The World Bank Group and Local Votes

The World Bank Group's requirement of "broad community support" for projects

The purpose of the World Bank Group (WBG) is to reduce poverty and promote social and economic development through loans to corporations and countries for development projects. The WBG includes the International Finance Corporation (IFC), which makes loans and equity investments in private sector projects; and the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which provide loans to public sector projects.

IFC requirements

The IFC has established social and environmental standards for its projects. The Policy on Social and Environmental Sustainability requires not only that communities adversely affected by IFC projects be consulted , but that those communities "broadly" support the project.

In particular, paragraph 20 of the policy requires that the IFC:

"assure itself that the client's community engagement is one that involves free, prior, and informed consultation and enables the informed participation of the affected communities, leading to broad community support for the project within the affected communities, before presenting the project for approval by IFC's Board of Directors."

Common sense would suggest that the results of local votes are important in deciding whether there is "broad community support" for a proposed project, and the IFC's 2007 Environment and Social Review Procedure (ESRP) so provides.

The ESRP outlines the process through which staff implement the IFC's commitment to promoting projects that are environmentally and socially sustainable. The 2007 review specifically provides (at page 38) that in deciding whether there is broad community support for a project, IFC staff must consider the results of a formal referendum (local vote) held on the project. When a referendum is held and community members vote overwhelmingly in opposition to an IFC project, it is of course difficult to see how the project enjoys "broad community support."

IBRD and IDA requirements concerning indigenous peoples

Operational policies and other internal guidelines set out the Bank's standards on matters relating to indigenous peoples, involuntary resettlement, environmental assessment, and natural habitats for IBRD and IDA projects. Operational Policy 4.10 is of critical importance for indigenous communities affected by such projects.

Paragraph 1 of the policy establishes that "The Bank provides project financing only where free, prior, and informed consultation results in broad community support to the project by the affected Indigenous Peoples." Paragraph 6 of the policy states that the goal of such consultation is "to fully identify their views and ascertain their broad community support for the project."

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The International Finance Corporation assures itself that there is broad community support for the project within the affected communities before presenting the project for approval by IFC’s Board of Directors.

- International Finance Corporation