Abstract
Until recently, the professional disciplines of environmental and social sciences have too often been seen as distinct. Unconnected training and implementation of activities linked to the human and biophysical aspects of development meant that separate tools and organizational structures emerged. Indeed, it is only in recent times that we have learned that interaction between these sciences yields better development outcomes. For this author, who had studied environmental science as well as law, often seen as a social science, the lack of intersection always seemed an unnecessary weakness in the field of development. Why had this division lasted for so long, and have we now turned the corner?
As a development institution, the World Bank operates in many countries where environmental and social policies are weak or where governments have limited capacity to apply and enforce them. To help protect people and the environment, the World Bank requires that borrowing governments adhere to its environmental and social policies when it finances their projects – such as building a road, a hospital, or a water treatment plant.
The World Bank introduced its first operational policy for environmental assessment of Bank-financed projects in 1989: Operational Policy 4.01 (OP 4.01), ‘Environmental Assessment’ (World Bank, 2013). This policy was issued at a time the Bank was being criticized for the environmental and social impacts linked to its finance, such as from the Sardar Sarovar Dam project in India. Over time, OP 4.01 was complemented by nine additional policies, including two social policies, respectively on involuntary resettlement and Indigenous Peoples. The 10-policies are referred to as the ‘Safeguards’, as they aimed to help ensure that Bank-financed projects would ‘do no harm’. Indeed, the kind of harm that was associated with large infrastructure projects that too often had led to both environmental and social impacts.
In 2010, the Safeguards were evaluated by the World Bank’s Internal Evaluation Group (IEG), which, inter alia, noted inadequate coverage of social risks and impacts: The existence of an umbrella policy for Environmental Assessment provided an open-ended mandate for engaging with borrowers and clients on the environmental agenda. By contrast, the restriction of social safeguards at the Bank to two policies focused attention on these two effects but narrowed the relevance of social safeguards to a much smaller segment of the portfolio. [. . .] Current Bank social safeguards do not provide adequate coverage of community impacts; labor and working conditions; and health, safety, and security issues at the project level . . . (
Independent Evaluation Group, 2011
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The World Bank subsequently undertook its largest-ever global consultation to improve upon the Safeguards, which engagement confirmed the need to expand its social policies. Finally, in August 2016, the Bank’s Board of Executive Directors approved a new Environmental and Social Framework (ESF) for Investment Project Finance. It includes a new Environmental and Social Policy, outlining the Bank’s due diligence responsibilities, along with 10 new Environmental and Social Standards that must be applied by borrowers at the project level and supervised by the Bank (World Bank, 2018). The ESF became effective on 1 October 2018: all new investment projects must now be prepared under its integrated approach to environmental and social assessment.
So, what were the challenges in forging this intersection of environmental and social policies? And what does this integrated framework mean for the development community?
Challenges
OP 4.01 had several incarnations but remained in effect for almost 30 years. It still applies to projects that were approved before the ESF became effective. The policy notes, quite broadly, that an environmental assessment evaluates a project’s potential environmental risks and impacts in its area of influence; examines project alternatives; identifies ways of improving project selection, siting, planning, design, and implementation by preventing, minimizing, mitigating, or compensating for adverse environmental impacts and enhancing positive impacts; and includes the process of mitigating and managing adverse environmental impacts throughout project implementation.
On social concerns, the policy is more limited; an assessment ‘takes into account the [. . .] human health and safety; social aspects (involuntary resettlement, indigenous peoples, and physical cultural resources)’. The World Bank’s social development specialists felt this phrasing implied that social risks and impacts were marginal in relation to the physical environment. Prior to the ESF, they even proposed a standalone social counterpart to OP 4.01.
In the 1970s and 1980s, damage to the environment became a focus for the international community. This led World Bank member countries, donors and borrowers alike to establish environmental ministries and national laws on environmental impact assessment. There was no parallel movement on social risks and impacts, which were not considered as pressing as environmental harm. Most member countries have distinct environmental agencies, which have a long history of impact assessment. In fact, many countries looked to OP 4.01 when they developed their environmental assessment laws.
Another challenge lay inside the World Bank, with environmental specialists and social development specialists under separate directors, a division, however, that the ESF helps to overcome.
The promise
The ESF integrates environmental and social issues and provides the basis for ‘green and sustainable growth’. Almost 50 years ago, the UN Conference on the Human Environment raised awareness that the environment was being damaged in ways that could impact all of humanity, and that sound science was needed to understand how to stop this harm. This was followed by the 1992 Rio Conference on Environment and Development; by then, it was widely recognized that the developed world was the key contributor to environmental harm, and that the need to curb industrial growth had to be balanced with the development of emerging economies. The needs of the poor, of Indigenous Peoples, and of countries whose resources had been exploited were recognized as social needs, to be factored into global declarations on the environment and development.
