The World Bank
1818 H Street, NW
Washington, DC 20433 USA
Draft Operational Policy 9.00 Program for Results Financing
To the World Bank Board of Executive Directors:
We, the undersigned organizations, representing civil society representatives from XX countries, write to express our grave concerns with the World Bank’s Draft of Operational Policy 9.00 Program for Results (P4R) Financing.
P4R is a new form of financing which could undercut decades of efforts to establish strong social and environmental standards and accountability mechanisms at the World Bank. Under the laudable rubric of providing governments with more flexible financing for health, education and other social programs, P4R actually would allow the Bank to fund potentially harmful projects and activities that specifically would be exempt from complying with most World Bank safeguard policies, including those related to indigenous peoples, involuntary resettlement, natural habitats and dam safety, as well as other important policies, including those related to project supervision and monitoring.
The draft policy acknowledges that P4R loans could be used to fund activities with significant adverse environmental and community impacts, and even some with irreversible impacts, without application of the safeguard policies. As a result, a P4R loan could, for example, be given to a government for a forests-related program that ultimately results in land-grabbing and indigenous rights violations. But under P4R, World Bank indigenous peoples policies would not apply to this loan, nor would normal disclosure standards. And although the draft indicates that Bank’s accountability mechanism could be used for P4R lending, without clear standards at the project level, it is impossible to hold borrowers accountable for complying with those safeguards.
Finally, we note with concern that the P4R draft policy is the latest development in an alarming trend at the World Bank, in which the institution has created numerous forms of financing to which safeguard and accountability standards are very difficult to apply, if not completely exempt. The de facto result is that, today, the environmental and social standards that the Bank has carefully crafted over twenty years apply to a increasingly smaller proportion of Bank lending. P4R will exacerbate this problem by, encouraging clients to seek P4R lending as a way of avoiding compliance with and accountability for environmental and social safeguards.
With its sweeping exemptions, the proposed P4R represents probably the most radical development in this worrying trend towards the dilution of social and environmental safeguards. For this reason, we urge the Bank Board to reject P4R, and to make a strong commitment to applying robust safeguards to all types of financing at the World Bank Group.