Narsee Monjee Institute of Management Studies

Environment Management Project

Environmental Safeguard Policies of World Bank

Submitted To: Submitted By: Group 8, Division A

Dr. Bala Krishnamoorthy
A006 Chirag Bansal
A019 Aashi Gupta
A050 Aryansh Rastogi
A052 Riya Saha
A053 Shakabda Sarangi
A061 Saumya Vashishtha
Overview

World Bank introduced Safeguard policies in the 1980s and 1990s, after the World Bank and
other investors came under intense criticism for the environmental destruction and displacement
of people caused by its investment projects. Safeguard policies were originally meant to ensure
that the Bank’s investments did not inflict unintentional harm. Many international financial
institutions followed suit and developed safeguard policies of their own. The main objective of
creating safeguard policies was to-
1) Do no harm: It is to protect people and environment from adverse impacts of investments
2) Reduce and manage environmental and social risk of the big investment projects
3) Do good: It is to enhance social equity and promote environmental sustainability
Safeguard policies are further classified in three part format-

(1) Operational Policies (OP) – These define statement of policy objectives and operational
principles including the roles and obligations of the Borrower and the Bank
(2) Bank Procedures (BP) – These define mandatory procedures to be followed by the
Borrower and the Bank
(3) Good Practice (GP) – These define non-mandatory advisory material

Under the umbrella of Environmental Safeguard policies, 5 policies were formulated, which
were operational policies-
(1) OP 4.01 Environmental Assessment
(2) OP 4.04 Natural Habitats
(3) OP 4.09 Pest Management
(4) OP 4.36 Forests
(5) OP 4.37 Safety of Dams
Strengths
The main strength of safeguard policies is their relative success in reducing risks to people and
the environment. While these safeguard policies have not prevented all harm, they have helped
decrease the chance that Bank-funded projects will result in severe social and environmental
damage. Among other things, they have given communities access to stronger decision making
and accountability mechanisms than what might otherwise not be available in most developing
countries. They have also allowed the Bank to implement projects in areas where the government
could not adequately mitigate social and environmental concerns on its own. This strength was
clearly reflected in the case of –

The Role of Civil Society – Vietnam’s Trung Son Dam

In Vietnam, the World Bank team responsible for overseeing implementation of the Trung Son
dam solicited input from civil society early in the planning process. The team encouraged
transparency by releasing documents such as a matrix of comments from civil society and
responses by the Bank.
Weakness
Several of the policies weaknesses relate to the disconnect between the World Bank safeguard
policies and the legal, institutional, and political realities of recipient countries. While traditional
safeguard policies entail relatively detailed requirements, recipient governments are primarily
responsible for their implementation. However, governments can have limited incentive to
thoroughly implement these policies. Although some governments appreciate Bank guidance in
implementing projects with challenging social and environmental dimensions, governments are
often less willing to invest in systems imposed by an outside institution. In addition, detailed
safeguard requirements can sometimes appear to simply duplicate national processes.
Government employees, in turn, are familiar with their own structures and incentives systems.
For instance, government staff members do not receive bonuses from the World Bank if they
succeed with safeguard implementation; their salaries and positions are determined by the
government. The reflection of above weakness is reflected out in below case of -

Safeguard Challenges in Cambodia

In 2009, the World Bank suspended funding to Cambodia when it could not agree with the
government about how to proceed on the Land Management and Administration Project
(LMAP). LMAP had supported land titling for thousands of primarily rural families. However,
an investigation by the World Bank’s Inspection Panel found that by only titling land that was
not in dispute, the project had indirectly contributed to the involuntary resettlement of thousands
of people residing on more valuable land. The preparatory documents for the project stated that it
would “not title lands in areas where disputes are likely until agreements are reached on the
status of the land.” According to the Inspection Panel, however, interpretation of this sentence
“seems to have changed over the course of Project implementation. The current interpretation is
that the Project will not title lands in areas where disputes are likely.” Several factors apparently
contributed to this change in interpretation, including push-back from the government and weak
monitoring on behalf of the Bank, made worse by turnover in Bank staff.