Currently the World Bank has 10 safeguard policies. These are mandatory policies applied to all Bank operations which are designed to ensure that World Bank interventions do not cause harm to social groups and environments that are often overlooked or marginalised in economic development. The policies define procedures to ensure that Bank operations adhere to international law, respect agreed human rights and conform with accepted international environmental standards. [1] The policies aim to help overcome weaknesses in borrower country policies and institutions, which may currently fail to protect vulnerable social sectors and environments. World Bank staff are obliged to comply with these policies in all projects, including sectoral adjustment loans (SECALs), and they are also encouraged to address these issues in developing Country Assistance Strategies (CAS). Compliance with safeguard policies is not currently mandatory in full structural adjustment loans. [2]

The safeguard policies have evolved over twenty years and have gradually been tightened and rationalised. Retraining of Bank staff is currently underway to explain to them how they are meant to apply these policies. Safeguard policies work best when they are succinct and simple, and make clear to staff and clients (who are often not experts in the issues addressed by the policies) how and when safeguard actions should be applied in the project cycle.

Successive reviews of the implementation of safeguard policies show that safeguards are overlooked or avoided when they:

• are unclear
• imply high transaction costs
• imply long project preparation times
• incur significant debts for borrower countries/clients to repay.

Although originally conceived as tools to condition World Bank engagement with borrower governments, the safeguard policies have emerged as the principal instruments used by civil society to hold the World Bank itself accountable to project affected persons. The policies thus provide the main yardstick against which civil society claims to the Inspection Panel are measured.  

The Bank’s current ‘forestry’ policy OP 4.36 consists of a number of injunctions only some of which imply clear procedures for Bank staff. [3] For the purposes of the FPIRS, the current safeguards have been summarised as follows:

1.      No Bank Group financing for commercial logging in primary tropical moist forests

2.      Adoption of policies and an institutional framework consistent with sustainability

3.      A participatory approach to the management of natural forests

4.      Adoption of comprehensive and environmentally sound conservation and development plans with clear definitions of the roles and rights of key stakeholders, including local people

5.      Basing commercial use of forests on adequate social, environmental and economic assessments

6.      Making adequate provisions to maintain biodiversity and safeguard the interests of local people, including forest dwellers and indigenous peoples

7.      Establishing adequate enforcement mechanisms. [4]

Although the OED review mentioned OP 4.36, it did not make a comprehensive assessment of the degree of implementation of the safeguard elements, being mainly focused on the implementation of the World Bank’s more general 1991 Forest Policy (now renamed a ‘strategy’). [5] The main findings of the review (considered contentious by many NGOs) were that the first safeguard had a ‘chilling effect’ on forestry lending, while the overall policy made staff ‘risk averse’. The review also found that participation was weak and that the concerns of forest dwellers were poorly addressed, governance issues were generally neglected and institution-building was weak. In general, safeguards were observed at entry but often not adhered to in the implementation phase. [6]

The OEG review of IFC performance found that the safeguards had effectively terminated IFC investment in logging in the tropics but had provided no guidance on how to deal with other forest types. The policy was not taken into account cross-sectorally and social issues were not given prominence. OP 4.36 was only adopted into IFC procedures in 1998. Even after this, very few operational staff had any awareness of the policy requirements. Few of the clients were made aware of the forest policy. The problem was generic: safeguard policies in general were not formally referred to in IFC project documents until January 2000. [7]

During the FPIRS OED and regional workshops, as well as at the June TAG meeting, a number of revised safeguards for the new World Bank forest (not forestry) policy were proposed, including the following:

• extend the proscription on Bank financing of logging to all old growth forests (boreal temperate, tropical dry and tropical wet)
• apply the forest policy to structural adjustment lending, ESW and CAS*
• secure the tenure rights of forest-dwellers as a precondition to Bank operations
• include an outright ban on negative impacts in forests defined as ‘high conservation value forests’ (including all forest types)*
• condition support in non-HCVFs on internationally accepted certification standards*
• inclusive and participatory decision-making

A number of other proposals were made for strengthening the policy which may or may not have been conceived as potential safeguards:

• focus on institutional reform, governance and anti-corruption issues
• empower local communities to engage in participatory forest management
• improve monitoring and evaluation

Only those safeguards that have been asterisked* have, so far, been accepted by the World Bank as needing to be included in a future policy.

Potential advantages and problems with proposed new safeguards:

• adoption of policies and an institutional framework consistent with sustainability
• a participatory approach to the management of natural forests
• making adequate provisions to safeguard the interests of local people, including forest dwellers and indigenous peoples
• establishing adequate enforcement mechanisms.

