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

Even community-based projects financed by the World Bank have had harmful impacts on forest communities due to poor design
By
Tom Griffiths

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.

In November 2012, World Bank Group President Jim Yong Kim publicly committed the Bank to ensuring that the review process will not result in dilution of existing standards. NGOs have welcomed this pledge, but serious concerns remain about both the content and scope of the review and the process for public consultation on the development of a new safeguard framework. This article provides a summary of the review and sets out some key NGO concerns on content and process alongside recommendations for addressing gaps in the review and measures needed to strengthen the Bank’s safeguards framework.

Some key recommendations of civil society and indigenous peoples[i]

  • A revised safeguard framework must include measures to ensure effective policy implementation, including reforms to staff incentive structures and provision of more resources for safeguard application and monitoring
  • Any consolidation and simplification of policies must not result in dilution of standards
  • Binding standards for Bank staff and borrowers must be maintained
  • Safeguards must be harmonised upwards to bring them into line with international human rights and environmental standards, including those enshrined in the UN Declaration on the Rights of Indigenous Peoples (UNDRIP) and related human rights instruments
  • A new integrated framework must include binding standards on key emerging issues, including human rights, FPIC and land acquisition, among others
  • The review and new framework must address social and environmental risks in all forms of Bank lending instruments (including programmatic loans), not just investment finance
  • Consultations on the review and policy update must be meaningful and ensure targeted outreach to communities and vulnerable groups affected by Bank loan operations
  • The review and update process must result in strengthened accountability of the World Bank Group to affected communities and the public

Content and aims of the review and update process:

The policies under review include the Bank’s policies on Environmental Assessment (OP4.01); Involuntary Resettlement (OP4.12), Indigenous Peoples (OP4.10), Forests (OP4.36), Natural Habitats (OP4.04), Pest Management (OP 4.09), Physical Cultural Resources (OP4.11) and Safety of Dams (OP4.37). The policy for Piloting the Use of Borrower Systems for Environmental and Social Safeguards (OP4.00) is also under review.  

According to the Bank’s Approach Paper launched in October 2012, one of the main stated objectives of the review is “to strengthen the effectiveness of the safeguard policies in order to enhance the development outcomes of Bank operations”, while noting that the Bank is “aware of advances in regional and international practices to address environmental and social issues, and the emergence of sustainability frameworks in use by the broader international and development finance community”.[ii]  To this end, in addition to the policies noted above, the review will also explore how the Bank might address seven “emerging areas” not adequately covered by existing policies, including:

  • human rights
  • free, prior and informed consent (FPIC) and Indigenous Peoples
  • land tenure and natural resources
  • labour and occupational health and safety
  • gender
  • disability
  • climate change

Review schedule:

The revision process is divided into three phases as follows.

Phase I: October 2012-April 2013 [internal and external consultations and “analytical work”]

Phase II: May-November 2013 [consultations on a new draft “integrated framework”]

Phase III: December 2013-June 2014 [finalisation, final consultations and presentation to Board][iii]

Phase I is already coming to a close. Consultation meetings and dialogues during this first phase have been held around the world, beginning with an NGO information meeting in Washington in November 2012. Several one-day meetings with “expert focus groups” selected to analyse each “emerging area” have also been held in the first quarter of 2013. Summaries of both the general consultation meetings and expert discussions are posted on the Bank’s safeguard review website (see Further Information section below).

Shifting timetable:

As this article goes to press, there are signs that the whole safeguard update schedule may be put back as the World Bank indicates that any new safeguard framework must be consistent with its forthcoming new 'modernization' agenda. This modernization plan is currently not expected to be launched until October 2013, meaning that any first draft of a new safeguard framework may not appear until the end of this year.

Filling the implementation gap?

In response to key recommendations stemming from the 2010 Independent Evaluation Group (IEG) review of the Bank’s safeguard system highlighting the need for strengthened application of safeguard standards[iv], the Bank’s Approach Paper notes that the review process is an opportunity to carry out several actions to improve safeguard policy implementation, monitoring and supervision (at Section V). The same paper claims that the Bank will consider ways to “transform” the “approval culture” to one that focuses on results and outcomes.

Notwithstanding these positive public commitments, current indications suggest that the safeguard review process is not paying adequate attention to the crucial question of safeguard implementation. To date, the initiative appears to be mostly focused on re-writing policies and guidelines, rather than re-vamping the whole safeguard framework as an integrated system. Meanwhile, the Bank’s recently concluded and controversial Investment Lending Reform (ILR) initiative, which consolidated many distinct policies in one new shortened policy instrument, has slackened supervision requirements. This weakening has occurred despite assurances from the Bank that the ILR process would not lower standards.

