Environmental and social considerations in the World Bank safeguards for

38. The World Bank’s current environmental and social safeguards integrate a wide array of environmental and social considerations.⁸⁹ The OP and BP cover for instance Environmental Assessment (OP and BP 4.01) and Environmental Action Plan (OP and BP 4.02), Natural Habitat (OP and BP 4.04), Water Resource Management (OP 4.07), Indigenous Peoples (OP and BP 4.10), Involuntary Resettlement (OP and BP 4.12) or Forests (OP and BP 4.36). These instruments describe the process that must be followed by the World Bank’s staff; the requirements that must be fulfilled by the Recipient for World Bank’s funds to be committed;⁹⁰ and the requirements that must be fulfilled by the Recipient during project implementation, which must be supervised by the World Bank. Thereby, they constitute selectivity (or ex-post) conditionality but also performance (or ex ante) conditionality.

39. Taking as an example the environmental impact assessment, the OP 4.01 Annex B describes its content requirements.⁹¹ The process will depend for each proposed project on

85 Ibid., p. 285. Shihata, The World Bank Inspection Panel, op. cit., pp. 43-44.

86 For an analysis of the World Bank’s safeguards in view of their revision, see Von Bernstorff, Dann, Reforming the World Bank Safeguards, op. cit.

87 World Bank, “Environmental and Social Framework” (2017), available at:

http://documents.worldbank.org/curated/en/383011492423734099/pdf/114278-WP-REVISED-PUBLIC-Environmental-and-Social-Framework-Dec18-2017.pdf; ibid., “Environmental and Social Framework”

(website), op.cit.

88 Ibid., “Environmental and Social Framework”, paras. 2-4, p. ix.

89 Bekhechi, “Some Observations regarding Environmental Covenants and Conditionalities”, op. cit.

90 Boisson de Chazournes, “Policy Guidance and Compliance”, op. cit., p. 285.

91 World Bank, “Operations Manual”, op. cit., OP. 4.01 Annex B; see Boisson de Chazournes, “Policy Guidance and Compliance”, op. cit., pp. 286-287.

the results of the environmental screening⁹² carried out by the World Bank, which classifies the project into one of four categories: A, B, C or FI. The criteria for this classification are the type, location, sensitivity and the scale of the project, as well as the nature and magnitude of its potential environmental impacts. Category A projects are likely to have significant adverse environmental impacts; Category B projects have potential environmental impacts that are less adverse than those of Category A; Category C projects are likely to have minimal or no adverse environmental impacts. Category FI projects involve investment of the World Bank where sub-projects are likely to have environmental impacts.

40. The extent and type of the required environmental impact assessment is gradually determined by this categorization. The most thorough environmental impact assessment is required for Category A projects, while generally no environmental impact assessment is required for Category C projects.⁹³ Other obligations, such as those concerning public consultation⁹⁴ or disclosure,⁹⁵ also vary depending on project categorization.

41. The environmental impact assessment is submitted by the Recipient⁹⁶ and must take into account: the natural environment (air, water, and land); safety and human health; social aspects (such as involuntary resettlement or indigenous peoples); and global and transboundary environmental aspects, considering natural and social aspects in an integrated way.⁹⁷ The OP 4.01.III further requires that the environmental impact assessment take into consideration the variations in project conditions and country conditions; the findings of environmental studies; national environmental action plans; the country’s policy framework, national legislation, and institutional capabilities related to the social and environmental aspects; and the obligations of the country for project activities under relevant international environmental treaties and agreements. If the project is classified as Category A, the Recipient shall engage independent environmental impact assessment experts to undertake the environmental impact assessment and for the most risky,

92 World Bank, “Operations Manual”, OP 4.01.VIII.

93 Ibid., OP 4.01.VIII.

94 Ibid., OP 4.01.XIV.

95 Ibid., OP 4.01.XV-XVIII.

96 Ibid., OP 4.01.IV.

97 Ibid., OP 4.01.III.

contentious or concerning projects, the Recipient should also retain an independent advisory panel.⁹⁸

42. The World Bank advises the Recipient on the environmental impact assessment requirements, reviews the environmental impact assessment and may require additional work.⁹⁹ It must determine whether the environmental impact assessment’s findings and recommendations provide an adequate basis for processing the project for financing.¹⁰⁰ Depending on the project, other instruments, such as an Environmental Management Plan,¹⁰¹ can be used to fulfill the environmental impact assessment requirements. An Environmental Management Plan details the actions and measures to be taken during project implementation in order to eliminate, offset or reduce adverse environmental impact.¹⁰² 43. During project implementation, the Recipient shall report on compliance with the findings of the environmental impact assessment including implementation of any Environmental Management Plan, the status of mitigatory measures and the finding of monitoring programs.¹⁰³ The World Bank shall supervise the environmental aspects of the project based on the environmental impact assessment, the Environmental Management Plan and other project documents.¹⁰⁴ The requirements related to an environmental impact assessment constitute selectivity conditionality and then performance conditionality, as explained in the next section.

2.2. Categorizing environmental and social safeguards as selectivity or performance conditionality

44. In order to comply with the environmental and social safeguards, obligations are placed on both the World Bank and on the Recipient. In the example above, the World Bank must categorize the project, review the environmental impact assessment and decide whether it is satisfactory, while the Recipient must carry out the environmental impact assessment.

These conditions must be fulfilled by each partner before the signing of the loan agreement, i.e. as selectivity conditionality. Then, during project implementation, the Recipient must

98 Ibid., OP 4.01.IV.

99 Ibid., OP 4.01.V.

100 Ibid., OP 4.01.V.

101 Ibid., OP 4.01.VII.

102 Ibid., OP 4.01. Annex A. III.

103 Ibid., OP 4.01.IXX.

104 Ibid., OP 4.01.IXX.

implement and comply with any environmental measures decided by the time of signing, while the World Bank must supervise the environmental aspects. The Recipient has to comply with these measures during the implementation of the project before a certain deadline, which can be the first, or any subsequent, disbursement, or within a certain time span. The conditions defining these requirements are contained in the loan agreement and therefore constitute performance conditionality. Their incorporation in loan agreements signed by the World Bank and the Recipient naturally enables the conditionality to become binding under international treaty law.¹⁰⁵

45. In consequence, the environmental and social safeguards, which are internal standards of the organization, sometimes merely non-binding and advisory, originating in the World Bank’s administration and not always approved by the Member States through the Board of Directors, are transformed into internationally binding loan agreement conditions.¹⁰⁶ The dynamic behind this transformation is the consistent use of the environmental and social safeguards in the appraisal of the project and then in its implementation, namely first as selectivity conditionality and then reflected and translated into performance conditionality within the loan agreement.¹⁰⁷