Attendees

WB:

Melanie Robinson, UK Executive Director

Phil Stevens, UKDEL

DFID:

James Alawi, DFID

Stephen Sabey, DFID

NGOs:

Kate Geary, BIC Europe

Alison Doig, Christian Aid

Thomas Maddow, Fauna and Flora International

Matti Kohonen, Christian Aid

Aida Kowalska, Birdlife International

Daniel Pullan, RSPB

Petra Kjell, Bretton Woods Project

Luiz Vieira, Bretton Woods Project

Apologies:

Noelle Kumpel, Zoological Society of London

Polly Meeks, ADD International

Helen Tugendhat, Forest Peoples Programme

Preethi Sundaram, IPPF

ED update:

Highlight of focus of annual meetings and next six months:

• Working on pieces that go to governors – Forward Look to 2030/ SDGs and COP. Focusing on establishing the ‘Gateway to a better Bank’ to ensure that finances are properly aligned with twin goals. Looking to concentrate on FCS (fragile and conflict-affected States) and IDA, that is ensure support goes to those that most need it.
• More agile Bank – FCS. Regional public goods – refugees, climate, etc. Better at leveraging private finance.
• Better knowledge – advice and knowledge – specificity and relevance. Also crisis response – in partnership with UN – risk financing, etc.
• UK pushing hard on all of the areas above. This is top priority for annuals.
• Voice negotiations – new dynamic formula is being developed for discussion at annuals. If the proposed formula is agreed, work will turn to implementation. Special capital increase? Balance economic weight vs. development mission contribution (through contribution to IDA). Looking for more equitable voting power.
• One flagship event at annuals on private leverage.

Third IDA meeting will take place immediately after annuals. Discussions are coming along well. There is a good package with a good opportunity to leverage IDA. Looking to double IDA commitments to FCSs and resource Refugee Window. New IDA Private Sector Window (PSW) seeks to better align IDA with poverty reduction. IDA special themes also include climate and gender. PSW (if approved) will focus on the creation of ‘good’ jobs.

The next IDA meeting will take place following Annuals. Had two meetings thus far and the discussions are coming together very well. Exciting opportunity to leverage IDA. Policy commitments UK has pushed for FCS doubled, refugee window; PS window finding a way for Bank to do much better; strong commitment on gender and Climate Action Plan absolutely top priority for UK; and job creation.

Look to use annuals to ‘land’ policy commitments from shareholders – December will be time to nail down financing commitments.

CSO questions:

1. Where is the Forward Look documentation? Documentation on the process has been totally lacking. Will documents be made available prior to the annual meetings? Will UK push for greater transparency on this process?
2. Indigenous Peoples Policy – FPP question about Tanzania waiver. What is the UK position? CSOs shared letter from Tanzania. DFID/ ED were asked whether UK have access to the letter.
3. Financial Intermediaries question – BIC Europe – sector of great concern. CSOs are not particularly concerned with FIs as vehicle for expansion of SME finance. However CSOs continue to have concerns with high risk projects….and negative human rights impact. At annual meetings new cases will be highlighted by CSOs. Not convinced that IFC is doing enough to ensure positive impact and application of performance standards, particularly through commercial Banks.
4. Forest Action Plan. What is the relationship with safeguards? What is the relationship between climate and forest action plans? Will Bank provide a definition of ‘forest smart’ lending as current definition of this important concept is missing.

ED answers:

• Don’t know about the Forward Look documentation – will follow up. Spring meetings document only outlined areas for focus. Otherwise the discussions have been limited to informal discussions (e.g., through seminars – less formal with fewer ‘official’ positions). Very early in the conversation. Early thinking. At annuals meetings documents will be developed and possibly shared. Events are also being organised at annuals – including for example relative to events at World Humanitarian Summit.
• Tanzania- the Board, including the UK, was satisfied that the proposed waiver and Vulnerable Groups Planning Framework (VGPF) approach would be materially consistent with implementation of the policy, but recognise there was concern about the sequencing of discussion – final consultations on VGPF before or after Board discussed the potential waiver. If issues arise they must be addressed in project implementation. The Consultations were a condition for project effectiveness on consultation. UK comfortable that people could benefit from the project, and that proper consultation would happen. Balance was well struck in the end.
• Financial Intermediaries – Thank you… Come from same perspective – important to reach SMEs, etc. Recognise that there are also problems, as do IFC – to bring FIs to standards – need for pragmatic solutions. It is impossible to bring all FIs up to the desired level immediately – cannot screen for perfection so pragmatic solution is to be able to screen so that FIs meet at least a reasonable standard and are committed to improvements. Very usefully brought this issue to the forefront – need transparency and grievance mechanism to capture when things are going wrong. IFC is moving for increased disclosure over time – this is a reasonable way of dealing with that. The IFC must pressure for greater client accountability. ED agrees with push for increased disclosure… Very useful to hear new problems – both specific and assess systemic issues.
• Forest Action Plan – clearly key link with climate issue. Looking for coherence – Looking also through a people-centred approach. Attended meeting with finance ministers on climate/ forest during Springs – convinced that finance ministers see the rationale for protection. The action plans do not say much about safeguards as these had not yet been approved. Looking for consistency. ESS6 has proper mitigation hierarchy.

Safeguards

ED:

• Deepest consultations to date on WB systems/ proposals. New draft is the result of intense negotiations and is now on its final stages. Final third draft available. Final decision 4 August. Important to have final opportunity for CSOs to comment.
• ED considers the current draft a good pragmatic outcome – impossible to please all parties. 189 shareholders, etc. Need for compromise. Believes that the SGs have been modernised and provide good coverage and will ensure positive social and environmental impact. It is important to recognise that current document is focused (as has often been requested by CSOs) on a move to a more developmental approach – build capacity. Very pleased to see this, in contrast to previous WB ‘bubble’ approach.
• Move to more of risk-based vs. one size fits all approach. More impetus for staff to understand and analyse risks –also greater focus on application of SG throughout the life of project. “This is just the beginning” – implementation is key. Proper resourcing is also imperative.

CSO questions:

Overall concerns:

1. In addition to general concerns with the draft as such, CSOs are also concerned with implementation. It is essential that CSOs have an opportunity to input into guideline documents which will frame implementation.
2. Asked about the sequencing of events once SGs are approved. When will budgeting and incentive structures be discussed? Is there a more detailed timeframe available?
3. Scope of application: For example Development Policy Lending (DPL) is not covered by present SG. The previous UK ED noted that Bank would look at this when SG review is finished. What are the next steps and timeline?
4. Borrower framework – How will framework be benchmarked? How will this be done during capacity development phase?

ED answers:

• Guidelines will be developed under ESS. Work also on implementation plan – management plan (15 month process). Once SGs are approved guidelines will be developed – looking at IFC policy, best practice in other MDBs and sector specific expertise- will be released as they are completed. Do not know process of consultation. Implementation plan has begun but not complete. Also focus on client readiness.
• Budgeting and incentive structure. While the Board and shareholders have been focusing on budget control generally within the Bank, it is recognised that properly resourcing of SG implementation is critical. Incentive structures are broader issue – focus on risk assessment and use of indicators – pushing for a risk-based approach.
• Scope of application: Yes, this review is limited to investment lending and any next steps regarding review of DPL, for example, must wait the completion of the current SG process. Will look at coherence of DPLs and P4Rs in a later phase.
• Borrower framework – NGOs seem schizophrenic – However, we should see this as an opportunity for the Bank to strengthen clients’ capacity to manage environmental and social risks in all their investment projects – not just those financed by the WBG – rather than an attempt to water down the standards.
• Follow up questions:

1. Guidelines were touted by Bank SG staff during SG discussions as the tool that would clarify remaining questions –therefore, as so much depends on them, CSOs insist that there is a clear need for consultations.
2. Pleased to see GHG measuring as part of projects, but there remains lack of clarity about emissions. It is not clear whether the document speaks of emissions over lifecycle of the project or just construction period – you capture the information but what are you going to do with it? How is Bank taking the NDCs seriously and CoP21? CSOs plan to approach the ED for a side event for Annuals on low carbon development.

