IFC PRolog

Response to guest blogger, Kirk Herbertson

First of all, Kirk thank you for agreeing to be our first guest blogger.  You touch on a number of very broad and complex issues.  Let me briefly try to address them.  Yes, IFC is committed to a collaborative and transparent review process.  We have many stakeholders and the consultation process is designed to carefully collect views and inputs from all of them.  We need to be realistic about the fact that some of the issues are complex and sensitive and that we will not be able to address all the suggestions from all our stakeholders as sometimes they are conflicting.  However, this does not mean that we would not take them into consideration or analyze them.   All voices are very important to us.
 
Specifically on the topic of human rights, our intention is to engage stakeholders to understand how to incorporate human rights provisions relevant to the private sector into the performance standards.  We believe that many human rights issues were addressed and incorporated in the original set of the Sustainable Policy and Performance Standards but in the language of social development for the private sector.  This language is slightly different than the nomenclature used by the human rights community but it doesn’t mean that the same outcomes are not being achieved.  The current policy includes a number of provisions consistent with the overall approach to avoid and minimize potential project risks that are highlighted in the internationally agreed human rights laws.  At the project level, tangible connection between the project and human rights can be made in many areas, such as, working conditions, project use of security personnel or treatment of Indigenous Peoples.  Building upon the foundation that is currently in the Performance Standards, we hope to better articulate requirements that the private sector can implement.
 
Your comment that communities affected by IFC-financed projects are often not aware that the IFC is involved in the project and thus have no way to hold project developers accountable to IFC standards is a fair one.  Under the application of the Safeguard Polices (pre 2006), clients were required to translate the IFC Environmental Review Summary (ERS) in to the local language and make it publicly available.  The location of the ERS was advertised in newspapers or in radio announcements and they specified that the client was seeking IFC financing.  When we changed to the Performance Standards in 2006, we eliminated this requirement because we increased the local disclosure requirement from projects.  Our intention was to have clients increase ownership of this process by preparing their own project information to be used for local disclosure and to develop a relationship with surrounding communities.  An unintended consequence was that there was no longer a mechanism to make communities aware of the presence of IFC in the project.  We are now considering ways in which we could close this loop and reintroduce a requirement to inform local communities about our involvement in projects that have a directly affected community.  

Finally, in regards to your point on the commitment of senior management, I can assure you that management’s instruction to the team working on the review and update is for IFC to stay current and to show leadership on these issues.  The intention is not to dilute the standards but to move them forward while ensuring that they can be implemented by the private sector.

The IFC Review and the Rights of Affected Communities

My name is Kirk Herbertson, and I am an associate at the World Resources Institute, one of the many civil society organizations (CSOs) engaging in the IFC policy review process. I participated in the IFC’s first consultation in Istanbul, Turkey, and then again at the consultation at IFC headquarters in Washington, DC.

I have high hopes for the IFC review, but its success depends on continued transparency, widespread participation, and devoted leadership. The IFC has demonstrated a willingness to respond to criticism and feedback during the review process—staff members have discussed difficult issues frankly, and IFC has made plans to consult local communities when there were initially no plans to do so. But noticeably lacking is a public commitment by World Bank Group senior management to strengthen—rather than dilute—the IFC’s policies.

In particular, the IFC needs to strengthen its approach to human rights. In most cases, the IFC and its clients continue to place the burden of human rights protections almost entirely on governments. This is an outdated view. An IFC senior advisor recently explained that the human rights landscape has changed in the past three years, particularly because of the work of John Ruggie, the UN Special Representative on business and human rights. Ruggie’s reports to the UN Human Rights Council clarify that under international law, companies are responsible for respecting human rights in their overseas activities. Governments certainly must implement their human rights obligations, but a government’s failure to do so does not let IFC or its clients off the hook.

Human rights are a critical part of the IFC’s mandate to alleviate poverty. To help alleviate poverty, IFC investment choices need to consider the structural causes that human rights help to protect against—such as discrimination, exclusion, lack of accountability, and abuses of state power. Yet the IFC Performance Standards explicitly reference human rights in only one sentence (on core labor rights). And although the Performance Standards address some human rights risks implicitly, implementation remains a problem.

The IFC will need to fill many gaps in its treatment of human rights. For example, there is no policy to prevent deliberate siting of undesirable land uses in minority neighborhoods, even if the decision has underpinnings of racial discrimination. Communities should also have access to remedies when rights have been violated. The IFC cannot be an enforcer of human rights; that is the role of governments. Instead the IFC requires clients to comply with its policies, and has a Compliance Advisor/Ombudsman (CAO) to resolve more serious conflicts. But communities affected by IFC-financed projects are often not even aware that the IFC is involved (directly or indirectly), and thus have no way to hold project developers accountable to IFC standards. Greater community awareness of IFC involvement in projects and the existence of the CAO is essential.

The IFC will consider many important issues during the review—human rights, as well as climate change, supply chains, and disclosure of information. A dynamic, global CSO movement is participating in this process, and will continue to advocate for stronger IFC standards. To learn more about some of the CSO responses to the IFC review, I recommend visiting the Bank Information Center’s website at http://www.bicusa.org/en/Issue.49.aspx.

Our First Consultation with Civil Society - Annual Meetings in Istanbul

This was our first major consultation with civil society, we are just starting the review process.  Being relatively new to IFC I wasn't sure what to expect. I was pleased to see a large turn out, there were more than 70 participants and the knowledge about the Sustainability Policy and Performance Standards was very high. People came prepared to participate which was very welcomed by IFC.  The issues discussed were broad and sometimes challenging, but the quality of feedback was very good.

