Civil Society Groups Seek More Disclosure by IFC

12 March 2010

A consortium of civil society groups March 8 urged the IFC to be more responsive to environmental and social concerns, and also suggested a variety of disclosure policy reforms.

These comments, signed by nearly 100 organizations from 38 countries, were submitted as the IFC conducts a review of the implementation and effectiveness of its Social and Environmental Sustainability Policy and Performance Standards.

On disclosure, the organizations said the IFC should adopt a presumption of disclosure, subject only to clear and justified exceptions.
The groups urge the IFC, the Bank’s private sector lending arm, to mimic other features from the World Bank’s newly adopted disclosure policy. For example, the letter suggests that the IFC should release so-called “draft” documents simultaneous with their transmittal to the Executive Directors, including drafts of the Project Assessment Documents, Program Documents, and policy documents.

“IFC’s reliance on its clients to make certain disclosures has inherent weaknesses,” according to the 18-page letter, which added, “IFC should set clearer standards for their disclosure performance and institute disclosure oversight mechanisms.”

“In addition, IFC should assure full disclosure of the Environmental and Social Review Document, as well as post-approval documents, such as supervision reports, annual monitoring reports and project implementation and completion reports, and the clients’ environmental and social monitoring reports.”

“IFC should take steps to clarify where and how to submit requests, and provide for appeals to be reviewed by an independent and authoritative body,” according to the letter.

Currently, the IFC Sustainability Policy requires contract disclosure only for “significant” extractive industry (EI) projects, defined as accounting for 10 percent or more of projected government revenues, according to the letter.  “Such a threshold is arbitrary and has been ineffective in bringing about any contract transparency in IFC projects as was intended by Bank Management’s commitment to the Extractive Industry Review.”

Since the inception of the policy in 2006, the letter explains, more than 55 IFC extractive industry projects have been approved and not a single project funded by IFC has triggered this requirement, even in cases where the arbitrary threshold appears to have been met.

“The IFC Policy needs to require that all EI investments publicly disclose contracts, without regard to any threshold size or scope.” The letter said this should include all contracts, principal and derivative, related to the EI operation to which the government is a party, including, inter alia: between host governments and companies.

“In addition, all IFC-supported extractive industry projects must disclose all contracts and agreements affecting the ultimate payments made to the government, such as those involved in pricing methods of the companies and formulas that change government payments based on changes in commodity prices, project costs, or other factors.”

By Toby McIntosh

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Filed under: 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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