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The World Bank The World Bank “Safeguard”Policies: “Safeguard”Policies: An OverviewAn OverviewZagreb, May 2009Zagreb, May 2009

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Overview of Presentation

1. World Bank SG Policies in context: what are they, why do we have them, where do they come from?

2. Overview of each SG Policy (10 + 1)

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1. Safeguard Policies in Context

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World Bank Operational Policies

Based on WB’s Articles of Agreement, General Conditions, & specific policies approved by WB Board

Set out in WB Operational Manual (Manual covers OPs, BPs (Bank Procedures), Guidance Notes, etc.)

Guide all aspects of WB Operations Cover wide range of topics (e.g. financial

terms/conditions of WB loans, “emergency response,” tobacco, Development Policy Lending, Financial Intermediary lending, economic evaluation of investment lending, water resources, procurement, project cycle steps, etc. )

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Legal Policies• OP 7.60 Disputed Areas• OP 7.50 International Waterways

Environmental Policies• OP 4.01 Environmental Assessment• OP 4.04 Natural Habitats• OP 4.09 Pest Management• OP 4.36 Forestry• OP 4.37 Safety of Dams

Social Policies• OP 4.11 Physical Cultural Resources• OP 4.12 Involuntary Resettlement• OP 4.10 Indigenous Peoples

WB Safeguard Policies (10+1)

BP 17.50 Bank Disclosure Policy

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Purpose of the World Bank Safeguard Policies

Do no harm: protect people and environment from adverse impacts

Reduce and manage risk for the Client and for the WB

Do good: enhance social equity and environmental sustainability

Respond to a world-wide constituency

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Environmental and Social “Due Diligence”

WB Management’s fiduciary responsibility to its shareholders (along with Financial Management, Procurement): assurance that all reasonable measures have been taken to ensure lending is environmentally/socially sound

Applies to sub-projects within projects Applies to all project components and investments

regardless of source of financing “Safeguard Documents” = Assessments and plans

required by SG policies (publicly disclosed)

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Key Roles – Who does What?World Bank

WB Board (representing Donor & Borrowing Countries) identifies needs and approve policies

Operations Policy and Country Services Unit (OPCS) and Legal Dept (LEG): draft OPs, BPs, set Bank-wide standards for interpretation and compliance, report to Management and Board

ECA Region Safeguards Team: (in consultation with Task Team and as needed with Senior ECA Management and/or OPCS, LEG): for each project, determines which OPs are triggered, appropriate EA category & specific compliance requirements; approve “Due Diligence” instruments (may delegate); clear Appraisal and Legal Documents;

WB Project Task Team: work with Borrower and SG Unit to ensure appropriate triggering/screening; advise Borrower on compliance throughout project cycle; evaluate “Due Diligence” instruments and Client capacity; disclosure (Infoshop); verify/ report to Management throughout project cycle

Quality Assurance Group and Internal Evaluation Group: Review performance of WB Staff and Management and quality of operations vis a vis SG (application, compliance, implementation, impact)

Inspection Panel: Independent body, investigates complaints by affected people; Reports independently (makes recommendations) to WB Board

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Key Roles: Who Does What?Borrower/Client

Implementing Agency/Entity: responsible for preparation, disclosure/consultation and implementation of “Due Diligence” instruments; reporting to Government and WB

WB’s official Government counterpart (e.g., MoF): legal commitment to implement DD instruments

Sub-project grant/loan recipients: specific obligations as spelled out in sub-grant or sub-loan agreements

Contractors/suppliers/consultants: specific obligations as spelled out in contracts

Public (civil society,“Project Affected Persons”, NGOs): advise on project design (consultations); raise legitimate grievances and complaints through appropriate channels

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Who Influences the Safeguard Policies?

WB Board

Donors

Project Beneficiaries

CivilSociety

NGOs

Media

WB Management

Affected Persons

Borrowers

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Cross-cutting Principles of SG Policies

Avoid negative impacts where possible; otherwise minimize, reduce, mitigate, compensate (in that order)

Match level of review, mitigation and oversight to level of risk and impacts

Inform the public and enable people to participate in decisions which effect them

Integrate environmental and social issues into project identification, design and implementation

Strengthen Borrower capacity

= Ingredients of Sustainable Development

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2. Overview of Safeguard Policies

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World Bank Safeguard Policies: Three-Part Format

Operational Policies (OP) – concise statement of policy objectives and operational principles including the roles and obligations of the Borrower and the Bank

Bank Procedures (BP) – Mandatory procedures to be followed by the Borrower and the Bank

Good Practice (GP) – Non-mandatory advisory material

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OP/BP 4.01: Environmental AssessmentObjectives:

To inform decision makers of the nature of environmental and social risks

To ensure that projects proposed for Bank financing are environmentally and socially sound and sustainable (promote positive impacts, avoid/mitigate negative impacts)

To increase transparency and participation of stakeholders in the decision-making process as one essential element

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Applies to all Investment lending (not Development Policy Lending); triggered for almost all investment projects

Umbrella EA policy: subsumes elements of others Based on screening of operations (Category A, B, C, FI) Scope of EA issues (integrated env & social); types of EA

instruments (based on risks and on type of lending) Bank and Borrower responsibilities (incl. consultation

and disclosure) Operational Annexes

OP/BP 4.01: Environmental AssessmentKey elements:

(more details later)

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OP 4.04 Natural Habitats

Objectives: Protect, maintain, restore natural habitats and

their biodiversity; Ensure sustainability of services and products which natural habitats provide to human society

