World Bank: Human Rights Status Report and Action Plan

Since Jim Yong Kim took office as the president of the World Bank Group on July 1, 2012, he has overseen meaningful advances in tackling discrimination, in certain instances improved its analysis of and response to human rights risks, and worked to learn from the Group’s past mistakes. To be effective, these advances need to be broadened and institutionalized. Kim’s presidency has coincided with a number of developments within the Bank, including the review and update of the World Bank’s safeguard policies and an increased recognition of the importance of civic participation and social accountability following the popular uprisings in the Middle East and North Africa, providing him with important opportunities to entrench human rights reforms. In April 2013, Human Rights Watch wrote to Kim proposing an agenda advancing human rights in his presidency.[i]

This paper is an assessment of the World Bank Group’s progress in three key human rights areas that are central to the Group’s goals of eradicating extreme poverty and promoting shared prosperity. It outlines steps that the Group should take to build upon the gains that it has made to:

• Advance the elimination of all forms of discrimination;
• Foster a World Bank Group that respects and protects human rights in all that it does; and
• Support an environment in which community members and civil society can freely and effectively hold their governments and international institutions to account.

Advance Equality and the Elimination of All Forms of Discrimination
The World Bank Group has taken an increasingly public role in tackling discrimination under Kim’s leadership. He has emphasized that institutionalized discrimination is bad for people and societies as well as for economies. He has stressed that “eliminating discrimination is not only the right thing to do; it’s also critical to ensure that we have sustained, balanced, and inclusive economic growth in all societies.”[ii]

Kim publicly raised the stigmatization and exclusion of Roma during his visit to Bucharest in July 2013. The Roma are among the poorest and most discriminated-against minority groups in Europe.^[iii] In Bosnia and Herzegovina for instance, Human Rights Watch documented pervasive discrimination against Roma and other national minorities in the constitution, national laws, and public institutions.^[iv] This research shows the wider impact of discrimination on the daily lives of Roma in accessing housing, education, health care, and employment. Kim noted, “three out of four live in poverty, one in three goes to bed hungry at least once a month, and almost half live in segregated communities.”[v] In a piece co-authored with former Bank President James Wolfensohn, Kim urged Europe to focus on Roma integration across the continent emphasizing that this is not only the right thing to do, but smart economics.[vi]

In addition to publicly criticizing draconian anti-gay laws in Uganda, Nigeria, and 81 other countries, the World Bank has since February 2014 delayed a US$90 million loan to Uganda’s health sector to review how the government’s recently-passed anti-gay law might affect the project. This due diligence was necessary since the law criminalizes “promotion of homosexuality” and directly threatens critical public health efforts. The April 3, 2014 police raid on the Makerere University Walter Reed Project, a health clinic and medical research facility, illustrated just how real this threat is. According to the US, which funds the clinic, the raid led to the arrest of an employee, allegedly for conducting “unethical research” and “recruiting homosexuals.”[vii] Systemic discrimination on any grounds (sexual orientation and gender identity, as well as gender, ethnicity, religion, language, disability, and political or other opinion among others) is antithetical to development and the World Bank should undertake due diligence to ensure it does not contribute to it anywhere.[viii]

The tough question currently facing the World Bank is: what should it now do in Uganda, and based on what assurances could it release the $90m loan given that the law is in force? Some donors are considering continuing support to the health care sector if Uganda’s health ministry provides guidelines on the treatment of LGBTI people to healthcare workers. This is an effort to guarantee access to healthcare by all, irrespective of their sexual orientation or gender identity. But since the police enforce the law, such reassurance from the Ministry of Health will not ultimately protect people from rights violations when seeking health care. There is also the risk that such guidelines could ultimately lead people to falsely believe that they could safely seek or provide care within the guidelines without consequences. Further, the guidelines provide the government a cover to say that they are not turning away anyone from care when the inevitable consequences of the law are increased barriers to quality healthcare for LGBTI individuals.

Rather than push for ineffective measures from the Ministry of Health, the World Bank, in collaboration with other donors, should press the government to repeal the Anti-Homosexuality Act so that discrimination is not an entrenched aspect of access to healthcare in Uganda. In the short term, the World Bank should encourage the government not to oppose the pending application for an injunction to stay the enforcement of the law. It should also press for the case challenging the law’s constitutionality to be heard by the court urgently as it can often take years for a highly controversial case such as this to be listed before the Constitutional Court in Uganda.

