Participants list:
UK delegation:
Melanie Robinson, UK executive director to the World Bank
David Kinder, UK alternate executive director to the World Bank
Jennifer Stockill, advisor to UK executive director to the World Bank
Ruth Turner, IDA lead, DFID IFI team
UK civil society participants:
Kiri Hanks, Oxfam
Jo Khinmaung-Moore, Tearfund
Petra Kjell, BIC Europe
Kat Kramer, Christian Aid
Roosje Saalbrink, Womankind Worldwide
Jon Sward, Bretton Woods Project
Sally Tyldesley, CAFOD
Luiz Vieira, Bretton Woods Project
Agenda:
1. General update from UK ED – including General Capital Increase
2. Global Risk Financing Facility
3. 2019 WDR/IEG Results and Performance Report
4. Climate and environment: financial intermediaries and energy access
5. Inspection Panel modernisation
Item 1: Melanie Robinson general update
On General Capital Increase (GCI) [agreed at 2018 Spring Meetings, see Dispatch Spring 2018]: It took a lot of work to get the negotiations over the line, but we were pleased with the final package. We have a strong commitment to IDA18 and the GCI implementation and will prioritise a focus on the poorest countries. In terms of the GCI’s focus on FCAS [fragile and conflict-affected states], this is one area where we feel that the Bank can do better, so we welcome this emphasis. We also supported the IFC capital increase, as we’ve been a supporter of IFC 3.0 and are focusing on its implementation, including the next focus on advisory services. The next step in the capital increase process will be the formal approval of resolutions by shareholders.
We’ve also been engaged with:
- The International Development Committee inquiry into sexual abuse and exploitation in the aid sector.
- Disability Summit coming up in UK on July 23-24; we’re pushing the Bank to include disabled people in developing country contexts.
- Human Capital Index (HCI) – we’ve been involved in the finalisation of the methodology, etc.
- IDA19 priorities – we’re working on starting negotiations for next package, and would like civil society thoughts on IDA18.
Questions:
Kat Kramer: on HCI – are climate change and “just transition” policies linked to this?
Melanie Robinson (MR): No – there was a lot of discussion about what to include in the HCI, but there was a pretty strong push-back from the Bank to focus on the most transformational changes that it can support. So, the HCI looks at the human capital level of kids when they leave school, rather than just transition issues. But this would be part of the wider policy discussion the Bank is having with countries around issues related to human capital.
Luiz Vieira (LV): During our last meeting, we had discussed the petition to the US Supreme Court that challenges the IFC’s claim to absolute immunity from prosecution in US courts. You said that you would have to discuss the issue with the Bank’s legal counsel in order to articulate a position on this. Have you had a chance to do that?
MR: No – I haven’t. But what I would say is that it’s really important for the Bank to be able to take risks, in order to be able to operate effectively in difficult environments. In terms of any complaints that arise from Bank projects, the different independent accountability mechanisms are the place to deal with this.
(Melanie Robinson left the meeting)
Item 2: Global Risk Financing (GRiF) Facility
Jon Sward: At the G7, the GRiF was announced as a new Bank-run facility that will potentially receive donor funding from the UK and Germany (via BMZ). We wanted to use this opportunity to put the GRiF on your radar, as it’s aligned with the general areas of emphasis of the UK delegation, although it’s unclear at this point whether the board will have an oversight of this facility (this isn’t the case in a number of other trust funds that the Bank operates). Firstly, UK CSOs have already been part of consultations on London Centre for Global Disaster Protection & the G20 InsuResilience initiative in the past year. We’re hoping to engage with the formation of GRiF as well; we aren’t sure about the governance structure of GRiF or what instruments it will include, as it is quite new, but are hoping there will be a formal CSO observer status for the facility. There are also concerns about how the impact of disaster risk finance (DRF) disbursed under the facility will be measured, and also how to make sure that instruments don’t dis-incentivize disaster risk reduction. There’s also a lack of accountability for the World Bank’s Cat-DDO [catastrophe deferred drawdown option] instrument, which doesn’t require countries to report to the Bank how they spend the money lent under this instrument. Finally, we’d like to see an inter-disciplinary WBG team involved in the facility, not just people with technical expertise in DRF.
Nicola Ranger: the UK planning to be a donor is pending ministerial approval of the business case that I am working on, but it is extremely early days in terms of deciding how the facility will work. We’re quite focused on ensuring that countries have access to rapid finance after disasters, when it’s most essential, as well as having a mixed set of instruments that are appropriate for each country context.
David Kinder (DK): Thanks for bringing this to our attention. In terms of the make-up of the World Bank’s team, that’s definitely something that we can take up on our side, and we would be interested to hear more about that.
Item 3: IEG report and WDR future of work draft
LV: We were quite worried about the findings of the recently published IEG Results and Performance Report. Overall, the hoped for development outcomes across the World Bank Group are down. For IFC, the findings are particularly worrying: disclosure of project-level environmental and social information from monitoring and supervision reports during implementation is still inadequate, and third-party monitoring could be used more widely. For IFC Advisory Services, the decline in development effectiveness rating was even sharper than for IFC Investment Services projects. Projects rated mostly successful or better for development effectiveness fell from 63 percent in FY11–13 to 49 percent in FY14–16. This is the lowest positive development effectiveness rating registered since IEG first started reviewing IFC Advisory Services projects in 2008.