One of the issues that received a lot of attention during the morning discussion was consultations with communities affected by an IFC client's operations.  We do recognize how important stakeholder engagement is, especially when  it relates to local communities, and we continue to look for better ways to help our clients engage effectively with those groups. The feedback and comments received  are helpful and we hope to hear more on the topic to get everyone's perspective as we move forward.  We recently published a Good Practice Note titled "Addressing Grievances from Project-Affected Communities" a tool  to help our clients meet our requirements related to community engagement  under the Performance Standards. Its publication is timely and we hope it will help our clients implement quality grievance mechanisms.

Click here for the Istanbul Consultation presentation.

Updates from the Annual Meetings

One of the things that has most impressed me about the Annual Meetings this year, aside from being in Istanbul, is really the number of people participating, which is the highest on record.  Representatives from civil society groups came from all over the world to participate in the Civil Society Policy Forum, meet with staff from the World Bank Group and the IMF, and with each other.  I think the interaction alone with such a diverse group of peoples and views has been enlightening for everyone, and I really enjoyed some of the sessions on various topics I participated in.  People had really done their homework and came ready to participate.  We really received a lot of solid, useful feedback on the performance standards and disclosure policy.  I know the session was difficult, but I hope others got as much out of it as I did. 

Towards Greater Transparency

Now that we’ve begun the review, I would like to introduce myself.  I am Aaron Rosenberg, the Chief for Public Affairs here at IFC.  I will be leading the Disclosure Policy part of the review and I want to encourage everyone to participate.  This will be a long process and your participation is critical to ensure our new policies reflect input from a wide variety of our stakeholders.  For my first entry in the PRolog, I want to discuss some important reforms underway.  I’m sure people are aware of the Disclosure Policy Review also being undertaken by the World Bank, more precisely IBRD.  www.worldbank.org/disclosure  The Board will soon be debating the new approach to disclosure, which has been the subject of consultation over the last several months with many stakeholders.  The Bank’s current proposal is a real paradigm shift towards a presumption in favor of disclosure.  This important movement represents a real reform effort underway in the Bank to become more transparent and inclusive.  If adopted, the Bank’s new disclosure policy will certainly set some precedent across the landscape of multilateral development banks.  We will be looking at IBRD’s new policy in the context of our review as well.  My question is what should IFC incorporate from IBRD’s new policy?  IBRD’s policy is based on disclosure of information related to the public sector, but IFC’s clients and activities are in the private sector.  What new requirements would be appropriate for IFC?     

How and Where You Can Help

Welcome everyone!

Let me introduce myself.  I am Patricia (aka Patty) Miller, Environmental & Social Manager in IFC’s Environmental and Social Sustainability Department, and I am one of the many specialists working on the review and update of the Performance Standards so you will be hearing from me from time to time.  

Last week was a huge one for the team with the launched the website http://www.ifc.org/policyreview .  As these things tend to go, we had a last minute IT glitch and a few people worked through the night to get them resolved.  Take a look at the website if you haven’t had a chance already and let us know if it can be improved.  We want it to be user-friendly, easy to navigate and hope the information is clear and sufficient- let us know if it isn’t.

Today is a big day – it is Day 1 of the first phase of consultation.  We will have three consultation phases throughout the next 18 months to review and update the Performance Standards and Disclosure Policy.  We are interested in any and all comments but during this scoping phase it would be helpful if you could provide your guidance in three general areas:

1) clarity of language – are there areas of ambiguity that need to be clarified?
2) implementation effectiveness – do you have any suggestions on how to improve PPS implementation? and
3) gaps in current coverage – are there any missing topics that we need to include?  

The countdown for this first phase has started and you’ll have until November 13 to provide your feedback using one of the many channels we’ve put in place.

Meanwhile, we’ll be holding face-to-face consultations, hosting webinars and other such events to allow us to get feedback from our stakeholders and to help keep you informed.  To find out more about these events and to participate, please check out our calendar.

I look forward to an interesting dialog,

Patty

Let the Review Begin!

Well, here we are at last, ready to embark on an exciting journey to review and update the IFC Policy and Performance Standards on Social and Environmental Sustainability and Policy on Disclosure of Information, also known as the sustainability framework.

IFC has learned a lot in the past three years in implementing its framework. Though this may seem like a very short period of time to review the implementation effectiveness, evolution has taken place in the external global setting and within IFC that needs to be captured.

Our clients, civil society groups, directly affected communities, the IFC Compliance Advisor Ombudsman (CAO), IFC Internal Evaluation Group (IEG) and the Equator Banks have been, and will continue to be, a great source of knowledge on how to improve the effectiveness.

Since 2006, they have shared with us their experience of how the sustainability framework has affected their projects or them personally. We met, we called, we exchanged emails, we engaged in technical conversations and sometimes in difficult heated debates about our policies and our standards—all of which will help us to revise and update them to increase their effectiveness. Transparency and accountability are of the utmost importance to us.

We have put a lot of thinking into how to conduct this process in a collaborative and transparent way such that all stakeholders can participate. We hope that you agree that the process we have outlined will be effective and don’t hesitate to let us know how it can be improved.

We've set up this blog as one more tool to update you on the latest and to share our thoughts with you, but most importantly, to give you the opportunity to speak freely and more personally on the topics that matter to you the most.

So, with this opening welcome, let the review begin and the comments flow in!