Despite these critical examples of progress, efforts to eliminate discrimination are patchy and Kim should take steps to institutionalize the progress that he has made. For instance, the World Bank Group has not taken steps to tackle the horrifying discrimination against the Rohingya, a Muslim minority group, in Burma which amounts to ethnic cleansing.^[ix]

The Burmese government has long denied Rohingya the right to obtain citizenship in Burma, which has facilitated human rights abuses against them and rendered them stateless―posing a serious obstacle to achieving a durable solution to the sectarian violence in Arakan State and resolving the situation of Rohingya refugees.^[x] The Rohingya face restrictions on movement, employment, and access to opportunity, education, marriage, and many other aspects of their everyday lives.^[xi] For decades they have faced violent abuses by state security forces such as abusive forced labor, rape, arbitrary detention, torture, and killings based on ethnic and religious grounds.^[xii] This discrimination has played a role in pushing Rohingya into increased poverty and is a hurdle in the realization of social and economic rights.^[xiii] The World Bank Group dismissed this entrenched discrimination as “localized instances of communal violence … that indicate the need to address continuing societal fault lines” in its October 2012 interim strategy note which set the Group’s path for reengaging with Burma.[xiv] The attacks on the Rohingya and the impacts on their social and economic rights have heightened since then, but the World Bank has remained silent. The World Bank should work to address the urgent social needs of the most in need, and in Burma, that includes the needs of the Rohingya and other ethnic minorities.

The World Bank has also not taken steps to address discrimination on the basis of political and other opinion, including in its own projects, for instance in Ethiopia.[xv]

Next Steps
To reinforce and build upon these important gains, the World Bank Group should:

• Continue to speak out publicly about the high cost of discrimination for individuals, society, and the economy and articulate any concerns in both routine and high level meetings with government officials.
• Through the ongoing safeguards review, prohibit discrimination on all grounds prohibited under international law (race, color, descent or ethnic origin, nationality, language, religion, sex, disability, sexual orientation or gender identity, political or other opinion, national or social origin, property, birth, marital status, HIV status, or other status). Require staff to systematically assess the environment for discrimination and marginalization, including obstacles to substantive equality, identify risks of discrimination, and fully address them. The World Bank should actively work to address inequality in the activities it supports. This would include, for example, respecting the rights of persons with disabilities and working to ensure that all activities supported by the Bank are disability-inclusive and that Bank staff have the capacity to support this.
• Ensure that all members of affected communities, including the most marginalized, have the opportunity to meaningfully participate in all stages of Bank-financed projects, including by providing the necessary funds to make this possible, engaging appropriate intermediaries, and closely monitoring consultation processes.
• Analyze the environment for discrimination and marginalization in systematic country diagnostics and outline steps toward eliminating discrimination every country partnership framework or country engagement note. Articulate forms of discrimination as challenges and risks for development and promote policies designed to realize substantive equality for marginalized and excluded groups.
• Work with governments to strengthen data collection and analysis along grounds of discrimination to increasingly identify barriers to poverty eradication. It may not be feasible to disaggregate data by all potential grounds of discrimination, but at a minimum the World Bank should work with governments to collect data disaggregated by gender, marital status, demographic group (i.e. ethnic background, language, religion), locale (rural/urban/slum household, state/territory), age, and disability.
• Ensure systems for results frameworks measure the extent to which projects reach marginalized communities and incorporate their inputs and perspectives, including the most poor; women; people with disabilities; ethnic, linguistic, and religious minorities; and sexual and gender minorities, among others.
• Adjust the incentives structure for employees to reward staff that actively tackle discrimination and marginalization in the projects that they develop and their other work.

Foster a World Bank Group that Respects and Protects Human Rights
Under Kim’s leadership, the World Bank has made some progress in undertaking due diligence to identify human rights risks related to Bank-financed projects, as evidenced by the Uganda project discussed above and the Uzbekistan project discussed below. Kim should build upon these gains and institute the systems necessary to ensure that staff undertake the necessary due diligence in all projects. While Kim has emphasized the importance of the World Bank Group learning from its mistakes, it needs to implement more meaningful change at the International Finance Corporation (IFC) for lessons to truly be learned.