The focus group needs to consider whether these issues, which were in OP 4.36 and the other safeguards proposed during the FPIRS process, should or should not be included in the safeguard package. I believe it is self-evident that the four elements that were in OP 4.36 should be retained and even strengthened in the new safeguard policy.

In the documentation provided to TAG 1,  High Conservation Value Forests were defined as:

those that possess one or more of the following attributes:

a)       forest areas fundamental to meeting basic needs of local communities (e.g.  subsistence, health) and/or critical to local communities’ traditional cultural  identity (areas of cultural, economic or religious significance)

b)      forest areas that provide basic services (e.g. watershed protection, erosion control) that are crucial and unable to be effectively replaced by other land cover.

c)       forest areas containing globally, regionally or nationally significant concentrations of biodiversity and forest areas that are in or contain rare, threatened or endangered ecosystems.’ [8]

‘Such areas are to be determined locally through [a] consultation process and based on internationally accepted standards.’ [9]

At first reading, the HCVF concept is very welcome because it embraces social, ecological and biodiversity considerations. However, actually applying this concept as a safeguard, as opposed to a Good Practice objective, may be very problematic because:

• It is a novel concept which has not yet gained widespread international endorsement
• Workable methodologies, acceptable to all interest groups, for determining which areas are HCVFs have not yet been tried out in the field
• It implies a very expensive and time-consuming process
• It is not a concept that will be readily understood by non-experts

As such the concept is unlikely to be workable in the short to medium term, especially if it is to be applied to structural lending as the Bank now intends. Indeed, it is clear that the concept of HCVF has been elaborated principally by those with a forestry project perspective, without due consideration of the difficulties of applying the concept to cross-sectoral and structural Bank operations affecting forests, which is what the safeguard approach requires if it is to be effective. As the TAG issues paper notes:

‘Initially, it may not be possible to define [HCVF] at the national level, in which case the identification of high protection value forest should be pursued for areas likely to be affected by specific operations being planned.’ [10]

There are two risks inherent in the early application of the HCVF approach. One is that the concept will be imposed hastily from the top-down without time to really assess which forests have such values. Serious social and environmental damage may then ensue. [11] The other is that, in the absence of clear, agreed national definitions and procedures, and in the face of very high transaction costs, the policy will be considered impossible to apply. This is likely to have a ‘freezing effect’ on borrowers and will make Bank Group staff even more ‘risk averse’ in dealing with forests.

This is one reason why it may be advisable to retain the current safeguard proscribing Bank financing of logging in old growth forests, at least for those countries which have not yet been through broadly inclusive national processes defining HCVFs.

Social safeguards: securing poverty alleviation

Participation:

OP 4.36 included specific safeguards; on the need for consultation with interest groups in forest related projects (para 1c)); and on the need for policies and a legal and institutional framework to promote the active participation of local people and the private sector in the long-term sustainable management of natural forests (para 1 d) (i)). The revised policy should require no less. It should include explicit language requiring the effective and informed participation of affected groups.

Community forestry:

The revised forest policy is intended to promote ‘collaborative, joint and community forest development and conservation’. [14] The policy should thus include safeguards requiring borrowers or clients to develop credible participatory forestry policies.

Tenure:

During TAG 1 a number of advisors urged the inclusion of specific safeguards to secure recognition of indigenous peoples’ (IPs) and other forest dwellers’ customary rights, provide secure land tenure for the rural poor and institute clear property rights regimes. OP 4.36 already requires borrowers to ‘adopt comprehensive and environmentally sound conservation and development plans that clearly define the roles and rights of... local people (including forest dwellers)’ (para 1 d) (ii)), and to ‘set aside adequate compensatory preservation forests to... safeguard the interests of forest dwellers, specifically their rights of access and use of designated forest areas’ (para 1 d) (iv)). During TAG 1, some Bank staff argued that these issues are already addressed through the safeguard policy on IPs. There are a number of problems with this:

• The policy applies only to IPs and not all forest-dependent groups or forest fringe communities
• The IPs policy (OD 4.20) is currently being revised (as OP 4.10) and it is not yet known what it will contain. If reliance is to be placed on OP 4.10, then it must include binding safeguards securing recognition of IPs’ customary rights. 

International legal requirement:

In line with OP 4.36 (para 2.) the revised safeguard policy should include the statement: ‘the Bank does not finance projects that contravene applicable international environmental and human rights agreements.’