The IFC’s new policy framework: the Performance Standards
In April 2006, the International Finance Corporation (IFC) completed the process of revising its environmental and social “Safeguard Policies”, creating a completely new policy framework for managing the social and environmental risks associated with IFC-financed projects. This framework consists of a policy covering the IFC, called the “Policy on Social and Environmental Sustainability,” eight “Performance Standards” which will govern the obligations of IFC clients (i.e., corporations), and a disclosure policy.
Throughout the process of IFC’s safeguard policy revision, the International Accountability Project was actively involved with a global civil society coalition that was monitoring the process. The coalition registered significant concerns about the way in which this review was undertaken, and we consistently provided substantive comments to the IFC and World Bank policy-makers. The IAP has focused primarily on issues associated with the involuntary resettlement performance standard, and also on the overall accountability issues that are at stake.
In May 2006, the Halifax Initiative, with contributions from the IAP and others, released a comprehensive report that outlines civil society’s concerns with the IFC’s new policy framework. Click here to see the report, entitled One Step Forward, One Step Back: An Analysis of the International Finance Corporation’s Sustainability Policy, Performance Standards, and Disclosure Policy.
The IFC’s new policy framework has impacts that go far beyond the IFC’s own operations. An increasing number of private corporations, through the Equator Principles, have voluntarily committed to upholding the IFC policies as the standards they follow in their lending and operations. The private corporations that have agreed to adhere to the Equator Principles/IFC policies now collectively represent approximately 75 percent of all project loan market volume. For this reason, the IFC’s revision of its policies has implications for more than $60 billion in additional development finance.
In addition to the final report above, IAP input into the IFC policy revision process included:
- February 1, 2006. IAP participated in civil society meeting with Lars Thunell and other IFC staff regarding IFC policy revisions.
- January 25, 2006 letter to Lars Thunell, IFC from Dana Clark, IAP regarding upcoming February 1st civil society meeting with the IFC.
- December 23, 2005 letter from Michael Klein, Acting Executive VP, IFC, to Dana Clark and Fergus MacKay.
- December 10, 2005 letter to Paul Wolfowitz and Lars Thunell, from the International Accountability Project and Forest Peoples Programme, endorsed by 224 organizations from around the world.
- November 25, 2005: IAP comments submitted to IFC on the 2nd draft.
- November 7, 2005: The IAP participated as part of a civil society briefing for the Board of Executive Directors of the World Bank, and their staff, in Washington, DC.
- November 7, 2005: The IAP delivered a sign-on letter to the Executive Directors, raising significant concerns about the IFC's performance standard on involuntary resettlement.
- April 2005: Civil Society Analysis Submitted to IFC
- April 2005: The IAP participated in a two-day meeting with IFC and civil society on April 18-19, 2005.
- December 2004: IAP Letter to IFC
Related Links:
- Global Rights, Rules and Responsibilities
- International Finance Corporation (IFC)
- Bank Information Center
Related Documents (PDF):
- UK Government Statement on IFC Revised Policy and Performance Standards (Nov. 25, 2005)
- Second Draft of IFC Policy and Performance Standards (Sept. 22, 2005)
- First Draft of IFC Policy and Performance Standards (August 2004)
- Civil Society Comments on IFC’s Revised Disclosure Policy, Sustainability Policy and Performance Standards (Nov. 3, 2005)
- Gender Action Comments on IFC's Second Draft (November 2005)
- Operational Directive 4.30 on Involuntary Resettlement
- Operational Policy 4.12 on Involuntary Resettlement
