World Bank Makes Killing Indigenous Peoples More Profitable

Date of publication: 
17 December 2014

The World Bank’s Environmental and Social Framework draft neglects mentions Indigenous rights

Washington, D.C. – Not only does the World Bank’s new Environment and Social Framework (ESF) draft incentivize governments to ignore Indigenous peoples, it strategically neglects Indigenous and human rights of Free, Prior, Informed Consent (FPIC) and protection from forced evictions. Despite the Bank’s repeated “alignment” with international human rights laws and standards, the new ESF draft prioritizes rapid loan approval for borrower countries over protection of human rights, by allowing countries to “opt-out” of FPIC requirements if they do not recognize Indigenous peoples within their border. The neglect of Indigenous rights in the new ESF draft sends a clear and false message that protecting Indigenous peoples, let alone basic human rights, should drive up the cost of lending.

A set of environmental and social safeguards designed to support borrower countries’ Bank-funded projects, the Environmental and Social Framework (ESF) draft was released for consultation on July 30, 2014. A concerned letter from [Special Rapporteur Mandate Holders of] the United Nations’ Human Rights Council (UNHCR) accuses the World Bank of continually prioritizing rapid approval of loans over the enforcement of safeguards, likely due to increased competition from other lenders to secure the “business” of developing country borrowers. However, incentivizing governments to adopt poor engagement practices with Indigenous peoples is counter-intuitive: countries that have negligible or non-existent policies toward Indigenous peoples are found to pose a much higher business risk than those that do have Indigenous policies, according to a recent study by First Peoples Worldwide. The Bank is cultivating a more hostile environment, both for Indigenous communities and business, with this safeguard draft.

While the ESF draft does require borrower countries to obtain Free, Prior, and Informed Consent (FPIC) from Indigenous communities, it allows countries to define who Indigenous peoples are to begin with. Countries where “the existence or notion of Indigenous peoples is contested” can choose to opt-out of the ESF’s FPIC requirements – essentially incentivizing governments with fewer standards to comply with if they choose to not recognize Indigenous peoples within their borders. If countries decide to opt-out, the piecemeal treatment of rights throughout the document fails to protect Indigenous rights under any other safeguard clause. Even if countries do comply with the FPIC requirement, the processes for acquiring FPIC outlined in the ESF draft don’t comply with international standards, and don’t require requesting parties to have meaningful consultations with or participation of affected Indigenous peoples.

The Bank also backpedaled on their land acquisition, restrictions on land use, and involuntary resettlement standards, particularly concerning for Indigenous peoples. While an existing standard (ESS5) states that involuntary resettlement should be avoided, the new ESF draft fails to prohibit projects that will cause forced evictions, and fails to recognize that forced evictions violate international human rights law. There is also no reference to the need for prior notice before resettlement, security of tenure, access to public services and facilities, and most alarmingly, no prohibition on use of bank funds for land grabbing and the consequent displacement of people.

Moreover, the recent evictions of Sengwer peoples in Kenya due to a Bank-funded project demonstrate the Bank’s regard for Indigenous lives – that they have none. When a Bank-financed watershed conservation project in the Embobut Forest of Kenya resulted in forced evictions, the Sengwer community challenged the project through litigation in Kenyan courts and filed a complaint with the World Bank. “As the World Bank started to defy their own safeguards, the Sengwer started looking for ways to end the negative impacts the project was having on their community,” says Rebecca Adamson, president and founder of First Peoples Worldwide. “We’re all familiar with a race to the bottom in the business world, but now we are seeing it in the international aid world too.” The Sengwer Indigenous Peoples Programme is a grantee of First Peoples Worldwide’s Keepers of the Earth Fund.

The ESF draft egregiously avoids significant mentions of human rights or international human rights law throughout most of the document. Although the Bank has aligned itself and its operations in support of human rights through its Articles of Agreement, the ESF fails to stipulate how. While the draft includes a new standard on Indigenous peoples rights, they are built into the document incrementally. The ESF draft does not include a comprehensive safeguard that addresses all civil, political, economic, social and cultural rights collectively, as in other international human rights laws and standards. Furthermore, the human rights norms expressed in the ESF draft fail to reflect any existing human rights laws and standards, which may muddle implementation and enforcement. The UNHRC calls for the World Bank to include human rights within its overall program objectives, and incorporate due diligence into its risk management policies.

Read the Special Rapporteur’s letter of concern here –


UN Human Rights Council and U.S. Senators slam World Bank draft safeguards

By Molly Anders –

16 December 2014

World Bank President Jim Yong Kim. The bank was called “an increasingly isolated outlier” in its treatment of human rights in draft safeguards by the U.N. Human Rights Council. Photo by: Young-Jin Yoo / World Bank / CC BY-NC-ND

A group of 28 experts from the U.N. Human Rights Council sent an open letter Monday to World Bank President Jim Yong Kim, sharply criticizing the bank’s treatment of human rights in its draft safeguards.

