The World Bank Group later this year is expected to start the implementation of the Environmental and Social Framework (ESF) as a mechanism for protecting people and the environment in project finance.
However, this is not a radical departure from the existing Safeguards policies.
Speaking at an environmental and social framework workshop, the World Bank’s Country Director, Henry Kerali said, “the safeguards have served the World Bank and our Borrowers well, but they need to be brought up to date.”
This is to harmonize with other international financial institutions (IFI), such as IFC Performance Standards, as well as reflecting on the concerns which have emerged since the operational policies were drafted, he said.
Citing an instance, Kerali said, risks related to climate change were not known when the Operational Policy on Environmental Assessment was first issued in 1989.
The Bank’s current safeguard policies, issued nearly 20 years ago, sets the standard for Multilateral Development Banks in protections for people and the environment.
The Safeguard policies apply to all IBRD/IDA Investment Project Finance, covering 1,345 projects with a net commitment amount of US$185.2 billion, representing just over 85 percent of the World Bank’s total portfolio in terms of volume.
The key improvements of the ESF are forged to have a more systematic coverage of all environmental and social issues.
Attention to social issues has expanded, including labor standards and working conditions, community health and safety, transparency and stakeholder engagement, and non-discrimination provisions.
The Bank in this framework has also deepened its attention to environmental issues.
It also focuses on a new adaptive and clearer approach as well as highlights on strengthening country systems.
Kerali said, “the World Bank is committed to a long-term process aimed at building Borrower capacity to support implementation of the ESF , as this workshop marks the beginning of that process.”
The Bank will assess the country’s environmental and social frameworks, to see the extent to which these frameworks are ready. Where there are gaps, it will work with our Borrowers to address them.
Capacity and institution building is critical and is core to the ESF effort, Kerali said.
Kerali noted, saying; “the World Bank is committed over the medium and longer term to support the environmental and social capacity strengthening needs of our Borrowers. We are currently working on a strategy to that effect, so we can be more systematic in our approach.”
“And if our clients’ systems are strengthened, this will impact not just the projects that we finance, it will also have a multiplier effect for all investments, no matter the source of funds,” he added.
By Joshua W. Amlanu