Not So Fast, World Bank: Safeguards Matter!

October 10, 2016

Since mid-2012 the World Bank has decided to undergo a review of its environmental and social policies. At the time when this process was launched, the Bank stated that the multi-stage examination was being undertaken "to better address environmental and social issues that countries face today (…) and to deliver better environmental and social outcomes in the projects and programs the Bank supports." Even if this statement appears unproblematic, the matter has brought a great deal of debate.

In July 2014 the World Bank presented a first draft, Environmental and Social Framework. Specifically, this draft lays out the rules and criteria by which Bank’s loan recipients must live up to in order to qualify for funding. These safeguards cover a wide variety of areas that include climate and forest standards, and a vast set of civil liberties, mainly related to labor, disability, child, gender and sexual minority rights. The alleged purpose of this new framework is to ensure the Bank is not helping to foster non-sustainable growth and making sure prosperity is shared by all. Without diminishing the importance of enforcing these standards, it appears crucial to determine how these benchmarks were established and brought together in the first place.

Concerns were raised rapidly by several civil organizations from diverse countries, specifically those located in Africa and Latin America. In early February 2015, for example, advocates from Peru, Bolivia, Ecuador, Argentina, Mexico, and Colombia, were particularly  dubious of  the World Bank’s global consultations on loan safeguards meeting in Lima, Peru. Several participants of this gathering where disappointed with the Bank’s inability to explain how, when, or what criteria they will allow countries to use the implementation of the proposed Environmental and Social Framework. The discomfort escalated when Bank officials claimed they had no obligation to comply with international treaties and laws since the Bank itself is not a member-state. Many had the impression that if the Bank does not have to live up to well-established and recognized international laws, they can get away with a lot of illegal behavior.

Reality gives credit to these concerns. Peru’s indigenous and peasant communities, like the ones from Cajamarca, continue to suffer violence, discrimination, and insufficient consultation over developmental decisions that involve their own communities. This has fostered feelings of disfranchisement and led to elevated levels of social conflict. In January 2015 the Human Rights Ombudsman reported a total of 159 conflicts in the country, of which 108 are active. The bulk of these conflicts relate to socio-environmental concerns, specifically with extractive industries. In some cases, projects operated by these companies have the direct support of the World Bank. Therefore, skepticism from Peruvian civil society is understandable, particularly if the Bank continues introducing polemic clauses like the opt-out option for borrowers, allowing countries not to apply the indigenous peoples' safeguards. Consequently, the legal recognition of the rights of indigenous peoples over their lands, territories and resources is not fully supported, which is a critical element for the protection of indigenous peoples in any development intervention.

Finally, a dangerous aspect of the Bank’s proposal is the precedent it sets for other multilateral finance institutions. The World Bank has historically been a leader in developing progressively stronger environmental and social protections, but this latest draft undermines that reputation significantly. After all, if the World Bank wants to achieve its essential goals of eliminating extreme poverty and increase shared prosperity, it must engage in a process that is based on the understanding that human rights and sustainability are the fundamental components of development, not the opposite.



About Author(s)

Alfonso Buzzo's picture
Alfonso Buzzo
Born and raised in Argentina, I have been working in development for the last ten years in a local slum with crack addicts and homeless people. After moving to Pittsburgh, I am currently an MID candidate at Pitt. Development and Latin American Social Justice are my main concerns, and I am willing to spend some time working in Washington after graduation at either the World or Inter-American Development Bank.