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Getting to Yes on the Next Generation of Safeguards

Stefan Koeberle's picture
In July 2012, the World Bank embarked on a review and update of its policies to protect people and the environment in the projects it finances.  There is no question that a strong Environmental and Social Framework is essential to achieving the World Bank’s goals of reducing poverty and building shared prosperity.  It is also fair to say there are strong opinions about how best to craft these policies.
 
The scope of this consultation was unprecedented.  This was the most extensive consultation the World Bank has ever had.  In the first two (out of three) phases, we consulted in 65 countries, including 54 borrower countries; held 8 dedicated Indigenous Peoples consultations and 5 topical expert consultations (labor, biodiversity, non-discrimination, LGBT/SOGIE; cultural heritage); and had consultations and workshops with development partners, including other Multilateral Development Banks, the International Labor Organization, the United Nations High Commission on Human Rights, and the World Health Organization.
 
As the 2015 Spring Meetings wrap up here in Washington, DC, I thought it would be useful to take stock of where things stand on the safeguards review, and provide some insight on what we are trying to achieve and the feedback we’ve heard.   
 
It is worth touching on why the Bank is undertaking this review.  Simply put, it’s a different world.  Over the last two decades, the issues our clients face have changed dramatically, and their ability to manage them – as well as the Bank’s – has significantly increased.   The safeguards review is taking place against the backdrop of a larger effort to modernize the Bank.  As the Bank reforms to be more operationally efficient, this change process will naturally influence the safeguards review as we seek to improve and streamline our work.
 
In addition, international best practice on environmental and social protections has evolved.  When our safeguards policies were first drafted more than 20 years ago, they were the gold standard.  It is now our turn to catch up.  And that is exactly what we intend to do.
 
We will have “leading edge” environmental and social standards that are clear, stronger than our current safeguards, and that support our goals of ending poverty and promoting shared prosperity.  Our next generation of environmental and social protections will add strong new principles of non-discrimination, including children, disability, gender, age, and SOGIE, and it will add detailed labor provisions to protect workers, including grievance mechanisms, non-discrimination, occupational health and safety, and prohibiting child and forced labor. 
 
Going forward, we will broaden the range of biodiversity concerns and add sustainable use of living natural resources (e.g., fisheries and forests), and we will add climate change considerations including greenhouse gas estimation and reduction and climate resilience.  Assessments of social and environmental risk will be strengthened, ensuring resources are especially targeted to high risk projects. Finally, we will add Free, Prior, and Informed Consent (FPIC) for Indigenous Peoples, and require increased and ongoing stakeholder engagement.
 
I won’t pretend that this is simple.  It is not.  There is agreement on some points and widely divergent views on others.  This was underscored last Friday in a Civil Society Forum session on the safeguards review, which drew about 100 CSO representatives from both developing and developed countries.   

The session included a constructive exchange on how best to address issues ranging from labor and indigenous peoples to risk assessment and disability. 
Vicky Tauli-Corpuz 
The reality is that many stakeholders differ on the treatment of several key provisions in the draft proposal.  To take just a few examples, some see the “alternative approach” language on Indigenous Peoples (IP) as undermining our current operational policy, while others are concerned that IP language without an alternative approach would violate their constitutions and risk inciting or exacerbating civil strife.  Vicky Tauli-Corpuz, the UN Special Rapporteur on the Rights of Indigenous Peoples, conveyed the perspective of Indigenous Peoples, as well as the complexity of addressing this issue with governments.
 
Borrowers are advocating for the use of their own frameworks with capacity building support from the Bank, while some donors and CSOs prefer for the Bank’s framework to be the default, citing concerns over oversight and implementation.  David McCauley, Senior Vice President for Policy and Government Affairs at the World Wildlife Fund reinforced this sentiment while also asserting it would be a missed opportunity if the Environmental and Social Framework did not identify a pathway for using borrower systems.
 
On labor, there is generally consistent feedback that the draft language should expand the scope of coverage.   Peter Bakvis, the Director of the International Trade Union Confederation’s Washington office, expressed cautious optimism about how labor might be treated in the second draft, but noted that he would reserve judgment until seeing the revised text.  Fair enough. 