The intersection of environmental and social issues is clear throughout the ESF. Its standards capture the social ‘gaps’ that IEG noted in its evaluation, and more. Environmental and Social Standard 1 (ESS1) lays out in non-exclusive fashion the environmental and social risks and impacts that must be assessed. One key cross-cutting area is ‘ecosystem services’, which are defined as ‘benefits that people derive from ecosystems’ and include four types: provisioning, regulating, cultural, and supporting. Each of these provides benefits that intertwine the natural with the anthropogenic – benefits that each can provide to the others, but which can be lost to society without human collaboration and understanding.
The interplay of environmental and social values in ecosystem services is also recognized in ESS4 on Community Health and Safety. This requires that Bank-financed projects assess the impact of environmental factors, such as climate change or natural or man-made hazards, on the health and safety of communities, particularly for disadvantaged and vulnerable groups. Project design must reflect the views and needs of these groups. For example, the design of a road must consider more than the environmental design and impacts. Social impact must also be assessed, through community input on issues such as access for the poor, safety for the most vulnerable, and service to schools and hospitals.
Another key way that Bank policy now integrates social risks and impacts is ESS2 on Labor and Working Conditions. The Safeguards addressed workers’ health and safety but not social issues, such as prevention of forced or child labor, the need to address gender concerns in the workplace, or workers’ rights to adequate wages, expression of grievances, and association or collective bargaining. Previously, such issues were more likely to possibly be identified through the procurement process. Now, under the ESF, every new project is assessed to ensure adequate worker protections.
The ESF also enhances the interrelationship of environmental and social issues concerning Indigenous Peoples. Under ESS7, project design must reflect understanding and respect for the traditions and cultures of Indigenous Peoples, including their close attachment to their lands. To help understand project risks and potential benefits, it is not enough to assess the impacts of project finance on the natural resources associated with these lands. Social analysis must detail how the community makes decisions, with project design taking into account the community’s culture, beliefs, and institutional arrangements. These social concerns must inform the project’s environmental design.
Another ESF innovation is the Standard on Stakeholder Engagement and Information Disclosure. ESS10 requires that all projects engage stakeholders in a meaningful way, with a plan for this throughout the project life cycle. It requires that such engagement be free from coercion and intimidation, and that projects have grievance mechanisms to handle environmental or social concerns while protecting those who raise concerns from retaliation or reprisal. Thus, in addition to environmental concerns, project grievance mechanisms may deal with working conditions and labor concerns, as well as claims related to sexual exploitation, abuse, or harassment. This broad recourse for community concerns expands on the Safeguards, which required such mechanisms only where projects had risks from involuntary resettlement or to Indigenous Peoples.
In its Vision Statement for Sustainable Development, the ESF spells out key overarching development principles: the World Bank’s project finance is based on adherence to non-discrimination and social inclusion, public participation, transparency, and accountability. Clearly, to apply these principles, the Bank’s environmental and social specialists must work in an integrated way when looking at project design and impact.
Through over 30 years’ experience in applying environmental and social policies, the World Bank has shown that integrating these concerns is critical to protect communities and the environment, as well as to improve outcomes. Development professionals are now able to consider environmental and social issues side by side and can better balance these concerns with development objectives. In this regard, the ESF is also an excellent tool for the World Bank to track progress on the UN’s Sustainable Development Goals. By addressing the whole spectrum of development, the ESF is helping harmonize how environmental and social policies are applied across the family of development agencies. At the same time, we must recognize that application of sound environmental and social policies takes place in and are implemented at the local level. Thus, successful implementation requires a whole chain of relevant actors to see the value in a holistic approach. Breaking down the historic silos between these professional fields and governmental structures will still take further effort.
Footnotes
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
Author biography
Charles E. Di Leva is the Chief Officer for Environmental and Social Standards at the World Bank. He is responsible for overseeing the implementation of the World Bank’s new Environmental and Social Framework and advising on complex environmental and social issues faced by Bank operations. Formerly, Mr. Di Leva served as World Bank’s Chief Counsel of the Environmental and International Law Practice Group. There, he led the Bank’s legal work on the revision of its environmental and social safeguards. Previously, Mr. Di Leva served as Director of the Environmental Law Center at IUCN in Bonn, Germany.