World Bank Safeguards Policy Changes: Safeguarding the Bank, *Not* Human Rights and Environmental Integrity

By Gregory Berry, Legal Intern
By Gregory Berry, Legal Intern

Last week, CIEL joined other civil society organizations in one of the final consultations with the World Bank on the draft revisions to its safeguard policies.

But perhaps “revision” is too gentle – a better word might be overhaul. The World Bank’s new proposed safeguard policies mark an attempt to move away from a mandatory safeguard system to open-ended compliance, the success of which is largely left to the discretion of borrower countries.

As a new and albeit impressionable legal intern with CIEL, I offer the following: an outsider’s take on the most recent consultation process. This perspective may be of use to those who are not entrenched in the nuances and implications of the changing safeguards policy. Conversely, an outsider’s opinion may help illustrate the stakes of this consultation more clearly to the average taxpayer, who could be unaware that their own tax dollars fund the World Bank whose projects can have devastating effects on vulnerable communities and the environment.

The importance of the consultation cannot be overstated. Ill-advised and poorly supervised World Bank projects have lead to devastating environmental impacts and human rights violations. For example, the Nam Theun 2 Hydropower Project in Laos grossly underestimated massive human displacement and other downstream economic impacts. The livelihoods of more than 150,000 people were forever disrupted or destroyed. Some of the dam’s unforeseen impacts to poor fishermen and indigenous communities were the result of the bank confidently relying on data provided by a corrupt government.

As another example, the Uganda Transport Sector Development Project was funded without effective analysis of the impacts to vulnerable communities and without any meaningful consultation or participation by landholders. Farmers’ lands were compacted and taken without consent or compensation. Women and children were subjected to harassment, as well as sexual and physical harm during the construction phase of the project. Community members complained that the corrupt police force would often overlook transgressions linked to the project.

Given the Bank’s track record of problematic projects, how then do the draft policies compare to the old standard, and what can we expect?

On the surface, the draft policies appear to broaden the reach of human rights protections. New language specifically requires monitoring of impacts on vulnerable communities, giving “particular consideration to Indigenous Peoples, minority groups, and those disadvantaged or vulnerable because of, for example, age, disability, gender or sexual orientation (…).” In actuality however, the new draft seems to overtly shift responsibility and liability for harms away from the Bank and onto borrower countries. This is especially problematic because borrower countries may lack the financial and technical capacity to adequately handle monitoring and/or grievance systems when things go poorly. Worse, borrower countries may lack the political will to adequately assess or monitor project impacts on the environment or on vulnerable, underrepresented, and disenfranchised (and in the case of LGBT communities – often criminalized) populations.

For the past four years, CIEL has worked tirelessly to convey the importance of clearer and stronger environmental and social safeguard policies to the US Treasury and Senate, as well as World Bank staff, management, and board of directors. Indeed, throughout the consultation, civil society’s overarching concern has centered on the lack of clarity, detail, and strength of the safeguards to adequately protect human rights and the environment going forward.

So why then were discussions on human rights and acceptable grievance mechanisms to protect these concerns pushed to the final hours of a two-and-a-half-day process? Ultimately, World Bank representatives rejected arguments that human rights language should be incorporated into the safeguards policy. The Bank emphasized that the point of the consultation was not to achieve resolution on any arguments presented, but instead to add clarity to questions asked and diligently report comments back to the board of directors, which will make the final decisions. Bank representatives at the consultation averred it was “above our pay-grade” to weigh in on whether human rights should be incorporated into the framework.

But here is the problem: The World Bank seems to be shifting responsibility and liability for human rights violations and environmental degradation from the bank to the borrower. This would mean borrower countries increasingly bearing the burden of designing, categorizing, implementing, monitoring, and remedying issues related to development projects, instead of a more hands-on, integrated approach by the World Bank. In this context, two questions loom:

  1. What is the scope of liability and extent of responsibility of the Bank under this proposed policy? and
  2. Will shifting responsibilities advance environmental protection, or will it discourage borrower countries from diligently seeking, disclosing, and remedying risks?

The World Bank chose to begin with a focused discussion on its discretionary framework for adaptive risk management, in which the amount of effort and Bank resources put into a project shall be equal and proportionate to the foreseen risks of the project. However, by shifting the responsibility onto borrower countries to identify stakeholders, devise resettlement plans, and establish project-level grievance mechanisms on top of pre-existing duties to conduct Environmental and Social Impact Assessments, the World Bank diminishes its capacity to understand those risks. It would seem that the new safeguards policies would not require the Bank to conduct a full assessment and valuation. This effectively minimizes the “effort” put into monitoring project impacts, and risks the possibility of diluting environmental and human rights protection.

Further, successful adaptive risk management requires quantitative analyses of environmental impacts, which are not currently required in a timely manner in the draft policy. But without quantified baseline data, weighing risks to biodiversity and living natural resources against projected impacts is impossible. Without thorough quantification requirements at the beginning of a project, the Bank risks facilitating project approvals without assessing the true impact on the climate and environment.

In this outsider’s opinion, the safeguard consultation process was effective in highlighting loopholes that could foreseeably lead to environmental degradation or an increased risk of human rights violations. Civil society organizations have declared that they will not accept looser assessment or monitoring requirements, and have demanded more inclusive stakeholder engagement, among other pending issues. To achieve this and to truly safeguard human rights and the environment, the World Bank must provide a written commitment in its policies beyond its discretionary approach to “monitor the monitoring” of its borrowers.

Originally posted March 01, 2016