Indigenous peoples and NGOs urge the UN to focus on the human rights impacts of multilateral finance institutions

The UN Human Rights Council – the highest body in the UN tasked with overseeing human rights law – has just finished meeting in Geneva. In a statement, a group of indigenous peoples’ organisations and non-governmental organisations urged the Council to urgently consider, and provide guidance on, the human rights obligations of multilateral finance institutions, an issue of key importance as these institutions review and update their safeguard systems. 

Introduction: Why safeguards matter

So-called “safeguard standards” for international finance institutions emerged as a consequence of destructive forestry, agricultural colonisation and extractive megaprojects financed by the World Bank in the Amazon, Indonesia and India in the 1970s and 1980s.[i] Since then many other multilateral development banks and development agencies have adopted their own safeguard policies and related complaints mechanisms. In addition to the need to protect community rights from destructive development investments, it is increasingly recognised that even well-intentioned conservation and ‘community development’ projects can cause damage and violate rights if they are poorly designed and fail to protect human rights and fragile habitats.[ii] 

Forwards or backwards? The World Bank’s safeguard review and update (2012-14)

The World Bank is currently undertaking a two-year “review and update” of eight of its ten social and environmental safeguard policies. NGOs have highlighted how the World Bank must use the review as an opportunity to upgrade its standards and bolster implementation and compliance systems to increase Bank accountability and deliver sustainable development outcomes. At the same time, they have raised concerns that the Bank’s plan to “consolidate” its policies, with greater emphasis on the use of country systems to address safeguard issues, could end up in weakened standards and less accountability of the Bank and borrower governments to affected communities and the public.

The World Bank’s Forest Policy

As the World Bank reviews its environmental and social standards, a major opportunity to overhaul World Bank approach to forests must not be missed.

The negative impacts of World Bank-financed projects on tropical forests have been an issue of concern for civil society and forest peoples for decades. In the 1980s, World Bank megaprojects in the Amazon and in Indonesia in support for infrastructure projects, agricultural colonisation and transmigration generated major criticism from the public. This in turn generated the political pressure that was a key factor in leading the World Bank Group to adopt mandatory social and environmental standards, known as safeguards, to demonstrate its commitment to preventing harm to people and the environment [See Article 1].

Upcoming publication: Special Edition FPP E-Newsletter on Safeguards

The next E-Newsletter from FPP will be a special edition on safeguards, investigating both the current update and review process ongoing in the World Bank and wider safeguard issues tied to climate finance, private sector standards and regional development bank investments.