“The bank’s proposed new safeguards seem to view human rights in largely negative terms, as considerations that, if taken seriously, will only drive up the cost of lending rather than contributing to ensuring a positive outcome,” the experts said in the letter, a copy of which was obtained by Devex before it was officially published Tuesday on the OHCHR website.

In the largest public condemnation issued by the council against the World Bank to date, the document added that “it is fair to say that the vast majority of development actors, from the European Investment Bank to the U.N. Development Program, have expressed a clear commitment to human rights in their policies, thus making the [World] Bank an increasingly isolated outlier in this regard.”

Also on Monday, the U.S. Senate Foreign Relations Committee aired their own complaints about the bank’s new safeguards, issuing a statement of concern to the Department of Treasury secretary.

The committee noted in the 2015 draft appropriations bill that the World Bank’s safeguards “fall short of international law and best practices,” and called for the bank to conduct “rigorous due diligence and human rights risk management” in all projects and loans.

The safeguards draft — known within the Washington, D.C.-based institution as the “Environmental and Social Framework” — was leaked in June to heavy criticism from civil society organizations like the watchdog group Bank Information Center and environmental advocacy organization International Rivers, which argue the new policy doesn’t adequately address the risks related to human rights and the environment in future bank-funded development programs.

The Foreign Relations Committee’s letter points to Treasury’s past role in advancing human rights standards in the Asian Development Bank, and asks that it use its power to bring the World Bank to the same level, underscoring that the current draft “allows governments to opt out” of safeguards and “weaken existing mechanisms for transparency, oversight and accountability.”

“We expect the Treasury to demonstrate similar leadership in this case,” the letter reads, “so that the World Bank’s safeguards are at least as strong as the strongest safeguards of the ADB and other multilateral financial institutions.”


Congress Warns World Bank Not to Dilute Safeguards

16 December 2014

Co-authored with Jolie Schwarz, Legislative Affairs Fellow at Bank Information Center –

The FY 2015 Omnibus Appropriations Bill expected to be signed by President Obama this week sends a clear message to the World Bank that its safeguard policies must remain strong in spite of recent efforts to weaken the crucial standards that protect people and the planet from harms caused by development projects. The bill also sets priorities for the U.S. government to fight for at the World Bank Board — namely, that all dilutions of current policies must be removed and that human rights due diligence should be incorporated into relevant policies.

The World Bank is currently in the process of an unprecedented review of its social and environmental safeguard policies — many of which were inspired by acts of Congress and U.S. government advocacy over the last few decades. Organizations from the U.S. and around the world have expressed serious concerns on a recent draft of the updated policies released by the Bank, which they perceive as a massive dilution of the current policies. CSOs claim that the new safeguards framework “abandons clear definitions and strict adherence to ex-ante minimum procedural requirements in favor of unlimited discretion by Bank Management.” One of those ex-ante requirements is the minimum period for public disclosure of environmental impact assessments, which arose from a now infamous provision of the International Financial Institutions Act, known as the Pelosi Amendment, which requires the U.S. government representative at the World Bank board to withhold support on projects for which an assessment has not been publicly disclosed at least 120 days before a Board vote.

The language in the bill suggests that Congress is concerned that its legacy of promoting strong social and environmental standards at the Bank is at risk, including through new policies that would effectively eviscerate the longstanding protections for communities triggered by the Pelosi Amendment. Without such ex-ante requirements, poor communities with little influence over the development agenda in their country now have even fewer opportunities to prevent harmful projects from going forward in their communities, to resist forced displacement or to protect their cultural heritage from destruction.

One of the bill’s provisions would require the U.S. representative at the Bank to vote against any project if the applicable social and environmental standards for that project provide less protection than those currently in force at the Bank. The bill also requires the U.S. executive director to encourage the Bank to conduct rigorous human rights due diligence and human rights risk management in connection with its development activities. Typically, those that face the highest risks and suffer the most significant impacts from development projects — including women, children, persons with disabilities, indigenous peoples, sexual and gender minorities, among others — are also the most vulnerable to having their human rights violated in the name of development. The language in the omnibus bill makes clear that failing to assess the human rights risks faced by these marginalized and vulnerable communities is no longer acceptable to the United States Congress.

This language could prove to be a real headache for the U.S. government which will now have to push back on many new provisions in the draft that specifically have to do with human rights. For example, although the draft incorporates “free, prior and informed consent” (also known as FPIC), which is a key tenant of indigenous people’s rights, it would also allow borrowing countries to “opt-out” of applying the Indigenous Peoples standard at all — including FPIC. In addition, the Bank has failed to articulate how it will operationalize its stated aspirational commitments to human rights in the draft, which notably do not include intentions to conduct human rights due diligence.

The position of the U.S. government on the first draft of the Safeguard policies is expected to be made public sometime early next year. So far the U.S. Treasury, which is the lead agency on U.S. engagement at the Bank, has only announced that they remain committed to strengthening these policies and reaching an “international consensus” on the matter. However, such consensus would mean that the new safeguard policies will not only fail to meet international standards — including those on human rights — but also fall far short of the high bar that current standards have set for borrowing countries to obtain Bank financing, which the U.S. Congress has clearly stated in this bill to be unacceptable.