IFI governance


UK civil society meeting with UK World Bank Executive Director Melanie Robinson

19 March 2018

14 May 2018 | Minutes


Melanie Robinson, UK Executive Director (ED) to the World Bank (via teleconference)

Jennifer Stockill, Advisor to the UK ED (via teleconference)

Ruth Turner, IDA Policy Lead, DFID

Mark Collins, World Bank Group Team Leader, DFID

Luiz Vieira, Bretton Woods Project

Graham Gordon, CAFOD

James Hawkins, E3G

Kiri Hanks, Oxfam

Fred Smith, SightSavers

Petra Kjell, BIC Europe

Jon Sward, Bretton Woods Project

Chiara Mariotti, Oxfam

Sanae Fujita, University of Essex

David Stephen Kinder, Alternate UK ED to the World Bank (via phone)

Bruce Liggit, RSPB (via phone)


Jo Khimaung-Moore, Tearfund

Sharon Shukhram, TUC


Item 1: UK priorities for Spring Meetings

Luiz Vieira (LV): Asked about the UK’s priorities for the upcoming World Bank Spring Meetings [which took place on 20-22 April 2018].

Melanie Robinson (WB UK ED): Negotiations on capital increases for IBRD and IFC will be a major focus.

The UK’s other objectives for the Spring Meetings include: engaging with the Bank’s focus on fragile and conflict-affected states (FCAS), including for IBRD and IFC, global public goods such as climate change, and leaving no one behind: gender and disability. We also support mobilising private finance, in line with poverty reduction and decreasing inequality, and a more agile Bank with more effective and less costly management.

Beyond the capital increase discussion, the DFID Secretary of State, Penny Mordaunt, will likely make an intervention on human capital issues [Bank President Jim Yong Kim has championed the Bank’s development of a human capital index, to be unveiled later in 2018]. We want to show that there is a set of issues including health, early childhood education, water, etc., where investments are crucial in order to improve human development indicators. On the topic of sexual exploitation & abuse (SEA): there’s been a Bank meeting with the UN already, and we’re hoping the Spring Meetings will offer an opportunity for a similar meeting with other international financial institutions (IFIs). We’re also planning to focus on rising debt levels in some countries, in terms of our bilateral relations, and measures to tackle illicit financial flows, as well.  We will also be participating in roundtable discussions on Somalia and Zimbabwe.

Fred Smith, Sight Savers: What are the UK’s priorities for the upcoming Global Disabilities Summit?

UK ED: The Secretary of State [Mordaunt] has raised the issue of the Summit in meetings with WBG president Jim Yong Kim, [IFC CEO] Phillipe Le Houérou, and IBRD CEO Kristalina Georgieva. We hope to see increased ambition from the Bank on disability inclusion, in addition to ongoing work such as The Disability Inclusion Accountability Framework (due to be finalised soon).

Item 2: Climate & Environment – recent WBG announcements, energy access

Jon Sward (JS): When we last met in September, you were introduced to the Big Shift campaign, which is a coalition of 40 civil society organisations (CSOs) around the world working on environmental issues. We have three ambitious asks: for public finance institutions (PFIs) to divest from fossil fuels funding by 2020; to scale up PFIs’ investments in renewable energy; and to prioritise universal energy access within PFI lending portfolios, in order to meet SDG7. We wanted to follow up with you today on two Bank announcements related to climate that have taken place since we last meet with you in September: the WB’s announcement in October that it will begin tracking emissions in 2018, and the announcement at the One Planet Summit in December that it will end ‘upstream’ finance for oil & gas after 2019.

James Hawkins (JH): What is the plan in terms of the WB’s emissions tracking? Obviously we would support the methodology being as robust and transparent as possible.

UK ED: The UK is very supportive of both announcements, and I think it represents Jim Kim’s commitment to this issue. I need to follow up on thresholds and emissions reductions targets. The emissions target is a logical next step [in terms of post-2020 targets for the Bank]. For emissions tracking, it will include high-intensity sectors first, then emissions intensive sectors.

JS: We were encouraged by Jim Kim’s announcement at the One Planet Summit that the Bank will end finance for ‘upstream’ oil and gas by 2020. From a CSO viewpoint, we would like to start the discussion now about how the IDA exemption in the upstream pledge, which allows the Bank to fund upstream gas projects in low-income countries, will be implemented. There are concerns that this may not be stringently implemented. We’d also like to see the pledge applied more broadly to a moratorium on infrastructure that supports the development of new upstream oil and gas, such as pipelines that link new ‘upstream’ developments to markets.

