Fri | Dec 3, 2021

New measures for obtaining World Bank loans

Published:Friday | August 7, 2015 | 6:24 PM

Caribbean countries seeking to obtain loans from the World Bank will now have to comply with a new set of social and environmental rules.

The World Bank said the draft framework, under discussion for several years, represents "a major step forward" that strengthens its protection of the environment and the world's poor and vulnerable in its investment projects.

In early March, the World Bank acknowledged that internal reviews had found significant flaws in the way it handles the resettlement of people to make way for development projects.

Under the proposed framework, the World Bank will demand that borrowing countries extend labour rights, including for the first time, the rights to collective bargaining and freedom of association.

The institution also amended a previous proposal on environmental standards that had raised ire among non-governmental organisations and other groups in July 2014.

According to the new rules, indigenous peoples affected by projects would need to give "free prior and informed consent" before the projects can proceed.

The financial institution said that if prior consent "can't be shown, the World Bank will not proceed with the aspects of the project relevant to indigenous peoples"

But in a joint statement, 19 civil society organisations denounced the new World Bank framework, calling it a "dangerous rollback in environmental and social protections".

They warned that the proposed rules "will vastly weaken protections for affected communities and the environment at the same time as the bank intends to finance more high-risk projects".