Protecting the Poor and the Environment in World Bank Investment Projects
Economic development depends in part upon providing infrastructure and facilities that improve people’s lives and expand economic opportunities. This development can be from a road that allows a farmer to get goods to market, access to electricity so hospitals can refrigerate medicines and children can do their homework at night, providing clean water to reduce the incidence of easily preventable water-borne diseases that kill an estimated 1,400 children every day, or access to local facilities such as schools, clinics or community centers.
Governments in developing countries often turn to the World Bank to help finance infrastructure and service facilities. We fund these projects because we know they can help to reduce poverty and improve living conditions, which is central to achieving the World Bank’s goals of ending extreme poverty and promoting shared prosperity.
A cornerstone of our work on investment projects is helping to ensure strong protections for people and for the environment. We help do this through policies – often called “safeguards” – that serve to identify, avoid, and minimize harms to people and the environment. These policies require borrowing governments to address certain environmental and social risks in order to receive Bank support for investment projects.
Examples of these requirements include conducting an environmental and social impact assessment, consulting with affected communities about potential project impacts, and restoring the livelihoods of displaced people. World Bank safeguards are widely regarded as an effective way to ensure that environmental and social concerns and community voices are represented in the design and implementation of our projects.
New Rules Reflect a Changing World
The world has changed since the first of our existing safeguards was developed more than 20 years ago. On August 4, 2016, the World Bank’s Board of Executive Directors approved a new Environmental and Social Framework (ESF) to help protect people and the environment in the investment projects it finances. This effort is one of several key initiatives, including procurement reform, and the climate and gender strategies, recently undertaken by the Bank to improve development outcomes.
The ESF responds to new and varied development demands and challenges that have arisen over time. The experience and capacity of many borrowers has improved and our requirements have been updated to reflect the realities of today.
This framework will boost protections for people and the environment and drive sustainable development through capacity- and institution-building and country ownership. It will also enhance efficiency for both the Borrower and the Bank.
The framework brings the World Bank’s environmental and social protections into closer harmony with those of other development institutions, and makes important advances in areas such as transparency, non-discrimination, social inclusion, public participation, and accountability – including expanded roles for grievance redress mechanisms. The framework helps to ensure social inclusion, and explicitly references human rights in the overarching vision statement.
In order to support the new framework – and meet additional oversight demands – the World Bank is on a trajectory to substantially increase in funding for the safeguards.
Strengthening national systems in borrowing countries is recognized as a central development goal by the World Bank and most of its shareholders. In line with this goal, the framework places greater emphasis on the use of borrower frameworks and capacity building, with the aim of constructing sustainable borrower institutions and increasing efficiency.
The expanded protections in the framework, which is precedent-setting for the World Bank, include comprehensive labor and working condition protections and community health and safety measures that address road safety, emergency response and disaster mitigation. It also includes a responsibility to include stakeholder engagement throughout the project cycle, and a non-discrimination principle augmented by a new mandatory World Bank Directive that lists examples of vulnerable and disadvantaged groups and explicitly requires staff to assist borrower to consider, mitigate, and manage related issues.
This framework will promote better – and lasting - development outcomes. It provides broader coverage and access, and will benefit more people, especially vulnerable and disadvantaged groups. The framework promotes sustainable development by considering a greater range of environmental and social risks and potential impacts, and by encouraging the sustainable management of living natural resources. Livelihoods will be better secured by providing protections for workers and improving living conditions of people displaced by projects. The framework will foster resilience by requiring emergency preparedness measures to guard against unexpected shocks and by considering climate change impacts and requiring measures to address them.
Instructions from the Board
The World Bank’s Board of Executive Directors, based in part on a 2010 report from the World Bank’s Independent Evaluation Group (IEG), directed Bank management to: revise the existing safeguards policies to increase coverage and harmonization across the Bank group; enhance client capacity, responsibility and ownership; strengthen safeguards supervision, monitoring, evaluation to ensure rigorous implementation of our policies; and improve accountability and grievance redress systems and instruments.