World Banks Environmental and Social Safeguards and The Evolution of Global Order

Leiden Journal of International Law (2019), 32, 537–559
doi:10.1017/S0922156519000293
ORIGINAL ARTICLE
INTERNATIONAL LAW AND PRACTICE: SYMPOSIUM ON THE WORLD

BANK ENVIRONMENTAL AND SOCIAL FRAMEWORK
The World Bank’s Environmental and Social Safeguards

and the evolution of global order
Philipp Dann* and Michael Riegner**
*Humboldt University Berlin, Lehrstuhl für öffentliches Recht und Rechtsvergleichung Humboldt Universität Berlin,
Unter den Linden 9, 10099 Berlin Email: [email protected] and **Humboldt University Berlin, Lehrstuhl
für öffentliches Recht und Rechtsvergleichung Humboldt Universität Berlin, Unter den Linden 9, 10099 Berlin
Email: [email protected]
Abstract
This article analyses the World Bank’s environmental and social Safeguards against the backdrop of chang-
ing paradigms of global legal order. In January 2017, a new ‘Environmental and Social Framework’ (ESF)
entered into force and replaced older ‘Safeguard Policies’ that had incrementally emerged since the 1980s
in response to harmful impacts of investment projects financed by the Bank. The Safeguards reform epit-
omizes the changing structures and geopolitical shifts that shape international law in the twenty-first cen-
tury and provides a fascinating looking glass on the evolution of global order since the end of the cold war.
In this perspective, we see the first generation of Safeguards, introduced since the late 1980s, as an element
of incremental legalization in the emerging global governance regime, a regime characterized by unipolar
multilateralism and geopolitical dominance of ‘the West’. The 2016 reform not only reflects the increased
politicization of global governance by civil society but also the emergence of a more competitive multilat-
eralism, characterized by counter-institutionalization on the part of emerging powers like China. A com-
parison of the old and new Safeguards thus allows us to analyse different forms of contestation and
resulting normative evolution in the key area of global governance of development and finance.
Keywords: development; global order; international institutional law; social and environmental safeguards; World Bank
1. Introduction: The Safeguards as a lens on the evolution of global order

In January 2017, the World Bank’s new ESF entered into force. It replaced the older ‘Safeguard
Policies’ that had incrementally emerged since the 1980s in response to harmful impacts of Bank-
financed investment projects. The new ESF requires the Bank and its borrowers to assess and
manage environmental and social risks, to inform and consult with stakeholders, and to compen-
sate certain project-affected people. These new rules are significant in their own right, as they
affect investment projects in over hundred countries with an annual lending volume of US
$45 billion.1 But beyond its economic impact, the safeguard reform has a much wider political
and legal significance. Since the 1990s the Safeguards have become a global normative standard.
They were emulated by multilateral development banks (MDBs), by the private sector, and they
diffused within domestic legal systems of borrowing countries. Moreover, the Safeguards reform
1
World Bank, available at finances.worldbank.org/Loans-and-Credits/IBRD-Countries-by-Borrower-s-Obligation/2akt-
uau7/data; www.worldbank.org/en/news/press-release/2016/07/12/world-bank-group-support-tops-61-billion-in-fiscal-year-
2016 (all websites last accessed 28 May 2019).
© The Author(s) 2019. This is an Open Access article, distributed under the terms of the Creative Commons Attribution-NonCommercial-
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tion in any medium, provided the original work is unaltered and is properly cited. The written permission of Cambridge University Press must
be obtained for commercial re-use or in order to create a derivative work.
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538 Philipp Dann and Michael Riegner
currently is one of the very few major multilateral lawmaking projects that attract quasi-universal
support under new geopolitical conditions: Western donor countries including the US, emerging
powers like China and India, as well as developing nations, all agreed to the reform package in
2016 and remain committed to it until today. The universal embracement is all the more surpris-
ing as the ESF covers a wide range of controversial policy issues, ranging from climate change,
labour standards and indigenous peoples, to human rights and accountability of international
institutions. Hence, the Bank’s new Safeguards represent a multi-issue compromise among old
and new powers, which was achieved not only in the shadow of new competitors like the
Asian Infrastructure and Investment Bank (AIIB), but also with significant civil society partici-
pation at the national and global levels.