In its formal response to the IEG safeguards review, Bank management had promised to carry out a review of current practices with respect to responsibility, accountability, incentives, staffing, and budgeting for safeguard processing and supervision.[v] Repeated requests for information on this vitally important review have so far drawn a blank from the Bank. Questions raised in the Phase I consultations have so far not generated any meaningful response to NGO questions enquiring about Bank plans for institutional reforms to improve safeguard implementation.

NGOs, including FPP, maintain that the review must embrace the need to radically overhaul the implementation and compliance framework of the Bank to ensure that revised and new standards which are adopted are applied effectively in its projects and programmes. This means that the new integrated framework must include a specific chapter on implementation, compliance and measures to secure positive outcomes for communities and the environment. Civil society organisations warn that without clear plans to improve implementation, any new integrated safeguard framework will fail to deliver useful results.

Learning lessons?

The Bank claims that the safeguard review will be informed by past and ongoing sector and thematic reviews (Approach Paper, paragraph 36), yet it remains unclear how the new framework will take project implementation experience as well as official and independent evaluations on board. NGOs have consistently asked how the Inspection Panel investigations and findings on compliance will shape the new safeguard framework and they are calling on the Bank to provide the Inspection Panel with a formal role in the review process.[vi] Civil society has similarly drawn attention to the key evaluations undertaken by the IEG, which provide detailed recommendations to the Bank on the implementation of safeguards. Bank management advise that they are talking to the Panel and have invited comments, but that any formal participation of the Panel in the review process is something for the Board to decide. For its part, the Board advises that it is Bank management who is managing the review process.[vii]

NGOs are requesting that the Bank make public its discussions with the Inspection Panel so far, and insist that systematic documentation of lessons from the Panel must inform the design of any new safeguard framework. NGOs further request that the Bank make clear in the safeguard review how it is responding to relevant IEG evaluations.

Narrow scope for the review:

While civil society organisations have welcomed attention to “emerging areas”, they have repeatedly questioned why the Bank review is so tightly confined to consideration of only the eight identified safeguard policies and their application to “investment projects”. All other financing instruments are barred from the safeguard review discussions, removing a significant portion of Bank financing from revision of changes needed to the Bank’s social and environmental safeguard framework. The Bank’s current response is that extending the scope of the review is a decision for the Board and this request from civil society will be passed to the Committee on Development Effectiveness (CODE). Civil society has pushed consistently for all financing instruments to be covered by the review, pointing out the need for Development Policy Loans to be included[viii] and arguing that any new financing instruments must be part of an integrated Bank-wide system of assessing, avoiding and managing social and environmental risk.[ix]

Civil society organisations insist that the scope of the safeguard review must be extended to cover all financing instruments, including Development Policy Loans (DPLs) and Program for Results (P4R).

Clear binding rules or vague guiding principles?

Bank presentations and its Approach Paper on the safeguard review propose that a new framework would include a tripartite set of documents on safeguard principles, policies and guidelines. They note that “emerging areas” like human rights might be dealt with through non-policy options, such as overarching broad “principles”, rather than in new and specific safeguard rules and standards. There is a genuine concern that the bank will lump all complex and thorny emerging issues into its new proposed “principles” bag, without adopting meaningful and specific policy standards.

Civil society organisations stress that the Bank must incorporate core emerging issues such as land tenure, gender, labour and human rights as a key elements in the new policy framework setting out binding requirements on Bank staff and Borrowers, including the option to adopt a new stand-alone safeguard policy on land rights and land acquisition.

Flawed start to consultations:

In addition to concerns on the content and scope of the Bank’s safeguards review, after five months of on-going dialogues and discussions there is mounting criticism of the Bank’s process for public consultation in Phase I.[x] Although referred to as ‘consultations’, they have taken the form of information sharing discussions with limited time for meaningful discussion meant to cover fifteen distinct policy topics as well as other issues linked to improvement of development outcomes (see below). The compressed nature of the process has meant that meetings are usually held for half a day (as short as 3.5 hours) and are all intended for a range of stakeholders to attend, thereby sharply reducing the ability for any one group to discuss its views at length.

Attendees at the Washington meeting drew attention to the short time made available for plenary discussions where views and ideas could be exchanged. NGOs in Paris noted a tiny turnout (six people) due to a lack of outreach. Those attending in Norway noted that they were restricted to talking about overarching concerns as time was lacking for any detailed discussion of emerging issues. Participants in the meeting in Lima sharply criticised the format of the meeting there, stating “we consider that the format of these sessions is insufficient to gather the points of view and main concerns of the interested stakeholders”. Participants of the meeting in Jakarta complained repeatedly of a lack of requested information being provided to them. Concerns have also been raised about the lack of timely and clear information on the expert focus group meetings. The list goes on.

