IFC policy for when projects cause harm lambasted as ‘letdown’

The International Finance Corporation, the private sector arm of the World Bank, has released a new policy to govern how it responds when projects go wrong and seriously harm people or the environment, but advocates lambasted its “shocking” failure to go far enough or address past problems.

The new draft, Approach to Remedial Action, will guide how IFC and MIGA, or the Multilateral Investment Guarantee Agency, compensate communities when projects they have invested in cause environmental destruction, health problems, or human rights violations, among other issues.

The new guidelines provide some clarity on how IFC will avoid problems, help resolve complaints, and increase leverage on clients to make sure they pay when things go wrong. But it does not guarantee compensation from its own coffers.

“The problem is almost nothing is new,” said Margaux Day, the policy director at Accountability Counsel, a group that advocates for people harmed by internationally financed projects. “IFC has failed the board’s assignment and failed the communities that it impacts.”

Read the full article by Adva Saldinger for Devex here.