Stephen Lintner
Senior Advisor on Safeguard Policies
The World Bank
1818 H Street, NW
Washington, DC 20433
USA

Dear Mr Lintner,

Draft OP 8.60 on Development Policy Lending

The Forest Peoples Programme has reviewed the proposed OP 8.60 on development policy lending and we offer the following comments.

1. Public participation:

The policy makes no requirement of borrowers for public participation in program formulation, although the Bank ‘encourages borrowing countries to consult’. Bank staff then merely have to ‘describe’ these procedures and any outcomes in their documents (draft Article 6).

q       The lack of any requirement for public participation in program formulation is a major weakness of the draft policy. Such a policy undermines Bank claims that future programmatic lending processes will be transparent. [1]

2. Social provisions:

The policy accepts that negative social impacts may result from adjustment lending. It proposes that these be identified in Country Assistance Strategies (draft Article 9). All that the staff then have to do is to summarize what these likely impacts are and what the borrower plans to do to address them, including identifying any gaps (draft Article 10).

q       No actions are required of the Bank or Bank staff to ensure that there are measures in place that will avoid or mitigate negative social impacts. This is extremely disappointing.

3. Environmental provisions:

Likewise, the policy accepts that negative environmental impacts may result from adjustment lending. These too, are to be identified in Country Assistance Strategies (draft Article 9). Again, all the staff then have to do is to summarize these likely impacts are and what the borrower plans to do to address them, including identifying any gaps (draft Article 11).

q       No actions are required of the Bank or Bank staff to ensure that there are measures in place that will avoid or mitigate negative environmental impacts. This is extremely disappointing.

4. Specific concerns about forests:

During the Forests Policy Implementation Review and Strategy, senior World Bank staff gave public assurances that the new Forests Policy would also address the impacts of adjustment and programmatic lending on forests. In the event the draft Forests Policy did not contain such provisions.

At the time the World Bank’s board was then asked to approve the revised Forests Policy (which was adopted on 31 October 2002), a number of Executive Directors queried why there was nothing in the Forests Policy about adjustment lending. Bank staff offered assurances to the Board inter alia noting that:

q       The draft OP 8.60 contains no specific provisions about forests. Moreover, no requirements for a transparent and participatory process are yet proposed (see 1. above). There are no requirements of the Bank, Bank staff or of borrowers to ensure the adoption of measures to avoid or mitigate negative environmental impacts, including those on forests (see 3. above).

Conclusion:

In conclusion we find that the draft OP is in some measures weaker than the current policy that it replaces. In addition, although the draft policy makes reference to the need for staff to consider environmental and social impacts of programmatic lending, there are no requirements of staff to take measures to avoid or mitigate these negative social and environmental impacts. Moreover the operational procedures for determining negative impacts remain very unclear and are therefore unlikely to be effective.

We urge that the draft policy be withdrawn and substantially revised.

Yours sincerely

Marcus Colchester
Director