New rules have drawn fire from NGOs for creating loopholes and shifting responsibility to the borrowing nations
The World Bank adopted a new set of policies on Thursday 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.
The global lender dedicated to fighting poverty, whose commitments rose to more than $60 billion this year, said the new environmental and social framework had involved the "most extensive consultation ever conducted" by the bank.
"These new safeguards will build into our projects updated and improved protections for the most vulnerable people in the world and our environment," World Bank President Jim Yong Kim said in a statement.
The Bank last year acknowledged that its projects had sometimes resulted in forced population displacements. World Bank projects in regions around the world have been accused of underwriting human rights abuses.
But the first major update to the World Bank's safeguard policies in nearly 20 years has drawn fire from some non-profit groups for creating "loopholes" with more vague language and more reliance on borrower country laws and standards.
"The bank has effectively dismantled thirty 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 non-profit group focussed on forest preservation.
The new rules are to take effect in 2018 and will require client states to conduct a "broadened social assessment and management of environmental and social risks," to guarantee labour rights and prohibit any form of forced labour.
Projects will have to reduce environmental harm and avoid large-scale population displacements, according to the new policy.
Kim told reporters on a conference call that one key example of the changes will be increased protections for lesbian, gay, bisexual and transgender communities. The bank pulled out of a $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 countries to lift their own environmental and human rights safeguards to match those of the Washington-based development lender.
While welcoming some improvements, Nadia Daar, head of the Washington office at Oxfam International, said in a statement that her organization was "frustrated and disappointed" that the new policy had not gone further.
The bank information centre, an organisation which lobbies to improve World Bank policies, said the new rules lacked "the strength and clarity that people negatively impacted by development so profoundly depend upon".
As the latest version of the rules became public last month, Human Rights Watch likewise said it "does not require the bank to respect human rights".
Kim, the Bank president, said the framework represented "the best possible compromise".
"We had to find a path down the middle where we can both ensure that abuses didn't happen and at the same time make it possible for borrowers to borrow," Kim told reporters in a conference call.
Overly strict criteria risked harming the economic prospects of poor countries, he said. The Bank currently faces a growing number of other actors in global development, including China, seen as placing fewer conditions on financing.