Mohammed Loutfy from the Lebanese Physical Handicapped Union praised the Bank’s engagement on disability issues, in particular the recent hiring of a new disability adviser, while noting some glitches in the consultaton process for persons with disabilities. He also encouraged the Bank to consider standards on universal access and inclusion.
Safeguards session at 2015 Spring Meetings
 
The stellar participation we’ve had from our shareholders, stakeholders in civil society and beyond, and our development partners, has enriched the process.  The end result will be better for it.  
 
I am confident that we are collectively moving in the right direction.  Our environmental and social protections, which are already at a high standard, will move from strong to stronger. 
We expect the proposal to change in key areas, and we are looking forward to continuing this lively conversation after the Committee on Development Effectiveness (CODE), a subcommittee of the World Bank’s Board of Executive Directors, has reviewed the next draft.
 

Next Steps

  • The review of the World Bank’s safeguard policies includes three consultation periods. Two rounds of consultations have been completed (Phase 2 closed on March 1, 2015).
  • The World Bank is reviewing in detail the feedback we received and revising the draft framework.
  • The World Bank will initiate the third consultation phase when we have permission from CODE to disclose the framework for consultation. Consultation materials will include all materials presented to CODE.
For more information: http://consultations.worldbank.org
 
 

Comments

Submitted by Chudi Okafor on

I must say thank you for the update. I must add that your team is managing this process with uncommon purpose. The stakeholders in Ethiopia during the consultation appreciated the openness of the process. The challenge is to sustain this progress during implementation and use its acceptance by stakeholders to improve safeguards accountability.

Dear Chodi,
Thank you for your kind words. Our team really appreciates positive feedback since it’s not an easy task to find the right balance on such critical issues where many stakeholders hold different opinions. We want to make sure that everybody is heard as the new environmental and social framework is being formulated and when new projects are developed and implemented. As you rightly point out, we want to make sure that there is clear accountability during implementation.
All the best,
Stefan

Submitted by Anonymous on

Many thanks. Now the WB faces more and more competition from commercial banks, and the new DFIs such as the BRICS Bank and the AIIB. Is the WB leaning toward ever stricter E&S Safeguards even if that means losing influence and market share? Or, is there appetite to try and push back on the NGOs, and instead agree something reasonable, which means it wont take 2 years for the WB to close an infrastructure project? Many thanks,

Submitted by Anonymous on

WBG should continue to set high standards. Well done to Stefan and his team for the extensive and thoughtful consultation they have put in place and the real attempts to balance different viewpoints on these complex and important issues. To the commenter who refers to the BRICS competition, surely the WBG should be setting standards not following them. 2 years might sound like a long time, but not if your own livelihood, health or welfare, never mind the WBG's reputation is at stake. Think about how long it would take (in a developed country) to get the evidence together and hold a public consultation on building a major new motorway through an area of outstanding natural beauty, or closing a local hospital. 3 - 5 years is quite normal on such big decisions, and rightly so.

Submitted by Anon on

"Simply put, it’s a different world." To say the world has changed is not sufficient -- what is the directional nature ? What are some hypothesis that the existing scheme isn't working or is inefficient ?
In reading this, it's clear the scope is massive, and given that there are many stakeholders, the best one can do is to recognize a prevalent opinion and make sure it delivers "good" and doesn't cause "harm."
My takeaway is that there seems to be more "considerations" -- more factors mean more comprehensiveness but inevitable dilution of core considerations or a very unwielding scheme which I'm sure is a motive for reform (avoid the result of bigger, and worse than former scheme). The post doesn't mention the changes -- do borrowers have more capacity ? (Do they want advice rather than a prescriptive scheme. Do donors want more or less safeguards and what is their comfort level with Non-Bank entities certifying safeguard compliance. External competition via BRIC or AIIB ? Reminds me of US manufacturing off-shored to Asia and elsewhere -- ample economic growth for Asia, but pollution & other externalities. What is the new normal that the Bank is targeting (more selective risk based or massive swath because every safeguard is critical, or maintain top tier (comprehensive & unwielding) and slowly lose relevance ?

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