  • WB at times does things that none else can do, e.g. capital investment for infrastructure. There is a need for big investments to lift a country up, but I hear what you are saying, it can also be a dilemma.

NGOs made the following points:

  • We are pleased that the DBR review has been announced. We are keen that DFID push for the review to have an independent panel, including CSO representation, for documentation to be public, plus substance on how the rankings are used in country (gender, taxation, jobs).
  • The DBR ranking has been controversial, the review could draw a line under this. We would like to see DBR work for smallest entrepreneurs.
  • There are concerns around issues not being effectively implemented on the technical assistance side, e.g. on infrastructure. Technical assistance should more effectively reflect the findings, there is too much focus on certain directions of reform.

The Minister of State made the following point:

  • Support wanting to see an evaluation of the DBR.

b) Disasters Risk Reduction (DRR)

NGOs made the following points:

  • Pleased with government leadership, with resilience champions. It should do as much as possible bridge humanitarian and development gap, with a particular focus on structural causes of slow onset crisis.
  • It should engage WB on how resilience should be applied beyond general language – what does it mean in practice for WB lending. For example, as lending for infrastructure for schools is scaled up, resilience considerations should be taken into account.
  • Social protection also provides a unique opportunity to address DRR. WB and ILO are doing great work on a holistic view, which should be supported and encouraged.

The Minister of State made the following point:

  • There is a question whether WB should engage in social protection.

NGOs made the following points:

  • WB can play a key advisory role on social protection, as with the G20.
  • The advisory role for G20 is crucial for how to make social protection strategies more coherent.

The Minister of State and officials made the following points:

  • The Secretary of State will represent in these meetings.
  • DFID’s approach on DRR needs approval, MoS personally champion earthquake resilience in Nepal, but there is a question how far the WB can reach.
  • Please forward your thoughts to the Secretary of State before the Tokyo Annual Meetings.
  • Jim Yong Kim’s reform agenda includes a focus on results and learning.

2) Safeguards

NGOs made the following points:

  • Safeguards are good for development and effectiveness, good for delivering results – evaluations proves this.
  • The WB safeguards review is an opportunity to upgrade the safeguards. It should be broad ranging and also look at other development modalities, e.g. programmatic lending. Consultations should listen to all stakeholders, including affected communities, and not just clients/borrowers, but also representatives from donor countries.
  • We don’t want to see a dilution of the safeguards. Clarity is good, but not as a code word for removing requirements.
  • We are concerned that ILR process is already risking a serious weakening of oversight and implementation standards – that is why NGOs have called for that process to be slowed down.
  • There is a need for upward harmonisation, in existing safeguards and also new standards binding staff and borrowers to address emerging issues, e.g. land rights, labour rights, gender, disability and climate change.
  • It’s not just about content, but also implementation mechanisms, they need to be strengthened.
  • Safeguards as a benchmark for labour policies – it’s included in the Equator Principles, IFC, etc, but not at the WB.
  • Example of work on a WB project causing lot of damage in Cambodia which took a huge amount of time to sort out. The standards were there, but the implementation was weak. The loan was pushed out, but with little follow up – this needs to be more rigorous.
  • The role of WB as standard setter is important and valuable in the international environment, and influences other international financial institutions, including smaller lenders. In China WB standards are being talked up. WB has real resonance as standard setter, this is quite encouraging.

The Minister of State made the following points:

  • In favour of very strong safeguards, but is the current system is good and efficient? It’s hugely bureaucratic and not sure if this is sensible. The safeguards amount to hundreds and hundreds of pages – eight hundred pages won’t necessarily lead to a good outcome.
  • A big dam is different to building a school – we want to look at outcome rather than just process, so that outcomes of sustainable development come out of the process. Safeguards could ensure this.