In sum, the Safeguards reform epitomizes the changing structures and geopolitical shifts that
shape international law in the twenty-first century. We, thus, argue that the Safeguards provide a
fascinating looking glass on the evolution of global order since the end of the Cold War. In this
perspective, we see the first generation of Safeguards, introduced since the late 1980s, as an ele-
ment of incremental legalization in the emerging global governance regime, a regime character-
ized by unipolar multilateralism and geopolitical dominance of ‘the West’. If we turn our looking
glass to the 2016 reform, then the Safeguards compromise appears as a multifaceted reflection of
processes of contestation and change in international law since the 1990s: The reform not only
reflects the increased politicization of global governance by civil society but also the emergence of
a more competitive multilateralism, characterized by counter-institutionalization on the part of
emerging powers like China. A comparison of the old and new Safeguards thus allows us to ana-
lyse different forms of contestation and resulting normative evolution in the key area of global
governance of development and finance.
In this comparative analysis, we adopt two different perspectives: a geopolitical one, focused on
the wider political and economic context as well as on the processes inside and outside the Bank
when the Safeguards were first introduced and then reformed; and a legal perspective, analysing
the content of the Safeguards along three dimensions that each reflect foundational but shifting
concepts of international law: first, the relationship between Bank and member state law, shaped
by the concepts of state sovereignty on the one hand and authority of international institutions on
the other; second, the role of individuals, which is circumscribed by individual rights, especially
human rights, and accountability for violations of such rights; and third, the thematic coverage of
the Safeguards, which defines the relationship of ‘development’ to other international regimes and
thus represents an element of either fragmentation or integration of international law across pol-
icy areas and international institutions.
To elaborate our argument and these perspectives, the article proceeds in three steps: Section 2
analyses the evolution of the Safeguards in the 1990s, outlining the geopolitical context and their
legal content along the three analytical dimensions. Section 3 turns to the 2016 reform, investi-
gating the profoundly changed context and briefly outlining the process and outcome of the
reform. Section 4 then takes a closer look at the substance of the ESF, returning again to the three
dimensions. Section 5 concludes.
2. First generation Safeguards – in the first generation of global governance

2.1 Context and process: World Bank and the incremental introduction of safeguards in the
1990s
The Safeguard policies emerged in the late 1980s and early 1990s as part of a transformation of
the Bank from lender to norm-setter, a transformation that profoundly increased its role in the
global order and its impact on borrowing countries. At its inception, the World Bank was con-
ceived as a lending institution and its founders did not assign a normative role to it. Initially, the
Bank, thus, operated chiefly as a lender of funding for infrastructure projects. It paid out loans to
borrowing countries, which then implemented the project according to their own laws and
Leiden Journal of International Law 539
standards. The loan agreements essentially required the Bank to pay out the loan and borrowers to
repay it.2 This changed in the 1980s. This decade saw the introduction of the widely-known and
much criticized structural adjustment programmes, based on a new legal instrument for budget sup-
port from the Bank.3 It was also marked by another, equally important, normative development: The
Bank started to enact more robust environmental and social standards for its investment projects,
which became known as ‘Safeguards’. These Safeguards grew incrementally in response to an in-
creasing perception of serious deficiencies in concrete projects: When a dam is constructed or a road
is built, land must be acquired and possibly expropriated, communities are displaced, businesses lose
customers; waters are polluted, trees cut, natural habitats lost; and occasions for corruption and
waste generated.4 With each ‘problem project’, awareness of specific risks for people and the envi-
ronment grew. As a result, incrementalism characterized the legalization process at the World Bank.
This legalization process can be attributed to several factors and occurred at a historical moment
characterized simultaneously by hubris and crisis.5 Hubris inspired claims about the end of history:
Western powers, in particular the US, dominated international relations. In the decade after the end
of the Cold War, the global order was shaped by unipolar multilateralism and the emergence of a
system described today as global governance.6 The ‘West’ led by the US dominated economically,
politically, and normatively. Economically, Latin America and South-East Asia were only slowly
recovering from heavy debt crises. China, Brazil, and India were opening their economies but
growth rates had yet to take off. World Bank borrowers remained dependent on public capital flows
and the private capital these flows leveraged.7 Politically, the US and their allies dominated inter-
national relations in the absence of their former rivals in the Eastern bloc. Normatively, American
and European legal systems and ideas claimed superiority and influenced international lawmaking
and bilateral law reform projects around the world.8 Liberal internationalism favoured the founda-
tion of new international institutions and a strengthening of existing ones.
