The International Finance Corp.’s investments in Honduras and elsewhere have recently come under fire from its own compliance officers and civil society organizations for failing to adequately consider environmental and social risks in project planning.
Dinant — a Honduran palm oil company the IFC invested in — has been accused of being involved in the violence against farmers in the local Aguan Valley, and the IFC-financed Tata Mundra coal plant in India has also been criticized for its negative impact on the environment and local fishing communities.
In meetings with civil society this week during the World Bank spring meetings, the IFC is trying to reassure CSOs that it is adequately addressing these issues, and released a document on lessons learned from them — but many CSOs think the bank’s private sector investment arm needs a fundamental change in its culture.
A representative from CAO, the IFC’s compliance office, meanwhile, said staff “often feel — and tell us — that environmental and social risk is not taken seriously” and the internal culture is not always one “where people feel comfortable talking about environmental and social concerns.”
Criticisms of the IFC are especially relevant as the World Bank is increasingly relying on its private sector lending arm, with the bank’s board and management pushing the IFC to take on larger, riskier and more transformational projects, as well as play a bigger role in difficult environments, especially conflict-affected and fragile states.
For the most comprehensive coverage of the World Bank’s spring meetings, check out daily updates via Storify, and be sure to follow Devex on Twitter and Facebook. You may tweet questions and comments to our reporters Paul Stephens @pauldstephens, Michael Igoe @twigoe, Rolf Rosenkranz @devexrolf and Adva Saldinger @deveximpact.
Jim Kim: Addressing inequality, investing in people critical to sustainable growth
Can the World Bank promote more open governance?
GPE to engage private sector for skills-oriented education
Want to know everything about the World Bank's spring meetings?
The World Bank's new country engagement strategy
Revealed: World Bank's new global practice leaders
From around the web: