The latest draft of the World Bank’s updated safeguards could allow borrowers to substitute all or parts of their own laws and policies to implement Bank-financed development projects whether or not they provide equivalent risk protection. The goal of increased country ownership of development projects and programs is widely shared, and permitting the use of a borrower’s own framework to manage the potential risks—in lieu of World Bank safeguards—can also provide opportunities to build national institutions over the long term. However, the capacity of Borrower Frameworks varies widely across World Bank client countries, and the Bank has not always proven up to the task of monitoring a borrower’s implementation of a project—even when its own policies apply.
In order to ensure that protections for people and the environment are not compromised in Bank-financed projects, it is crucial that the decision to use Borrower Frameworks be based on rigorous assessments, and limited to less-risky projects.
The Bank’s new Environmental and Social Framework (ESF), that is set to officially replace the current safeguards in the next few weeks, should allow for the use of Borrower Frameworks, but it must require them to be strictly assessed. Initially, the Bank should be required to measure a borrower’s social and environmental framework against the substantive requirements of the new ESF—not only its objectives. In addition, the ESF should require the Bank to engage in a consultation process with project affected people and stakeholders to ensure a full picture of the system—and how it is implemented—can be evaluated.
Assessing Borrower Frameworks at the project level is an important and necessary step in the development process as it provides information that can inform projects and sectors throughout the borrowing country. Building upon this progress by linking project level assessments with an overview assessment carried out at the national level, through the Bank’s Systematic Country Diagnostic (SCD) process, could lead to even better understanding of the capacity of a borrower’s systems more generally. In this way, over time and through regular updates of project experience as well as the overview assessment, a more comprehensive picture of a Borrower’s demonstrated implementation capacity can be developed.
Finally, certain projects and contexts are ill-suited for the use of Borrower Frameworks, and it is important that the new ESF also include a list of “no-go” areas, including: 1) High and Substantial Risk projects, 2) projects in fragile and conflict affected states, or states with significant governance challenges; and 3) projects involving financial intermediaries (FIs).
It is of vital importance to ensure that current standards for the use of Borrower Frameworks are not diluted under the new ESF. The Bank plays a critical role in strengthening Borrower Frameworks and implementation capacity through technical support as well as critical financial resources. We encourage the Bank to continue providing this support and in doing so also ensure that people and the environment receive the same level of protection as that provided under the World Bank’s own policies.