David Stephen Kinder (DSK): There was an interesting set of announcements around the One Planet Summit: the underlying commitment to greenhouse gas (GHG) accounting and the introduction of using a shadow carbon price to evaluate potential investments have flown under the radar, but these may ultimately be more important in ensuring a shift towards low carbon projects than the upstream announcement, due to the limited number of upstream projects that the Bank currently funds. The factoring of the shadow price will really affect how projects score in internal Bank evaluations. What are the right emissions reporting thresholds? There is a UN agreed methodology that would be useful to reference, and it would obviously also be helpful to have alignment across the MDBs, in terms of their approach.

UK ED: In terms of Bank management, it’s very clear – from President Kim’s leadership – that their policy should be to support Nationally Determined Contributions (NDCs), and they are already giving countries advice on stranded assets. At the same time, we need to be making the case for renewables, which I think we are doing through the Scaling Solar programme, which recently completed a $0.04/kw hour bid in Zambia. If countries want to use the IDA exemption, they will need to make the case for it, which will be difficult to do. In terms of infrastructure, we need to make sure that what we’re doing is in line with a low-carbon future, but I think the Bank is moving in this direction with how it’s supporting the NDCs.

Graham Gordon (GG): We met earlier today to discuss CAFOD’s campaign on energy access, so I won’t repeat what has been discussed. But from the point of view of Bank lending, we’d like to see funding for energy access as a share of the portfolio increase, as the Bank draws down its fossil fuel investments, and we’d also like the Bank to introduce a series of milestones in order to track the shift in this direction.

UK ED: That your campaign has attracted over 30,000 signatures shows that you’ve hit on an important topic. There is a question of how to track access of the poorest people. We need to look at it at the project level.

GG: I would encourage the Bank to engage with SEforAll [the UN body dedicated to reaching Sustainable Development Goal 7], and others who are working towards the universal access goal of SDG 7 as part of this effort.

Item 3: Development Policy Loans (DPLs)

Petra Kjell (PK): Again, I wanted to highlight 2017 research produced by BIC Europe and others which showed that some DPLs have required ‘prior actions’ that created investment incentives for fossil fuels in some countries. We remain concerned that the DPF [Development Policy Financing] doesn’t have safeguards, per se. The only guidance that exists is very vague on this topic. When we met with the other European EDs to the Bank last week in Brussels, there was some appetite from Dutch ED for a DPF review, once the ESF [Environmental and Social Framework, the Bank’s new project lending safeguards] is implemented. Would you support this?

UK ED: I think there are concerns about accountability, transparency and incentives. What prior actions are included in the DPF are key. Prior actions have been one of the most effective policies for getting rid of fossil fuel subsidies, introducing renewables, and other progressive policies. We should explore more use of DPFs in the climate space to put countries on low carbon pathways. In general, we’re trying to increase the proportion of funding committed to climate change, which will involve looking at DPF funding in terms of where it goes. On safeguards, the biggest win is the ESF reform, to make them more developmental. This is more about capacity building and that approach needs to apply to all investments. This is about the overarching government frameworks, not just about DPF. This is a more transformative route than a DPL review, which takes time and is costly.

PK: How will the Bank understand the impacts of DPF, in light of for example the critique by the IEG [the Bank’s Independent Evaluation Group], and improve the instrument without a review?

UK ED: At Board level, we do review prior actions and can alert if we note issues. There’s nothing non-transparent about that – they’re included in the DPL documentation when it comes to the Board. We need to build capacity for the ESF, but I’m not sure for the DPF that introducing a safeguard is the most effective way to ensure that prior actions support low carbon development. DPF is about budget support, so need to be about building capacity at this level.

Item 4: Maximising Finance for Development (MFD)/Public-Private Partnerships (PPPs)/Anticipated Impact Monitoring Mechanism (AIMM):

LV: We wanted to continue the discussion we started in the last meeting about the role of private sector, given the shift towards Maximising Finance for Development. Our concerns are illustrated by the findings of the independent panel commissioned by the Bank to evaluate the Doing Business Report (DBR). As you know the panel recommended the Bank cease using the ‘paying tax’ indicator and also highlighted the report generally has a negative bias against regulation. One can also look at tax competition in Europe to see the impact of the threats posed by a drive to attract private investment at virtually any cost. If European countries are forced to bend to private sector demands, what hope do developing countries have? CSOs working on PPPs also had an independent legal analysis done of the Bank’s standard PPPs contracts, which found that the clauses they contain are skewed towards private sector. Also, there is the issue of staff incentives within the Bank, and how these match up with the ultimate development outcomes of projects financed. How is UK trying to grapple with these issues, given the recent critical discussion of PPPs in the UK with the collapse of Carillion?

