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Critics assail World Bank’s new environmental strategy

by Danielle Knight

Washington, 18 Jul 2001 (IPS) - The World Bank launched a new environmental strategy Wednesday that failed to appease its critics.

The Bank said the initiative aims to further integrate environmental protection into its projects and programmes. The lending agency’s detractors welcomed the effort but said it would prove insufficient in correcting the negative impact of the Bank’s private-sector loans.

The new strategy, approved by the Bank’s executive board Tuesday, calls for stronger incentives for staff to pay attention to environmental issues, coordinate work across sectors, and re-align resources toward environmental objectives.

“We intend to work with our clients to define to what extent environmental factors matter, both as opportunities and as constraints for their development, and how to best integrate them into development planning,” said Kristalina Georgieva, director of the Bank’s environment department.

The strategy is the result of a two-year effort involving worldwide consultations to figure out how the Bank can foster environmentally sustainable development.

Two years ago, the Bank’s own Operations Evaluation Department (OED) concluded the institution had been only partly successful in supporting environmental sustainability in borrowing countries.

“Environmental sustainability was not adequately integrated into the Bank’s core objectives and country assistance strategies,” the OED said last month, in a memorandum to the executive directors and Bank President James Wolfensohn. “The institution’s environmental efforts have not been consistent nor have they been held to uniform quality standards.”

The new strategy articulates and emphasizes three main objectives: improving the quality of life; improving the quality of growth; and protecting the quality of regional and global commons, such as climate, forests, water resources and biodiversity. It defines the quality of life as people’s health and livelihood as impacted by environmental conditions.

The strategy seeks to improve the quality of growth “by supporting policy, regulatory and institutional frameworks for sustainable environmental management and by promoting sustainable private development.”

Magda Lovei, senior environmental economist and principal author of the strategy, said its objectives are realistic and are ready to be implemented. “We are confident that the final draft presents a balance between divergent views and sets a direction for a people- centred environmental agenda which supports sustainable development and poverty reduction,” said Lovei.

Francis Seymour, director of the institutions and governance programme at the World Resources Institute here, commended the Bank for articulating its three objectives and for stressing that environmental protection should be integrated across various sectors, such as energy and transportation.

But Seymour, who was among five members of an advisory panel to the OED’s review of the environmental performance, said the strategy fails to integrate environmental concerns into the work of the Bank’s private-sector affiliates, the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). This is a “significant omission,” she said, because these agencies are the fastest-growing units of the World Bank Group and have been criticised for supporting environmentally destructive ventures such as the Chad-Cameroon oil and gas pipeline project.

The strategy, she added, also failed to detail how environmental protection would be incorporated into the private-sector operations of the Bank’s central lending units, the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA).

“It is still not clear where environmental sustainability fits into the Bank’s overall corporate priorities,” Seymour said. “There is a lot of unfinished business.”

Critics also said that the strategy did not sufficiently change incentives for Bank staff and management to integrate environmental issues into their programmes and projects.

The strategy paper says staff members need to be provided with enhanced incentives and rewards for giving proper consideration to environmental issues, adding: “In order to recognize good performance, the environment family of the Bank will institutionalise high-profile ‘green’ awards for staff and managers in other sectors.”

Carol Welch, deputy director of international programmes at Friends of the Earth, applauded the effort but said the strategy lacked measures that would hold Bank managers and staff accountable if they did not consider environmental protection as part of their decision-making.

“The overall downside of the strategy is that there is no accountability if people fail to abide by environmental guidelines,” said Welch.

Seymour added that although the OED review had criticised the Bank for not giving the environment priority as a central theme of the institution’s work, the new strategy failed to remedy this shortcoming.

“The declining prominence of environmental sustainability in the very instruments used by the Bank to signal its strategic priorities indicates the need for the Bank’s senior leadership to reassert the centrality of the environment to the Bank’s core business,” she said. – SUNS4940

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