This overall situation contributed to the consolidation of a global governance system charac-
terized by a set of normative assumptions. These assumptions included the belief in the possibility
of international authority beyond the state and a rudimentary notion of a global common good.
These ideas offered a normative justification for the increased exercise of public authority by in-
ternational institutions. These justifications obscured, for quite some time, the extent to which the
existing global governance system continued to institutionalize inequality.9 At the World Bank,
this inequality had always taken the form of weighted voting, a significant departure from sover-
eign equality: The US and other OECD countries continued to enjoy voting rights intended to
represent their share in the world economy but not automatically adjusted to the changing
2
‘World Bank’ refers to two legal entities, the International Bank for Reconstruction and Development founded in 1944, and
the International Development Association, founded as a soft lending arm in 1960. During these first decades, the two insti-
tutions, at times, politically conditioned their loans on reforms of domestic (mostly economic) policies and law, and signs of a
‘mission creep’ from infrastructure to agriculture and education can be seen as early as the 1960s. Yet, these developments
remain informal and were not directly reflected in the Bank’s legal regime until the 1980s, as described in the following paras.
On these early developments see D. Kapur, R. Webb and J. Lewis (eds.), The World Bank. Its first half century (1997); E. Mason
and R. Asher, The World Bank since Bretton Woods (1973).
3
P. Dann, The Law of Development Cooperation: A Comparative Analysis of the World Bank, the EU and Germany (2013),
90, 413.
4
See I. Hadiprayitno, Hazard or Right? The Dialectics of Development Practice and the Internationally Declared Right to
Development, with Special Reference to Indonesia (2009).
5
Dann, supra note 3, at 101–24.
6
For global governance see J. N. Rosenau and E. O Czempiel, Governance Without Government (1992). For hubris see
F. Fukuyama, The End of History and the Last Man (1992).
7
On the World Bank’s financial leverage see J. Delmon, Mobilizing Private Finance with IBRD/IDA Guarantees to Bridge
the Infrastructure Funding Gap, World Bank Working Paper No. 70428 (2007).
8
On rule of law promotion see D. M. Trubek and A. Santos (eds.), The New Law and Economic Development: A Critical
Appraisal (2006).
9
We draw here on M. Zürn, Theory of Global Governance: Authority, Legitimacy and Contestation (2018), 6–10.
economic realities. This was even exacerbated by the cyclical process of International
Development Association (IDA) replenishments, i.e., the drives for additional funding from weal-
thy donor states. Only these donors participated in the pledging conferences and thus influenced
the policy orientation of the Bank even more directly without being counterbalanced by any bor-
rowing or recipient country participation.10
The hubris of the 1990s, however, also contrasted with a moment of crisis that began to affect
international institutions in general and the World Bank in particular.11 The Bank faced scathing
criticism from different constituencies: For one, civil society organizations (CSOs) became
increasingly aware of the problematic effects of World Bank activities. Structural adjustment pro-
grammes elicited fierce critique, especially in Latin America. The more traditional Bank-financed
investment projects also came under fire in the late 1980s and early 1990s. The Bank’s problems
are illustrated by the often-cited example of the Narmada dam in India: Its construction displaced
more than 140,000 people, affected the livelihoods of many more, and sparked worldwide con-
troversy. National resettlement rules and their implementation proved inadequate, and the Bank’s
own standards and implementing practices were found to be insufficient.12 CSOs began to orga-
nize ever more vocal protests. This was true for protests in the Global South, but there was also
increasing awareness of lacking social and environmental protection in the Global North. In par-
ticular, CSOs in the US were able to influence Bank policy indirectly through the US Congress’
power of the purse.13 In addition to these external pressures, the crisis also came from within. The
Bank’s management was becoming increasingly aware of the fact that many of its projects had
become inefficient, with substantial time and cost overruns due to deficient internal organizational
and procedural structures. The critical Wapenhans report of 1991 testified to these deficits and
documented severe governance and compliance problems within the Bank. Taken together, these
problems posed a serious legitimacy crisis for the Bank.