DK: What’s the relationship between the Bank and how it responds to IEG? There are budgetary constraints that prevent the Bank from implementing all of the IEG’s recommendations, but in other cases there aren’t legitimate reasons as to why the Bank doesn’t adopt the IEG’s suggested changes. But IEG reports are discussed by the Committee on Development Effectiveness, and at the Board itself. One of the things that I’d like to see IEG do is to change the way that they package their findings so that they’re more accessible, and also be able to provide a rapid response on some issues while still being robust. I think there’s a frustration sometimes that IEG reports discuss things that occurred several years previously, and in the meantime everyone else has moved on.
Jennifer Stockill: A new IEG head is to be appointed in the autumn. I agree that there have been issues with Bank uptake of IEG recommendations – we are now piloting new approaches to recommendations and work plans to rectify this. The IEG now has formal mandate on learning – which hopefully will make a difference as they didn’t have a formal mandate before. Time lag is a concern, we would like to be able to fast track things on some issues. Meso-reports – which are quicker to produce – are being trialled.
LV: One of the long-running criticisms of the Bank is that it has a hard time incorporating knowledge that goes against its dominant way of viewing issues. For example, the Deaton Report published in 1996 showed exactly that the Bank ignored evidence that suggested growth was not an effective way of reducing poverty. This provides a nice segway to talking about the draft of the 2019 World Development Report. It’s not going too far to say that we were outraged by the working draft of the report. Firstly, there’s major questions around the procedure: Consultation with the labour movement has been virtually non-existent. But there’s an also significant worry about the content of the report, which is completely in favour of informalisation, eliminating minimum wages, labour market flexibility, etc.
DK: We’d certainly share your concerns in some of those areas, although in the UK one of the things that we’ve benefited from in terms of our economy is having a flexible workforce, so we certainly support that.
Roosje Saalbrink: There are specific impacts on women in a lot of these areas – in terms of informalisation, eliminating minimum wages, and labour market flexibility, women are likely to be disproportionally (and negatively) impacted. Considering the UK government’s commitment to gender equality, it is vital that the government is aware of how the current version of the report’s policy suggestions can undermine women’s rights and gender equality. The UK and WDR research team should consider reaching out to groups that work on labour issues with a focus on the impact on women, including women’s rights organizations, for example Public Services International (PSI) and Women in Informal Employment: Globalizing and Organizing (WIEGO).
Sally Tyldesley: At CAFOD we’re also focusing on the link between the future of work and green jobs, and would like to see this emphasised in the WDR.
Item 4: Climate and environment
(a) Financial intermediaries (FIs)
Petra Kjell: We have been pleased with the reduction in the IFC’s number of high risk investments in FIs. But we wanted to touch base on where we are in terms of the IFC’s commitment to track its fossil fuels exposure in its FIs portfolio, especially for coal. We haven’t seen this. We would also like to see disclosure of name, sector and location of sub-projects, so that where the money ends up is transparent and project-affected peoples can avail themselves to the CAO in the case of projects funded by IFC-backed FIs. The US OPIC does this already, so there should be no legal barrier.
DK: We have supported the IFC’s investment in FIs, but interested to hear your concerns on client disclosure. Can you remind me when the commitment to track exposure to coal was made?
PK: The IFC’s CEO Philippe Le Houérou made the commitment in a blog post last year to track the IFC’s FI clients’ exposure to coal. We’d like to see this publicly disclosed rather than just going to the board.
Jennifer Stockill: If you can send the info on this, we can follow up.
(b) Energy access
Jo Khinmaung-Moore: Thank you to David for speaking at our side event on SDG 7 at the Spring Meetings. One of the issues that emerged out of the Spring Meetings was that there were questions in terms of transparency on the levels of the Bank’s investment for off-grid renewable energy, and the number of new connections it funds. It would be good to get clarity around figures. $500 million for off-grid renewable energy in Africa seems low compared to billions in the overall energy budget. And 71% of energy access investment should go to decentralised renewable energy in order to meet SDG 7, according to the International Energy Agency.
It’s also important what the World Bank counts as energy access. It should be defined as access to sustainable, clean, affordable and reliable energy, especially for the poorest, rather than measuring just basic electricity connections which might not be affordable, reliable, clean or sustainable.
Tearfund will also be producing a briefing for the upcoming World Bank Annual Meetings on the role of public finance in ‘last mile’ energy access provision.
It’s a key moment now as governments gather to review progress against SDG 7 at the UN. Energy is an enabler of development and SDGs including health, education and jobs. This moment is an opportunity for the World Bank to develop a roadmap to SDG 7 and improve its tracking and reporting of energy access spending.
Kiri Hanks: Added to that, Oxfam is sponsoring a proposed panel for the upcoming Civil Society Policy Forum in Bali in October on the alignment of MDBs’ energy spending with SDG 7 and the Paris Agreement. We’ve invited Melanie to join the panel, and we’re really hoping that you will be able to participate.
DK: That’s all great and we’ll certainly consider the invitation, depending on whether we can align our schedules accordingly.
We are closely aligned on this subject. When energy projects go to the Board for approval, e.g. there was a recent one for Tanzania – we raise last mile connections, rather than the traditional upgrade of infrastructure lines. This is something we are consistently pushing on.
In addition to providing direct finance to energy access projects, I think what we are also focusing on is what the Bank is doing in their overall country work to push for energy access.
On the differences in the data and monitoring on energy access, we can facilitate discussion with staff on the numbers.
Item 5: Inspection Panel modernisation
DK: We are chairing the Committee on the modernisation of the Inspection Panel. We would welcome the opportunity to further discuss some of the issues related to this with UK civil society. If we could arrange a conference call on this with civil society soon, that would be very welcome.
