The Impact of the World Bank’s Safeguards Review

Cristina Passoni, Ariel Rosenbaum, and Eleanor Vermunt

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In 2012, the World Bank announced a review and update of its Environmental and Social Safeguards, a set of operational policies governing the conduct of the Bank and the borrower country (“Borrower”) in order to ensure that Bank operations do not harm people and the environment. The decision to review the Safeguards reflects both an increase in competition from other lenders as well as an ideological shift of the international community in favor of greater Borrower ownership.The first draft of the World Bank’s Environmental and Social framework was published in July 2014 (“first draft”). In

The first draft of the World Bank’s Environmental and Social framework was published in July 2014 (“first draft”). In response to comments received in the process of consultation, in July 2015, the Bank issued the Second Draft Framework for Consultation (“Proposed Safeguards”), which is the subject of this report. The Proposed Safeguards have received widespread attention from civil society organizations, many of which have emphasized the tensions between greater Borrower ownership and the capacity of the new Proposed Safeguards to protect affected communities. Despite extensive
discussion surrounding these Proposed Safeguards, little attention has so far been given to their relevance for the World Bank body that is tasked with holding the Bank accountable for compliance with the Safeguards-the World Bank Inspection Panel. In this paper, we explore the potential impact of the Proposed Safeguards on the Panel, whose role is essential to the accountability of the Bank. Based on our analysis of the changes embodied in the Proposed Safeguards and the Panel’s previous approach to assessing Bank compliance with the existing safeguards, we conclude that adoption of the Proposed Safeguards should not impede the Panel from continuing to function as an accountability mechanism.

However, given the shift to greater Borrower ownership in the Proposed Safeguards and the apparent decrease of Bank control over projects, it is possible that the Panel may face resistance from Bank Management and the Board of Executive Directors who might argue that, given the qualitative changes contemplated by Borrower ownership of the project, Bank Management should not have the same level of responsibility as it did in relation to the current Safeguards. Further, if the Bank does not explicitly recommit itself to high environmental and social standards and does not reaffirm the saliency and
importance of the Panel, there is a serious risk that states, particularly those with more autocratic regimes, might be emboldened to refuse the Panel access or to intimidate witnesses from cooperating with the Panel. To ensure its continued effectiveness, we recommend that the Panel should both continue to engage with Bank Management and the Board of Executive Directors to clarify its role under the Proposed Standards, and continue to assert its unchanged role and power in the first set of cases it investigates after the adoption of the new Safeguards.