IFC Discusses "Concept Paper" on Disclosure Policy

6 August 2004

The International Finance Corporation, having announced plans to review its six-year-old disclosure policy, appears to be starting with a very general statement of concepts likely to disappoint transparency advocates.

A draft of a July 13 “Concept Paper” provided to freedominfo.org “attempts to define the framework for a new approach to disclosure issues.” The document, recently discussed by a key IFC committee, is intended to lay the groundwork for five “regional” external consultations and “other focused sessions with stakeholder groups.”

The 11-page document lays out pro-transparency objectives, providing they preserve the “independence” of the IFC decisionmakers, do not create significant costs or “undue” additional time requirements for IFC staff, and respect proprietary information and are “considerate of resource implications for clients.”

Already, the IFC has been engaged in fact-finding efforts on disclosure issues, and for the remainder of the year the schedule contemplates more public consultations. A draft policy is to be prepared in the December 2004- February 2005 time period.

The concept paper, quite distinct from draft policy, apparently is to be the basis for these further consultations. It aims to describe principles and discuss the “roles and responsibilities” of the client and the IFC before reaching a one paragraph conclusion. That conclusion calls transparency a “core value” of “sustainable private sector investment.” It speaks of meeting the needs for “timely information” of project-affected peoples and “supporting the governance role of the IFC’s shareholders and the public.”

The “principles based approach” envisioned does not actually result in the enumeration of principles, but does introduce the two sections dealing with the two “roles and responsibilities” sections.

In terms of the “clients,” meaning private sector borrowers, the IFC document does not discuss specific documents or steps in the process. It says generally that the clients should disclose social and environmental assessments “as soon as feasible and before they may be in final form, or fully analyzed by IFC.” Disclosures should be in local languages and should be updated as necessary as the project is completed.

The IFC also hints that other disclosures of a clients’ documents on social and environmental assessments will occur once the IFC has determined that “it is likely to proceed” with the projects.

As for the disclosure of IFC-generated documents, the concept paper envisions an expanded “Summary of Project Information,” which is a brief, factual summary that now is supposed to be released 30 days prior to the date for board consideration. The concept paper does not suggest any specific time frame for the earlier release of information indicating that a project is under consideration.

The IFC requires that the environmental impact assessments for “category A” projects, those with significant environmental impacts, would be released 60 days prior to board consideration. Earlier releases, the concept paper notes “would mean that clients and/or IFC might be asked questions on environmental and social issues in projects that they may not be in the position to fully address at that time.”

Post-approval reports on projects apparently would be the sole responsibility of the clients. The IFC paper frowns on revealing more project assessment information for individual projects, saying that to do so “may affect a company’s competitive position.”

Instead the IFC paper proposes to provide greater detail and more systematic disclosure of “aggregate development results.”

The concept paper suggests slight liberalization in the occasional, discretionary, post-consideration release of IFC strategy or policy papers.

Disclosure of minutes from IFC board meetings is recommended, but minutes of executive board sessions or the “summaries” of meetings would not be disclosed, the concept paper suggests.

By Toby McIntosh

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ABOUT IFTI WATCH

In this column, Washington, D.C.-based journalist Toby J. McIntosh reports on the latest developments in information disclosure in International Financial and Trade Institutions (IFTI).
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