As a response to this crisis, the Bank adopted a strategy of increasing legalization and juridi-
fication as part of a larger strategy of technocratic legitimation. It decided to overhaul its policy
framework and give it a more formalized – and legal – structure. Internal legal acts were classified,
new standards were enacted as ‘Operational Policies’ and ‘Bank Procedures’ (OP/BPs), processes
for enactment and amendment were standardized, and publicity requirements introduced.14 Over
time, a total of 11 OPs and BPs, collectively known as Safeguards, provided protections against
particular risks (e.g., resettlement) and for particular groups (e.g., indigenous people) or resources
(e.g., forests, natural habitats). Besides, an independent review mechanism, the Inspection Panel,
was established to hear non-compliance claims by project affected individuals, as outlined below.
The concrete processes in which these early Safeguards were adopted reflected the larger
political context. In the already unequal institutional structure of the World Bank, its Articles
of Agreement do not clearly set out the procedure for secondary lawmaking.15 The process, thus,
10
J. Xu, Beyond US Hegemony in International Development: The Contest for Influence at the World Bank (2017), 42 et seq.
11
See generally J. Klabbers, ‘The Life and Times of the Law of International Organizations’, (2001) 70 Nordic Journal of
International Law 287.
12
S. Maitra, ‘Development Induced Displacement: Issues of Compensation and Resettlement – Experiences from the
Narmada Valley and Sardar Sarovar Project’, (2009) 10 Japanese Journal of Political Science 191; T. Berger, ‘The World
Bank's Independent Review of India's Sardar Sarovar Projects’, (1993) 9 American University International Law Review 33.
13
See on environmentalists and generally K. Daugirdas, ‘Congress Underestimated: The Case of the World Bank’, (2013)
107 American Journal of International Law 517.
14
On the Bank’s internal system of legal instruments see Dann, supra note 3, at 187–92. For comparing World Bank
Safeguards to legal instruments in other MDBs see J. von Bernstorff and P. Dann, Reforming the World Bank’s
Safeguards (2013), 10–16; OP/BP 4.00-4.37. In addition, there were two legal safeguard policies on transborder rivers and
disputed territories that are not affected by the current reform. Available at www.worldbank.org/en/projects-operations/
environmental-and-social-policies#safeguards.
15
In this relation see also G. Jokubauskaite, ‘The Legal nature of the World Bank Safeguards’, (2018) 51 Law and Politics in
Asia, Africa and Latin America 78.
evolved over time, reflecting a balance between Bank management under the President, on the one
hand, and the Board of Executive Directors representing member states, on the other.16 In this
system, the Board would lay out the general principles of the safeguard policy to be adopted and
management would prepare the actual text of the policy. While this balance shifted back and forth
over time, US influence over the process remained a constant: The US appointed the President of
the Bank and held the largest share of votes in the Board. Largely excluded from this process were
those member states that did not hold larger voting blocks, especially all borrowing and recipient
countries, even if they were important borrowers and therefore directly affected by new Safeguards
(India and China for example). However, their position, or rather opposition, towards the
Safeguards did not stop the process.
Equally excluded were external actors and civil society17 – with one significant exception:
Domestic US interests were able to influence Bank policy indirectly through the US Congress’
power of the purse. The Bank depended on regular replenishments to refinance its interest-free
credit by its concessional lending arm, the IDA. Appropriations by Congress, thus, were a leverage
for interests represented in it, which was used extensively since the 1970s.18 An illustration of US
influence is the introduction of environmental impact assessments (EIA) into Bank Safeguards.
During the early 1990s US CSOs pressured Congress, which resulted in the so-called ‘Pelosi’
amendment in the early 1990s. This amendment to an appropriations bill, proposed by
Democratic Representative Nancy Pelosi, made US contributions to IDA dependent on the intro-
duction of environmental impact assessments into Bank procedures. The Bank duly enacted such
a Safeguard policy (OP 4.01), which largely followed the US model mandated by the federal
National Environmental Policy Act (NEPA) of 1969.19 In sum, the Safeguards process was, thus,
driven (for different reasons each) by the Bank management, Western states, and bottom-up pres-
sures in concrete projects and was enabled by the unipolar structure of the global order at the time.
