International Consortium of Investigative Journalists

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World Bank safeguard proposal 'dangerous,' rights groups say

Sengwer, Kenya

The World Bank’s latest proposal for redoing its standards for financing dams and other big projects represents a “dangerous rollback” of the global development giant’s protections for vulnerable people and the environment, according to Oxfam, Human Rights Watch and other environmental and rights groups.

The bank’s proposed changes “will vastly weaken protections for affected communities and the environment at the same time as the bank intends to finance more high-risk projects” through governments in economically struggling regions, a statement signed by 19 global advocacy groups says.

The groups say the new standards would shift too much responsibility to governments to police themselves and fail to require detailed procedures or budgets for the bank's oversight.

The World Bank counters that the proposed changes would strengthen rather than weaken protections. It says the latest rewrite is a “major step forward” that will improve safeguards for ecosystems and for people who are evicted from their homes as the result of development initiatives.

“We are well on our way to having ‘leading edge’ environmental and social standards that are clear, stronger and more comprehensive than our current safeguards, and that support our goals of ending poverty and promoting shared prosperity,” Stefan Koeberle, the bank’s director of operations risk, said in a news release.

The bank released the proposed rules on Tuesday. New rules cannot go into effect until after a period of public comment followed by a vote to approve them by the World Bank Group’s governing board, which is made up of representatives from the United States and other member countries.

That process could take months or even stretch into 2016.

The bank’s “environmental and social safeguards” address what happens to poor and vulnerable communities that end up in path of roads, power plants and other projects backed by the bank. The safeguards framework requires that the bank’s borrowers identify people whose homes or land will be lost, as well as people whose livelihoods will be damaged as a result of development projects. Borrowers must resettle them into new homes or help restore their livelihoods.

The arguments over how these principles are carried out aren’t just a matter of bureaucratic wrangling. The standards that World Bank agrees to follow -- and impose on governments that borrow money from the bank -- will have an impact for generations.

Projects sponsored by the World Bank can hurt or help people and habitats around the globe. Building dams can provide electricity for rural precincts, but it can also force thousands of poor people from their homes. Conservation programs sponsored by the bank can help preserve forests and fight climate change, but they can also endanger the way of life of indigenous peoples who live in the forests.

In addition, the World Bank’s rules are often treated as benchmarks by regional and national development banks and large private sector firms, as they set their own standards for financing development.

ICIJ's World Bank databaseThe rulemaking process comes against a backdrop of growing criticism of how well the bank has enforced its current rules. An investigation by ICIJ, The Huffington Post and other media partners found that the World Bank often fails to make sure that people harmed by its projects are protected and compensated for their losses. In some cases, governments have been accused of using World Bank money to bankroll mass evictions that have destroyed villages and targeted people for violence from security forces.

World Bank Group President Jim Yong Kim has promised that the bank will work harder to make sure its safeguard standards are followed. He has also said the bank will allow “no dilution” of its safeguards during the revision process.

The bank said Tuesday that the proposed safeguards framework would improve how the bank judges social and environmental risks, ensure that resources get directed to high-risk projects and require that borrowers follow due process if they evict people from their homes. The latest draft includes new language specifying that resettlement costs must be included in total project costs and that project activities that displace people cannot begin until resettlement plans are approved by the bank.

Environmental and rights groups criticized the first draft of the safeguards revision when it was released in 2014. They say that the new draft released Tuesday includes some improvements over the earlier version but that it still represents an unsettling departure from the bank’s current standards.

In the groups’ statement, Kate Geary of Oxfam said the bank has an “appalling track record when it comes to protecting people moved from their homes and livelihoods as a result of Bank-funded projects. The draft does little to ensure that these problems will be addressed, as the [World Bank Group] Board will be asked to approve projects that cause displacement even before resettlement plans and budgets are in place.”

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