IFC Performance Standards
Senior management at the World Bank have actively pushed for the Bank to abandon the use of mandatory Safeguards for public sector work and replace Safeguards with inappropriately weak "standards" such as those used by the IFC for private sector activities. Despite having far less capacity than the IFC and far fewer staff and despite its focus on public sector investments, the Green Climate Fund has chosen to base its initial environmental and social safeguards on a weakened version of the IFC's Performance Standards.
In this section, we will examine examples of IFC projects as well as assessments of the ability of IFC Performance Standards to protect communities and the environment. We do note, however, that the IFC does utilize the ILO Core Labor Standards, which are lacking in those of the WB and ADB
11.11.11 and 26 CSOs, CSO Letter to IFC re Lessons Learned, June 2014
CAO Audit of the IFC's enormous Financial Intermediary portfolio finds IFC unable to trace environmental or social impacts:
Ulu Foundation, Notes on the CAO Audit of IFC Financial Intermediary Investments
Replacement of World Bank Safeguards with a model based on IFC Performance Standards leads to a reduction of the Bank’s direct and mandatory role in oversight, including assessment, categorization, monitoring, consultation, information disclosure, and evaluation of Bank funded activities and investments along with a shift towards a greater reliance on client self-assessment and self-reporting and the client’s environmental and social risk management systems. A shift to client a self-assessment regime, such as that of the IFC, will lead to less accountability, less compliance and poorer safeguards results. This represents not only a policy dilution but a surprising lack of upward harmonization with international best practices resulting in a “race to the bottom” in terms of environmental and social standards.
The IFC’s Performance Standards (PS) did not prevent the 2012 launch of a new IFC program under the Climate Investment Funds/Forest Investment Program to prepare to support industrial logging on up to 700,000 hectares of intact forest in Indonesia, including in high conflict regions such as West Papua. (See FIP section below.) The PS did not stop the IFC from investing in Corporacion Dinant in Honduras, despite credible evidence that the company was complicit in forced evictions and substantial human rights violations. (See, for example: Financial Times: IFC under fire for project with group linked to killings, CSO Response to CAO Investigation into IFC Support for Corporación Dinant, Honduras, etc.) The CAO found that these failures arose, in part, from staff incentives “to overlook, fail to articulate, or even conceal potential environmental, social and conflict risk”, and that staff felt pressured to “get money out the door” and were discouraged from “making waves”.
Given this as well as CAO findings of the failure of IFC to provide meaningful oversight on environmental and social issues for close to half of its portfolio, it is clear that the IFC private sector Performance Stnadards do not provide an appropriate model to utilize in the context of the WB Safeguards review.
Lessons learned about IFC Performance Standards and their implementation from the IFC's role in the Indonesian Forest Investment Plan.
The Ecological Justice, Indonesia: Forest Investment Program (FIP) The largest publicly-funded threat to Indonesia's forests and forest-dependent peoples in decades? Bahasa Indonesia
Solidaritas Perempuan, The Ecological Justice + 64 CSOs, 40 individuals: Protest of Civil Society toWB-IFC about the FIP Development Process in Indonesia, June 1, 2014
Annex I: Questions for the World Bank and International Finance Corporation Annex I: Pertanyaan untuk Bank Dunia dan International Finance Corporation
Annex II: Proses Perencanaan FIP Indonesia Melanggar Syarat Konsultasi FIP yang ditemukan di dalam FIP Design Document; FIP Indonesia’s planning process violates FIP consultation requirements found in FIP Design Document
Annex III: FIP Fake Consultation List
Solidaritas Perempuan + 57 NGOs, 80 individuals: Civil Society Concerns on Indonesian Forest Investment Plan, November 4, 2012
Solidaritas Perempuan, AKSI – action for gender, social dan ecological Justice, dan ‘Ulu Foundation: Pandangan dan Rekomendasi Terhadap Dokumen Forest Investment Plan (FIP) Versi 26 September 2012; 10 Oktober 2012
Aksi, Solidaritas Perempuan, ‘Ulu Foundation: Pandangan terhadap Usulan Forest Investment Program (FIP) Indonesia, 17 September 2012
Solidaritas Perempuan, Meminta dokumen draft FIP versi Indonesia, 13 March 2012
CAPPA + 26 NGOs, Civil Society Concerns Regarding the Forest Investment Program Preparation Grant for Indonesia, 2011
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