The World Bank on Thursday approved new rules that aim to expand protections for people and the environment in projects financed by the bank while making it easier for borrowers to comply with its standards.
However, the first major update to the World Bank’s safeguard policies in about 20 years has drawn fire from some nongovernmental organizations for creating “loopholes” with more vague language and more reliance on borrower country laws and standards.
“The bank has effectively dismantled 30 years of environmental and social protections for the world’s most impoverished and vulnerable peoples,” said Stephanie Fried, executive director of the Ulu Foundation, a nonprofit group focused on forest preservation.
World Bank president Jim Yong Kim defended the changes as a compromise that strengthens many protections while eliminating “onerous” requirements in countries whose environmental, labor and human rights standards match those of the World Bank.
The new standards, which are scheduled to be fully implemented by 2018, are also to bring the World Bank’s safeguards more in line with those of other multilateral development banks.
Kim told reporters on a conference call that one key example of the changes would be increased protections for lesbian, gay, bisexual and transgender communities.
The bank pulled out of a US$90 million loan to Uganda’s health system in 2014 after the government passed a law that imposed life sentences for certain homosexual activities and made it a crime not to report violations.
Kim said the World Bank had committed increased funding to work with its 189 member nations to lift their own environmental and human rights safeguards to match those of the Washington-based development lender.
The new standards come at a time when the World Bank is facing new competition from the Chinese-led Asian Infrastructure Investment Bank, which announced its first loans of about US$509 million in June.
Kim said the World Bank could create safeguards so onerous that borrowers might be unable to comply with them, or it could allow unacceptable outcomes for poor and indigenous communities.
“We had to find a path down the middle where we could both ensure that abuses did not happen and at the same time make it possible for borrowers to borrow,” Kim said, adding that it was a challenge getting 189 nations to agree on the new standards.
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