https://www.ciel.org/ifc-poised-to-unveil-first-remedy-policy-after-deca...
The International Finance Corporation (IFC) — the private lending arm of the World Bank — is expected to publish its first remedy and responsible exit policy framework in just a few weeks. This long-awaited policy was driven by decades of advocacy from CIEL, civil society partners, and communities impacted by IFC financed projects.
The forthcoming policy is a landmark opportunity for the World Bank Group (World Bank) to finally align its actions with its responsibilities under international law and its own development mandate. It aims to ensure that the IFC, in its development endeavors, not only refrains from causing harm but also takes proactive measures to address and rectify any harm it contributes to.
This opportunity comes at a critical time when the World Bank, under the leadership of President Ajay Banga, has acknowledged the need for significant operational reforms articulated in the Evolution Roadmap to effectively address the contemporary global polycrisis challenges and uphold the World Bank’s mission of ending extreme poverty and boosting shared prosperity on a livable planet.
However, significant concerns persist regarding the Bank’s commitment to accountability and transparency as it continues to expand its financial operations. Throughout the years, there have been numerous instances where the Bank has financed development projects that caused harms to the communities and environments it is supposed to help, whether through inadequate stakeholder and risk assessments before project approval or ignoring reports of environmental and social harms during project implementation.
Instances like the Tata Mundra and Alto Maipo projects illustrate the IFC’s historical approach of exiting problematic projects quietly, leaving affected communities to bear the brunt of the harmful environmental and social impacts alone instead of taking action to remedy the harms they contributed to.
While the IFC has previously adopted environmental and social safeguard policies and established an independent accountability mechanism, the Compliance Advisor Ombudsman (CAO) to address project-related grievances, these measures have often fallen short in addressing the harms suffered by communities and the environment when things do go wrong.
CIEL recently met with President Banga regarding the ongoing discussion on the remedy and responsible exit framework. Our conversation with President Banga emphasized the need for robust provisions in the final remedy framework to ensure the IFC’s responsibility in providing remedy for communities who have been harmed by IFC-funded projects.
CIEL remains optimistic about the framework’s potential impact despite the long delays and flaws in the consultation process, as well as the widespread criticism due to the IFC’s reticence to commit to providing remedy and compensation for cases where egregious harm has stemmed from its financed projects, such as that suffered by children in the Bridge International Academies project the IFC financed.
This year marks the 80th anniversary of the World Bank’s creation. While many recommendations have been made over the years regarding changes needed to improve the institution, the impending policy represents a critical opportunity for the World Bank Group to finally institute a clear remedy and responsible exit framework that lives up to the lofty ideals the Bank has espoused for decades.
The World Bank Group was always meant to be more than just a financial institution – it is tasked with contributing to a world where the poorest and most vulnerable are not the ones bearing the brunt of the harms, whether it be from the impacts of the polycrisis or development projects.
The Bank’s goals of ending poverty and solving the polycrisis can never be met without a clear and unwavering commitment to accountability to the communities it purports to serve. But ensuring it fulfills its responsibility to those who have been harmed by the projects it has financed would be a huge step forward.
For communities impacted by IFC-financed initiatives, the prolonged absence of a formal remedy framework has exacerbated harm and delayed justice. The imminent release of the IFC’s remedy policy is eagerly anticipated by those communities seeking justice and by stakeholders worldwide, including CIEL, as it represents a critical step towards ensuring equitable development practices, meaningful accountability and remedy from harm.
As the World Bank board deliberates final approval of the framework CIEL and many others will remain vigilant, advocating for a robust policy that upholds the World Bank’s mandate and responsibilities under international law, as well as the wishes of communities around the world who continue to await the remedy they deserve.
