On February 21, 2023, the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) released their draft Approach to Remedial Action, prompted by an external review conducted more than two years ago on IFC and MIGA’s Environmental and Social Accountability framework. The external review determined that the institutions are responsible for providing access to remedy resulting from project harms. Unfortunately, the Approach to Remedial Action ignores the external review’s recommendations and absolves the institutions from providing holistic access to remedy that is also in line with communities’ expectations. Instead, IFC and MIGA have placed the burden of remedy on clients, leaving a significant accountability gap regarding what actions fall within the institution’s responsibility.
In particular, the Approach to Remedial Action fails to address the following issues:
- Detailing a plan for the types of remedy IFC and MIGA will provide
- Explicitly defining IFC and MIGA’s responsibility to provide direct financial contribution for remedial action
- Providing access to remedy after the end of a project
- Delivering remedy to communities experiencing harm from projects that have already been approved
BIC joins others in civil society in calling on IFC to engage with a range of stakeholders during the consultation process and significantly improve the quality and ultimate effectiveness of the Approach. Through the development of the Approach to Remedial Action, IFC has the unique opportunity to reestablish itself as a leader in the development finance field. We encourage IFC to strengthen the Approach to Remedial Action and recognize that a rights-compatible remedy framework at the IFC would serve as crucial guidance for other development finance institutions.
In addition to the proposed Approach to Remedial Action, IFC also released its draft IFC Responsible Exit Principles, which fail to adequately recognize the importance of including impacted communities as full stakeholders in the process. While BIC welcomes IFC’s draft principles, we call on IFC to commit to developing plans for exit through a collaborative process that consults with leaders of project-affected communities in a culturally and gender appropriate manner, preserving the security of participants. The plan should also be guided by the principles of do no harm, transparency, and aim to prevent escalation of social conflicts and risks of reprisals. Finally, we encourage IFC to consider the range of potential harms resulting from IFC projects and identify viable solutions to address such harms.
In February 2023, BIC joined other CSOs in releasing a statement detailing gaps and recommendations in the draft Approach to Remedial Action. On April 20, 2023, BIC and other CSOs submitted input through IFC’s consultation process on the draft Approach to Remedial Action and Responsible Exit Principles. The joint submissions provide context on the need for IFC and MIGA to develop strong remedy and responsible exit policies that meet and exceed industry standards, including recommendations and concerns. We call on IFC and MIGA to improve the draft Approach and Principles and commit to providing genuine access to remedy and responsible exit when their projects lead to harm.