New: WRI statement on diversity, equity and inclusion

You are here

The World Bank Just Overhauled its Safeguards for the First Time in 30 Years

The World Bank’s new Environmental and Social Framework, four years in the making, is designed to ensure that projects the bank invests in, like roads or agricultural facilities, are safe for people and the environment. Given the bank’s checkered history of supporting occasionally controversial projects, the framework aims to help ensure that the approximately $30 billion that the bank invests in projects annually do not cause harm. The framework is likely to have an impact on the policies of other development banks and governments around the world, as they seek to meet or exceed the World Bank’s standards.

The framework replaces “safeguard” policies that previously governed the activities of the bank and its borrower governments, and is the first overhaul of the policies in 30 years. The framework is the result of much negotiation and compromise, with input from governments and communities around the globe. A common theme throughout the negotiations centered upon how to introduce new requirements while improving the relationship between the bank and its borrower governments.

Here are three key facets of the new framework:

New Relationship with Governments

The relationship between the World Bank and the countries it lends to is a sensitive one: While the bank wants to make sure its money supports activities approved by its directors and managers, countries want more control over how they use money they borrow. This tension was evident in negotiations over the new framework, which was released August 4. Many borrower countries called for greater flexibility in the bank’s requirements, while many members of civil society groups wanted a more stringent way to avoid harming people or the environment.

The framework is a compromise. It allows greater flexibility for borrower countries on when they must show that they can implement social and environmental protections, and what documents they need before a project is approved. But there is also more emphasis on implementation of commitments after projects are approved. The bank and borrowers must now agree and report on legally binding plans for implementing protections (so-called Environmental and Social Commitment Plans), a new requirement. The bank has also promised to commit more funding and staff to ensure that the framework is implemented.

Special Attention for Vulnerable People – but Not All of Them

The new framework is meant to help ensure that projects funded by the Bank do not harm vulnerable people. How exactly such protection should be provided, though, was the subject of intense debate. For example, while some developed countries pressed for language to protect the LGBT community, a number of developing countries opposed it.

The finished framework reflects this debate.  Workers get new protections and project developers are required to get consent of indigenous peoples before implementing projects that affect their land or access to resources. However, there are only limited protections for women, and none for the LGBT community. The framework’s definition of indigenous peoples is more complicated than in the old safeguards, introducing a narrower definition for peoples in Sub-Saharan Africa, which could make it more challenging for indigenous people to qualify for support.

Recognition of Climate Change

The bank’s old safeguards barely mentioned climate change. The new framework introduces requirements to assess each project’s greenhouse gas (GHG) emissions and what impact a changing climate will have on its success. In negotiations, debate hinged primarily on a fear among borrower countries that adding GHG accounting requirements would make project preparation more costly. Because most countries have relatively low GHG emissions compared with historic emissions of richer countries, the bank agreed to pay GHG accounting costs under certain circumstances.

A Combination of Compromises

The Environmental and Social Framework is a combination of compromises. Going forward, the world will be watching as the World Bank begins to phase in the new framework. Ultimately, everyone’s hope is that it paves the way for effective collaboration between the bank and its borrowers on projects that bring about equitable and sustainable development.

Stay Connected