Will the World Bank cut back on social, environmental and human rights protections?
This week, the World Bank holds its annual meeting. Amid the delegates rushing in and out, the Bank is expected to discuss a number of organizational changes ushered in by President Jim Yong Kim. As usual, a large number of civil society events critical of the Bank are planned, including a protest outside the Bank’s headquarters. This year, the protests have a specific focus: backsliding on the Bank’s commitment to environmental, social and human rights safeguards in Bank-financed projects.
Ever since the 1970s, affected communities and activists have complained that some development projects, despite the promise of raising living standards or incomes, have done more harm than good. Starting with the Narmada Dam in the late 1980s, communities began targeting financing of these projects by international financial institutions (IFIs). Pressure to avoid or minimize these harmful collateral effects has over the last quarter century led to an expanding set of guidelines, operational procedures (OPs), and impact assessment requirements for IFIs. These were joined over time by monitoring and redress mechanisms of various sorts, all aimed at improving the quality and outcomes of projects and programs as well as avoiding controversy, bad publicity and legal challenges from dissatisfied local communities or workers. For example, in 1993 the World Bank created the Inspection Panel; the regional development banks soon after created their own accountability mechanisms. The World Bank’s private sector arm, the International Finance Corporation, created a Compliance Advisor Ombudsman; the US Overseas Private Investment Center has an Office of Accountability.
In all these cases, the performance of the lender is measured against a set of internal guidelines and operating procedures. The most common complaints involve failure to do an adequate environmental and social assessment, or to comply with involuntary resettlement rules and those involving indigenous peoples. Other current safeguards involve dam safety, pesticides, and cultural heritage. In 1997, the World Bank grouped ten Operational Policies as specific safeguard policies – six environmental, two social, and two legal policies.
The safeguards system for IFIs created in the 1980s is being pulled in two directions. On the one hand, growing lending in infrastructure and natural resource-related sectors has made it even more imperative that those providing the funding have some way of assessing, and avoiding or reducing, harmful effects on local communities, water and land. In particular, investments in Reduced Emissions from Deforestation and Forest Degradation (REDD) projects in countries with tropical forests have raised concerns that indigenous and forest communities will be the losers in a global market for forest carbon. To the extent that other actors, especially multilateral and bilateral aid agencies, fund similar projects, they become subject to the same pressures. Indeed, UNDP and several bilateral aid agencies now have – or are developing – their own safeguards. Combined with this, social, environmental and human rights assessment and monitoring, and accountability for unanticipated effects of private as well as public projects is becoming a key demand of civil society in forums ranging from the negotiation of the post 2015 Sustainable Development Goals to the UN Working Group on Business and Human Rights. Businesses, private banks and bilateral aid agencies are all, to one degree or another, developing their own safeguard, assessment, and due diligence systems.
On the other hand, the IFIs have to contend with the rise of new financial and political actors. Sovereign wealth funds and Chinese and Brazilian development banks now provide alternative sources of development project finance, often without any environmental or human rights strings attached. According to the Economist, these banks’ lending “already dwarfs the $52.6 billion the World Bank disbursed last year. In 2013 BNDES of Brazil doled out $88 billion. Its Chinese equivalent made loans worth $240 billion.” (“An Acronym with Capital,” July 19, 2014) Last July, the BRICS countries created a New Development Bank (NDB) and Contingent Reserve Arrangement (CRA) as potential alternatives to the World Bank and IMF. The NDB has an initial capital of $50 billion and the CRA of $100 billion. The Bank must figure out how to compete in this new landscape.
Moreover, the Banks, along with aid agencies, are being pushed to abandon the “conditionalities” seen as overbearing and paternalistic by recipient governments. The Fourth High-Level Forum on Aid Effectiveness, held in Busan, Korea in 2011, called for “country ownership” of development programs. In response, the World Bank has sought to push evaluation, mitigation and monitoring of environmental and social risks and impacts onto borrowers, thus “streamlining” the Bank’s own role. This, combined with the Bank’s efforts to cut down on time and paperwork in order to compete in a newly-diversified funding arena, and to increase its loan volume by 50% over the next decade, led to the current review of the environmental and social safeguards.
The proposed revision: structure and controversies
In 2009, the Bank’s Independent Evaluation Group found that the safeguards had, to some extent, been working, but that they needed to be updated to take into account new lending modalities. The Bank announced that it would review and update the policy framework. The stated goals of the review include incorporating existing requirements, including new ones, providing greater accountability as well as a tailored approach which takes into account the country and sector context. It would “[a]llow, where and when appropriate, for less front-loading during project preparation, with more investment in effective monitoring and supervision for the realization of agreed project commitments”; and “promote a project-based approach focusing on outcomes rather than procedural compliance.” In other words, the Bank is trying to get away from a “box-checking” approach, become more agile, and shift away from prior assessment towards more monitoring throughout the project life cycle.
