The World Bank is in the process of reviewing, updating and strengthening its environmental and social policies that serve to protect vulnerable people and the environment in World Bank investment projects.

On July 1, 2015, the Committee on Development Effectiveness (CODE) of the World Bank’s Board of Executive Directors authorized a third phase of consultations on a revised (second) draft of the proposed Environmental and Social Framework and requested the preparation of an accompanying document to outline certain issues that require further attention. The text of the entire revised framework, as well as the issue summary, was made publicly available on 4 August. Consultations will begin immediately.

The start of these consultations is the next stage of a long journey. There are a wide range of complex and significant issues still to be addressed and great diversity of views both on principle and on specific language. The challenge of reaching agreement across 188 countries is clear. In the end, the World Bank’s Board of Executive Directors will decide on the outcome of the review.

The consultation will continue in more than 30 countries. The first stop will be in Angola, where the World Bank will consult with the Ministers of Finance of African countries. After that, teams of seasoned World Bank safeguards specialists will consult with governments and other stakeholders until the end of the year.

“This revised draft is the result of a robust – in fact, an unprecedented – consultation with World Bank shareholders and stakeholders,” said Hartwig Schafer, World Bank Vice President for Operational Policy and Country Services. “The level of engagement and the caliber of feedback has been excellent, which shows in the revised draft. The proposed Environmental and Social Framework would substantially expand the scope of coverage from our current policy, and would help to ensure that project risk is managed more consistently and effectively.”

The proposed framework presents a risk- and impact-based approach to protecting the environment and people, and features a strong emphasis on risk management and achieving sustainable development outcomes over the life of projects; broadened social assessment and management of environmental and social risks; greater clarity of the roles and responsibilities of the World Bank and Borrower; increased harmonization with development partners and recognized good international practices; and renewed and strengthened partnerships with borrowers.

“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,” said Stefan Koeberle, Director of Operations Risk for the World Bank. “Our next generation of environmental and social protections will add strong new principles of non-discrimination, including children, disability, gender, age, and LGBT/SOGIE, and it will add – for the first time in World Bank history – detailed labor provisions to protect workers, including the rights to collective bargaining and freedom of association, strong grievance mechanisms, non-discrimination, occupational health and safety, and prohibiting child and forced labor.”

The proposal broadens the range of biodiversity concerns and adds provisions for the sustainable use of living natural resources (e.g., fisheries and forests). Climate change considerations have been added, including requirements to estimate and reduce greenhouse gas emissions in Bank-supported projects and to promote climate resilience. Assessments of social and environmental risk will be strengthened, ensuring resources are especially targeted to high risk projects. Finally, the draft framework includes Free, Prior, and Informed Consent (FPIC) for Indigenous Peoples, and requires increased and ongoing stakeholder engagement.

The proposed revision has evolved significantly from the first draft:   

• The “alternative approach” clause for the applicability of the draft indigenous peoples’ standard has been deleted. 

• The Free, Prior, Informed Consent (FPIC) provision, which was already a major step forward from the Bank’s prior position of Free, Prior, Informed Consultation, has been strengthened to require the World Bank to document that consent has been obtained. If this can’t be shown, the World Bank will not proceed with the aspects of the project relevant to Indigenous Peoples. These improvements provide for a new standard that is at the forefront of International Financial Institution (“IFI”) safeguard policies.

• The proposed labor standard has been substantially expanded to include the rights to freedom of association and collective bargaining. In addition, the scope of the proposed labor provision provides increased coverage for contractors, primary supply workers, and workers involved in community labor.

• On biodiversity, the revised draft introduces the concept of ecosystems, and clarifies that offsets, which are actions to compensate for unavoidable biodiversity impacts associated with economic development, should only be considered as a last resort, and proposes that in some instances offsets would be prohibited altogether. 

• On land and involuntary resettlement, the second draft proposes to add an annex with detailed resettlement planning requirements, including for the production of baseline studies, and clarifies that compensation must always be paid before displacement. In addition, the revision also treats resettlement as a development opportunity, including benefit sharing for project-affected people, and a requirement to assess risks and impacts caused by land titling activities has been added. 

• Human rights and the World Bank’s contribution to their realization are addressed in the draft framework’s Vision and through key provisions in the standards.  The proposed framework emphasizes that the Bank shares the aspirations of the Universal Declaration of Human Rights and helps its clients to fulfill those aspirations. This approach is promoted in the design and implementation of the development projects the Bank supports.

At the request of Executive Directors, the third review phase will focus on implementing the framework in borrowing countries and on issues that require further discussion.

Consultations will also focus on the feasibility to implement the proposed provisions on the ground and on the potential impact of the proposed Framework on Borrowers. Throughout consultations, the Bank will work with Borrowers to identify any additional support needed to implement the proposed provisions.

The feedback received during consultations will inform the third draft Framework and the discussions of the World Bank’s Executive Directors as the reform of the safeguard policies proceeds.

A dedicated consultation web page provides a platform for shareholders and stakeholders to contribute to the discussion.

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Background

The review of the World Bank’s safeguard policies began in 2012 with the goal to:

• Enhance protections for the poor and the environment through modernized standards;

• Provide inclusive access to development benefits through the introduction of a non-discrimination principle;

• Strengthen partnerships with borrowing countries through closer cooperation and increased use of borrower frameworks; and

• Strengthen the World Bank’s leadership through a modernized safeguards framework.

The review of the World Bank’s safeguard Policies includes three consultation periods. Two rounds of consultations have been completed (Phase 2 closed on March 1st).

This reform touches on complex development matters, including Human Rights, climate change, and a number of social issues. Consultations on the first draft Environmental and Social Framework showed a wide range of views among shareholder governments and civil society groups. When the Committee on Development Effectiveness (CODE) of the World Bank’s Board of Executive Directors discussed the second draft of the proposed Framework, consensus emerged on the overall architecture and some of the proposed provisions. However, many issues remained open. CODE authorized consultations in order to continue efforts to find solutions where views are divided. Executive Directors requested the preparation of an indicative list of outstanding issues to guide discussions throughout the consultation process.