Performance Standards

John ButlerWB Safeguards Training WorkshopNovember, 2013

Outline/Objectives

Overview of the Performance StandardsOutcomesRequirements

Review key differences between Performance Standards and Safeguard Policies

IFC Business ModelLarge share of business is

investment in existing projects and companies

Infrastructure projects normally entail an awarded concession prior to IFC involvement

IFC vs. Bank Project CycleIFC/MIGA typically arrive late in client’s

project development process:Marketing, feasibility, design studies

already completedCosts & benefits already consideredSafeguards (EIA) work often already well

underway or completed ( and approved by Govt authorities)

Prospective client looking for project financing; IFC is an option

IFC Performance Standards (Updated 2012)PS 1: Assessment and Management of

Environmental and Social Risks and ImpactsPS 2: Labor and Working ConditionsPS 3: Resource Efficiency and Pollution PreventionPS 4: Community Health, Safety, and Security PS 5: Land Acquisition and Involuntary

ResettlementPS 6: Biodiversity Conservation and Sustainable

Management of Living Natural ResourcesPS 7: Indigenous PeoplesPS 8: Cultural Heritage

PS 1: Assessment and Management of Environmental and Social Risks and Impacts

Identify and evaluate E&S risks and impactsAdopt a mitigation hierarchy (avoid, minimize,

compensate/offset)Improve E&S performance of clients through

effective use of [risk] management systemsEstablish a responsive and effective grievance

mechanismDevelop an effective community engagement

program for the life of the project

PS2: LABOR AND WORKING CONDITIONS

Promote fair treatment, non-discrimination, and equal opportunity

Establish, maintain, improve worker-management relationship

Promote compliance with national lawProtect workers, including children, migrant

workers, workers engaged by third parties, and workers in the supply chain

Promote safe and healthy working conditions, and the health of workers

Prohibit the use of forced labor

PS3: RESOURCE EFFICIENCY AND POLLUTION PREVENTION

Consider ambient conditions and apply technically and financially feasible resource efficiency and pollution prevention principles and techniques (GIIP –> WBG EHSGs) [Good International Industry Practice]Resource efficiency

Cleaner production principles GHGs Water consumption

Pollution prevention GIIP/WBG EHSGs Wastes Hazardous material management Pesticide use and management

PS4: COMMUNITY HEALTH, SAFETY, AND SECURITY

Community Health and Safety Infrastructure and equipment design and safetyHazardous materials management and safetyEcosystem services [resulting in H&S risks]Community exposure to diseaseEmergency preparedness and response

Security PersonnelDirect or contract workersGovernment security personnel

PS5: LAND ACQUISITION AND INVOLUNTARY RESETTLEMENT

Avoid, minimize displacement by exploring alternative designs

Avoid forced evictionAnticipate, avoid, minimize adverse social and economic

impacts from land acquisition or restrictions on land use by:Providing compensation for loss of assets at replacement costEnsuring that resettlement activities are implemented with

appropriate disclosure, consultation, and informed participationImprove or restore livelihoods and standards of living for

displaced personsImprove living conditions among physically displaced

persons through provision of adequate housing with security of tenure

PS6:BIODIVERSITY CONSERVATION AND SUSTAINABLE MANAGEMENT OF LIVING NATURAL RESOURCES

Protection and Conservation of BiodiversityModified habitatNatural habitatCritical habitatLegally protected and internationally recognized areas Invasive alien species

Management of Ecosystem ServicesSustainable Management of Living Natural ResourcesSupply Chain

[Where a client is purchasing primary production that is known to be produced in regions where there is a risk of significant conversion of natural and/or critical habitats]

PS7: INDIGENOUS PEOPLESAvoidance of adverse impactsParticipation and consent

Circumstances Requiring FPIC Impacts on lands and natural resources subject to

traditional ownership or under customary useRelocation of IPs from lands and natural resources subject

to traditional ownership or under customary useCritical cultural heritage

Mitigation and Development BenefitsPrivate Sector Responsibilities where Government is

Responsible for Managing IP Issues

PS8: CULTURAL HERITAGE

Protection of Cultural Heritage in Project Design and ExecutionComply with national law and internationally recognized

practicesRetain competent professionalsChance find proceduresConsultationCommunity accessRemoval of replicable cultural heritageRemoval of non-replicable cultural heritageCritical cultural heritage

Project’s Use of Cultural Heritage

OP 4.03: World Bank Performance Standards for Private Sector Approved by World Bank Board in June 2012Applies to projects (or components) that are designed, owned,

constructed and/or operated by a Private Entity Optional: OP sets out the circumstances under which the WB PS

may be applied, but application is not mandatory

Objectives: to facilitate Bank support for private sector-led projects (by

applying an approach better suited to private sector)To enhance policy coherence and cooperation across the World

Bank Group (e.g. a common approach for WB Group staff and Borrowers, for jointly financed projects)

The actual PS (1-8) are the same as for IFC and MIGA; some differences in how they are applied

Interim Guidance Note for WB staff on implementation procedures (closely parallels IFC procedures)… final instructions under preparation

Definition of “Private Entity”Any natural or legal person, whether privately or publicly

owned, which: Is carrying out or is established for a business purpose and is

operating on a commercial basis; Is financially and managerially autonomous; andHas day-to-day management that is not controlled by the

government

Examples of Private Sector Activities: • Public-Private Partnership (PPP) – e.g. in infrastructure sector• Activity involving medium or long term management contracts, concessions, build-own-operate arrangements, etc.•Activity involving a financial intermediary, if sub-projects supported by WB are implemented by Private Entities

Private Sector Activity comprises the entire project

Bank applies WB PS to the entire project

Private Sector Activity comprises part of Bank-supported Project, rest of which is non-Private Sector Activity

Private Sector Activity falls within the “Area of Influence” of a Bank-supported project, rest of which is non-Private Sector Activity

Bank applies WB PS to the Private Sector Activity and WB Safeguard Policies to the rest of the project

WB Safeguard Policies, not Performance Standards Apply to: Activities involving provision of goods, services, or civil

works for facilities that will be operated by public sector (i.e. Private sector involvement is limited to winning a public service contract)

Activities where responsibilities for identifying, assessing and managing Env. & Social risks are shared between Private Entity and member country and can’t be separated (then WB Safeguard policies apply)

OP 7.50 (International Waters Policy) applies to any WB-supported Private Sector Activity. Notification of Riparians may be done by Private Entity, Government or WB Group