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BIC recently published two reports analyzing the impact of World Bank and IFC finance on forests and forest peoples around the world. These publications outline the findings of BIC’s review of World Bank Group public and private sector lending from the perspective of investments both within the forest sector, and in the primary sectors that drive deforestation: transportation, agriculture, and energy and mining.
The findings in these reports emerge from a detailed portfolio analysis of IBRD/IDA and IFC’s investment portfolios in these sectors during the period 2008-2014, in 13 tropical forest countries from key forest geographies: Mexico, Guatemala, and Honduras in Mesoamerica; Brazil, Colombia, and Peru in the Amazon; Indonesia, Philippines, and Cambodia in Southeast Asia; India in South Asia; and the Democratic Republic of Congo, Liberia, and Cameroon in Africa.
This research demonstrates the ways different types of World Bank projects impact forests, and identifies shortcomings in project-level impact assessment and mitigation. The study includes a comparison of the magnitude of investment in these four sectors, an analysis of triggering of safeguard policies, identification of the frequent typologies of impacts to forests, and an examination of common mitigation strategies. However, reliable and comparable estimates of the direct and indirect impact of World Bank investments on forests are not available, hindering efforts to track and quantify the WBG’s overall contribution to deforestation and degradation. BIC also found that disclosure of documents containing information on assessments of risks to forests and outcomes for forests is variable and inconsistent, particularly at the IFC.
Despite the lack of information available for many products, it is clear that the World Bank invests disproportionately in sectors that drive deforestation relative to investment in the forest sector, where forests are an explicit project objective. For most countries in the sample, dollars invested in the three “drivers sectors” analyzed was 100X or even 1000X greater than dollars invested in the forestry sector. The World Bank Group’s investment in forest conservation, management, and governance is clearly insufficient to address the scale of the global challenge of tropical forest loss, as well as to meaningfully foster poverty alleviation for the huge portion of the world’s extreme poor who are dependent on forest resources. The reports find that common impacts to forests at the project level include deforestation and degradation, restrictions to the land rights and resource use of local communities, increased access to forests and forest resources, and impacts to protected areas. However, identification of impacts to forests is inconsistent overall.
BIC’s reports also highlight the vital importance of safeguard mechanisms in mitigating the adverse impacts of World Bank projects on forests and forest peoples. Strong safeguards coupled with strategic investment in the forest sector can solidify the World Bank Group’s international leadership in forests, and foster the transfer of stronger environmental and social standards to public and private sector entities. In the context of the current World Bank safeguard review, the risks posed to forests by extractives, agriculture, and transportation—as outlined in this report—underscore the need to strengthen policy language protecting forests and forests peoples.