BIC recommends stronger transparency standards for IFC
6 April 2005
BIC submits comments on the IFC's Disclosure Policy Framework calling for strengthened disclosure principles, procedures and constraints; increased institutional transparency; and increased investment-specific transparency.
In November 2004, the International Finance Corporation (IFC) released a Framework for Discussion Regarding Disclosure of Information for public comment as part of their Disclosure of Information policy review process.
Bank Information Center (BIC) has submitted comments to the IFC on the framework paper. BIC's recommendations focus on strengthening disclosure requirements in three key areas: disclosure principles, procedures and constraints; increased institutional transparency; and increased investment-specific transparency. A summary of BIC's recommendations is listed below. Between May and September, the IFC will present a revised draft disclosure policy to Management and then to the Board Committee on Development Effectiveness (CODE). After the CODE meeting the revised draft will be disclosed for 30 days for public comment. The Board will then meet in September to discuss the final draft policy for approval.
To read BIC's comments, click on the link below:
For more information about the IFC's disclosure policy review process, see:
Summary of BIC's Recommendations regarding the IFC's Disclosure Framework:
SECTION 1: PRINCIPLES, PROCEDURES AND CONSTRAINTS
1.1 A PRINCIPLE OF PRESUMED DISCLOSURE
- The IFC should retain a stated presumption in favor of disclosure in its revised disclosure policy.
1.2 INFORMATION REQUEST PROCESS
- In order to better implement the presumption in favor of disclosure, the IFC should establish minimum process guarantees around the information request process.
- The IFC should recommend a process through which the public can appeal refusals to disclose information.
- Subject to the disclosure policy constraints, IFC Management should be authorized to disclose information not specifically listed in the disclosure policy.
1.3 DISCLOSURE CONSTRAINTS
- The IFC should clearly articulate information that is considered business confidential such as industrial trade secrets and commercial or financial information, the disclosure of which would likely cause substantial harm to the competitive position of the person from whom the information was obtained.
- In its disclosure policy, the IFC should outline clear rules regarding the application of disclosure policy constraints, including a standard rule of segregation.
- The IFC should adopt a “public interest override” to ensure that in cases where the public interest in disclosure outweighs the interest in confidentiality, the information would be disclosed.
- Disclose IFC legal agreements, with proprietary and commercially sensitive business information segregated from disclosure. At a minimum, modify constraint on disclosing legal documents to accurately reflect IFC’s plan to disclose Action Plans and commitment to require contract transparency in extractive industries.
1.4 INFORMATION DISSEMINATION AND TRANSLATION
- Dissemination of information to locally affected communities in a language that they can understand should be a key objective of the IFC’s disclosure policy. The IFC’s disclosure policy should direct people to the WBG’s PICs and Translation strategies for more information regarding availability of information and should, wherever possible, specify dissemination and translation requirements.
SECTION 2: INSTITUTIONAL TRANSPARENCY
2.1 FINANCIAL INFORMATION
- The IFC should disclose detailed information on its operational budget, including a clear indication of departmental budgets and other aspects of resource allocations. The IFC should release detailed information on actual expenditures.
- The IFC should release detailed information on actual expenditures.
2.2 DEVELOPMENT IMPACT
- Require that the annual development impact report include disaggregated, project-level development impact reporting data.
2.3 OPERATIONS OF THE BOARD OF DIRECTORS
- The IFC should disclose a detailed calendar listing the tentative agenda for Board meetings. This calendar should be updated on a rolling basis to provide at least a 4-week advance notice of policy and project discussions.
- The IFC should publicly disclose the most final documentation on a policy, strategy or project when it is circulated to the Board for approval.
- The IFC should disclose a summary of Board meetings and encourage the disclosure of written statements prepared by the Executive Directors.
2.4 GUIDING DOCUMENTS: POLICIES, STRATEGIES AND GUIDELINES
- The IFC should disclose a calendar of planned revisions to policy, strategy and guidelines in the upcoming 12 months.
- At a minimum, for all policies, strategies and guidelines to be revised or development, the IFC should disclose at least one draft of the review document for a 120-day online commenting period.
