World Bank safeguards for sustainability revised
The World Bank has recently introduced a newly revised set of sustainability “safeguards” following extensive public consultation.
Published in August 2016, the new safeguards are intended to apply to World Bank investments, which are normally directed at governments rather than the private sector (which the World Bank funds through the International Finance Corporation [IFC]). The World Bank works with governments in developing countries seeking financing for infrastructure and service facilities. The World Bank may fund these projects and has a sustainable development objective, including encouraging protections for environmental and social matters. This is done through the promotion of World Bank policies called “safeguards” that require borrowing governments to address certain environmental and social risks in order to receive World Bank support for investment projects.
In part, this sets a baseline standard that governments themselves are expected to meet, in their activities and national governance of environmental and social matters. The World Bank may offer capacity and institution building to governments to achieve these objectives. Examples of expectations that may be set as a pre-condition for investment might be conducting an environmental and social impact assessment, consulting with affected communities about potential project impacts, or compensating for adverse impacts on livelihoods of displaced people.
Prior to this update, the World Bank safeguards diverged significantly from other newer standards like the IFC Performance Standards and Equator Principles. The new safeguards framework brings the World Bank’s environmental and social protections into closer alignment with those other standards. For example, there is more emphasis on public participation, and accountability including expanded roles for grievance redress mechanisms. Unlike the old safeguards, the new standards include labour and working condition protections and community health and safety measures that address road safety, emergency response and disaster mitigation (like the IFC Performance Standards). There are also rules regarding environmental assessments and management. It also includes an enhanced stakeholder engagement and non-discrimination human rights requirements. The new standards will be rolled out over the next 12 to 18 months, with implementation expected to take place in 2018.
The new safeguards are of interest for Canadian miners for a couple of reasons. First, they illustrate that there is increasing convergence around common standards for sustainability, like the IFC Performance Standards, which should guide Canadian miners in understanding what sustainability expectations can mean in their operations. This is consistent with the Government of Canada’s own CSR Strategy for the Extractive Sector which itself endorses those standards. The standards enunciated in the safeguards are also the product of consultation involving World Bank stakeholders, including member countries, civil society organizations from developed and developing countries, academia, development experts, and others in 63 countries. As such, they reflect a vetted best practice in sustainability that should guide corporate standards. The new safeguards also illustrate how developing country governments are being encouraged to adopt expectations for environmental and social management that conform to these international standards. This all potentially factor into country regulatory requirements that will affect Canadian miners working in these jurisdictions.
Michael Torrance is a lawyer with Norton Rose Fulbright, Toronto.
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