The World Bank’s annual spring meetings take place this week in Washington, D.C. One big topic on the agenda is how to update the World Bank’s “safeguard” policies. Created in the early 1990s, these policies ensure that the Bank considers the social and environmental effects of proposed projects. For example, the safeguards require those borrowing money to assess the project’s environmental impacts and to compensate households who are negatively affected.
The full suite of safeguards is now under review for the first time. Among other things, the Bank hopes to make its safeguard policies reflect changes in the global economic and political landscape that have occurred in recent decades.
World Bank Safeguards vs. National Safeguards
One question on the table is how the World Bank safeguards should interact with national systems already in place in recipient countries. Since the creation of the Bank’s safeguards, many countries have strengthened their own rules and institutions to ensure that large-scale projects are implemented in a manner that protects people and the environment. These include, for instance, laws requiring environmental impact assessments, or government agencies to oversee land use changes. Relying on these domestic systems can potentially improve protection of people and the environment. National laws, for example, allow governments and citizens to work within their own familiar structures, and they’re sometimes more appropriate for local circumstances than Bank policies.
But under the current safeguards, the Bank often uses its own systems to provide social and environmental protection, rather than a country’s existing laws and institutions.1 Many countries still can’t adequately protect citizens and ecosystems in the face of large projects. Governments in developing countries suffer a range of challenges, including a lack of resources and capacity and complex historic and political dynamics that make creating and implementing effective laws difficult. As a result, the Bank’s safeguards still play an important role.
The Bank’s policies have other benefits at the national level as well. For example, they can provide government staff with experience implementing social and environmental protections and give citizens an additional avenue to engage in the planning process.
Steps to Improve World Bank Policies
Navigating the relationship between the World Bank’s system and those of recipient countries will not be easy. The Bank can take several steps to improve its policies in this regard. WRI’s recent working paper, Striking the Balance: Ownership and Accountability in Social and Environmental Safeguards, outlined these steps. They include:
- Build on what the country offers: The Bank would benefit from safeguard policies that allow it flexibility to respond based on national circumstances. If national laws and institutions are strong, the Bank can step back; if they are weak, the Bank can step in to fill gaps.
- Provide clear minimum standards and positive incentives: Clarity regarding what is allowed and what is not can help Bank staff, recipient governments, and affected citizens understand what needs to be done and whether a country’s systems are adequate. The Bank can provide incentives for those that exceed minimum standards, such as access to technical assistance grants and concessionality.
- Ensure that a full safeguard system is in place: Regardless of whether the safeguard system is based on domestic or Bank procedures, the Bank should verify that government and Bank staff implementing the system anticipate risks, plan to deal with those risks, manage and monitor implementation, and respond to harm.
- Invest in both Bank and country safeguard systems: The Bank would benefit from hiring more staff members dedicated to safeguards. Safeguard experts at the Bank often oversee several projects at once and have little time to visit project sites. In addition, the Bank should help recipient governments strengthen their ability to implement large-scale projects in an equitable and sustainable manner. This could be done through technical assistance grants or through closer collaboration when implementing complex projects.
- Empower vulnerable people: The Bank should ensure that civil society organizations and local communities are involved in the implementation of any safeguard system, regardless of whether it is based on the Bank’s systems or those of the recipient country. Public engagement can be encouraged through disclosure of information, multi-stakeholder platforms, community-based monitoring, and similar mechanisms.
According to World Bank President Jim Yong Kim, the meetings this week come “at a moment of historic opportunity. For the end of absolute poverty, a dream which has enticed and driven humanity for centuries is now within our grasp.” Kim emphasized, too, that this dream cannot be reached without putting vulnerable people and sustainability at the center. Effective safeguard policies are one vital piece in this puzzle.
- LEARN MORE: Download the full WRI working paper, Striking the Right Balance: Ownership and Accountability in Social and Environmental Safeguards