For their part, indigenous peoples have collectively and directly condemned the lack of specific outreach to them, and expressed general concerns about the conduct and design of consultations (the Bank is now trying to raise funds to enable a targeted consultation with indigenous peoples in Phase II, though this is not yet guaranteed).

Changes to consultation process essential in next phase:

As the first phase draws to a close, attention now turns to what will happen in Phase II. This Phase will open with the presentation of a draft outline of a possible new approach to safeguards – though it is unclear what level of detail will be contained in this first draft. During the first phase, Bank staff involved in public consultations meetings have indicated that the new framework will propose a “completely new structure” for safeguard policies, which the Bank admits carries risks of accusations of policy dilution (Approach Paper, paragraph 40).

Given that the Bank is planning a major overhaul of its safeguard policies, it is essential that faults in the consultation process are corrected to enable robust public scrutiny of the Bank’s proposals. The consultation process needs serious re-thinking and a re-design to allow people to effectively engage.

The listening Bank?

Civil society organisations and indigenous peoples have sent clear and consistent messages to the World Bank during the first phase of its public consultations on its safeguard framework. The call for widening the scope of the review, for example, has been made in most of the public meetings held over the last five months. The Bank’s safeguard review team advise that concerns and recommendations raised by external stakeholders will be passed to the Bank’s Committee on Development Effectiveness (CODE) at the end of Phase I, and that any changes to the review mandate and scope as well as the consultation process will require Board approval.

The question at the close of Phase I is: will CODE and the wider World Bank Board listen to civil society and communities affected by World Bank projects and programmes? Will they grasp the safeguard review as an opportunity to develop a safeguard system fit for the 21st century?

Whether the Bank will use the safeguard review and update activity to move forwards on standards and to increase public accountability remains to be seen. What is very clear already is that without serious intervention by the Bank’s Board and governmental shareholders, the most serious shortcomings in the review process will not be fixed, and the Bank could even risk going backwards with a new framework that is not fit for purpose. However, the World Bank and its new President still have the room to ensure that this reform process is not wasted. Rich and detailed lessons on the past problems plaguing the Bank safeguard system exist and must be drawn on to inform the safeguard update. If the Bank is serious about strengthening its safeguard framework, then its ‘modernization’ reform measures must include significant improvements to its arrangements for safeguard implementation and compliance.

Tom Griffiths and Helen Tugendhat

FURTHER INFORMATION

World Bank safeguard update web site: http://tinyurl.com/bs82xp5

Indigenous organisations:

Indian Law Resource Center: http://www.indianlaw.org/mdb

Asia Indigenous Peoples Pact Foundation: http://www.aippnet.org/home/statement/908-indigenous-peoples-letter-to-the-incoming-president-of-the-world-bank

Civil society:

FPP World Bank page: http://www.forestpeoples.org/tags/update-and-consolidation-world-bank-safeguard-policies-2010-13

Bank Information Center: http://www.bicusa.org/issues/safeguards/

Program for Results (civil society moderated): http://www.p4rcomments.org/

Development Policy Loans (Bank Information Center and Global Witness): http://www.forestpeoples.org/sites/fpp/files/publication/2013/04/dpl-primer-april2013.pdf

[i] Initial Comments by Civil Society Organisations on the World Bank’s Safeguard Policy review and Update December 2012 http://www.forestpeoples.org/sites/fpp/files/publication/2013/01/initial-comments-civil-society-organizations-world-bank-safeguards-review-dec2012.pdf

[ii] The World Bank’s Safeguard Policies: Proposed review and Update Approach Paper World Bank, Wasjington DC, October 10, 2012 http://siteresources.worldbank.org/EXTSAFEPOL/Resources/584434-1306431390058/SafeguardsReviewApproachPaper.pdf

[iv] IEG (2010) Safeguards and Sustainability in a Changing World: An Independent Evaluation of World Bank Group Experience IEG, Washington, DC  http://go.worldbank.org/ZA4YFV9OL0

[vi] NGO Joint letter to Chairman of CODE, 1 March, 2013

[vii] Reply from Chair of CODE, March 21, 2013

[ix] Program for Results (civil society moderated page): http://www.p4rcomments.org/

[x] See, for example, Indigenous peoples' letter to the World Bank on the conduct of the safeguards review consultations, March 4, 2013 http://www.forestpeoples.org/sites/fpp/files/publication/2013/03/aippletterwbmarch-2013-2.pdf ; See also CSO letter to World Bank Board expressing concerns over defective consultation in Lima, 14th February 2013 at: http://www.forestpeoples.org/sites/fpp/files/news/2013/02/LatAm%20CSO_Letter_WorldBank_SG_Review_Consulation_Feb2013_English.pdf