News / 19 December 2014

US Congress against weaker safeguards of World Bank

After months of lobbying of a group of NGOs, including Both ENDS, the United States Congress has opposed weakening of the investment criteria, the so-called ‘safeguards’ of the World Bank. The Congress sent a letter to the US Treasury, stating that the Banks’ social and environmental criteria for investments should not be weakened and the Treasury should oppose this. This is a great success for civil society organisations from around the world - including Both ENDS – which have been working for years to maintain and even improve the current investment criteria of the World Bank.

Weak criteria
“Currently, the World Bank is reviewing its safeguards”, says Pieter Jansen of Both ENDS. Civil society organisations are afraid that the current rules will be weakened. “This would have enormous consequences for millions of people in developing countries, as the extent to which the Bank takes into account the effects of its investments on people and their environment, would decrease. Take, for example, the construction of a large hydrodam that floods the surrounding villages, or a large agricultural project that pollutes land and water and forces people to move elsewhere. Fortunately, the US Congress has prevented this further weakening of standards.  The US is the largest shareholder of the World Bank and has a lot of influence. The letter from the Congress cannot be ignored.”


Persisting and persuading
Pieter himself has been closely involved in the processes that finally lead to this result. Together with the ULU Foundation (Hawaii), Center for International Environment Law (USA), Inclusive Development International (USA), Friends of the Earth (USA), Urgewald (Germany) and Ecological Justice (Indonesia) he has been urging Members of Congress write the letter. “It took quite a lot of persuasive power; we have lobbied and talked with Members of Congress and their colleagues for months.”


Not giving in
“The lobbying NGOs produced another achievement: Congress also passed the ‘2015 Omnibus Appropriations Act’. This act withholds the US from giving financial support to investments of financial institutions that cause large-scale deforestation, disrupting mining activities in tropical forests and the construction of large, destructive dams for hydroelectric energy. Both the letter and the passed act are very good news, especially after the disappointing consultations we had with the World Bank. The Bank did not want to give in at all to civil society organisations opposing the weakening of its safeguards. But now the Bank will have to listen.”



The ‘2015 Omnibus Appropriations Act’ also states that the International Finance Corporation (a division of the World Bank) and other international financial institutions should be more transparent.  Currently, the names of the owners of companies that are being supported by governments - with public money - are often not disclosed. Under this new law, these names have to be made public.  In addition, the law will enable the US to bar individuals and their families from entering the country if the State Department has information about their involvement in corruption, human rights violations or unethical mining activities.


Do no harm
Pieter Jansen: “In Europe, we share the Congress’ concern that the World Bank will dilute the rules to such an extent, that human rights, the fundamental rights of the EU and various environment and biodiversity agreements which the EU has signed, will all be under great pressure. That is why we are very happy that Congress has taken these steps. With this, the World Bank can move back in the direction of its most important principle: do no harm.”



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