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No Public Money for Corporate Power

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International Finance Corporation (IFC) aims to weaken its environmental and social policies

The International Finance Corporation (IFC - the private sector arm of the World Bank Group) is in the process of revising its environmental and social policies, its technical pollution standards and information disclosure requirements. The revised standards will become the new benchmark for international financial lending practices for other private commercial banks, such as the Equator Banks, as well as Export Credit Agencies and other International Financial Institutions. Three different revision processes are underway, each with a different time frame. More information (www.grrr-now.org).

 

The IFC's policies were intended to protect people and the environment against the harmful impacts of IFC investment. Although the policies have improved over the past years, implementation has been feeble, with the policies being regularly violated.

 

But rather than addressing these fundamental deficiencies, the IFC opted to launch a review that would recognize and institutionalize this failure to implement standards.

The proposed Performance Standards would be only be voluntary, with the new proposal backsliding from existing inadequate policies.

 

The IFC review process itself is questionable for several reasons. In September, a letter was sent by 180 NGOs, including a number of Friends of the Earth groups, demanding:

  • more time,
  • more translation,
  • more explanation,
  • and more clarity.

When the IFC did not meet these requirements, Friends of the Earth and others decided not to participate in the review and called a boycott.


news :

foei involved in ifc safeguards review (december 2005)
The controversial review of the International Finance Corporation (IFC) environmental and social safeguard policies or ‘performance standards’ is drawing to a close. The IFC, the World Bank’s private sector arm, is attempting to dilute its environmental and social standards to make them easier for private companies to implement, and to encourage private banks to sign up to the Equator Principles. FoEI Chair Meena Raman has written to World Bank executive directors outlining FoEI’s concerns with the proposals. Of particular concern to FoEI, aside from the weakening of the standards, is the continued lack of coherence of World Bank policy with on the ground project practices, and until this is addressed, policy details are of little value.


IFC review drags on (26-02-2005)
In response to a boycott, the International Finance Corporation has extended the timeline for public consultation on the review of social and environmental safeguards and the information disclosure policy. The revised timetable was to see the publication of an guidance notes end January. Public comment on the disclosure policy will be received until 31 March, and on the safeguard policies until 29 April. The IFC expects the performance standards, which will replace existing Bank safeguard policies, to come into effect in January 2006.
In spite of high-profile boycotts carried out by FoE groups and others in Rio, Washington, Manila, London, Paris and Nairobi, the IFC claims to have received "substantial and diverse input" from various stakeholders throughout the consultation period since September. FoE groups are taking up the importance of the IFC policies with their government representatives. Groups have sent letters to the Executive Directors, Ministries and the IFC heads and met with ministry officials, who were often surprisingly unaware of the debates. Documents were also distributed to other national organizations, explaining the risks and threats of the current review, and making ambitious proposals.

 

Many private banks and ECAs cite World Bank and International Finance Corporation safeguard procedures in their efforts to avoid or mitigate environmental and social impacts. Read the civil society demands at www.grrr-now.org and read about FoE groups’ activities at www.foei.org/ifi/ifc_boycott.html .


world bank's new lending safeguards still weak (october 2004)

World Bank draft environmental standards for private sector activities are still too weak. The World Bank's International Finance Corporation (IFC) guidelines are relevant for all its lending activities, including risky pipelines, mines and large dams. Pressure from commercial banks to relax the standards has led to a review process. But in a recent consultation in Rio de Janeiro , civil society walked out in protest at the IFC's new proposals.

 

'The environmental and social guidelines were established to protect people and the environment from negative impacts generated by the institution's projects… But the new draft standards seem to be geared at protecting private sector profits rather than anything else' said FoEI's Longgena Ginting.


ifc under fire (november 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” 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 Brazil , in the Philippines , in the US , in the UK , in Germany and in Ghana ,” said Sebastien Godinot of FoE 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.


world bank group responds to ngo boycott (december 2004)
After months of civil society protest, the International Finance Corporation (IFC) is reportedly planning to significantly revise its consultation process on new social and environmental standards. According to a reliable source, various demands made by NGOs on the timeline and available information will be complied with. The decision comes after a three-month civil society boycott of IFC consultations in Brazil , Manila , London , Nairobi and Istanbul by groups from around the world. “These developments are a welcome signal that the IFC took note of our concerns. The institution agrees now that policies that took years to develop cannot be discussed through a rushed process where relevant information is not available. It is curious however that these issues could only be resolved after a boycott,” said Janneke Bruil, FoEI IFIs programme co-coordinator.

 

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