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World Bank Board Declines to Revise Controversial Draft Policies

WASHINGTON, Jul 31 2014 (IPS) - A key committee of the World Bank’s governing board Wednesday spurned appeals to revise a  draft policy statement that, according to nearly 100 civil-society groups, risks rolling back several decades of reforms designed to protect indigenous populations, the poor and sensitive ecosystems.

While the Committee on Development Effectiveness did not formally endorse the draft, it approved the document for further consultation with governments, non-governmental organisations (NGOs), and other stakeholders over the coming months in what will constitute a second round a two-year review of the Bank’s social and environmental policies.

“The proposed ‘opt-out’ for protections for indigenous peoples, in particular, would undermine existing international human rights law." -- Joji Carino

At issue is a draft safeguard framework that was designed to update and strengthen policies that have been put in place over the past 25 years to ensure that Bank-supported projects in developing countries would protect vulnerable populations, human rights, and the environment to the greatest possible extent.

“The policies we have in place now have served us well, but the issues our clients face have changed over the last 20 years,” said Kyle Peters, the Bank’s vice president for operations policy and country services.

He stressed that the draft provisions would also broaden the Bank’s safeguard policies to include promoting social inclusion, anti-discrimination, and labour rights, and addressing climate change.

But, according to a number of civil-society groups, the draft, which was leaked over the weekend, not only fails to tighten key safeguards, in some cases, it weakens them substantially.

“The World Bank has repeatedly committed to producing a new safeguard framework that results in no-dilution of the existing safeguards and which reflects prevailing international standards,” according to a statement sent to the Bank’s executive directors Monday by Bank on Human Rights (BHR), a coalition of two dozen human-rights, anti-poverty, and environmental groups that sponsored the letter.

“Instead, the draft safeguard framework represents a profound dilution of the existing safeguards and an undercutting of international human rights standards and best practice,” the coalition, which includes Amnesty International, Human Rights Watch, and the NGO Forum of the Asia Development Bank, among other groups, said.

Perhaps the most dramatic example of that dilution is a provision that would permit borrowing governments to “opt out” of the Indigenous Peoples Standard that was developed by the Bank to ensure that Bank-funded projects protected essential land and natural-resource rights of affected indigenous communities.

“We have engaged with social and environmental safeguard development with the World Bank for over 20 years and have never seen a proposal with potential for such widespread negative impacts for indigenous peoples around the world,” said Joji Carino, director of the Forest Peoples Programme.

“The proposed ‘opt-out’ for protections for indigenous peoples, in particular, would undermine existing international human rights law and the significant advances seen in respect for indigenous peoples rights in national laws,” she added.

But Mark King, the Bank’s chief environmental and social standards officer, insisted that the draft’s provisions represented a “strengthening of existing policy” that, among other provisions, introduces “Free, Prior and Informed Consent of Indigenous Peoples” in all Bank-supported projects.

“In exceptional circumstances when there are risks of exacerbating ethnic tension or civil strife or where the identification of Indigenous Peoples is inconsistent with the constitution of the country, in consultation with people affected by a particular project, we are proposing an alternative approach to the protection of Indigenous Peoples,” he said, adding that any such exception would have to be approved by the Bank’s board.

The Bank, which disburses as much as 50 billion dollars a year in grants and loans, remains a key source of project funding for developing countries despite the rise of other major sources over the past 20 years, notably private capital and, more recently, China and other emerging economies, which have generally imposed substantially fewer conditions on their lending.

Faced with this competition, the Bank has been determining how to make itself more attractive to borrowers by, for example, streamlining operations and reducing waste and duplication. But some critics worry that it may also be willing to exercise greater flexibility in applying its social and environmental standards – a charge that Bank officials publicly reject, despite the disclosure of recent internal emails reflecting precisely that concern.

Under prodding by NGOs and some Western governments in the 1980’s and 1990’s, the Bank had established itself as a leader in setting progressive social and environmental policies.

More recently, however, “it has fallen behind the regional development banks and many other international development institutions in terms of safeguarding human rights and the environment,” according to Gretchen Gordon, BHR’s co-ordinator.

“The Bank has an opportunity to regain its position as a leader in the development arena, but unfortunately this draft backtracks on the last decade of progress,” she told IPS. “We hope that the [next round of] consultations will be robust and accessible to the people and communities who are most affected, and that at the end of the day, the Bank and its member states adopt a strong safeguard framework that respects human rights.”

While welcoming the Bank’s new interest in issues such as discrimination and labour rights, the BHR statement criticised what it called the framework’s movement from “one based on compliance with set processes and standards, to one of vague and open-ended guidance…”

According to the statement, the draft threatens long-standing protections for people who may be displaced from their homes by Bank-backed mega-projects and may permit borrower governments and even private “intermediary” banks to use their own standards for assessing, compensating and resettling affected communities “without clear criteria on when and how this would be acceptable.”

In addition, according to BHR, the draft fails to incorporate any serious protections to prevent Bank funds from supporting land grabs that have displaced indigenous communities, small farmers, fishing communities and pastoralists in some of the world’s poorest countries to make way for major agro-industrial projects.

“We had hoped that the new safeguards would include strong requirements to prevent governments like Ethiopia from abusing its people with Bank funds,” said Obang Metho, executive director of the Solidarity Movement for a New Ethiopia, a group that has brought international attention to Bank-backed land grabs in his home country. “But we are shocked to see the Bank instead opening the flood-gates for more abuses.”

The draft was based on a five-month-long consultation involving more than 2,000 people in more than 40 countries and a review of other multilateral development banks’ environmental and social standards, according to the Bank.

In a teleconference with reporters, King denied that the Bank was lowering its existing standards. In addition to broadening existing standards, he said, the Bank will “use as much as possible the borrower country’s own existing systems to deliver social and environmental outcomes that are consistent with our values.”

He and Peters also stressed that more attention will be paid to assessing and addressing the risks of social and environmental damage during project implementation, as opposed to the more “up-front approach” the Bank has taken in the past.

Jim Lobe’s blog on U.S. foreign policy can be read at Lobelog.com.

Editing by: Kitty Stapp

The writer can be reached at ipsnoram@ips.org

 
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