Back on the merry-go-round: the World Bank reviews its Safeguard Standards

Towards the end of 2010 the World Bank announced that it was launching a review process of eight of its so-called ‘safeguard policies’, those policies which are intended to establish minimum requirements to minimize or remove the risk of social and environmental harms being directly caused by World Bank financed activities (see list below) and its policy on the use of country systems. The review encompasses the policies that are binding on the International Bank for Reconstruction and Development (IBRD) and the International Development Agency (IDA), the two institutions that make up the public lending arms of the ‘World Bank’[i].  Over the years, the Bank’s safeguard policies have been successively reviewed and updated. While these revision processes have resulted in some useful safeguard standards, civil society organizations and indigenous peoples point to serious remaining gaps and weaknesses in the Bank’s safeguard framework. They highlight, for example, that the Bank’s standards and commitments are beginning to lag considerably behind other financial institutions in areas like resettlement and indigenous people’ rights, and lack an overall framework for social risk assessment.

World Bank (IBRD/IDA) Safeguard Policies

4.01 Environmental Assessment (1999)

4.04 Natural Habitats (2001)

4.36 Forests (2002)

4.09 Pest Management (1998)

4.11 Physical Cultural Resources (2006)

4.37 Safety of Dams (2001)

4.12 Involuntary Resettlement (2001)

4.10 Indigenous Peoples (2005)

4.00 Piloting the Use of Country Systems (not a safeguard policy, but also in the review)

The review announced is intended to be a comprehensive and complete look at the safeguards as a whole and may well result in a completely new system where individual policies as we currently recognise them could disappear entirely or be merged with other policies in a new format. Such possible radical changes have attracted a high level of attention from civil society and social justice organizations around the world who are concerned that the process could result in a dilution of existing standards. At the same time, the review process could open possibilities for additional new safeguards. In this context, it is noteworthy that in launching the review, the World Bank acknowledged that key issues such as labour rights and gender considerations are not addressed in existing safeguards implying that new policies might need to be developed.

Will the Bank learn lessons from its own implementation evaluations?

The review comes at a timely moment for the Bank. In 2011 the Independent Evaluations Group of the Bank released a detailed review of all the Bank’s safeguards, reviewing both the IBRD/IDA policies and the commensurate standards used by the IFC and MIGA. In this review, Safeguards and Sustainability Policies in a Changing World: An Independent Evaluation of World Bank Group Experience, extensive recommendations were provided to both IBRD/IDA and to IFC/MIGA which should form a significant input into this current review. More targeted, the World Bank also recently released a long-awaited review into the implementation of the World Bank’s policies on indigenous peoples, Implementation of the World Bank’s Indigenous Peoples Policy: A Learning Review (FY2006-2008). Among many other stark findings, this latter report details a systematic failure to appropriately address land and resource rights in Bank projects impacting on indigenous peoples, raises serious questions about the manner in which the policy has been triggered, reveals extensive failures to appropriately document consent, agreement or support processes from indigenous peoples for these projects and a widespread lack of appropriate disclosure or conflict resolution mechanisms at the local level. With such new and detailed information, the current review can be appropriately informed as to past implementation weaknesses, and work to address them in whatever new system emerges.

However since the announcement of the review last year, very little has concretely happened in terms of developing the review process.  It is expected that an ‘approach paper’ will be revealed soon (September 2011) and opportunities for public comment will commence. In the absence of clear information or plans from the World Bank, civil society organizations, indigenous peoples’ organizations and others have submitted a formal letter to the President of the Bank detailing the key requirements in the new system that must be incorporated to ensure that the Bank is able to deal with emerging social and environmental risks.

Part of the letter addresses an area of current and significant concern relating to the emergence of new lending processes that would not require the application of the safeguard policies. This refers to the so-called ‘Programme for Results’ initiative, or P4R operational policy (OP 9.00) which is currently under fast-track development and expected to be finalized prior to the end of 2011. This lending instrument would allow funds to be loaned without the safeguard policies attached, relying instead on recipient country governments to use their own existing laws and regulations. In the case of indigenous peoples, this policy instrument could undermine decades of work in achieving recognition that the rights of indigenous peoples require protection, especially where the national laws are insufficient or where indigenous peoples are completely unrecognized. FPP supports the call for this new proposed form of lending to be brought into the safeguard review processes, under the core principle that effective safeguards must be universally applied across Bank lending and grant-giving operations.

The NGO letter also addresses the need to develop safeguards, which ensure compliance and consistency with existing international standards and instruments on both the environment and on human rights. The World Bank has long required consistency with major environmental conventions and treaties but human rights standards and laws have been consistently disregarded. This must change, and the safeguard review provides the opportunity to ensure that the World Bank adopts robust standards and safeguards on human rights..

The World Bank has decades of experience in using its safeguard policies, from the earliest days in the 1980s through until today, and that experience – as recorded in the two reports already cited – must inform the actions the Bank takes now as it embarks on the design of its new approach. The involvement of indigenous peoples and civil society in such a process will be key if it is to result in an effective, equitable and rights-based system that will deliver real and sustained development results.

The full text of the NGO letter, endorsed by FPP, is provided here:http://www.forestpeoples.org/sites/fpp/files/publication/2011/09/csoletteronworldbanksafeguardsreview.pdf

[i]The Safeguard Review does not cover the policies and procedures of the International Finance Corporation (IFC), which has recently concluded a review of its own performance standards, nor does it address standards applying to the Multilateral Investment Guarantee Agency (MIGA).