Bridge International Academies
Over the last several years, there has been mounting evidence of the International Finance Corporation's (IFC) alarming misconduct around its investment in the world's largest for-profit primary school chain, Bridge International Academies, operating in Kenya, Uganda, Nigeria, Liberia, and India. Teachers and students from the schools have come forward with disturbing reports of rampant child sexual exploitation, abuse, and harassment (SEA/H), labor violations, and dangerous occupational safety conditions.
From 2013-2022, IFC invested $13.5 million in Bridge Academies. The schools fostered an environment fraught with abuse, causing irreparable harm to thousands of children. By 2018, IFC’s independent accountability mechanism, the Compliance Advisor Ombudsman (CAO), had accepted its first complaint on Bridge Academies. Shortly after the CAO investigation into Bridge Academies found evidence of child SEA/H, IFC and Bridge entered into a non-disclosure agreement (NDA) in a clear attempt to cover up, rather than address, the child sexual abuse.
There is also still no information on how IFC will provide remedy to the victims. As of December 21, 2023, IFC has not publicly disclosed a Management Action Plan (MAP) for the CAO investigation that has concluded (Bridge International Academies-04), detailing steps IFC will take to address the harm. Another MAP will result from CAO’s investigation of Bridge International Academies-01, which is still underway. This drawn-out process means that nearly six years after CAO found the first complaint eligible, neither Bridge Academies nor IFC has been held accountable for its cover-up, failure to adhere to IFC's environmental and social (E&S) policies, or the harm stemming from these projects.
Despite these severe harms and open investigations, in March 2022, IFC quietly divested from its equity stake in NewGlobe, the parent company of Bridge International. While IFC may allege that its exit from the projects is "responsible," the evidence does not support that claim. IFC failed to develop plans for exit through a collaborative and transparent process with project-affected communities or commit to providing remedy.
If IFC claims that it will provide remedy under exceptional circumstances, then what are those circumstances, if not cases of child SEA/H? IFC must thus prioritize the provision of remedy to those harmed by its failure to apply the Performance Standards in its investment in Bridge International Academies, including through direct contribution to remedy. We also expect IFC to implement measures to prevent child SEA/H in future projects. The Bridge case clearly demonstrates why IFC needs a strong remedy policy that defines the exceptional circumstances when it will provide remedy in the future.
IFC's Obligation to Provide Remedy
In 2020, while CAO was investigating Bridge Academies, an external review of IFC and the Multilateral Investment Guarantee Agency's (MIGA) Environmental and Social Accountability framework recommended that the institutions contribute to remedy when their projects cause harm. Unfortunately, IFC has a long track record of failing to meet this obligation, even when CAO finds that it has violated its E&S standards.
Nearly three years later, on February 21, 2023, IFC and MIGA released their draft Approach to Remedial Action and Responsible Exit Principles in response to the external review. The Approach fails to meet the external review's recommendations, absolving the institutions from providing holistic access to remedy that aligns with communities' expectations. Instead, the draft Approach places the burden of remedy on clients and lacks details on what actions fall within IFC and MIGA’s responsibilities. The institutions have stated that they would finance remedy in "exceptional circumstances" but do not define these circumstances. Concerningly, IFC and MIGA have rejected calls from civil society to release a second draft for comment before Board approval, set to occur in the coming months.
Recommendations on a Remedy Framework
In light of IFC's misconduct around its investment in Bridge International Academies and its widespread non-compliance with its E&S policies and obligation to provide remedy, we call on the Board to demand that management put forward an Approach to Remedial Action and Responsible Exit Principles that responds to the external review recommendations. To meet the criteria called for by the external review, IFC must show a commitment to providing genuine access to remedy and responsible exit when their projects lead to harm. At a minimum, an effective remedial framework must:
- Clarify the exceptional circumstances under which IFC and MIGA will contribute financially to remedy;
- Detail a plan for the types of remedy IFC and MIGA will provide;
- Commit to remediating E&S harm as a component of responsible exit and to not exiting projects subject to ongoing CAO cases without the consent of community complainants;
- Deliver remedy to communities experiencing harm from projects that have already been approved;
- Describe how IFC and MIGA will exercise necessary leverage, including contractual leverage, to require clients to prevent and remediate harm in all projects.
The reports over the last year of IFC's negligence, attempt to conceal harm, and refusal to provide remedy even in the most egregious cases, such as Bridge International Academies, have demonstrated the need for a strong remedy policy at IFC and MIGA. However, IFC and MIGA's past misconduct has created distrust in its ability to negotiate a holistic remedy policy behind closed doors. Before IFC shares its Approach to Remedial Action and Responsible Exit Principles to the Board for consideration, we emphatically call on IFC to reevaluate its position on these crucial issues. IFC still has an opportunity to reestablish itself as a leader in the development finance field. A rights-compatible remedy framework at IFC would serve as crucial guidance for other development finance institutions, raising the industry standard.