Watchdog to investigate IFC support for Bridge private schools in Kenya

LONDON — The International Finance Corporation’s accountability mechanism has flagged “substantial concerns” about the organization’s $13.5 million investment in school chain Bridge International Academies in Kenya, sparking renewed debate over aid funding for commercial education.

On Thursday, the Compliance Advisor Ombudsman, the body tasked with resolving disputes between IFC and local communities negatively impacted by projects it supports, released a report saying it had opened a compliance investigation into IFC’s support to Bridge, a for-profit company that runs low-cost private schools across Africa, including nearly 300 in Kenya.

The investigation comes after Kenyan civil society group East African Centre for Human Rights, or EACHRights, lodged a complaint with CAO in April 2018, alleging that Bridge breached Kenyan labor standards, health and safety requirements, and national education regulations. It was signed by the NGO and a number of Bridge employees and parents who have chosen to remain anonymous. Bridge denies the claims.

The final report, due by September 2020, will not pass judgment on Bridge — CAO’s mandate covers whether IFC carried out proper due diligence and supervision regarding its $13.5 million investment in the school chain, first made in 2014.

The investigation is the latest development in a long-running battle over the use of aid money to support commercial education in low-income countries. Bridge, which has received funding from the United Kingdom, the United States, and the World Bank, has been a lightning rod in the debate, attracting widespread criticism from teachers’ unions, advocacy groups and the Ugandan government.

Critics say the rapid and unregulated growth of private and commercial schools is increasing inequality and putting children at risk. Instead, they want donors to support public education whenever possible. The recent, fatal collapse of private school buildings in Kenya and Pakistan has intensified calls for better regulation.

However, Bridge’s supporters argue that the debate is politicized and that public education systems are failing in low-income countries, with more than 260 million children out of school and millions more receiving poor-quality education. In the face of dismal projections, market-based, innovative approaches are desperately needed, they say.

Bridge had hoped to avoid a CAO investigation by entering a dispute resolution process with EACHRights, but the NGO refused, a spokesperson for Bridge wrote in an email to Devex.

As a result, the case automatically proceeded to the compliance appraisal stage. About half of cases that reach this stage then go on to a full investigation, a spokesperson for the ombudsman told Devex. In Bridge’s case, CAO decided that an investigation was the “appropriate response” considering “substantial concerns regarding the environmental & social outcomes of IFC’s investment in Bridge,” the report states.

If CAO concludes that IFC broke its own environmental and social performance rules, then the development financier will come up with an action plan, which must be signed off by the World Bank’s president and monitored by CAO. CAO’s findings are nonbinding and it has no enforcement powers.

Civil society groups have welcomed the decision to launch an investigation, which they hope will deter Bridge’s other high-profile investors from pursuing further support. Investors include CDC, the U.K. development finance institution; Facebook founder Mark Zuckerberg; Microsoft founder Bill Gates; and the Omidyar Network.

“It has been a long wait for the complainants involved in this case,” Dr. Judith Oloo, CEO of EACHRights, said in a press release. “We look forward to a rigorous and thorough investigation, and call on all investors to start taking action to avoid further harm.”

Some education advocates have heralded the CAO investigation a victory for the ongoing campaign against the “commercialization” of education. Other recent successes include persuading the Global Partnership for Education, the biggest global aid fund for education, to prohibit funds from being spent on commercial education. Similarly, last year, the European Parliament passed a resolution calling on member states to stop spending aid money on for-profit education.

In an email to Devex, Oxfam’s senior policy advisor for public services, Katie Malouf Bous, called it a “landmark case.”

“This is an important moment to take stock of the adverse impacts of funding profit-driven education, and for the IFC to apply the brakes on such investments, which are increasing inequality,” she wrote.

Meanwhile, the Bridge spokesperson said the CAO investigation will “provide us with the opportunity to demonstrate good corporate governance, accountability and transparency.”

“We remain disappointed that EACHRights is choosing to dedicate its resources to undermining an organization improving learning in some of Kenya’s most impoverished communities,” they added.

IFC said it stands by its investment in Bridge but that it will support the CAO investigation and “take corrective action as needed.”

“IFC believes Bridge provides an affordable option which is complementary to public education and leverages an innovative approach to provide quality education. IFC is committed to ensuring that Bridge schools operate professionally and in line with Kenyan law and IFC Performance Standards,” a spokesperson wrote to Devex.