UK ED: This is an evergreen issue. How to balance this? Philippe Le Houerou [IFC CEO] has shifted the power and debate within the IFC, in line with twin goals of the Bank [eradicating extreme poverty and promoting shared prosperity]. The new AIMM methodology [the IFC’s new development impact tracking framework] will really force development officers to sit down and define the anticipated development impacts of projects. This is having a fairly profound impact on staff.

LV: In the case of the DBR, we’d like to see it take into account what’s good for local businesses rather than businesses generally. We’re not opposed to support to the private sector, as long as it does benefit local economies and businesses. We are not convinced that the interests of big multinational private sector actors are necessarily aligned with those of small- and medium-sized local businesses. With AIMM, we’re very happy it’s happening, but ultimately its impact will depend on how development outcomes are defined and measured. In the case of MFD, if the Bank is talking about ‘crowding in’ institutional investors, that means taking on big infrastructure projects, because those are the only sort of investments that those actors are likely to invest in. It doesn’t seem to us therefore that MFD is particularly or adequately focused on support to national SMEs.

UK ED: On the question of whether MFD is related to the mega-infrastructure push. It’s important to see MFD as comprised of different layers of investments. For institutional investors – that’s more IBRD focused, than IDA or CAS, where they won’t invest.

LV: Would you support the Bank introducing a PPPs assessment before it supports such projects?

UK ED: I can’t commit to a specific policy here, that’s for the Bank and the Board to consider, but we want policy done right.

LV: What about for CAS and AIMM, would you support the development of a specific set of indicators for CAS, including looking at how proposed investments would affect the political settlement?

UK ED: This is a live conversation at the moment. Part of this is about bringing together WBG & IFC upstream and planning tools. Interesting thought about how it could be incorporated into AIMM, I will discuss with the IFC.

Item 5: Inspection Panel modernisation:

Kiri Hanks (KH): We are advocating for the modernisation of the Bank’s Inspection Panel (IP) in line with other MDBs’ best practice. This includes three components: a conflict resolution mechanism; advisory function; and [independent] monitoring.

UK ED: Daniel Bradlow is doing an assessment review of the IP which has just begun, looking at the three areas you’ve mentioned, and will involve consultations with CSOs. He will then provide the Board with a report, but it will not discuss recommendations, just the pros and cons of different approaches, and the report should be available in the late spring or summer.

LV: There is currently a petition by communities in India affected by the IFC’s Tata Mundra investment for the US Supreme Court to hear a case, which challenges the IFC’s immunity to prosecution in US courts. Would you support the Bank’s waiver of its immunity in cases such as these – where the IFC has not denied the alleged harms? Isn’t the best way to hold the Bank accountable through the legal system?

UK ED: I can’t speak to this now as I would need to seek guidance from the General Counsel.

Item 6: AOB

Jennifer Stockill: We’ve had some correspondence with the Bretton Woods Project about the revision of the draft ESF Guidance Notes for Borrowers (GNs) [part of the new ESF]. I know there was a recent meeting between Bank management and CSOs on this. Is there any update from your side?

Jon Sward: There was a meeting last week, which I was able to call in to. The Bank has received some 3,000 comments on the ESF, and they are compiling a response matrix that they will publish, which will explain whether and how each comment is incorporated into the revised GNs. They are also in the process of drafting a ‘good practice’ note on Gender Based Violence that will be aimed at staff who will be assisting borrowers in implementing the new ESF, along with other good practice notes. The concern from the CSO perspective is that it seems a second comment period for the revised guidance notes – which was one of the main asks of a CSO letter sent to management in December – is unlikely to happen. The problem now is that management has set themselves the task of revising these notes substantially, and there is a worry they still won’t be a very useful tool for borrowers at the end of the next revision. But, given that they are ‘living documents’ and can be revised at any time, CSOs will closely review the revised GNs once available.