Precautionary approach to natural resources management

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OP 4.04 (Natural Habitats)Key elements no WB support for significant conversion or degradation of

critical natural habitats* (if unavoidable, compensation through additional protected area of equivalent value)

Precautionary approach to natural resource management in interests of sustainable development

Where potential for impacts exists, assess/address Client capacity to implement protection

Preparation/appraisal/supervision to include qualified experts Take into account views/roles/needs of local communities,

NGOs; involve in planning, implementation (incl. PA management), monitoring; support local conservation incentives

*Definitions in Annex A

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BP 4.04 (Natural Habitats)

Any project with potential for significant conversion or degradation of natural habitat = Category A

Other projects involving natural habitats = Category A or B

Use of “compensation” approach requires V.P. approval

Costs of compensatory conservation (offsets) are included in project financing

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OP 4.09 Pest Management

Objectives: Support Integrated Pest Management (IPM)

approach for sustainable agriculture and health (promote use of biological/ environmental/ agronomic controls, reduced reliance on synthetic chemicals)

Reduce human exposure and health risks Help develop national capacity for IPM and

pesticide regulation/monitoring

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OP 4.09 (Pest Management)Key Elements

Assess issues through EA process (mitigation through EMP or separate Pest Management Plan depending on scale)

Pesticides may be financed in context of IPM (criteria for pesticide selection and handling)

No BP 4.09 - Pest Management Handbook

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OP 4.10: Indigenous Peoples

IP – distinct, vulnerable, social and cultural group attached to geographically distinct habitats or historical territories, with separate culture than the project area, and usually different language

Objectives: To foster full respect for human rights, economies, and

cultures of IP To avoid adverse effects on IP during the project

development One of the most controversial and contested OPs in other

regions; few applications in ECA (Siberia only)

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OPN 4.11 Physical Cultural Resources

Objectives : Physical Cultural Resources (PCR) are

identified and protected in World Bank financed projects

National laws governing the protection of physical cultural property are complied with

PCR includes archaeological and historical sites, historic urban areas, sacred sites, graveyards, burial sites, unique natural values

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OP 4.11 (Physical Cultural Resources)Key Elements & BP 4.11 Implemented as integral element of EA (EMP to

include PCR Plan as needed, or “Chance Finds” provision)

Typically triggered by:– any project involving significant scale excavation, earth

moving, flooding – any project in or near PCR site recognized by borrower

Archaeological survey to identify/characterise PCR (or to confirm none are present)

Mitigation may range from full protection to salvage & documentation (Borrower decides)

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OP 4.12 Involuntary Resettlement

Objectives: Minimize displacement Treat resettlement as a development program Provide affected people with opportunities for participation Assist displaced persons in their efforts to improve their

incomes and standards of living, or at least to restore them Assist displaced people regardless of legality of tenure Pay compensation for affected assets at replacement cost The OP Annexes include descriptions of Resettlement

Plans and Resettlement Policy FrameworksDetails in following presentation

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OP 4.37 Safety of DamsObjectives, Key Elements

To protect downstream populations and ecosystems from consequences of dam failure

Triggered if WB project finances dam construction or rehabilitation, but also when performance of a WB- financed project is dependent on an existing dam*

Distinguishes between large and small dams:– 15 m +, or 10 m + with other risk factors– Reservoir size – Likelihood of later increase in height/size

Requires dam independent panel to assess design/construction; detailed plans for construction/quality assurance; instrumentation, operation & maintenance, emergency preparedness

*due diligence requirements more modest in this case

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OP 4.36 Forests

Objectives: Forests are managed in a sustainable

manner Significant areas of forest are not

encroached upon The rights of communities to use their

traditional forest areas in a sustainable manner are not compromised

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OP 4.36 ForestsKey Elements & BP Applies to projects which may have impact on health and

quality of forests; projects which aim to bring about change in management, protection or utilization of forests

Applies to natural forests & plantations OP 4.04 applies, also to critical downstream habitats which

may be affected Plantations preferred to be made on unforested sites Attention to risk of invasive species Commercial harvesting may be financed for areas not

identified as critical forests/natural habitats

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OP 7.60 Projects in Disputed Areas

Legal Safeguard Policy The Bank may support a project in a

disputed area if governments concerned agree that, pending the settlement of the dispute, the project proposed for one country should go foreword without prejudice to the claims of the other country

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OP 7.50: Projects on International Waterways (Legal SGP)

Objective: to ensure projects will neither affect the efficient utilization and protection of international waterways, nor adversely affect relations between the Bank and its Borrowers and between riparian states

Triggered by any project which involves utilization of, or release of effluents into, an international waterway, regardless of scale, but exemptions may be approved in some cases

Legal Safeguard Policy – requirement for notifying other riparian States

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BP 17.50 Disclosure Policy/Disclosure Handbook

Supports decision making by the Borrower and Bank by allowing the public access to information on environmental and social aspects of projects

Mandated by six safeguard policies that have specific requirements for disclosure

In country: Before project appraisal in local language and in English

World Bank INFO-Shop: Before project appraisal in English (documents can be in

draft but must meet WB standards)

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Consultation (beyond disclosure)

Mandated by Environmental Assessment, Involuntary Resettlement and Indigenous Peoples Policies

A two-way process in which beneficiaries provide advice and input on the design of proposed projects that affect their lives and environment

Promotes dialogue between governments, communities, NGOs and implementing agencies to discuss all aspects of the proposed project

At least 2 consultations for a Category A Project (or Sub-project) and one consultation for a Category B Project (or Sub-project) before appraisal (or sub-project approval)

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