2.2 Nature and content: Original Safeguards as a reflection of their unipolar geopolitical
context
The political dominance and normative pull of the ‘West’ also shaped the nature and substantive
content of the Safeguard policies. They are, thus, another example of the extent to which ‘Western’
states acted as norm-shapers and the rest as norm-takers. This can be demonstrated along the
three dimensions identified in the introduction, each of which points to a structural element
of the international legal system, viz sovereignty/international authority, the role of the individual,
and thematic fragmentation or integration. These dimensions not only represent features of
international law in general but also principles of the law of development co-operation that
has emerged over recent decades.20
2.2.1 Relationship between Bank and member states: From sovereignty to shared responsibility
The relationship between the Bank and its member states is structured by the principle of sover-
eignty, on the one hand, and the public authority exercised by the Bank over its borrowers, on the
other. In the context of development co-operation, sovereignty can be reframed as a principle of
16
See Dann, supra note 3, at 189.
17
D. Hunter, ‘International Law and Public Participation in Policy-Making at the International Financial Institutions’, in
D. Bradlow and D. Hunter (eds.), International Financial Institutions and International Law (2010), 199.
18
See Daugirdas, supra note 13.
19
A. M. Esteves, D. Franks and F. Vanclay, ‘Social Impact Assessment: The State of the Art’, (2012) 30 Impact Assessment
and Project Appraisal 34; S. Park, World Bank Group interactions with environmentalists (2010); I. Bowles and C. Kormos,
‘The American Campaign for Environmental Reforms at the World Bank’, (1999) 23 Fletcher Forum of World Affairs Journal
211.
20
See in detail Dann, supra note 3, at 220; a synthesis in P. Dann, ‘Institutional Law and Development Governance: An
Introduction’, (2019) 12 Law and Development Review, 537.
collective autonomy, which supports claims for ownership and discretion of member states in
their interplay with the Bank.21
Before the Safeguards were adopted, international and domestic law remained relatively sepa-
rated in Bank projects, which were implemented by borrowers according to their own domestic
law. Beyond the negotiation of the loan agreement, collective autonomy of borrowers was not
limited, at least not legally. The Safeguards changed this and increasingly imposed requirements
on how member states were to design and implement projects: EIAs were to be conducted,
indigenous peoples to be consulted, resettlement plans to be drafted, project affected people to
be compensated etc. The scope for sovereignty and collective autonomy of member states shrank.
The multilevel interplay between international and national law was increasingly determined in
practice by the Bank’s internal law, at the expense of domestic constitutional law.
To understand this shift one needs to trace the particular legal techniques through which the
Safeguards become binding on borrower states.22 As OP/BPs, Safeguards have internal legal effects
only and are directly binding only on World Bank staff (enforced through bureaucratic hierarchy,
performance assessments, promotions and disciplinary measures, and through the Inspection
Panel). However, they also become binding on borrowing member states in two steps: First, if
a government wants to receive a loan or grant from the Bank, it is required to prepare a funding
application in line with the procedural, environmental and social requirements stipulated in the
Safeguards; they, thus, function as an ex-ante conditionality. Second, once the loan agreement is
concluded, it incorporates the Safeguards and the concrete environmental and social measures
agreed upon during project preparation. Loan agreements concluded with member states are con-
sidered treaties under international law.23 By virtue of this bilateral treaty, the borrower is under
an international legal obligation to comply with applicable Safeguards. In case of non-compliance,
the Bank is entitled to withhold or call in the loan.
