What is at stake with the IDB Safeguard Policy Review?

In December 2018, the Office of Evaluation and Oversight (OVE) at the Inter-American Development Bank (IDB) published the Evaluation of the Environmental and Social Safeguards for the IDB and IDB Invest, the IDB Group (IDBG)’s public and private sector lending arms, respectively. The main goal of the evaluation was to assess the effectiveness of the IDBG safeguards systems in terms of preventing, managing, and mitigating adverse environmental and social impacts of IDBG-financed projects. The safeguard policies establish mandatory standards and procedures that the borrowing governments and the Bank must follow in preparing and implementing Bank-financed projects.

One of the recommendations of the OVE evaluation was for the IDBG to revise its Operational Safeguards Policies.  The OVE evaluation provides important insights and recommendations for the direction of the Safeguards review process. The main messages of the evaluation are: a) the public and private arms of the Bank need to update their Safeguards, and b) while there has been a strong focus on up-front requirements, policy implementation and supervision needs to be improved.

Following the conclusion of the World Bank’s revision (2016) of its own policies, the IDB’s Safeguards review represents both an opportunity to adopt an upgraded set of safeguards that are aligned with the highest international standards and to reflect the needs and rights of the people, communities, and countries of the region of arguably the most influential Multilateral Development Bank (MDB) in Latin America. It also opens a window to influence an institutional change within the Bank to strengthen accountability, quality, and effectiveness of safeguards supervision and implementation. This requires focusing not only on the policies per se, but also beyond them. That is, it should create stronger internal and external capacity and an enabling environment that will strengthen safeguards implementation.

The overarching expectation for this planned review from these constituencies is that it will contribute to an upward harmonization of the safeguards policy frameworks, their effective implementation, and expanding their scope in key areas.

However, a major concern to date is that the IDBG is not taking appropriate measures to help ensure meaningful civil society and citizen participation in the review process. This concern is related to the lack of transparency around the process, and to the lack of articulation regarding two different policy revisions being undertaken at the same time (IDB & IDB Invest), that will each impact the Bank’s approach to addressing social and environmental risks. How these separate reforms fit together is unclear.

Civil society will engage in the IDB revision of its safeguards policies to make sure that the IDBG moves towards the highest feasible standards for development, incorporates lessons learned from projects that resulted in complaints to its Independent Consultation and Investigation Mechanism (MICI, by its Spanish acronym), and strengthens its position in the region as a rules-based lending institution that enhances positive sustainability impacts that extend beyond specific project interventions. 

Civil society is emphasizing several asks at the outset of the process to guide the safeguards review in this direction:

 1. Ensure a robust, meaningful, and inclusive consultation process for IDB & IDB Invest: Read and follow up on the letter from civil society with recommendations for consultations that was sent to the IDB Group.



2. Strengthen safeguard and project implementation and oversight: The consultation process focus should extend beyond the policies to the Bank’s incentive systems and capacity for supervision and ensure clear & unambiguous implementation guidelines with strong monitoring and evaluation (M&E) requirements and capacity for the new safeguards policy.

3. No dilution of core responsibilities for IDB & IDB Invest: The IDBG should retain and enhance accountability and oversight of safeguards implementation and outcomes.

4. Scope of the new safeguard’s applications: The new IDB safeguards should cover all IDB lending/financing instruments in a comprehensive way.

Civil society advocates for the IDBG to be a leader on safeguard standards in the region. The importance of this extends beyond the Bank. The expectation is for the IDBG to increase reliance on the highest development standards to guarantee better environmental and social governance, thus promoting positive spillover effects across other development institutions with high presence in the region, including governments and the private sector.