On June 12, 2014, the World Bank approved several projects in Uzbekistan, including a $US260 million irrigation project which supports the country’s cotton industry by irrigating farms and improving other water infrastructure. Uzbekistan’s cotton industry is grounded in a system of forced labor, including forced labor of children. During the 2013 harvest, the Uzbek government forced over a million of its own citizens, including 16 and 17-year-old children, to harvest cotton in abusive conditions under threat of punishment.[xvi] The same government officials that enforce the forced labor system control the irrigation system in the Bank’s project area.

The World Bank put in place certain mechanisms to mitigate the obvious risk of forced labor that this irrigation project and other projects in Uzbekistan present. It has agreed with the government that cotton will not be grown on newly-viable land and that the government will comply with its own laws prohibiting forced and child labor, as well as supporting mechanizing the cotton picking process on some of the land on which cotton is grown over the next five years. The Bank will also finance, or partner with other donors to finance, a third-party monitor tasked with identifying any forced or child labor on the areas in which the projects will be implemented. The World Bank has further confirmed that if it does identify forced labor, the project will be suspended.

This indicates an important shift at the World Bank toward recognizing and working to mitigate a human rights risk in its investments. While steps such as these may have been adequate to prevent human rights violations in other environments, in the Uzbekistan context these measures fall well short. Cotton is grown on more than one-third of the land in the area of the irrigation project. Even if farmers working this land are exempted from obligatory quotas it will be difficult for them to abandon cotton overnight. And if they farm cotton they will be forced to sell it at the state-determined price, which is too low to allow farmers to hire labor at market rates, making the use of government-supplied forced labor all but unavoidable. In light of this and the World Bank’s obligation not to finance forced labor, the Bank should have delayed the projects while maintaining its high-level dialogue with the government on labor rights and articulating steps that need to be taken by the government to end forced labor and other rights violations in the project areas. The Bank could then have proceeded with these projects when it saw meaningful progress in dismantling the abusive cotton system and the government had eradicated forced labor and assured respect for human rights in the project areas. This experience illustrates the need for the World Bank to develop better mitigation measures to ensure that the outcome is respect for human rights throughout the project.

The World Bank should utilize its ongoing review and update of its environmental and social safeguard policies to make human rights due diligence systematic.[xvii] This is all the more important as the Bank is about to embark on more high-risk and transformational projects. The absence of human rights due diligence from the safeguards has consequences that go well beyond Bank-financed projects. For instance, while the World Bank is not financing the government of Tajikistan to build the Rogun Dam, it has financed expert assessments looking at the viability of the government’s plans. While the World Bank-commissioned draft Environmental and Social Impact Assessment appropriately considers international environmental treaties and international water laws, it does not consider relevant international human rights instruments that should guide resettlement. Human Rights Watch research has found that the government has not provided the necessary compensation to displaced families to replace their homes or restore their livelihoods and that many families have suffered serious disruptions in access to housing, food, water, and education, in violation of international human rights law.[xviii] In addition, many people were not able to get land in their new communities that they needed for agriculture and livestock to supplement their incomes, greatly undermining their livelihoods.

In January 2014, the International Finance Corporation’s (IFC) Compliance Advisor Ombudsman (CAO) report on the IFC’s investment in Corporacion Dinant, a palm oil and food company, raised serious questions about how the IFC applies its rules on environmental and social issues, particularly in high-risk contexts. The CAO investigation stemmed from allegations that Dinant conducted, facilitated, or supported forced evictions of farmers in Bajo Aguán, Honduras, and that violence against farmers on and around Dinant plantations in the Bajo Aguán, including multiple killings, occurred because of inappropriate use of private and public security forces under Dinant’s control or influence.

The CAO concluded that IFC staff did not adequately assess and respond to risks of violence and forced evictions in the investment, in violation of the IFC’s own rules, and that they did not undertake adequate due diligence even though the situation around the project and the risks had been raised publicly. The IFC did not, as its policy requires,[xix] adequately oversee Dinant’s obligations to investigate credible allegations of abusive acts committed by the company’s security personnel or to sanction the use of force that goes beyond “preventative and defensive purposes in proportion to the nature and extent of the threat.” Nor did IFC project staff inform other IFC specialists on such environmental and social risks about the problems that they knew were occurring. The CAO also found gaps in project supervision at critical times, including the six months from February to August 2010, after Dinant had informed the IFC that five of its security guards had been killed in a clash with local farmers occupying disputed land. IFC staff also did not comply with its own requirement to “exercise remedies where appropriate” in a situation in which a client does not or is not able to reestablish compliance with environmental and social policies.[xx] After its initially defensive, brief response to the CAO report, the IFC has responded to pressure from Kim and the World Bank’s Board of Executive Directors by working with Dinant to address the serious problems.

