Four quick ways to drastically improve the World Bank’s social and environmental protection policies

World Bank headquarters in Washington, DC. Photo: Deborah W. Campos/ World Bank CC BY-NC-ND

Last week, the World Bank released the latest draft of their Environmental and Social Framework. Colloquially known as “the safeguards”, these policies are meant to protect people and the environment from any damaging impacts from the Bank’s projects.

However, we found the draft sorely disappointing. The Board of Directors will make a final decision about whether or not to approve the safeguards on August 4. We’re urging Bank officials to make four simple fixes that would drastically improve these policies.

Disclosure and Transparency

In 2009, the World Bank set the gold standard among development banks for transparency with its Access to Information policy. Shockingly, the draft of the safeguards is a step backwards in many respects when it comes to transparency and community consultation.

Involuntary resettlement is a traumatic experience. Here, a child stands on the steps of her now-empty family home in Cambodia. Credit: Tessa Bunney/Oxfam

The current draft of the safeguards does away with existing requirements for governments borrowing from the Bank to prepare and disclose resettlement plans before a project is approved by the Board.

These resettlement plans are vital; they cover where communities will be relocated, if they’ll have access to schools, health facilities, and employment opportunities, and detail the cost of doing all this.

Without these plans, it’s impossible for the Bank’s Board to know if a community can be adequately relocated, and therefore if the project should be funded at all.

Here’s how the Bank can require this information again:

On page 19 from the Environmental and Social Procedure Draft:

Change just one word:

“…draft documentation will include the instruments…”

Indigenous Rights

The Bank took a big step in recognizing the rights of Indigenous communities to determine what happens on their lands by including the right to Free, Prior and Informed Consent over project activities. Respecting FPIC is one of the key points Oxfam and the LandRightsNow campaign are pushing for.

From Oxfam’s Community Consent Index.

However, the safeguards limit FPIC’s applicability and give a vague definition of “consent,” equating it with “collective support.” This is left open to interpretation — who’s to say what counts as “collective support” for a project? The approval of an Indigenous community should be clear and unmistakable.

Here’s how the Bank can guarantee FPIC in a way which doesn’t allow for confusion and potential abuse:

On page 114 of the Proposed Environmental and Social Framework Draft:

Change one line:

“For the purposes of this ESS, consent refers to the collective expression of agreement by affected Indigenous Peoples…”

Protecting everyone affected

Nobody should be left worse off as a result of Bank-financed projects, which are supposed to help combat poverty. The problem is that the Bank doesn’t require this in writing.

Woman fisher on her boat in the Philippines. Credit: Simon Rawles/ Oxfam

For example, when livelihoods are indirectly impacted — think fishers whose catch is impacted downstream by the building of a dam — the Bank says its “mitigation hierarchy” will apply. In other words, the government should do its best to avoid negative impacts, and if they can’t do that, then they should try to compensate people for their losses.

The reality is a one-off payment is not enough to guarantee that families who have lost their source of income won’t fall into poverty.

As a policy meant to protect lives, “do your best” just doesn’t cut it; here’s how they can strengthen it:

On page 31 of the Proposed Environmental and Social Framework Draft:

Remove “where technically and financially feasible” and add:

“Where significant residual impacts remain, compensate for or offset them. Where impacts remain that involve loss of access to assets or resources or restrictions on land use that do not fall within the definition of Involuntary Resettlement, the Client is required to develop and implement a management plan to restore the livelihoods of affected persons to at least pre-Project level or better.”

Accountability for projects financed through financial intermediaries

Oxfam’s research shows that hands-off development lending through financial intermediaries, such as national or regional banks, can result in serious harm to communities unless it’s carefully monitored.

IFC Headquarters in Washington, DC. Credit: Photo by NCinDC. CC BY ND.

Take, for example, the Bank’s private-sector lending body, the International Finance Corporation. They essentially lend money to other commercial banks, and then that money goes on to fund a whole range of other projects — some good, some really awful ones. It’s extremely hard to track where this money ends up, and therefore it’s nearly-impossible to hold the Bank accountable for any human rights abuses committed in the course of the project.

We hoped that the new safeguards would prevent the Bank from going down that same dangerous path, while raising the bar for the IFC’s own set of standards.

Here’s how the Bank can ensure the projects it finances, either directly, or through intermediaries, are accountable to the same environmental and social standards:

On page 130 of the Proposed Environmental and Social Framework Draft:

Add one sentence:

“… a summary of each of the elements of the FI’s ESMS; sub-project names, sectors and locations; and draft and final Environmental and Social Impact Assessments (ESIAs) of FI sub-projects.

These policies will determine the rights, and in several cases, the future of many lives impacted by the Bank’s activities. Let’s do everything possible to get them right.

This post was written by Nadia Daar, Head of Oxfam International’s Washington Office.