WASHINGTON, D.C., 27 January 2004 – The International Finance Corporation, the private sector lending arm of the World Bank Group, has released a road map for its ongoing review of environmental and social safeguards, corporate disclosure policy, and related issues.
Adopted in 1998, IFC’s environmental and social safeguards and guidelines have become a global benchmark for multilateral lending organizations and private sector banks, particularly those involved in project finance.
“IFC’s leadership role has been recognized. We believe that to achieve the greatest possible impact on sustainable development and to help our clients manage their risks and become better corporate citizens, we continually need to incorporate best practices and evolve our standards,” said Rachel Kyte, director of IFC’s Environmental and Social Development Department.
Kyte added, “Updating our safeguards and disclosure policies is an essential part of IFC’s corporate approach. We intend to engage in a collaborative and transparent process where we will actively seek expertise and input from the full spectrum of stakeholders, from governments to clients to communities and nongovernmental organizations.”
IFC Safeguard Policy Review
IFC adopted its current set of safeguard policies in 1998 to help manage environmental and social issues in the private sector business environment in emerging markets.
In 2001, IFC management requested a review of the safeguard policies by IFC’s Compliance Advisor/Ombudsman. The final report,
A Review of IFC’s Safeguard Policies,
was released in April 2003 and can be found at the CAO’s web site:
http://www.cao-ombudsman.org/
In June 2003, several of the world’s leading banks adopted IFC’s environmental and social safeguards and guidelines as standards for their project finance lending, under an initiative known as the Equator Principles.
The CAO review assessed the effectiveness and impact of the safeguard policies and made recommendations on their content and system of application. While recognizing that they have significantly contributed to positive environmental and social impacts, the CAO review recommended that IFC take a number of steps to improve their effectiveness and impact and to demonstrate IFC’s leadership in environmental and social sustainability.
Consistent with the conclusions and recommendations of the CAO review, IFC is now updating its safeguard policies. The update will include strengthening and clarifying issues already covered by existing policies as well as examining additional issues.
The process will be in two stages. From February to June 2004, IFC will be consulting on specific and substantive issues and asking its Board of Directors for their input. The second stage will involve wide-ranging public consultations with stakeholders on the suggested framework and details of the policies.
IFC Disclosure Policy Review
IFC’s Policy on Disclosure of Information, last revised in 1998, sets out the Corporation’s guidelines for disclosure of information and describes the types of materials available to the public. Recognizing that transparency promotes efficiency and accountability and enhances development impact, IFC has decided to revise and update its policy.
The objectives for the review process are to determine the appropriate level of disclosure for IFC; to distinguish between IFC's corporate consultation and disclosure and sponsors' project-level consultation and disclosure; to reduce risk and improve development impact of IFC projects through greater consultation and dialogue; to encourage disclosure, consultation, and transparency by project sponsors and in member countries; to build trust, consistency, and efficiency; and to increase appreciation of IFC’s development impact and business performance.
For information on the Safeguard Policy Update and the Disclosure Policy Review go to
www.ifc.org/policyreview
. This site has been established to disseminate information and facilitate online submission of comments and questions on both reviews.
--------------------
IFC’s mission (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Since its founding in 1956, IFC has committed more than $37 billion of its own funds and has arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's committed portfolio at the end of FY03 was $16.7 billion with an additional $6.6 billion held for participants in loan syndications.