Thanks to Kim’s leadership and that of the Board, the IFC has also taken some steps to learn from its mistakes. The CAO concluded in the Dinant audit that staff failure to comply with IFC rules was largely due to their interpretation of the rules and their wide discretion in applying them. It found that the IFC deficiencies were in part due to its culture and incentives that measure results in financial terms, encouraging staff to “overlook, fail to articulate, or even conceal potential environmental, social, and conflict related risks,” regardless of IFC’s policies. IFC staff also felt pressured to “get money out the door” and were discouraged from “making waves.”[xxi] Further, nearly a quarter of respondents to a recent internal World Bank Group survey said that they disagreed that they could “report unethical behavior without fear of reprisal.”[xxii] And only 40 per cent said that the World Bank Group considers development results as their main objective, over and above loan volume and number.[xxiii] This illustrates the importance of institutionalizing due diligence processes and reforming incentive structures across the World Bank Group to ensure that people are rewarded for identifying and mitigating problems, as well as reporting internal mismanagement or corruption issues through the appropriate channels.

The IFC has recognized the need to improve its spotting and managing of risk, its consultation with communities, and its ability to address legacy issues, country context, and security/conflict context in its recent “lesson’s learned” presentation to the Board. However, the measures highlighted are inadequate in that they omit crucial issues. To be effective, this process needs to lead to reorientation of the incentives structure and other steps to adjust the culture of the IFC to ensure that human rights and environmental risks are responded to with the same degree of seriousness as financial and credit risks. Measures also need to be in place to ensure that risk is appropriately categorized. Further, the IFC needs to review its entire portfolio, address unidentified risks, and ensure that all future investments clearly contribute to poverty reduction. The IFC should commit to carry out human rights impact assessments in high-risk environments. It is also unclear how these lessons will be implemented, monitored, and evaluated. The IFC needs to commit to a time-bound process, with benchmarks and a program for monitoring and evaluation, as well as regular consultations with civil society organizations and affected communities and routine reporting to the Board on progress and implementation. This is particularly important as the IFC is set to increase engagement in fragile and conflict states by 50 percent.

Finally, governments have a responsibility to regulate the practices of companies to ensure that they do not violate human rights. The World Bank Group should assist governments in this venture. As an initial step, the IFC would go a long way toward promoting improved government regulation by including country-by-country analysis of this in their annual “Doing Business” report.

Next Steps
To reinforce and build upon these important gains, the World Bank Group should:

• Analyze the key human rights challenges that present a hurdle for sustainable development in systematic country diagnosis and outline steps for addressing these challenges in every country partnership framework and country engagement note.
• Through the World Bank’s ongoing safeguards review:
• Introduce into the policies requirements to:
• Respect and protect international human rights law and not support any activities that are likely to contribute to or exacerbate human rights abuses, irrespective of the funding mechanism utilized.
• Undertake human rights due diligence, which includes identifying human rights risks in its activities and avoiding, addressing, or mitigating any adverse human rights impacts. This analysis should continue throughout the life of the project.
• Enhance existing safeguards, in particular the indigenous peoples and involuntary resettlement policies, and introduce additional safeguards in high-risk areas such as labor and security, to meet international human rights standards.
• Apply safeguard policies to all activities of the World Bank, including all lending mechanisms and technical advice.
• Articulate time-bound benchmarks for the IFC to demonstrate reform of its institutional culture and incentives, practices for categorizing environmental and social risk, routinely assessing and addressing human rights risks in its investments, and monitoring and evaluation of the lessons learned exercise by a specialist internal team involving the CAO.
• Assess the current IFC portfolio to identify any high-risk projects that have not received adequate attention from IFC and comprehensively assess the IFC’s conduct in cases where the CAO has successfully concluded conflict resolution but no compliance audit was produced.
• Enhance implementation, monitoring, and supervision of safeguard policies across the World Bank Group, including by ensuring that they are adequately funded.
• Create incentive structures to reward staff for advancing inclusive, sustainable development that spurs positive human rights impacts for marginalized communities, in close compliance with safeguard policies/performance standards, and sanctions when harm occurs due to staff negligence.
• Ensure effective remedies for people adversely affected by World Bank Group projects.
• Through its “Doing Business Report” measure the degree to which governments:
• Require businesses under their jurisdiction to:
• Carry out robust and transparent human rights due diligence; and
• Publicly report on their human rights, social, and environmental impacts, as well as payments made to domestic or foreign governments, and
• Enforce these requirements.

