This month, World Bank executives approved the third and final draft of its Environmental and Social Framework, much to the disappointment of human rights and environmental organizations around the world, including ERI. This spring, ERI was among numerous civil society organizations that participated in public consultations around the second draft of the Framework. In a formal submission, ERI provided feedback on provisions of the draft safeguards policy that addressed grievance redress and the protection of indigenous peoples’ right to Free, Prior and Informed Consent (FPIC).
According to the World Bank, the consultation—which purportedly involved four years of analysis and engagement with nearly 8,000 stakeholders in 63 countries—was the “most extensive” ever conducted by the institution. The language in the final version of the Framework therefore has come as an unwelcome surprise for the human rights community, as it represents a major step backward for the World Bank in terms of ensuring social and environmental protections for communities affected by Bank-financed development.
In addition to the glaring absence of binding human rights obligations—the need for which was highlighted repeatedly by civil society groups throughout the public consultation—one of the most concerning policy changes is the dangerous amount of discretion the Framework gives to borrower countries. Under the new safeguards, the World Bank has delegated much of its due diligence duties to borrowers, giving them the responsibility of carrying out Environmental and Social Impact Assessments for projects despite possible (and probable) issues with capacity, conflicts of interest, and even corruption and bad faith.
Moreover, rather than requiring borrower countries to comply with a clear set of rules around social and environmental risk management that reflects internationally agreed-upon norms and standards, the Framework grants borrowers and financial intermediaries the flexibility to instead apply local laws and regulations as benchmarks for projects. This will essentially allow borrower countries with even the grimmest of human rights and environmental track records to get the green light on projects with potentially devastating social and ecological implications without adequate community engagement, oversight, and accountability.
Moreover, unlike earlier drafts, the Framework no longer requires borrowers to present plans for resettlement and compensation of communities facing involuntary displacement at the project appraisal stage, before the project in question can be approved. Instead, borrowers will only be required to prepare such mitigation measures before actual physical or economic displacement occurs, an approach that notably contrasts with the Bank’s “deep” concerns last year over its failures in the preparation, implementation, and oversight of resettlement policies.
A few aspects of the new Framework deserve praise. For example, in recognition of many African governments’ reluctance to formally recognize certain ethnic groups as “indigenous” for political reasons, Environmental and Social Standard 7 has extended protections traditionally reserved for indigenous peoples—including FPIC—to “Sub-Saharan African Historically Underserved Traditional Local Communities” possessing the some of the defining features of indigenous peoples, including self-identification as members of a distinct social and cultural group and collective attachment to a distinct geographic area. Moreover, for the first time, the Bank has also included a safeguard specifically for labor and working conditions that bans forced and child labor and workplace discrimination, and promotes collective bargaining rights and occupational health and safety.
But even the Framework’s most progressive provisions will operate under a potentially dangerous caveat: the ability of borrowers to allow their own laws, policies, and regulations to supersede stronger Bank guidelines so long as the two systems have “materially consistent” objectives. This is a lost opportunity for the World Bank, whose prioritization of making its regulations more palatable for potential borrowers has come at the cost of the basic rights and dignity of some of the world’s most marginalized communities.
