Making the Grade: a survey of IFI social policies and the policies of the European Investment Bank E

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Making the Grade a survey of IFI social policies
and the policies of the European Investment Bank
(EIB)

• Tom Griffiths
• Forest Peoples Programme

Rights to Complain IFIs and accountability on
the way to accountability and appeals mechanisms
for the European Investment Bank Brussels,
November 30th, 2006
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Objectives

• To assess existing range of IFI policies and
  related international standards on social
  development and social safeguard issues
• To compare these with EIB policies
• To make recommendations for strengthened EIB
  social standards and improved public
  accountability

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Scope of survey

• Overview of social safeguard policies of WB, IFC,
  IADB, AfDB, ADB not exhaustive
• Best practice standards, including World
  Commission on Dams and EIR
• Relevant standards in EU regulations, external
  policies and intergovernmental commitments not
  exhaustive

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Why operational standards ?

• Establish incentives to IFI staff and managers
  address social and environmental issues
• Provide external accountability of the IFI to
  local communities and citizens
• Constitute an agreed basis for negotiating loans
  or contracts with borrowers and clients
• Establish a yardstick for project monitoring and
  evaluation
• Improve overall development quality

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Effective operational standards

• Preconditions that must be complied with before
  the IFI will support a project
• Procedural and substantive operational rules
  binding on IFI staff and managers
• Implemented by well-resourced transparent
  management /compliance system (public procedures)
• Commitments and safeguards covenanted in loan or
  grant agreements
• Linked to independent IFI appeals and
  accountability mechanisms

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(No Transcript)
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Existing IFI policies

• Address specific social issues (previous slide)
• Establish objective and obligatory operational
  requirements on IFI staff, borrowers and clients
  (with explanatory definitions)
• Set benchmarks for project approval
• Integrated with project management, procedures
  and oversight
• Complemented by Implementation Guidelines
• Tied to accountability mechanisms
• Starting to reference standards to international
  law
• Still lack policies on key issues like human
  rights

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WB IBRD/IDA Policy on IPs

• The Bank provides project financing only where
  free, prior, and informed consultation results in
  broad community support to the project by the
  affected Indigenous Peoples para. 1. OP 4.10
• The Bank does not proceed further with project
  processing if it is unable to ascertain that such
  support exists OP 4.10, para 11

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OP 4.10

• Free, prior, and informed consultation with the
  affected Indigenous Peoples communities refers
  to a culturally appropriate and collective
  decision-making process subsequent to meaningful
  and good faith consultation and informed
  participation regarding the preparation and
  implementation of the project (fn 4, OP)

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IFC PS1 Social and Environmental Assessment and
Management Systems

• Where the client identifies specific mitigation
  measures and actions necessary for the project to
  comply with applicable laws and regulations and
  to meet the requirements of Performance Standards
  1 through 8, the client will prepare an Action
  Plan. (PS1 para 16)

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IFC Environmental and Social Review Procedures
(ESRP, 2006)

• Includes (inter alia) during the appraisal stage
  of the IFC project cycle
• Review of the Project Assessment Information and
  Action Plan and identification of gaps
• Review of clients ESMS and identification of
  gaps
• Identification of any Supplemental Actions to be
  incorporated in the clients Action Plan to
  address any gaps identified above

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EIB existing social policies

• The Social Assessment of Projects outside the
  European Union the approach of the EIB, 02
  October, 2006
• Development Impact Assessment Framework for
  Investment Facility Projects, April 2005
• Public Disclosure Policy principles, rules, and
  procedures, 28 March 2006
• Statement on Corporate Social Responsibility,
  2005
• Various guidelines and codes of conduct

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EIB Documents consulted

• The Social Assessment of Projects Outside the EU
  the approach of the EIB, October, 2006
• Development Impact Assessment Framework for
  Investment Facility Projects, April 2005
• Public Disclosure Policy, March 2006
• Statement on Corporate Social Responsibility
• Corporate Responsibility Report 2005
• Corporate Operational Plan 2006-2008
• The Project Cycle at the European Investment Bank
  (2001)
• EIB project eligibility and appraisal criteria
• Charter for Internal Audit, October 2001

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EIB Social policies

• Few in number and few operational standards
• Rightly base standards on international norms,
  regulations and best practice
• General principle-based statements on EIB
  commitments
• Vague on required standards for lending in non-EU
  countries
• Not backed up by associated compliance and
  independent complaints and appeals mechanisms

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EIB Social Assessment Policy, 2006

• Attention focuses on the potential impactson
  population movements and resettlement, and on
  vulnerable groupsAttention is given to
  establishing acceptable labour standards,
  ensuring the health and safety of the workforce
  and of the surrounding communities

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Conclusions

• The EIB is rightly committed to ensuring its
  policies and practice are consistent with
  international standards and best practice
• EU and European governments already committed to
  most international social standards
• However, objective operational social standards
  to which the EIB may be held accountable in its
  project finance outside the EU remain unclear or
  entirely absent

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Recommendations (1)

• Adopt binding and specific policies to
  operationalise its social standards consistent
  with international standards and best practice,
  including those of the WCD and EIR.
• As a very minimum, EIB policies should be at
  least equivalent to the World Banks IFC
  standards.

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Recommendations (2)

• Establish effective internal oversight, quality
  control and compliance mechanisms (with problem
  solving remit?)
• Establish an external independent complaints and
  appeals office (outside the EIB)
• And/or strengthen existing external mechanisms,
  to investigate violations of social and
  environmental standards and grievances of non-EU
  communities affected by EIB projects
• Undertake these measures to strengthen EIB
  accountability in full consultation with civil
  society

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Thank You