3) Land grabs

NGOs made the following points:

  • Oxfam is focusing on land acquisitions – in the past 10 years, land 10 times the size of UK has been bought up. Large scale acquisitions have increased since the food price crisis.
  • WB is the largest development organisation in the world, and invests in land acquisition and land administration projects. Agriculture investment tripled from 2002 – 2012. WB is a critical actor as an important advisor and standard setter. We see the role of private investment, but this model is not the right one with large scale buy ups – let’s take a step back.
  • Oxfam is calling for moratorium on further investments in large land acquisitions to allow WB to get its house in order. There are a number of controversial cases involving WB, including in Honduras and Uganda. While halting investment, WB should look into extent safeguards and policies, re transparency (e.g. for local communities), FPIC (communities being consulted), land governance and rights (e.g. if principles on voluntary guidelines are being upheld), to what extent a land investment is really promoting food security.
  • Understand complexities of issues, but practical steps are available – for instance, WB needs to support ex ante impact analysis (PSIA) before large land acquisitions. Iit should also ensure that governments entering into land related contracts with companies or other investors have access to relevant advice and assistance on how to negotiate investment contracts on land. These are practical steps that the Bank should be able to put in place immediately. We should learnt the lessons of the government to investor contracts that where negotiated on water in the last decades; we know by now that for these contracts to deliver positive development outcomes of the government must be in a position to be able to negotiate a good deal.
  • Upward harmonisation is important. There are key gaps to be filled, we need new policy standards and additional policy instruments – non-policy initiatives are not enough to deal with these issues. Need new standards on risk assessment, land, human rights assessment, gender assessment. A key point is that many safeguards policies, including the environmental and social impact policy, are out of date.

The Minister of State made the following points:

  • There are lots of dilemmas and paradoxes: Who owns land? Is the process working well in the country, are the laws being followed? Differences between small owners and others.
  • A moratorium is not the right way. I’m with you on lots of things, apart from that things should stay as they are and that big land purchases are generally wrong.
  • It’s a deep and difficult issue. Buying a large tranche of rainforest to protect it might be a good thing, but buying a large scale land for agricultural development might not always be such a good thing.

The Minister of State left the meeting

IFID officials made the following points:

  • Big supporters of PSIA, but there are a lot of push back from clients who see it as conditionality by the backdoor. This is a strategic and tactical question. We want positive social and environmental outcomes, but to what extent you can increase the requirements and to what extent you can keep shareholders and the bank’s clients on-board?
  • We are broadly supportive of seeing the Bank’s impact of projects strengthened, but don’t want to come out with a list of wants. There are lots of requirements and the clients don’t want to see this. For example, there is pressure from clients (and some NGOs) for WB to do more on agriculture, but clients want a certain type of support.

NGOs made the following points:

  • There is a question of who is the client? There are different objectives for different groups, e.g. the elected politician.
  • How do you see Ruggie’s principles [on business and human rights] in relation to the safeguards?

IFID officials made the following points:

  • UK is very supportive of country ownership, WB has gone a long way on this agenda. Jim Yong Kim wants to go further, people is the WB focus. But the formal relationship is clear – the country’s government and elected politicians.
  • The team at the Bank are aware of the Ruggie principles – there is a process, but there is some politics there.

NGOs made the following points:

  • To what extent the Bank’s clients represent their countries? For example, on land grabs there is a broad network of NGOs engaged, including the African Union. There is lots of political discussion on a regional level, which also calls for a moratorium.
  • In the earlier review of the safeguards, WB didn’t talk to people impacted by investments – instead they talked to governments and consultants. This safeguards review has to find a way to engage impacted peoples, need to build in resources and space to do this.
  • How to rejig the incentives by staff to ensure safeguards are applied? How to make sure what is there is properly implemented?
  • Think we agree that the level of safeguards required is not gauged simply by money, some sectors are higher risk than others in terms of social and environmental impacts. Forests and land are two of the riskiest sectors.
  • Question regarding agreed follow-up meeting on specific safeguards issues.

IFID officials made the following points:

  • Agree that we need to focus as much as possible on implementing the systems, but worry that lots of the safeguards are checklist types. Capacity and incentives are important. Jim Yong Kim wants more links between level of difficulty and staff. Want more emphasis on capacity building, also on the procurement side. We might need some change in resources, and how things are structured.
  • WB is looking at news ways of aligning interests, e.g. IFC to ensure staff are following incentives.
  • DFID will set up safeguards meeting, including FCO, after the WB annual meetings.