The International Finance Corporation (IFC) is the private sector lending arm of the World Bank Group. Through the IFC, the World Bank provides financing to private corporations, for a variety of investments in lesser developed countries, such as pulp and paper mills, oil and gas pipelines, metal mines and chemical and industrial facilities. The IFC is an important global financier and influences other international financial entities. In 2005, the IFC's committed portfolio reached US$19.3 billion and it helped to syndicate a further US$5.3 billion in financing.
This analysis of the International Finance Corporation's (IFC) Sustainability Policy, Performance Standards and Disclosure Policy provides a brief overview of each policy and standard, where it goes beyond the previous safeguard policies, where it falls short, and what is missing in terms of addressing the extractives industries.
► Small Victory on World Bank Debt Deal On March 28, 2006, the World Bank’s Board of Directors adopted the modalities for implementing its share of the Multilateral Debt Relief Initiative (MDRI), an outcome of last summer’s G-8 meeting and endorsed by the Bank and IMF at its fall meetings. The Bank deal provides for 100% cancellation of International Development Association (IDA) debt for 17 Heavily Indebted Poor Countries (HIPC).
World Bank Fund Suspension in Chad: Local Implications for AIDS Work
The Chadian government recently amended their Petroleum Revenue Management Law for the Chad-Cameroon pipeline by removing the 'future generations fund' (10% of direct oil revenues are placed in an account for future use) to be able to access more oil revenues. This was due to a recent change in national priorities in favour national security and territorial administration, away from such issues as health care. The World Bank perceived this change as unacceptable and in January 2006 suspended their $124 million loan for eight active projects in Chad (See Issue Update Vol. II, No. 1). Three days of talks between the Chadian government and the Bank ensued. The discussions covered Chad's social spending and its critical budget shortfall, as well as the increases in border security to tackle the influx of refugees coming from the Darfur region of Sudan. Despite the changes made by the Chadian government, the Bank has maintained its suspension, and plans 'to safeguard the oil revenues intended for poverty reduction programs included in its original agreement with Chad.' A way forward is not clear.
Mr. Graham Saul
International Program Director
Friends of the Earth Canada
Co-Chair of the Halifax Initiative Coalition
153 Chapel Street
Ottawa, ON KIN 1H5
Dear Mr. Saul:
Thank you for your correspondence of November 1, 2005 regarding the International Finance Corporation's (IFC) revision of its environmental and social safeguard policies.
The IFC's Policy and Performance Standards on Social and Environmental Sustainability are of fundamental importance not only for the operations of the IFC, but more broadly for the lead role that the IFC plays in setting standards for the private sector worldwide. Recognizing the importance of this IFC review, the Department of Finance has consulted closely with other government departments as well as with interested non-governmental organizations to formulate its recommendations.
The Honourable Ralph Goodale
Minister of Finance
House of Commons
Dear Minister Goodale,
As IFC nears the final stages of its safeguard policy revision process, it is essential that Governments and Board members actively encourage International Finance Corporation (IFC) to make further improvements to its Sustainability Policy and Performance Standards during the public comment period, which ends November 25th.
A leaked internal audit assessing the World Bank's involvement in a controversial Canadian gold mine in Guatemala has exposed glaring deficiencies in the due diligence undertaken by the International Finance Corporation (IFC), the Bank's private sector lending arm, prior to approving a $45 million loan for the mine.
Glamis Gold's Marlin mine in the Western Highlands of Guatemala has been plagued with controversy since the outset (See Issue Update 1 Jan 05). In March, the internal auditor, the Compliance Advisory Ombudsman (CAO), began an investigation after receiving complaints from Guatemalan citizens.