2.5 EVALUATIONS
- The IFC should re-consider, based on a revised list of disclosure constraints, which OEG reports must remain confidential. For instance, although Country Impact Reviews (CIRs) contain no company confidential information, they are not disclosed because they contain “summary IFC profitability information.” In cases such as these where confidentiality is determined solely by the IFC, the IFC should work towards greater openness.
SECTION 3: INVESTMENT SPECIFIC TRANSPARENCY
3.1 SUMMARY OF PROPOSED INVESTMENT (SPI)
- Require disclosure of SPI “as early as possible.”
Require an absolute minimum SPI disclosure of 120 days before Board consideration for both Category A and B projects. - Require disclosure locally in a form and language that are understandable and accessible to project affected communities.
3.2 SOCIAL AND ENVIRONMENTAL ASSESSMENTS
- Require disclosure of draft social and environmental assessments as early as possible and before they are finalized.
- Require final S&EA disclosure “as early as possible”
- Require minimum disclosure timeframe of 120 days before Board consideration for Category A projects.
- Continue to require IFC to disclose Category A assessments locally.
- Require early local disclosure for all social and environmental assessments (again with a minimum of 120 days for Category A projects), with summary information accessible in a language and form understandable to local communities.
3.3 ACTION PLANS
- Require the disclosure of Action Plans “as early as possible” and “no later than 120 days before the Board date for Category A projects.”
- The framework should establish milestone requirements for early release. One possible milestone could be “draft Action Plan will be disclosed locally by client soon after first round of consultations with project affected communities and before final draft Action Plans are prepared.”
- Include a requirement that Action Plan be disclosed locally in a form and language that are understandable and accessible.
- Include a requirement for disclosure of IFC’s assessment of client progress on meeting Action Plan objectives, including disclosure of when a client is out of compliance.
- Require early local notification of client’s intent to amend the Action Plan, not just ex-post release of basis of decision.
3.4 BOARD PAPER
- The IFC should disclose the final Board Paper on an approved project, subject to well-defined constraints on disclosure.
3.5 MONITORING AND IMPLEMENTATION
- Strengthen disclosure of monitoring information by requiring disclosure of client’s Monitoring Reports on social and environmental performance to the IFC in addition to specifically developed reports for local communities.
- Require disclosure of IFC project monitoring information, including project supervision reports.
- Require disclosure of all monitoring reports required by the Performance Standards, not just those affirmatively identified as disclosable.
3.6 REVENUE AND CONTRACT TRANSPARENCY
- Include binding requirement for revenue transparency for all extractive industries investments (while we believe this requirement should apply to all projects immediately, a phase-in for smaller projects could be footnoted to match the IFC’s EIR commitments).
- Require contract transparency—including Host Country Agreements, Inter-Governmental Agreements, and Production Sharing Agreements—for all extractive industries projects, not just those deemed “significant.”
- Require rather than encourage contract transparency for all projects that provide “essential services” (proprietary or commercial sensitive information could be segregated).
- Provide clear definitions of the specific projects requiring revenue and contract transparency, as well as an explanation for any discrepancy in requirements for large and small projects.
- Require mandatory disclosure of the transparency related requirements contained in loan agreements, as well as an explanation of where the required information must be disclosed (for example in the SPI).
3.7 OTHER IMPORTANT RECOMMENDATIONS
- The draft Performance Standards indicate that in certain cases the IFC may waive their application. The IFC should be required to disclose its intent and rationale to waive application of a Performance Standard, not just provide an ex-post release of the basis of a waiver decision.
- IFC should be required to disclose how it determined that “there is broad community support for the project by affected communities” for large projects with significant adverse impacts (see Guidance Note 1, para. 42). There appears to be no requirement for the IFC to disclose a record the basis of its decision in this critical area.
- Include specific requirement that that client must disclose documentation of “free and prior informed consultations.” Guidance Note 1, para. 41, states that the client must document the process, but does not specify whether this documentation is to be included in the clients’ assessments.
- Include explicit disclosure requirements of Indigenous Peoples Development Plan and Resettlement Action Plan in disclosure policy.