ED answer:

1. CAP and 28% are very clear on Bank’s role in supporting NDCs and ED is confident that the Bank is committed to this.

ED departed

Steven Sabey  – Unfortunately there is little scope for changes to the current draft document, however it is nonetheless useful to have input as CSOs insights can be useful during any subsequent negotiations.

CSO questions:

1. How are primary forests protected? ESS 6 Forest – focus on biodiversity and ‘stripping of people’ from the ESS6.

Answer (Phil):

• Guidance note – unclear if these will be open to a consultation process, as there is no requirement since they will not be approved by the Board. Perhaps the Board will be more engaged than usual on this process given the controversy surrounding the safeguards review. . The process will be led by (and is the responsibility of) management.
• DPL – no specific timeline to date. Get SG approved and these will be looked at as part of a retrospective
• Cannot comment on forests: would think that forest peoples would be covered by ESS1. Requested detailed question in writing.

CSO question:

1. Where is the language on what happens when/ if the project will not go ahead due to compliance risk/ concerns?

Steven – Thanked CSOs for support – document has quite a lot of what the UK government wanted. Recognises the need to focus on implementation. Thanked for constructive input.

IDA

DFID:

• 2nd meeting has taken place. 3rd in DC after annuals – 4th in December. Third is most important as commitments and resourcing must be agreed.
• Financing – Some countries willing to put significantly more. Likelihood of significantly larger replenishment.
• IBRD/ IFC transfer quantities remain open for discussion. Resource allocation remains a particular point of discussion, particularly regarding proposed transition support for countries that ‘graduated’ from IDA, which is seem by the UK as excessive. Available on non-concessional rate.

Policy areas:

• Consensus on doubling support to FCS. UK pushing strongly. Risk mitigation window – funds available to countries vulnerable to falling into conflict. Resourcing for Bank and partners in these countries.

Special themes:

• General sense by shareholders that papers produced for latest meetings where not ambitious. Need to go beyond ‘designing new tools’ – pushing hard on Jobs. Gender – good discussion – operationalising new gender strategy.
• Climate: pre Myanmar meeting – proposals to strengthen work on climate –Management has been more responsive and better at listening compared to previous IDA discussions.
• Support for sub-window for refugees – Catastrophe drawdown options – previously only available to IBRD.
• There has been general support for PSW: lots of questions about how this would work remain however.
• Phil – leveraging – reflows from existing loans – 3 to 1 ratio input to resource. Results measurement system – alignment with Scorecard and SGDs. Third tier – organisational functioning (as DFID). Disaggregation by gender and FCS.

CSO questions:

1. Tax: Pleased that illicit flows and taxes are now part of IDA beyond resource recovery. The question remains how to capitalise on South-South learning. Is there a way of measuring illicit financial flows? Implementation of SDGs will require much greater domestic resource mobilisation (DRM). It would be useful to have the Bank measure elicit corporate flows.
2. IFC – OFC – request for update from 14 July Board discussion. Scope to look at broader than current BEPs analysis.
3. PS window: PS solutions led by market mechanisms for utilities – UN HR special rapporteurs have expressed significant concerns around privatisation of basic services such as water education and health. In FCS the ability of state to provide services is an important part of conflict dynamics. Is this addressed? Also use of PPPs: lots of concerns around this. Most conflict affected states are not quite the level of Finland which is cited as example of effective design and management of PPPs – the impact of PPPs on debt sustainability remains a concern (voiced by, among others, the IMF). Also ADB high level paper on concessional versus non concessional lending. To what extent is IDA considering debt impact?
4. Infrastructure: lack of consideration of access to population vs. commercial sector. Document mentions 5GW in renewables. Does this include large-scale hydro? Will UK look at access issues?

