On Thursday, July 16th, 2015, the U.S. Treasury Department posted to its website the U.S. government’s position at a recent World Bank Board discussion on the revised Environmental and Social Framework (ESF). The statement highlights four cross-cutting issues that the U.S. finds particularly problematic in the newest draft of the Bank’s safeguards policies, which has not yet been released to the public:
1. Timing of preparation and disclosure of key environmental and social impact assessment documents
The revised ESF does not outline clear timing requirements for environmental and social impact assessment documents, which threatens to undermine U.S. law that requires these assessments be disclosed to the World Bank Board and project stakeholders at least 120 days before project approval before any U.S. Executive Director can vote to support it.
2. Use of borrower frameworks
Despite problems cited with the Use of Country Systems Pilot (OP/BP 4.00), the Bank has not retreated from its intention to transfer responsibility for environmental and social risk assessment and management to borrowing countries. The Bank has yet to clarify its methodology for determining if and how borrower frameworks meet Bank safeguards standards. The U.S. maintains (see previous Board statement here) that the Bank should retain safeguards responsibility for high and substantial risk projects until the ESF is evaluated five years after it takes effect.
3. Financing alongside other development partners
Increasingly, the World Bank is investing in projects that are co-financed by other multilateral and private donors. In these more complex lending arrangements, the U.S. insists that the Bank uphold the strongest safeguards policies rather than deferring to the risk evaluation and management systems of other lenders, which may be less rigorous.
4. Monitoring of Borrower compliance with the Environmental and Social Standards (ESSs)
As part of the Bank’s move to use existing national frameworks to safeguard against environmental and social risk, it has placed the bulk of responsibility for project monitoring with borrower governments. The timing and procedural requirements for borrower-prepared monitoring reports remain unclear in the revised ESF, which has prompted U.S. concerns about how project and Bank supervision teams will be kept abreast of necessary changes in project implementation.
The U.S. statement also calls on Bank Management to release a “comprehensive and costed implementation and monitoring plan” that details how the Bank will ensure internal accountability for the ESF, e.g. through “staffing, training and incentives”, and that demonstrates how the Bank will support Borrowers in implementing the new safeguards on the ground.