Latin American and Caribbean Civil Society Perspectives on the Draft of the World Bank’s New Environmental and Social Policy and Environmental and Social Standards

Latin American and Caribbean Civil Society Perspectives on the Draft of the World Bank’s New Environmental and Social Policy and Environmental and Social Standards

Lima, Peru, February 4, 2015 - We, the undersigned civil society organizations and social movements of Latin America and the Caribbean, wish to express our profound concern and dissatisfaction with the World Bank’s Environmental and Social Safeguard review process, as well as with the current draft of the new Environmental and Social Policy and Environmental and Social Standards published by the International Bank for Reconstruction and Development (IBRD) (which is a part of the World Bank Group).  Likewise, we wish to highlight the lack of receptivity we have witnessed on the part of the Bank to the comments and suggestions we have submitted on previous occasions with regard to this issue.

With regard to the consultation process, the World Bank (WB) performed the first phase in Argentina, Peru, and Guatemala in 2013, the second phase in Paraguay and Brazil in 2014, and in Nicaragua at the start of the present year.  The last regional consultation of the second phase was held in Lima on 4 February.  A limited group of organizations that do not represent Latin American civil society as a whole participated in the meetings held in the region.  In addition, the invitations were generally sent out with very little advance warning and without having provided the participants with the necessary information to enable their effective and informed participation.

In addition to the aforementioned, what the World Bank calls ‘consultations’ are reduced to simple informational meetings whose scope has been limited, given that the Bank has not effectively incorporated the recommendations and concerns which several organizations have submitted in a timely manner both in-person and in the form of letters.  All of this puts the legitimacy of the consultations in doubt and makes it impossible to rate the participation of Latin American civil society in the current process which the Bank is carrying out as being effective.

With regard to the content of the new Environmental and Social Policy and Standards proposed by the Bank, various organizations have submitted diverse technical analyses in a timely manner which provide a detailed discussion of the principal proposals for each of the Standards.  While we recognize that the new proposal demonstrates some progress that has been made, the backtracking and weaknesses found therein considerably outweigh its positive aspects.  Below we detail just a few of our principal concerns regarding which we continue to await responses from Bank representatives.

The Bank’s proposal leaves open compliance with the Standards; that is, it fails to clearly define when and how to comply with what is established by the Policy.  Under the current framework, an essential requirement calls for the evaluation of the environmental and social impacts and risks prior to project approval, as well as the publishing of the evaluations prior to the evaluation phase of high-risk projects.  The new framework, by contrast, establishes that the social and environmental evaluations (EIAs) should be begun “as early as possible” and as such, from the outset it puts at risk the consultation processes, as the latter cannot be performed effectively without having complete and detailed information regarding a particular project.

Likewise, the proposed framework is limited in scope, in that it will only be applied to investment loans, thereby leaving out other financial instruments such as development policy loans (DPLs) and the Program-for-Results (P4R), among others.  This means that more than 50% of the Bank’s portfolio in the region will not be covered by these Environmental and Social Standards.

In addition, the Bank’s new Policy proposal lacks binding language regarding international human rights standards and permits borrower governments to “opt” to comply with the Indigenous Peoples Policy to protect their rights.  The foregoing undermines the international consensus regarding the specific fundamental rights of indigenous peoples to their lands, territories, resources, and the course of their own development.  The draft eliminates the requirements for reference studies for reporting on the protection of the right to land, sustenance, and adequate housing.  In addition, it introduces “biodiversity compensation” in what had previously been considered natural habitats in critical condition and protected areas wherein projects could not be implemented.  This is crucial to our region, which contains vast indigenous and tribal territories as well as natural habitats in critical condition.

On another front, the Bank’s Policy proposal shifts responsibility for applying the Safeguards to borrower countries, without making clear how and when borrower countries’ systems will be employed, and without establishing precise criteria regarding the situations in which the countries’ systems are unacceptable.  The foregoing concerns us, given that many of our countries have weakened their regulatory frameworks, thereby endangering the full guarantee and respect for human rights.

For example, a new law in Peru profoundly weakens the authority and capacity of the Organismo de Evaluación y Fiscalización Ambiental [Office of Environmental Evaluation and Auditing] (OEFA), as well as the inter-sectorial coordination and control over the quality of environmental impact evaluations for which the newly created Servicio Nacional de Certificación Ambiental para las Inversiones Sostenibles [National Environmental Certification Service for Sustainable Investments] (SENACE) is responsible.  For its part, last year Mexico approved the first package of energy reform regulations prioritizing hydrocarbons, gas, and energy over any other use of the land.  These regulations permit expeditious expropriations of land, as well as potentially ignoring natural protected areas.

Bolivia’s Mining Law similarly permits activities in protected areas such as national parks, as well as excluding indigenous peoples’ right to free, prior, and informed consent with regard to exploratory activities.  Likewise, in recent years environmental permits for extractive and infrastructure projects in Colombia have been weakened.  Without the necessary clarifications, the draft leaves the Bank and borrowers with less of a possibility to focus on safeguards that contribute to building local risk-management capacity and respect for human rights.

In addition, in labor-related matters we find the Bank’s proposal to be weak in terms of adequate worker protections, given that it only protects those workers who are directly hired by the project and excludes tertiary contractors and public servants who are indirectly in charge of the project; that is, it does not protect fundamental worker rights throughout the supply chain involved in the execution of the project.  On another front, freedom of association will only be applied in those countries whose national laws establish it, thereby leaving unprotected project workers in those countries lacking union-related rights.  Thus, we believe that the Bank should make mandatory compliance with International Labor Organization conventions with regard to unsafe working conditions, child labor, unpaid salaries, and the refusal of the right to freedom of association and trade union freedom.

The Bank mentions cross-cutting policies aimed at the underprivileged or those in situations of vulnerability.  Nonetheless, it is necessary for the Bank to provide detailed information on how it will implement inclusive policies based on age, gender, ethnic origin, religion, physical handicap, sexual orientation, and gender identity, among others, as these groups could be affected by the impacts of a project or have limited ability to take advantage of the benefits it generates.

In a region such as Latin America with high rates of inequality, the draft does not include any requirement whatsoever to ensure that poor communities and excluded groups are not negatively affected by the impacts of Bank projects.  The draft proposal not only runs contrary to the central mission of the World Bank to eradicate extreme poverty and promote shared prosperity, but also lowers the standard both for the Bank itself as well as the entire international community.  The foregoing is particularly worrisome in our region, given that significant competition exists to channel financing from other institutions such as the Inter-American Development Bank (IDB), Development Bank of Latin America (formerly CAF), National Bank for Economic and Social Development of Brazil (BNDES), Chinese banks, and shortly, the New Development Bank of Brazil, Russia, India, China, and South Africa (BRICS).  Instead of promoting the strengthening of standards, this draft encourages other multilateral banks, international financial institutions, national development banks, and other initiatives such as the Green Climate Fund to lower their standards or lack incentives to strengthen them in the interest of being more competitive, as well as promoting the countries in the region to weaken their environmental and social frameworks ever more.

For all of the aforementioned reasons, we call on the Bank to take into consideration civil society proposals and abstain from adopting an Environmental and Social Policy that weakens current standards.  Only thus can we speak of sustainable development in the region.

Posicionamieto Regional (Spanish)

Evento Público (Spanish)