International
civil society letter regarding the
World Bank's safeguard policies
June 7, 2004
International Standards for International Projects
Dear Executive Director,
Civil society groups in the South and North are concerned about proposed
measures that would weaken the social and environmental standards applied
in World Bank projects. The following letter expresses concerns of 186
organizations from 60 countries. A clear majority of the signatories are
NGOs from borrowing countries.
Our letter responds to the Bank's proposed new middle income country strategy
(MIC strategy), and the pilot project in Mexico that has been submitted
to the Board. The MIC strategy proposes that future World Bank projects
in many countries rely on national social and environmental standards
rather than the Bank's own safeguard policies. The strategy also proposes
that in such projects, the role of the Inspection Panel will be linked
to national standards rather than the Bank’s safeguard policies.
The World Bank argues that these measures would "remove obstacles
to timely quality lending". (For a detailed critique of the proposed
MIC strategy, see International Rivers Network, The World Bank’s
Safeguard Policies Under Pressure, May 2004, available at http://www.irn.org/programs/finance/irn_wb_critique.pdf).
Civil society groups express the following concerns regarding the proposed
changes:
Compliance
with national and World Bank standards: It is self-evident
that all World Bank projects should comply with the national standards
of borrowing countries. We support a strengthening of national social
and environmental standards and capacities. But being an international
institution with a development mandate, the World Bank must also comply
with its own safeguard policies. Ultimately, we believe that all policies
of the World Bank, other international financial institutions and governments
should reflect the international environmental and human rights standards
that governments - i.e., the members of the World Bank - have established
through the framework of the United Nations.
Confusion
about applicable standards: The World Bank expects national
standards to be 'equivalent' to its own safeguard policies. It is not
at all clear what this means in practice. The Bank is currently preparing
the Decentralized Infrastructure Reform and Development Project (DIRD
project) in the state of Guanajuato/Mexico as a first pilot project for
the reliance on national standards. The project would bring about a significant
weakening of applicable standards. Its components may cause involuntary
resettlement. Yet neither Mexico nor the state of Guanajuato have resettlement
laws. The World Bank and the borrower have instead prepared an Environmental
and Social Management Framework (ESMF) that is supposed to reflect the
'spirit of Bank safeguard policies'. What can affected communities do
if the DIRD project violates the World Bank's Resettlement Policy (OP
4.12), but not Mexican laws and the ESMF?
Access to
information: Several safeguard policies require the World
Bank to provide civil society with timely access to important project
documents. Examples are Environmental Assessments under OP 4.01, and instruments
such as the Resettlement Plans under OP 4.12. It is unclear where civil
society could get access to such documents when future projects rely on
national standards rather than the Bank's safeguard policies.
Role of the
Inspection Panel: In most countries, governments can be
legally and politically held accountable for the projects that they implement
through the judicial system and through elections. The only mechanism
through which affected people can hold the World Bank accountable is the
Inspection Panel. The Panel was created to investigate the role of the
World Bank, and not governments, in projects that harm local communities.
It is questionable whether national governments would indeed allow their
actions to be investigated by an international body such as the Inspection
Panel. The role of the Panel would be significantly weakened in the proposed
Mexico pilot project. For the Panel to remain effective, it must continue
to hold the World Bank accountable, and its point of reference must continue
to be the World Bank's safeguard policies, not national standards and
procedures.
Need for strengthening
social and environmental standards: The experience of
affected communities, World Bank evaluations and Inspection Panel investigations
all document that the World Bank's safeguard policies must be strengthened
and more strictly supervised and complied with. This has been confirmed
by the report of the Extractive Industries Review. It will also be important
to strengthen the role of the Inspection Panel in the follow-up to its
investigations. We welcome the recommendations of the EIR, and the measures
that private banks and export credit agencies have recently taken to strengthen
their own standards. Many of these standards are still inadequate, and
are often not implemented in practice. The process of strengthening the
social and environmental standards of financial institutions must therefore
continue. It is worrying that the World Bank management intends to undermine
this trend by shying away from complying with international standards
in Bank projects.
Administrative
burden: The administrative inconsistencies of the procedures
of international financial institutions create an unnecessary cost and
burden for borrowing governments. The MIC strategy does not resolve this
problem. It proposes that national standards be analyzed and certified
regarding their equivalence with World Bank standards. Subjecting national
standards to international certification could create additional costs
and delays. In the case of the Mexico pilot project, the borrower for
example had to prepare, and will need to comply with, a new Environmental
and Social Management Framework, in addition to national laws and state
regulations. While we support an administrative harmonization of lending
procedures, we are opposed to any 'harmonization' process that will weaken
social and environmental standards but will not create any real administrative
benefits for borrowers.
In conclusion, we support a strengthening of national social and environmental
standards and capacities, but will oppose any measures that will weaken
the World Bank's safeguard policies, and the accountability of the Bank
regarding compliance with these policies. We strongly recommend that the
Board of Directors postpone a discussion of the Mexico pilot project until
it has had the opportunity to discuss a revised version of the MIC strategy.
The existing safeguard policies have been adopted based on extensive consultation
with international civil society. Any proposed changes that affect these
policies should therefore be made public for meaningful discussions by
civil society before they are presented to the Board of Directors.
Thank you for your attention to these concerns.
Yours sincerely,
Peter Bosshard, International Rivers Network, USA
Gustavo Castro Soto, Centro de Investigaciones Económicas y Políticas
de Acción Comunitaria (CIEPAC), Mexico
Shripad Dharmadhikary, Manthan Adhyayan Kendra, India
Manana Kochladze, CEE Bankwatch Network, Georgia
Ashish Kothari, Kalpavriksh, India
David Ugulor, African Network for Environmental and Economic Justice (ANEEJ),
Nigeria
cc. James D. Wolfensohn, President, The World Bank |