The World Bank’s “Program for Results”: Implications for Indigenous Peoples

The World Bank
The World Bank

Without consultation with indigenous peoples, and very little with civil society, the World Bank is proposing a new financing instrument that could have dramatic, devastating, and irreparable effects on indigenous lands and resources. The Bank’s proposed “Program for Results” (P4R) would provide few protections for indigenous rights, and avoid implementation of many rights that indigenous peoples have worked very hard to attain. The aspirations supported by the world community as expressed through the Declaration on the Rights of Indigenous Peoples will be undermined by this type of financing.

How would this happen? P4R would provide funding for general government programs (for development and poverty reduction), not specific projects. The International Finance Corporation, (IFC) the private sector lending arm of the World Bank Group, currently has an investment loan system that funds specific projects, generally run by private interests. The use of these funds requires that the borrowers meet certain criteria, and follow certain Performance Standards, and a Sustainability Framework, in the development of their projects as administered through the IFC. These are designed to protect indigenous rights, human rights, and the environment. IFC Performance Standard 1 provides for environmental and social impact assessment of projects, and the Performance Standards require consultation with communities and a grievance process for people affected by the projects financed by the Bank. IFC Performance Standard 7 (PS7) provides additional protections for Indigenous Peoples. PS7 requires World Bank clients to: 1) avoid adverse impacts though a Social and Environmental Assessment process, 2) establish a relationship with affected indigenous communities to ensure information disclosure and informed consultation with indigenous peoples, and the informed participation of indigenous peoples. Recognizing the special vulnerability of indigenous peoples to development projects, PS7 enhances the protections found in the grievance system.

The World  Bank
The World Bank

And, the World Bank’s Indigenous Peoples Policy has helped to establish significant protections for indigenous peoples and their communities where large scale mining or other development programs have been financed through participation by the World Bank. In the Bank’s own words, The World Bank policy on indigenous peoples, OP/BP 4.10, Indigenous Peoples, underscores the need for Borrowers and Bank staff to identify indigenous peoples, consult with them, ensure that they participate in, and benefit from Bank-funded operations in a culturally appropriate way – and that adverse impacts on them are avoided, or where not feasible, minimized or mitigated.

On the contrary, and as currently proposed, P4R relies primarily on national laws, legislation, and enforcement mechanisms to provide protection for human rights, the environment, and indigenous peoples. Environmental and social risk assessments would depend on the standards and procedures of the individual state. The binding safeguards that the World Bank has established will be replaced with “unenforceable guiding principles,” according to the Indian Law Resource Center.

Reliance on national domestic standards is frequently not in the best interests of indigenous peoples. In many countries, the existence of indigenous peoples is denied altogether (such as in China or Bangladesh), or even when acknowledged, Indigenous peoples can be ignored when it is to the benefit of powerful development interests (Pygmy communities in the Congo were ignored in the Bank’s loan for a forest zoning project). The Belo Monte Dam project is an excellent example of another issue encountered by Indigenous Peoples when dealing with national governments: Brazil’s Constitution protects the rights of “Indians,” but when powerful interests are at work, these protections have little value.

The World Bank is promoting P4R as a way to make its investments more effective in fighting poverty – a goal with which few would argue. They argue that using World Bank funds for national projects would be a more efficient way to target poverty in the various countries.  The Bank sees that countries are changing the ways in which they promote development and poverty reduction, and feels that its current policies do not allow it to compete with other major lending institutions such as the Brazilian Development Bank (BNDES) and other financial institutions such as the Inter-American Development Bank, that may invest in projects such as the Belo Monte Dam in Brazil. P4R would allow participation in such projects, unfettered by the obligations entailed by the use of traditional World Bank funding.

Indigenous organizations are not the only community concerned about the P4R proposal.  For example, Transparency International is concerned about P4Rs ability to deal with corruption, procurement, and social and environmental issues; Accountability Counsel is concerned that P4R will “undermine decades of the Bank’s work to provide the best development finance services to countries and communities around the world if certain key elements are excluded; and several other organizations are concerned over the types of projects that may be financed under P4R as high-risk projects are not excluded, project supervision by the Bank is not required, and lack of express social and environmental standards will make the Inspection Panel’s job, potentially, futile. BUSINESS EUROPE believes that  “the need for P4R has not been sufficiently demonstrated” and that various programs already exist that have worked well. There is also concern that P4R will lead to increased conflicts due to the lack of information, protection, and avenues for redress of grievances. CIEL raises concerns over several issues: the lack of standards for assessing environmental and social systems impacted by the projects, transparency, clarity and accountability, and inadequate consultation with Civil Society. Finally, there is concern that the risk assessment language does not address human rights concerns. (For these statements and more, see ) P4R could also have a detrimental impact on the environment. While saying publically that P4R will not be used to fund high-risk programs, there is nothing specific in the proposal to prevent such use under certain circumstances.

The international community and international law have played a significant role in promoting the rights of indigenous peoples. Though arguably international law was largely the creation of colonial powers as they came into contact with “the other,” in the last two decades indigenous peoples have used the push/pull of domestic and international law to gain and establish significant specific rights to self-determination, etc. P4R could well negate some of the growing force of the Declaration on the Rights of Indigenous Peoples. Even countries that have signed ILO No. 169, conveniently find their way around these binding obligations when development interests are at stake (Brazil and Chile are two good examples), and one may reasonably expect many countries to take advantage of this potential lessening of obligations to indigenous peoples.

A vote on the proposal was scheduled for mid-November, but has been delayed to an unspecified date. The pressure and input of many NGOs helped to bring about this delay, and there is another round of comments under way. Here’s hoping that additional input from the wider international community will cause the World Bank to make significant changes to the policy, or to forego it altogether.

Will P4R really accomplish the Bank’s goal of alleviating poverty? Or will it continue the exploitation of indigenous lands and indigenous peoples in the name of alleviating poverty? P4R would be a significant change of Bank policy, and Indigenous Peoples are already bearing a disproportionate burden of the effects of development and climate change.