World Bank social safeguards 'defective'

Friday, 18 July, 2014

Via Reuters earlier this week we learn that an internal review ‘obtained’ by the news agency shows the World Bank has “systemic defects in its procedures to ensure that people and the environment are not harmed in development projects.” The audit was published in mid-June and is based on a  a survey of 138 World Bank staff; key personnel interviews; and an analysis of current procedures and ongoing projects.

Already embattled by the launch of a rival institution by the BRICS emerging market nations and Chinese proposals for a $50-billion Asian Infrastructure Investment Bank, the World Bank has recently been reorganised to increase efficiency. In an increasingly competitive marketplace, balancing the need to meet countries’ financial needs rapidly with the preservation of social and environmental safeguards is likely to be a key challenge. These safeguards are now being updated for the first time in many years, and there are fears that the process may sacrifice environmental and social standards in favour of increased efficiency in terms of rapid loan completions. 

The Bank has said it that safeguards will not be weakened.

That said, it’s the current bunch that appear to have issues. This Reuters piece outlines how:

- Employees who focus on reducing social and environmental damage from projects lack independence or incentives to do a good job
- The Bank has little oversight over how well their advice is followed and how much money is devoted to safeguards
- Employees have said that safeguards are treated as a "check the box" measure rather than an integral part of designing projects
- 77 percent of surveyed World Bank specialists... believed the bank's management did not value their safeguards work.

The Bank hasn’t commented on the leaked report.