Wednesday 25 June 2014
22 Whitehall, London
Gwen Hines, UK Executive Director to the World Bank
Rachel Grant, DFID
Sarah Montgomery, CAFOD
Sabrina de Souza, RESULTS
Tena Navidal, RESULTS
Peter Chowla, Bretton Woods Project
Dario Kenner, Bretton Woods Project
1) Private sector
- Civil society has submitted various letters to the World Bank which are awaiting reply on: Loan to Honduran bank Davivienda (background information), IFC financial intermediary action plan, and IFC offshore tax policy.
- Recently submitted civil society letter on the IFC lessons learned document (background information). Higher level involvement is needed to get concrete changes. We are very worried about institutional culture, incentives and lack of attention to human rights. There needs to be a firm plan with benchmarks, monitoring, public progress reports. When will you take this up again at the board level?
Gwen Hines response:
- You should get replies to your letters soon. I am pleased the Davivienda loan is delayed.
- The Board has taken the lesson learned process very seriously. We have both formal and informal updates, for example quarterly meetings for IFC management.
- Following the case in Honduras and other issues we want more structured dialogue about higher risk projects and those in the pipeline. This could be a formal update to the Board or a more informal conversation, which I think can be valuable.
- Under the restructuring Morgan Landy is under a new team. Strategy Oversight compliance unit. An organogram will be published soon. This means that all risk management, including social and environmental will be at VP level, under Ethiopis Tafara, Vice President and Legal Counsel.
- Some EDs joined the global training on ESG risks for ESG staff, a key discussion is on how to make sure we take this to investment officers.
- Dinant CEO came to Washington and met with EDs.
- IFC budget for FY 2015 is asking for extra resources for oversight and supervision.
- We welcome your efforts to dialogue on higher risk projects but this is too project specific. A project review meeting is not enough to push Investment Officers in a different direction. We need to be able to see changes in public, for example what will be changed and then evidence that this has happened.
- On the budget it is good to see an increase. But is it enough for enhanced supervision needs? It is worrying to still be talking about what is the right amount for supervision. Our position is that if there is not enough money for supervision then don’t do the project.
- Change is needed not just to specific projects or portfolios, but how the IFC works at a systemic level.
Gwen Hines response:
- On the budget: Senior managers have a clear mandate from the Board to work in fragile and conflict states. What we are asking senior managements is: do you need more resources? This is not a blank cheque. We ask what staff do you need and where? It’s clear money should not be an excuse for not doing implementation.
- Part of resource and capability question is the One WBG approach. It’s clear the IFC team should have talked to local World Bank staff on the ground in the Dinant case.
- On incentives you want it to be everyone’s problem not just for specific ESG staff.
- When IFC Roadmap document came for board discussion there were tough questions, the IFC answered these and put them in an addendum to the Roadmap, it would be very useful to you to read these.
NGO points: It’s telling that it is not in the main document and is an addendum
Gwen Hines response:
- I made this point, asked for a formal addendum. We wanted to see information about what projects are coming in earlier, for example by a few months.
- The business review meetings are portfolio-wide, and not only project by project, plus we are getting CAO 6-monthly reviews to the whole board, not just CODE, these pick up systemic issues as well.
- Watch out for Evaluation and Results. They will look at areas like hospitality, we are not keen on IFC financing hotels. Need to not just judge on how much money invested, impact needs to be assessed. This is something UK has been pushing on. The common DFI indicators are coming. Not sure who the new team head is now that Nigel Twose is going to lead a global practice on jobs.
NGO points: What is the state of the Doing Business report in terms of implementing recommendations from the Independent Review Panel? There was meant to be consultation with civil society but there was not. How ensure problems with DBR not repeated in Benchmarking the Business of Agriculture (BBA)? (background information)
- Look at the papers for the February and April board discussions on DBR – they go through 1-by-1 on the recommendations and address what is being done.
- Some recommendations are going forward, others were disagreed with, others are still being looked at.
- As the UK we feel rankings are still very important. Some recommendations of the panel are being taken forward. New methodology includes some minor changes like swapping from ordinal to cardinal rankings and adding a second city in large countries.
- We are looking at how to integrate the Doing Business analysis in the Strategic Country Diagnostic to see if there are country specific contexts that are important e.g. it takes 20 days to setup business but country context changes what this means. This will help drive World Bank policy advice.
- Generally most new elements will be added in 2016 after a test and trial period first to see if this makes sense. The UK is pushing to have a gender indicator included. Next board discussion is in the Autumn when the draft of the report is ready.
- ICAI report; focus on private sector excessively ambitious. Questions around performance and value for money. Will the UK review the role of private sector in development? Not just focus on economic growth.