Answers (Phil):

• Doesn’t know outcome of IFC OFC meeting. Also pleased about the inclusion of illicit flows; would like to see analysis by the Bank.
• Grant vs. loans – will significantly increase grant component. One proposal – remove grant discount penalty. Refugee window will in some cases also be resourced through grants.
• Highlighted need for careful use of terminology about concessional lending as even IBRD lending is concessional (when compared to market rates) – only provided to countries deemed in low risk of debt distress.
• On PS window very much agree that there are risks in FCS and certain sectors – but this is about working closely with the Bank and IFC. IFC private education will not reach the poorest but there is a big demand for private education.
• Infrastructure – agree that Bank must also become involved in infrastructure access issues. Want to see transmission projects not just generation.

CSO comments:

1. Results measurement – SDGs – is that not related to leave no-one behind? – e.g. Energy access is implicit. Results measurement and link to SDGs: if you measure energy access it’s indicators from SDGs – what are you measuring? Energy should not be measured only from a gigawatt perspective, but by access and energy for all. Lots of nice words but not sure how you are going to ensure it’s delivered. Monitoring staffing financing packages, etc?
2. Questions about measurement and support to countries, for example, to develop bankable projects that increase access…
3. How to build capacity to deliver NDC. World Bank still quite attached to fossil fuels. What is being done to ensure transition and transparency and delivery?
4. On the climate paper it’s great to see land use change is recognised as a major aspect of GHG emissions. But there’s no recognition of people’s rights to resources – yet research shows time and again that forests are best protected by secure tenure rights for forest-dependent communities – would be great to see this in there and for UK to champion people’s rights to secure tenure as a way of combating climate change.
5. The IDA PSW paper rightly notes challenges related to conflict of interests between IFC Technical Assistance and investments in IDA. How will these be addressed? Has discussion on the issue begun? CSOs mindful of potentially significant negative (if unintended) consequences of WB interventions in CFS not guided by conflict analysis…
6. Gender – need to broaden discussion/ interventions beyond Female Labour Force Participation, gender approach must go beyond economic rationale.

Answers (Phil):

• Climate: committed to 28% = foundation of climate action plan. Country level activity is obviously very important. NDCs should be part of the development of CPF. Climate screening of every project however requires higher level view. How can we hold Bank accountable: Banks’ corporate scorecard – where do mitigation and adaptation feature in the scorecard.
• Banks Corporate Scorecard – need to discuss climate adaptation. On fossil fuels – where viable and possible Bank will focus on alternatives. One case last week – not even gas was possible. Need to take CPF perspective.
• Land use: IDA papers cannot say everything, however important to ensure land rights.
• On gender – Agree with Karen Grown – Bank’s role is to focus on economic perspective. Strategy does speak to other components.

Steven Sabey: Experience with IDA is that if you can get some good substantial policy-based commitments then Bank will deliver them. Bank will not cost a target they are not confident they can meet. IDA will not spell out how they will do it, but will rather focus on impacts.

• During discussions there has been large degree of agreement on domestic resource mobilisation and other tax issues.
• Regarding rights of peoples in forest: one of the criticisms of the documents provided to date is precisely that they have not sufficiently interacted with each other. DFID did make a strong push for more clear linkages.
• On ‘leave no-one behind’: yes, UK has strongly pushed for it, and it remains very important for the UK. Move away from averages and towards how are the worst doing. Plus push for marginalised communities being there across all themes.
• PSW – governance arrangements including conflict of interest questions are still under discussion.
• Are IDA papers still open to influence? Answer: there will be a draft deputies report next in one document -draft in October that will draw on special themes papers we discussed in June. We can still propose tweaks and changes.

Questions regarding MAR: Will MAR be on time?

Answer: Minister mentioned that MAR will be released shortly – in the autumn. Civil Society Assessment may be released sooner.

Actions:

1. Melanie/Phil to follow up on transparency and release of Forward Look docs
2. Phil to follow up on climate questions raised during the meeting.
3. CSOs to provide written input on concerns about forest peoples and ESS6
4. DFID-CSO: IDA – Mid Sept – potential discussion post release of paper