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News / 11 March 2013

Environmental regulations of the World Bank have to be better

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Recently, the World Bank announced to change its social and environmental regulations, the so-called 'safeguards'. These safeguards do not only apply to investments of the World Bank, but are often adopted by other banks and credit institutions all over the world. "If the World Bank changes the regulations, there will be significant global consequences!", Pieter Jansen warns. Last Tuesday he was in Brussels on behalf of Both ENDS for a consultation of the World Bank with European civil society organisations to give his view on the proposed changes.


Exceptions

"I took part in the consultation with the inclination that the safeguards should apply to all World Bank activities. Currently this isn’t the case: now the regulations only (fully) apply to project investments. But the Bank also provides other forms of credit: the ‘budget support’ (development funds directly given to the government of the recipient country) and ‘Programs for Result’ (meant to support government programmes with money paid on the basis of results). For these forms of credit the safeguards do not apply, or to a lesser degree.  Furthermore, the International Finance Corporation (IFC), a department within the World Bank that gives credit to the private sector, does not work with safeguards, but with guidelines. These guidelines are not completely binding. Recent research has shown that IFC hardly checks whether the guidelines are respected.

 

All these exceptions, as well as the informality and lack of controls, can have serious consequences for locals and the environment where investments take place. I want to prevent the World Bank from continuing to make exceptions to its own social and environmental regulations, and from working with guidelines rather than regulations."

 

Incomplete

"Another cause for concern is that the safeguards are not complete. For example, according to the current safeguards the Bank’s activities don’t have to be in accordance with international human right standards. Together with other civil society organisations Both ENDS advocates to ensure that compliance with human rights will now finally be incorporated as a strict condition. In earlier decision processes, like the one in 2011, this didn’t happen.

 

This year a number of consultation rounds take place. In 2014 the Bank will eventually decide on the safeguard.”

 

Small country, big voice
World Bank’s President Jim Yong Kim has repeatedly said that he doesn’t want a weakening of the current safeguards, and that Bank does not intend to maximize credit, but to fight poverty in the most effective and environmental friendly way. About this I can only say that I fully agree! But unfortunately it’s not the President of the Bank who makes the final decisions; the member states in the banking board do that. The Netherlands, being a small country, has an influential voice in the decision making because it provides a considerable financial input. But unfortunately, the Dutch have not yet clarified their position on the safeguards.  I’m going to make efforts to persuade the Netherlands to promote the position of civil society within the banking board, which means that safeguards should apply to allbanking activities, and that human rights are recognized."

 

 

Want to know more?

The World Bank’s safeguard consultations

IFC and the recent research showing that IFC hardly controls whether their guidelines are respected.

In 2011 the World Bank announced to provide credit with Programs for Results. Also then a fierce debate about the safeguards took place.

Read more about this subject