World Bank Safeguards Review

A broad spectrum of CSOs from various countries and regions will participate in the safeguards review and will have their own priorities. Below are examples of some CSO criticisms of the World Bank safeguards. We also expect that CSOs will identify additional issues as the campaign moves forward. To be successful, the campaign will need to draw on the wide range of expertise of CSOs worldwide, put all of the issues on the table, and identify where we can pursue shared goals and strategies.

Traditionally, the World Bank finances specific development projects, such as dams, roads, and oil and gas infrastructure. These are called "investment loans." Safeguards were designed to manage the environmental and social risks associated with these specific projects. However, financing is now being channeled in ways where the borrower’s actual use of World Bank funds is often unknown. These recently introduced instruments are called "development policy loans" and "programs for results." The environmental and social impacts of these new investments are extremely difficult for CSOs to monitor.

Most governments and international institutions use human rights standards as a way to manage risks and recognize the rights of disempowered people, particularly the poor. In many cases, CSOs have helped to incorporate human rights—ranging from the rights to life, food, and health to freedom from discrimination—into national constitutions and laws. When these same governments sit on the World Bank’s board of directors, however, they refuse to explicitly incorporate human rights into Bank policies. As a result, the safeguards do not address key issues such as labor rights, land rights, gender rights, freedom from torture and discrimination, rights of disabled persons, and indigenous peoples’ rights, among others.

The World Bank has played a significant role in the United Nations negotiations to reach a global deal on climate change. Since 2008, the World Bank has managed multi-billion dollar climate change trust funds for the UN. In December 2010, governments signed the Cancun Agreement and created a Green Climate Fund to finance the global response to climate change. Governments selected the World Bank to manage the trust fund. In the coming years, the Bank will play a leading role in directing finance to climate change efforts, and in setting the precedents for future financing. At the same time, the World Bank has not committed to reduce its own climate change footprint. The Bank does not measure how its investments contribute to greenhouse gas emissions, and has not committed to reduce the overall climate footprint of its lending portfolio. Instead, the portfolio of fossil fuel-related projects has grown.

Worldwide, indigenous peoples constitute some of the poorest of the poor. Although the World Bank was an early leader on indigenous peoples’ rights, it has fallen behind other development actors. For example, the World Bank’s 1991 indigenous peoples policy requires clients to create an indigenous peoples development plan, which gives people a voice in the future development path of their community. This has since become global best practice for governments and companies.

In 2004, in contrast, the World Bank slowed the advancement of indigenous peoples’ rights by creating a watered-down alternative to the international legal principle of "free, prior and informed consent." The principle requires project developers to gain the consent of impacted indigenous peoples before starting a project. The World Bank’s policy only requires developers to conduct "free, prior and informed consultations" with indigenous communities, stripping them of the right to control their traditional lands. Only since the UN General Assembly’s adoption in 2007 of the Declaration on the Rights of Indigenous Peoples has the more robust "consent" principle moved forward among governments and companies.

Since 1993, when communities feel that the World Bank has not followed the safeguards, they can bring claims directly to the Bank’s Inspection Panel. But it is unclear whether the Bank’s reforms will narrow the Panel’s jurisdiction.

Globally, donors are expressing a desire to shift away from environmental and social safeguards towards greater reliance on developing countries’ local laws. This will help to attract major borrowing countries such as China, India, and Brazil to the World Bank. The Bank, for example, has developed a "country systems" approach, which allows borrowing governments to rely on their own local laws instead of following the safeguards. This helps to build countries’ own capacity, but can also mean that development projects go forward in the short term in the absence of strong environmental and human rights protections. Many poor communities do not have a voice in how their government chooses a development pathway. While it is important to ensure country ownership over development projects, this ownership should be democratic, environmentally sustainable, and socially just.