The new framework replaces the existing Operational Procedures with a statement of Environmental and Social Policy, combined with ten Environmental and Social Standards (ESS). The policy statement is intended to clarify the scope of the safeguards, restricting them to investment project financing. It creates a classification system, ranging from little risk to high risk projects. It specifies the responsibilities of Borrowers, who are given a larger role in design and implementation of safeguards compliance, with the Bank limited to setting timeframes and outcomes.
The new ESSs do amplify existing safeguards in some important areas. There is, for the first time, a labor standard, which includes provisions on nondiscrimination, child labor, forced labor, and worker health and safety and requires a worker grievance procedure. However, it only applies to direct project employees, not to contractors, which greatly reduces its scope. Another ESS consolidates concerns about pest management with other pollution and resource issues, including a requirement to “consider options to reduce project-related greenhouse gas (GHG) emissions.” An ESS on Community Health and Safety includes, for the first time, provisions on oversight and accountability of security personnel, both public and private, used on a project. It also includes provisions on emergency preparedness and a wide array of potential local impacts. Other ESS topics include biodiversity and habitat loss, including controversial provisions allowing limited biodiversity offsets; protection of cultural heritage; rules for financial intermediaries, and general requirements to consult with stakeholders over the life of the project.
The most contentious nucleus of issues around IFI lending to date has involved land, forced displacement and the rights of indigenous peoples to control what happens within their territories. Here too there are some advances: periodic monitoring, for example, of people who have been involuntarily resettled as a result of a project. In the case of indigenous peoples, the draft goes beyond the current requirement of free, prior and informed consultation before any project involving their ancestral lands goes forward. In three specific high-risk circumstances –impacts on lands and natural resources under traditional ownership, use or occupation; relocation from those lands; and significant impacts on cultural heritage — borrowers must go beyond consultation to obtain the consent of the affected indigenous people.
However, a number of worrisome changes have caused a broad coalition of over 300 civil society groups to raise concerns that, despite assurances to the contrary, the draft does “dilute” the existing standards. It does so both through specific provisions and through an overall approach to flexibility and tailoring that will make it more difficult to hold the Bank accountable to a specific set of rules, through the Inspection Panel or otherwise.
The specific concerns include the following:
First, the draft limits its applicability to project finance, leaving out almost half of the Bank’s portfolio, which the Bank argues will be dealt with by having each new financing instrument have its own set of standards.
Second, by cutting down on “front-end” consultation and approval before the actual disbursement of funds, the Bank’s safeguards staff as well as affected peoples lose whatever leverage they might have had to improve projects or mitigate harms. They are left with monitoring, but trying to stop or improve an ongoing project when problems arise has significant political and economic costs, and so is unlikely to be done well or often. The track record to date, at least, has not been promising.
Third, the indigenous peoples standard, while admittedly an advance on the issue of consent, leaves a huge loophole for governments that do not wish to recognize the existence of indigenous people in the first place. The draft allows the application of an “alternative approach” where identifying indigenous peoples would create a serious risk of exacerbating ethnic tension or civil strife, or is inconsistent with the provisions of the national constitution. The borrower must agree that indigenous peoples are treated at least as well as other groups. Civil society groups fear that this may become a broad exemption for governments, wiping out decades of work on the specificity of dealing with indigenous populations.
Finally, the provisions on land and forced displacement allow for communities to be displaced and projects to go forward before provisions for resettlement are in place. The provisions, moreover, leave considerable flexibility to borrower governments to substitute cash compensation for resettlement land and services, a strategy that has proven in the past to impoverish and destroy communities. Nor do the provisions on land cover land titling or land use policies, which have in the past had deleterious effects on communities and encouraged land-grabbing.
There are many more critiques, including that the process of reforming the safeguards has been opaque and disingenuous. Given the problems, civil society groups are calling for the Bank to slow down the approval process and allow for meaningful consultation. As of now, the consultation period runs until the end of 2014, after which another draft will be produced. Hopefully, there is still time to fix the significant flaws in approach and avoid not only a weakening of the Bank’s safeguards, but the demonstration effect that any weakening will be likely to have on the procedures of other development actors.
The current safeguards are OP 4.01 Environmental Assessment; OP 4.04 Natural Habitats; OP 4.09 Pest Management; OP 4.10 Indigenous Peoples; OP 4.11 Physical Cultural Resources; OP 4.12 Involuntary Resettlement; OP 4.36 Forests; OP 4.37 Safety of Dams; OP 7.50 Projects on International Waterways; OP 7.60 Projects in Disputed Territories.
