Changes to World Bank Safeguards Risk “Race to the Bottom”, U.N. Experts Warn

  • by Carey L. Biron (washington)
  • Friday, December 19, 2014
  • Inter Press Service

In a letter made public Tuesday, 28 U.N. experts raise fears that the Washington-based development funder could foster a "race to the bottom" if proposed changes go forward. The document accuses the bank of selective interpretation of its own charter and its obligations under international law.3

"y contemporary standards the seems to go out of its way to avoid any meaningful references to human rights and international human rights law, except for passing references," the letter, addressed to World Bank Group President Jim Yong Kim, states.

"he Bank's proposed new Safeguards seem to view human rights in largely negative terms, as considerations that, if taken seriously, will only drive up the cost of lending rather than contributing to ensuring a positive outcome."

The World Bank says its safeguards constitute a "cornerstone of its support to sustainable poverty reduction", and the institution is currently updating these policies for the first time in two decades. Yet when the bank released a draft revision of those changes in July, the proposal set off a firestorm of criticism across civil society.

Critics warn that the revisions would allow the World Bank to shift responsibility for adherence to certain social and environmental policies on to loan recipients, while prioritising self-monitoring over up-front requirements. The new guidelines could also exempt recipient governments from abiding by certain aspects of the policies.

The bank has since extended the period intended to gather response to the draft, which was supposed to end this month, through this coming spring.

"The bank is not just any old actor in relation to these issues. It is the gorilla in the room," Philip Alston, the U.N. Human Rights Council's special rapporteur on extreme poverty and human rights, told IPS. "What it does on safeguards, and what it doesn't do on human rights, makes a huge difference in terms of setting global standards."

The letter, which Alston spearheaded, is a rarity in multiple ways. Not only are formal missives from the U.N. human rights system to the World Bank uncommon, but close observers say that no such previous letter has garnered the support of so many U.N. rights experts.

Those who signed the letter "are deeply concerned that the bank is planning to turn the clock back 20 years or more," Alston says, "and replace its existing standards with a system that will simply pass the blame for ignoring human rights considerations on to others, thus letting the bank off the hook."

Competitive pressures

Since the 1970s, the World Bank has been a pioneer in working to ensure that its development assistance does not lead to or exacerbate certain forms of discrimination or environmental degradation.

Yet the institution has never mandated that the programmes it funds comply with international human rights standards, largely on the concern that politicising the bank's lending could complicate its country-by-country anti-poverty focus. (Others, including Alston, maintain that human rights can no longer be considered a political issue.)

Consensus is growing, however, around the idea that sustainable development is impossible without a specific focus on human rights. Other multilateral institutions, including the U.N. Development Programme, have explicitly brought their assistance guidelines in line with international human rights obligations.

At the same time, the World Bank is experiencing greater competitive pressure. According to many analysts, including this week's letter, this is due to the recent creation of several new multilateral development lenders, funded particularly by fast-rising economies including China, Russia and India.

These entities are widely expected to put less emphasis on prescriptive and at times laborious requirements such as the World Bank's environmental and social safeguards. In such a context, however, Alston and others say the bank has an added responsibility to focus on the results that, they suggest, only core respect for human rights can bring.

The bank's management counters that the institution has been a leader in highlighting the interdependence between respect for human rights and development outcomes for at least two decades. Today, officials involved with the safeguard review maintain that both human rights and non-discrimination principles have been expanded upon in the new draft.

"Our draft proposal goes as far or further than any other multilateral development bank in the degree to which it protects the vulnerable and the marginalized," Stefan Koeberle, the bank's director of operations risk, told IPS in a statement.

"We are currently engaged in extensive consultations on the draft, and we have received a variety of constructive proposals to strengthen the language further. We will continue to carry out our role as an organization charged with achieving poverty reduction and shared prosperity, through sound policies that achieve beneficial environmental, social, and economic outcomes for all concerned."

U.S. leadership?

The concerns voiced by the U.N. experts come just after three U.S. lawmakers told the Obama administration that the World Bank's safeguards revision were resulting in a "dilution of existing protections".

In a letter to U.S. Treasury Secretary Jacob Lew, the lawmakers note that a November evaluation by an Asian Development Bank (ADB) auditor had "foreshadowed" some of these concerns. The trio urged U.S. intervention.

"The Department of Treasury has a history of successfully leading coalitions that call upon regional and national development banks to implement strong safeguards," the letter states.

"We expect the Treasury to demonstrate similar leadership in this case, so that the World Bank's safeguards are at least as strong as the strongest safeguards of the ADB and other multilateral financial institutions."

The United States is the World Bank's largest member, and watchdog groups say the new flurry of formal critical response is significant.

"U.N. human rights experts and the U.S. Congress have joined the chorus of voices trying to shake the World Bank into finally recognising that human rights should be central to all that it does, and particularly in safeguarding against harm," Jessica Evans, a senior advocate with Human Rights Watch, told IPS.

If the bank refuses to institutionalise "rigorous human rights due diligence," Evans continues, "the only conclusion that can be drawn is that the World Bank wants to retain an ability to finance violations of international human rights law while complying with its own policies."

Bank officials say the next draft of the safeguards revision should be made public by mid-2015.

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

© Inter Press Service (2014) — All Rights ReservedOriginal source: Inter Press Service

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