BIC Policy Update: Review of IFC social, environmental and disclosure policies
7 September 2004
This policy update introduces the ongoing policy reviews at the IFC, outlines the review process, and provides useful links to background documents.
Update January 24, 2005: IFC revises timeline for public consultation of Social and Environmental Performance Standards and of the Disclosure Policy
On Jan. 31, 2005 IFC will release Guidance Notes and an Indicative Draft of the Policy on Social and Environmental Sustainability and Performance Standards, showing the weight of comments received so far through consultation. The public consultation process on the draft Performance Standards has been extended until April 29, 2005. Public consultation on the disclosure policy will close on March 31, 2005. Read more:
IFC Launches Review of Social and Environmental Safeguard Policies and Disclosure Policy
Bruce Jenkins ()
The International Finance Corporation—the World Bank Group's private sector lending arm—has launched a fundamental revision of the environmental and social policy requirements that govern its lending operations. Civil society groups have long sought adoption, implementation, and strengthening of the IFC’s “safeguard" policies to ensure that the rights of communities impacted by IFC-financed projects are respected. The IFC has also launched a simultaneous revision of its information disclosure policy.
The IFC's safeguard policies cover a range of critical issues, including environmental assessment and natural habitats, impacts on indigenous peoples, involuntary resettlement, community health, and labor standards. The safeguard policies outline a set of minimum standards to which the IFC and its clients are to be held accountable. The IFC's disclosure policy determines the level and timeliness of access to information by communities concerned with IFC lending operations.
Revision of the IFC's safeguard policies is a critically important process. The IFC's safeguard policies do not just affect the obligations of the IFC and its private sector borrowers. In the past two years, more than 20 commercial banks have agreed to follow a set of environmental and social standards—known as the "Equator Principles"—that are based on the IFC's safeguard policies. These banks provide over 75% of all development project financing around the world. Further, national export credit agencies (ECAs) are increasingly relying on IFC safeguard standards. As the IFC revises its own policies, it is in effect undertaking a global standard setting exercise for environmental and social standards for privately financed development projects.
The IFC’s proposed policy revisions represent a complete reworking of its current environmental and social policy framework. Instead of ten safeguard policies, the IFC has proposed a set of “performance standards” for its private sector clients. These standards are written in a manner that allows much greater flexibility in implementation. The IFC has referred to the proposed standards as “statements of principles” rather then calling them “policies.” For the disclosure policy consultations, the IFC has only released a “concept note” (not a draft policy) that represents a fundamental shift from the traditional “document-based” disclosure policy to a more “principle-based” policy. Like the safeguard performance standards, the disclosure policy concept note is also quite general and vague in its articulation of transparency principles. See www.ifc.org/policyreview for both draft policy papers.
Process
The IFC is pursuing an extremely rapid and selective plan for engaging external stakeholders on these critical policy revisions. Unlike past World Bank safeguard policy revisions which have often involved several years of engagement on just one specific policy, the IFC plans to revise all its safeguard policies at once (plus its disclosure policy) and to directly engage external stakeholders for only four months.
Four regional consultations and topic and stakeholder specific meetings are to occur between September–December 2004. The IFC is proposing an extremely short 30-day electronic comment period in January–February 2005 to solicit final input on the post-consultation policy drafts. The IFC will seek Board approval of the revised safeguard and disclosure policies in February 2005.
The four regional multi-stakeholder consultations are:
- Latin America and Caribbean: Rio de Janeiro, September 27-29
- Asia and the Pacific: Manila, Philippines, October 27-29
- Africa: Nairobi, Kenya, November 29-December 1
- Eastern Europe, Central Asia, and Middle East: Istanbul, Turkey, December 13-15.
[Note: As of September 2, 2004, the IFC website still states that the first consultation will be held in Buenos Aires, not Rio. The IFC suddenly changed the venue barely four weeks before the scheduled consultation.]
It is important to note that as of September 2—with 25 days to go until the first consultation in the Latin America region—the draft revised safeguard policies were still not posted in Spanish or Portuguese on the IFC’s website (only in English). The draft disclosure policy concept note is available in Spanish and French. Furthermore, the IFC has still not released in any language for the Implementation Guides or Corporate Procedures that are to specify how the revised policies are to be implemented.
Each regional consultation will be an invitation only, multi-stakeholder (government, private sector, and civil society) workshop of approximately 60 people (30 for safeguards, 30 for disclosure). As yet the IFC has not organized any open meetings in conjunction with the regional consultations.
In addition to regional consultations, the IFC will be holding a series of topic and stakeholder specific meetings during the same time period. At this time, we know of the following such meetings:
- September 16-17: meeting with Equator Banks in conjunction with IFC press conference announcing safeguard review, London
- October 4: meeting with NGOs during the World Bank/IMF annual meeting in Washington, DC
- Week of October 4-8: meeting with international trade union representatives, Washington, DC
The IFC will be accepting comments on both policy revisions via mail, email, and web site submission until December 17, 2004. Click here for a timeline and details on submitting comments. Comments will be posted on the IFC website, and the IFC states that it will respond to submitted comments.
If you would like to stay informed of developments on the IFC’s policy reviews, please contact Bruce Jenkins at the Bank Information Center at .
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