Support an Enabling Environment for Civic Participation, Social Accountability
President Kim, himself once a peaceful protestor advocating to close the World Bank during the “50 years is enough” campaign, has often emphasized the important role that civil society plays in providing services and holding governments to account. He is also working to reorient the World Bank to see people as the Bank’s ultimate client. The Bank’s Global Partnership on Social Accountability is also now funding nongovernmental organizations.

However, to date, the World Bank has done little to counter the closing space for civil society. As an international organization that works primarily with governments, the World Bank has an opportunity to analyze the environment within which civil society organizations operate and to support governments in making that environment increasingly more enabling. This is also an important corollary to the Group’s anti-corruption work. The World Bank can do this both at the project level and through its dialogue with governments. Furthermore, as a leading authority on development effectiveness, the Group can illustrate how an enabling environment for civil society can advance sustainable development.

For instance, in the Uzbekistan projects discussed above, while the World Bank pushed hard for third party monitoring, it did nothing to ensure that independent civil society organizations or journalists would be able to monitor forced labor within the project areas. The Bank missed the opportunity to support an enabling environment within the project affected area for people in the country who have been working to hold their government and international donors to account. Attacks on journalists and civil society workers in Uzbekistan are well documented, particularly during the cotton harvest. On September 21, 2013 Sergei Naumov, an independent journalist, disappeared for several days after being detained by Uzbek authorities before being located at the Urgench City Department of Internal Affairs intake facility.[xxiv] Naumov had been shooting video footage of people forced to pick the cotton in local cotton fields. On September 24, 2014, Bobomurad Razzakov, chairman of the Bukhara region branch of Ezgulik (Compassion), Uzbekistan’s only legally registered independent human rights group, was sentenced to four years in prison by the Bukhara City Criminal Court on fabricated charges of “human trafficking.”[xxv] Ezgulik has worked extensively on human rights issues in the cotton industry and filed a complaint with the World Bank’s Inspection Panel on September 5, 2013, raising concerns about the Bank’s failure to ensure that its funds do not contribute to forced and child labor. [xxvi]

Next Steps
We urge the World Bank Group to lend its analysis and voice to opening space for civic participation and social accountability. We encourage the Bank to consistently, privately, and publicly raise concerns with governments when authorities use intimidation, laws, and violence to silence independent groups, arrest journalists and opposition politicians who criticize the government, or introduce repressive laws aimed at silencing civil society.

This would include:

• Analyzing the environment for speech, expression, and assembly in every systematic country diagnostic, and outlining steps to address challenges in every country partnership framework or country engagement note. The Bank should publish the draft of such strategies for a defined comment period to allow for substantive exchange with civil society. It should then publish comments received (with consent of the interveners) and provide them to the Board of Executive Directors.
• Articulating any concerns regarding the absence of an enabling environment for civic participation or social accountability in both routine and high level meetings with government officials, drawing on evidence indicating that such an environment leads to more sustainable development results, and sharing information that such concerns were raised publicly.
• Considering the environment for expression, association, and assembly when analyzing the risks related to proposed projects or programs. It is considerably less likely that a community member would report a problem with a Bank-funded project in countries where repressive NGO laws exist or are about to be enacted, where critical journalists, activists, or political opponents are jailed or violently targeted, or where there is a history or practice of violent crackdowns on protests. Therefore, the Group should identify this as a risk and put additional monitoring in place to enable it to detect problems with the project. In countries where there is a history or practice of violent crackdowns on protests, we encourage you to seek an undertaking from the government to protect the rights of protesters.
• Taking all necessary measures to ensure that the World Bank Group meaningfully consults with affected people and civil society, including marginalized groups, in crafting development agendas, reforming policy, and identifying, preparing, and carrying out projects.
• Increasingly research the role of civic participation and social accountability in enhancing development effectiveness. Any such research should include discussion of the human rights essential to civic participation and social accountability, most obviously the rights to free expression, association, and assembly. This would be an ideal topic for a World Development Report.