The Bangladesh International Crimes Tribunal (BICT): Complementarity Gone Bad
International courts cannot handle all possible international crimes prosecutions; as such, it is incumbent upon national systems to carry much of the burden. Indeed, the International Criminal Court is expressly complementary; it will assert jurisdiction only when there is no domestic court that is willing or able to bring charges. Although the ad hoc criminal tribunals enjoyed primacy over domestic systems due to their Security Council provenance, the relationship is still a partnership, as evidenced by the high degree of information sharing between the tribunals and their domestic counterparts, the provision of technical assistance and training to local actors, and the ICTY’s Rules-of-the-Road project. Rule 11bis was added to the Rules of Procedure and Evidence to enable the ad hoc tribunals to refer low-level cases to a domestic system with jurisdiction as part of the tribunals’ Security Council-mandated Completion Strategies. Putting to the side the imperatives of capacity, efficiency and cost-effectiveness, many experts express a preference for local justice for more deontological reasons. The theory is that judicial processes convened closer to the events in question will enjoy greater legitimacy within impacted regions, help instantiate the rule of law, and enable more meaningful access and participation for victims and witnesses.
Efforts at local justice can backfire, of course, as exemplified by the work of the Bangladesh International Crimes Tribunal (BICT). The BICT is a purely domestic effort proceeding under a 1973 statute defining international crimes within Bangladeshi law. Tracing its roots to the War of Liberation that gave rise to modern-day Bangladesh, the BICT is dedicated to prosecuting alleged collaborators of the Pakistani Army (then West Pakistan) for atrocities committed when East Pakistan (now Bangladesh) sought to secede in March 1971. These events cry out for justice; however, the fundamentally unfair proceedings underway before the BICT pervert the values and goals of transitional justice, insult the victims who deserve a more legitimate accountability process, and threaten to leave a lasting stain on both the Bangladeshi legal system and the system of international justice writ large. Many of the defendants may in fact be guilty of the crimes of which they are charged. But because the proceedings are so profoundly unfair, and the defendants are subject to the death penalty, we will never know for certain. Once hailed as a courageous and important exercise in historical justice, the BICT has become an object lesson for how international criminal law can be manipulated for political ends.
The BICT has drawn sharp criticism for a whole host of reasons, not the least of which is that its proceedings are entirely one-sided. So far, indictments have been leveled against eleven defendants representing the senior leadership of two opposition political parties (nine from Jamaat-e-Islami and two from the Bangladesh Nationalist Party (BNP))—both rivals of the ascendant Awami League. Not a single so-called freedom fighter (mukti bahani) or Pakistani national has been prosecuted, suggesting that the BICT is just a tool within a byzantine political vendetta rather than a genuine, and long-overdue, effort at historical justice. Although Bangladesh has ratified the International Covenant on Civil and Political Rights (in 2000), and was the first, and one of the few, Asian nations to ratify the ICC Statute (on March 23, 2010), many aspects of proceedings run afoul of the litany of procedural protections owed to criminal defendants under human rights law, most notably Article 14 of the ICCPR. Some of this unfairness can be traced to the very genetic code of the BICT’s legal framework; the rest has is attributable to the practice of the tribunal.
Due in part to their perceived unfairness and one-sidedness, the trials have become a dangerously polarizing force in Bangladesh. The verdicts have prompted mass demonstrations, street violence, and destructive hartals (strikes), which have brought Dhaka to a veritable standstill, destroyed public and private party, and led to the deaths of dozens of protesters at the hands of the Bangladeshi security forces. The imposition of the death penalty brings supporters of Jamaat-e-Islami to the streets; a mere life sentence, by contrast, infuriates backers of the Awami League and prompts competing protests and petition drives calling for the application of the death penalty. Many observers breathed a sigh of relief when the Supreme Court on September 17, 2014, commuted the sentence from death to life imprisonment of a leading Islamist politician and cleric, Delwar Hossain Sayedee. Nonetheless, the move sparked street protests, expressions of disappointment from members of the government, and calls for the Constitution to be amended yet again to remove the possibility of pardon. This trial was marked by heightened controversy, particularly when a key defense witness (who had originally agreed to testify for the prosecution) was kidnapped on the courtroom steps by plain-clothed agents as he arrived to testify. (He was later forcibly transported to India where he was promptly arrested for immigration violations). The independence of the judiciary—such as it was—is even more in jeopardy since the 16th Amendment to the Constitution—finalized on September 22, 2014—will empower Parliament to impeach Supreme Court judges for “incapability and misconduct.”
Notwithstanding these defects, the proceedings are popular among a number of victim groups, who have been denied any meaningful justice since the War of Liberation. In particular, the trials have given voice to the so-called Birangonas (“war heroines”), who are on record demanding the mass application of the death penalty—and worse—to BICT defendants. The Birangonas suffered unimaginably during the War of Liberation, and they deserve their day in court. They also deserve a legitimate, fair, and impartial judicial process that will stand the test of time, rather than the facsimile of justice being peddled by the BICT: justice in the service of politics and the demands of the street.