Groups Attack World Bank Standards

Groups Attack World Bank Standards

Press Release - Friends of the Earth International & Bretton Woods Project

Immediate release: Thursday 2nd December

PARIS (FRANCE), December 2, 2004 -- More than 200 civil society organisations and socially responsible investors called on the International Finance Corporation (IFC), the private sector arm of the World Bank, to protect the interests of the poorest and the public when setting rules governing global private investment.

The “Platform for Rights, Rules and Responsibilities” – which has been endorsed by more than one thousand groups in fifty three nations - was released as groups boycott the IFC’s latest public consultation on its “safeguard policy review” in Paris. The consultation is seen as ill-prepared, rushed and untransparent,

“The revision process has no credibility and we do not wish to participate in such a flawed consultation here in Paris. Friends of the Earth and other groups boycotted this process worldwide over the past few months, including in Brasil, in the Philippines, in the US, in the UK, in Germany and in Ghana,” said Sebastien Godinot of Friends of the Earth France.

The IFC is in the midst of a major revision of its environmental, social and disclosure policies, moving from binding rules to flexible and subjective standards. The IFC process has been criticized for both the direction of the new policies and the problems with the consultation process by civil society, investors, and even industry. Delegates representing hundreds of organizations have chosen to boycott and walk out of the consultations in protest.

Friends of the Earth International Financial Institutions Campaigner Hannah Ellis said: “More flexibility is another way to avoid commitments. As a development institution, the World Bank has an obligation to protect the interests of local people and their environment. We want to see stronger rules dedicated to the protection of people and the environment, not “flexible” standards dedicated to the protection of big business interests.”

The revision process will have significant impact on global finances. The IFC invested $23.5 billion in the developing world through 2004. The IFC’s standards are also increasingly being adopted by other major financial institutions. The Royal Bank of Scotland, Barclays, Citibank, and more than 20 other commercial banks called the “Equator Principles Banks” (which cumulatively arranged for over 75% of global international project finance) have agreed to follow the existing IFC environmental and social standards. In addition, some export credit agencies have agreed to benchmark their standards against those of the IFC.

Groups endorsing the Platform called upon IFC to:

• Meet the highest environmental and social standards and ensure that corporations respect international human rights, labour rights and environmental law as conditions for access to IFC loans;
• Commit and hold itself accountable to deliver on its stated mission of poverty reduction and sustainable development;
• Establish clear mechanisms for making the policies more enforceable and accountable and reject the proposal for self-monitoring by corporations;
• Screen all companies for their past performance on environmental, human rights and labour issues;
• Ensure that conditions are in place for meaningful and respectful engagement with affected communities, and recognise and respect indigenous peoples’ rights.
• Ensure that information is disclosed in appropriate languages in a timely and predictable way throughout the project cycle;

The IFC is currently consulting on its proposed policies, but the consultation process has been widely criticized by many stakeholders, including civil society and some in industry, for being rushed and for not being fully prepared. For instance, significant details of the policies are still not available publicly in spite of the fact that the public comment period is nearly over.

For a full list of endorsements, the full Platform text and other the regional statements, go to: www.grrr-now.org

For more information contact

IN PARIS Sebastien Godinot, Friends of the Earth +33-6.68.98.83.41 or finance@amisdelaterre.org

IN LONDON Hannah Ellis, Friends of the Earth Tel +44-20 207 566 1601 or +44-7952876929 (m) or hannahe@foe.co.uk

Lucy Baker, Bretton Woods Project Tel +44-20 7561 7610