World Bank regressing on environmental and social protections, critics charge

World Bank building (credit: Simone D. McCourtie / World Bank)

A new draft of changes to the World Bank’s safeguard policies does not provide better protections, and it potentially makes things worse, advocates charge. They are concerned that the Bank is shifting accountability away from itself for projects it finances. Lessons learned from negative effects of previous Bank-funded projects were said to have spurred improvements to environmental and social policies. The new draft is not a promising advance, according to critics.

“The Bank is continuing to transfer accountability and oversight for implementing these policies to the borrowers and government,” said Nadia Daar, policy adviser for Oxfam International, in an interview with Humanosphere. “There is still a lack of clarity how the Bank is going to do the due diligence to ensure governments are going to implement the safeguard policies.”

The leaked first draft of the World Bank’s Environmental and Social Safeguards Framework was roundly criticized in July 2014. Yesterday’s release of the second draft was championed by the Bank as a major step forward in its effort to strengthen its existing policies.

“The level of engagement and the caliber of feedback has been excellent, which shows in the revised draft. The proposed Environmental and Social Framework would substantially expand the scope of coverage from our current policy, and would help to ensure that project risk is managed more consistently and effectively,” said Hartwig Schafer, World Bank vice president for operational policy and country services, in a news release.

There are some points that advocates say are improvements from the first draft. Daar singled out better land and labor safeguards as areas with notable positive change. While the labor standards to not meet international labor standards, the revisions make more robust protections that are encouraging to her. And there is also language supporting land ownership projects – an area that Oxfam says needs improvement because of its importance to the lives of small-holder farmers.

But serious problems remain. Oxfam and 18 environmental and human rights groups from around the world joined together in criticizing the new draft. They say that World Bank President Jim Yong Kim is not living up to his commitment that the new standards will not “dilute” existing rules. Their major concern is that World Bank’s inspection panel will lose its ability to oversee projects.

In the draft, local and national governments bear responsibility for ensuring that projects are done properly and do not harm communities and the environment. Currently, people harmed by a Bank-backed project can seek justice through a Bank system, allowing for some external accountability for implementing governments. That could change, making it harder to gauge whether projects cause harm and to make things right when they do, the 19 groups say.

“With these revised proposed policies it is the government that is supposed to implement the policies,” Daar said. “It is going to be more country-level grievance mechanisms for these projects. In some circumstances it could work out, in others it could be highly problematic.”

That uncertainty is worrisome. And there is concern that it is sending the wrong signal to competitive institutions. There are new major players in the international lending game with the establishment of the Asian Infrastructure Development Bank and the BRICS (Brazil, Russia, India, China, and South Africa) Bank. Daar worries that there is a “race to to the bottom” among the institutions that compete with one another, making themselves more appealing to would-be loan recipient governments.

Another concern is the ongoing issue of protection for people who live outside immediate project areas. An example of this is the proposed Fomi Dam along the Niger River in Guinea. The project, backed by the World Bank, could affect the 1 million to 2 million people who depend on the Inner Niger Delta in Mali for their livelihoods. Projects like the Fomi Damn generally consider the impact to the communities immediately nearby. People are relocated and compensated as a part of the project. But those living downstream are on their own.

“The proposed resettlement standard denies millions of people who will be impoverished as a result of mega-dams and other infrastructure projects their fundamental rights to have their livelihoods restored and share in the benefits of development. This is a guaranteed recipe for exacerbating inequality,” said David Pred of Inclusive Development International, in a news release.

With more work to be done, the World Bank immediately began consultations regarding improvements to the framework’s second draft. At least 19 organizations are making it clear that big changes are needed in order for the World Bank to meet its own promises.

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Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.