Global Policy Forum

By Emad Mekay

The World Bank says it has postponed a consultation with civil society groups in Berlin on its proposed social and environmental guidelines for lending after the NGOs boycotted the event and threatened to launch protests instead.

A World Bank spokesperson told IPS that Wednesday's meeting was postponed until an undisclosed date in December; civil society groups say it was cancelled. The schedule change follows a meeting in London on Nov. 1 that was attended by only one group. Other gatherings have already been held in Tokyo and Washington; many groups also boycotted those consultations and staged protests. The NGOs (non-governmental organisations) are angry because they say the meetings are merely a "public relations exercise" and that the Washington-based bank is not serious about giving a greater say to indigenous and local people affected by bank-financed projects carried out by international companies.

The bank has scheduled other consultations with NGOs in Bangkok, Johannesburg, Moscow, Washington and Tunis before the end of 2004. The bank's private sector arm, the International Finance Corporation (IFC), said in August it was opening its doors for talks on its rules and guidelines for lending, and that it would launch public consultations as it updates its environmental and social safeguard policies. The IFC is also reviewing another policy on information disclosure.

The IFC has loaned 16.8 billion dollars worldwide since 2003. From its founding in 1956 through 2003, it has lent around 59 billion dollars to 2,990 companies that worked in 140 developing countries. The World Bank is the world's largest public-sector lender to developing nations, while the IFC lends to companies whose projects are supposed to contribute to development in those countries.

The bank, an institution dominated by the group of eight most industrialised countries (the G8) is often accused of working on behalf of the interests of western-based corporations and local elites at the expense of the poor, the environment and social norms in developing nations. Bank officials have long denied the allegations, arguing their mandate is to help reduce poverty and that bank loans have lifted millions of people worldwide out of poverty.

The groups that boycotted the Berlin meeting include War on Want, World Development Movement, Bretton Woods Project, Friends of the Earth and the World Wildlife Fund (WWF). Only anti-corruption NGO Transparency International (TI) attended the meeting in London.

The review of the IFC's standards and guidelines is particularly critical because several public and private institutions, including other banks, take their cues on social and environmental standards from the agency. "This whole consultation process is a sham," said Friends of the Earth (Germany) spokesperson Markus Steigenberger, in Berlin. "There is too little time and too little information available. The meetings are effectively no more than a World Bank public relations exercise. They provide no venue for meaningful consultation, especially for those most affected by IFC operations," he added.

According to Hannah Ellis of Friends of the Earth England, "although we are aware that the potential consequences of these environmental and social safeguards review are huge, not just for IFC financing but for the potential impact on the whole international financing sector, we feel that this kind of consultation is unconstructive."

NGOs say they want the IFC to stop financing companies with poor environmental and social records until they change their practices, and to ensure that its investments are environmentally and socially sound. The IFC guidelines recommend how to deal with such issues as natural habitat, indigenous peoples, involuntary resettlement, dam safety and cultural sites.

The review is also important because the agency has promised to incorporate into it some recommendations from the Extractive Industries Review, an independent assessment of the World Bank's involvement in funding oil, gas and mining projects. Earlier this year the EIR final report suggested the bank bail out of mining and gas projects and re-channel the money into developing renewable energy sources. The bank has said it will accept some EIR recommendations, but that it opposes ending investment in oil and gas projects because that would do more harm than good to the developing nations that rely on cash from those projects.

Among other things, the review is supposed to determine whether indigenous communities have the right to say "no" to an IFC project, whether some environmentally vulnerable areas should be protected from any kind of development and how international pollution standards should be modified. The groups say the World Bank is snubbing their proposals to the review, including that standards should be strong, clear and binding, that local people should be able to have a decisive say in projects and that the IFC should be subject to international law. "The IFC is sacrificing its social and environmental norms to meet industry demands," said Steigenberger. "But they are supposed to protect people and the environment. How can the World Bank Group justify weakening rather than improving its social and environmental standards?"

Critics add that without their participation, the review will be meaningless. "The World Bank, to maintain or to gain any legitimacy, must be accountable to its shareholders and to the communities who are investing, and in order to do that it must have constant constructive dialogue with representatives of civil society," Ellis said.

The bank denies it has turned down requests from the NGOs to further open the meetings and give more power to local and indigenous groups. "We are getting a lot of substantial NGO input from those who attended the regional workshops í  we had over 30 NGOs represented in Manila for instance," David Cowan of the IFC's communications department told IPS on Friday. "So we do want them and we do want to hear from them and we want to hear from them on the substance, and if they feel something is weak point out where it is," he added. "There is no sense in which the draft policy is a done deal. We are looking for input from all stakeholders. It means governments. It means clients and of course it means civil society groups and academics."