- Good to see included in Tier 1. What about a tier 2 indicator?
Gwen Hines response:
- DFID is doing review of agricultural programmes. For now WB has its own agriculture strategy from last year, plus new indicators in the corporate scorecard.
- Global Practice directors will start next week. Need to bring in health and agriculture together to discuss where we are as WBG. Good time to ask what they are doing. We want to do collective thinking on agriculture and health/nutrition. There will be cross-global-practice conversations.
- We are aiming to do more joint work between DFID & WB on analysis of how this works
- Agree there cannot just be a focus on economic growth. This is why we included it in the scorecard. Growth does not just solve nutrition so the question is what does. Work at many levels. From health, to education, to sanitation.
- We are still seeing how to incorporate nutrition and measure this. Tier 1 and 3 indicators are good, we know the Tier 2 indicators need work.
- It will be through the Global Practices and the Strategic Country Diagnostics. Find things like it’s a problem if a country with high malnutrition rates does not want to do anything about this.
- Too many silos. Problem in how things are labelled, so may not show up as nutrition. We are trying to get integration.
- A Bank cannot force a loan on a country because they have sovereignty. Even if high need for nutrition action, WB (or DFID) may not have a programme on this if they are confident it is covered by others (donors or government itself).
- On next goals it’s important to not lose focus on implementing current MDGs, especially off-track ones.
- On measuring the agriculture contribution to nutrition, this will depend on Juergen when he starts.
- We have concerns about the draft safeguards framework, in particular over the rights of indigenous people’s rights in Africa to free, prior and informed consent (FPIC). We have comments and sources that indicate an “alternative approach” to IP rights in Africa which indicates that the application of the indigenous peoples’ safeguard policy will be tailored to specific national circumstances thereby allowing governments to choose how they implement FPIC. Also concern on using the concept of “broad community support” which is not the same as applying FPIC.
- There is a huge difference between UN norms such as the United Nations Declaration on the Rights of Indigenous Peoples and ILO Convention 169 that are legally binding, compared to what could be voluntary WB safeguards.
Gwen Hines response:
- Waiting for formal proposals to be presented to Board, not helpful to see comments only, will wait to see what comes to CODE.
- We are interested in reforms which meet development effectiveness need, without weakening the quality, TTLs 2/3 time on reports and 1/3 on design – not right.
- Issues with the “IP” label in some countries which goes back to independence, this can contribute to ethnic tensions, different labels might be used; UK believes we still need to implement to meet the same objective to protect rights of the groups regardless of labels.
- I’m engaged in the debates on safeguards; we are clear with OPCS that we are interested in streamlining but not weakening; there is an internal process to iron out differences, will be at CODE in the next few months; this is a first cut, not the end of discussions on safeguards.
- On gender safeguards I can’t comment now but this is something we are watching very closely.
NGO points: How much engagement will there be, particularly external, on a new gender strategy?
Gwen Hines response:
- New gender cross-cutting solution area director does not start until September
- We are not calling it a strategy. We want a stock take of where we are and to discuss the issues. It will have to be an iterative process. So focus on formal and informal process. If there is a full strategy there will be formal consultation. There may be something like a “strategic framework update”.
- We have pushed for high level focus on gender. Sometimes difficult at the Board level to get gender indicators because of opposition of some other ED’s. We push for gender disaggregated data at different levels, focus on gender impact, showcasing good practice examples.
- Sometimes it feels like an EU and US issue but also developing countries are interested. There are different ways to talk about gender like getting girls into schools.
Chixoy Dam (background information)
- We have heard from Guatemalan groups that a deal with the government on reparations has almost been agreed, but the executive order to implement the 2010 plan is not yet signed.
- The World Bank (and IADB) should be contributing to the cost of these reparations given their role in the project and the money they made out of it, rather than all the costs falling on Guatemalan taxpayers.
Gwen Hines response: The World Bank position is that it is the Guatemalan government that must pay the reparations. Also been informed a deal is close to finalisation.
ICSID: Pacific Rim case in El Salvador (background information)
NGO points: This decision could undermine democracy as well as the cost of compensation. The role of ICSID in facilitating this undemocratic result because El Salvador could not implement its own laws. Will Kim launch a review of whether ICSID’s role is in line with WB mandate of reducing poverty?
Gwen Hines response: please send me the letter, this is something I will have to think about some more.
Spring & Annual Meetings
Gwen Hines asked the groups present for their opinion about the spring and annual meetings and whether they were effective use of resources.
NGO response: generally they can be useful, but civil society groups feel excluded and unrepresented in the main discussions. It would be better if there was more civil society representation throughout rather than having civil society put in its own separate space.