As a result, borrowers implement projects under two sets of norms: Their own domestic law,
and international obligations towards the Bank. If national law does not meet Bank standards, the
borrower faces the choice of forgoing the loan or raising its national standards to meet higher
Bank standards, at least for the project at hand. Under the economic and geopolitical conditions
prevailing until the 2000s, most borrowers accepted, if only grudgingly, this trade-off between
cheap loans and collective autonomy. Consequently, the conditionalities and the network of hun-
dreds of loan agreements the Bank concluded with a total of 146 countries over time effectively
multilateralized the safeguard regime.24 The Bank had turned from lender to international
lawmaker.25
This increased normative reach of the Bank was controversial for two reasons: For one, bor-
rowers not only had to accept a new set of Bank norms, they also had little say in the development
of these international norms in the first place.26 A second aspect was the fact that the Safeguards
applied uniformly across all borrowers, irrespective of the quality of their domestic legal system
and their administrative capacity: Mali and India, Suriname, and China were treated alike, at least
21
Ibid., at 238.
22
On the legal nature of the safeguards, see Jokubauskaite, supra note 15.
23
J. Head, ‘Evolution of the Governing Law for Loan Agreements of the World Bank and Other Multilateral Development
Banks’, (1996) 90 AJIL 214.
24
A similar multilateralization can be observed in the system of bilateral investment treaties, see S. Schill, The
Multilateralization of International Investment Law (2009).
25
See also B. Kingsbury, ‘Operational Policies of International Institutions as Part of the Lawmaking Process’, in
G. Goodwin-Gill and S. Talmon (eds.), The Reality of International law: Essays in the Honour of Ian Brownlie (1999),
323; D. Bradlow and A. Naudé Fourie, ‘The Operational Policies of the World Bank and the International Finance
Corporation’, (2013) 10 International Organizations Law Review 3. See generally J. Alvarez, International Organizations
as Law-Makers (2005); I. Jonstone, ‘Lawmaking Through the Operational Activities of International Organizations’,
(2008) 40 George Washington International Law Review 87.
26
On the process of adoption of policies and the lacking role of weaker states, see Section 2.1 above.
as a matter of law. While critics suggested that the Bank did, in fact, differentiate between large and
small borrowers in practice, such differentiation had no legal basis in the initial Safeguards.
In 2005, the Bank did introduce a policy on the ‘use of country systems’27 which, in theory, allowed
replacing parts of the Safeguards with domestic law. However, the policy imposed such strict
requirements that it was rarely applied in practice. A main obstacle was the requirement that
the national system be legally equivalent to the Safeguards, which was hardly ever the case. At
least on paper, the Bank, thus, subjected not only itself to relatively stringent requirements but
also all of its borrowers and recipients.
This, however, did not necessarily mean that the Safeguards actually protected the environment
and project-affected people effectively in practice. In fact, the original Safeguards suffered from
serious implementation deficits: Although they were integrated in loan agreements and states for-
mulated project-specific plans to mitigate social and environmental risks, the implementation of
these obligations and plans was entirely entrusted to the member states. In contrast to other
donors like the UN Development Program, which can execute its own projects, the Bank only
finances projects. Execution by national authorities is only a modality of implementation.
While the Bank could relatively effectively police borrower compliance with ex ante requirements
for project preparation before the loan was approved, the tables turned once the loan agreement
was signed and money started flowing: Supervising the implementation of hundreds of projects
worldwide proved difficult, and institutional incentives militated against actually withholding or
calling in loans once implementation problems occurred. This problem of the original Safeguards
was known as ‘frontloading’, whereas there was a lack of ‘downstream focus’.28 It was, thus, in the
implementation phase that borrowing countries retained, and regained, some of the collective
autonomy and discretion they had lost to the Bank in earlier phases of the project. Despite this
informal pressure valve, the Safeguards did change the overall equation between the sovereign
powers of member states and the Bank’s international legal authority.
2.2.2 Role of the individual: Rights and quasi-judicial accountability

The original Safeguards advanced the normative project of Western donors in another significant
way: They transformed individuals from passive beneficiaries of development projects into active
rights holders and legal subjects under international law. This transformation was in line with the
increasing role of human rights in the international legal order and is encapsulated by another
principle of development co-operation law, that of individual autonomy.29 Unlike human rights
law, however, this transformation was based on international institutional law, and it created rel-
atively concrete individual entitlements: These were mainly procedural rights for affected people
to participate and be heard in the development of a project and its implementation. Besides, they
established substantive guarantees, especially for compensating resettled residents or indigenous
peoples.30 These entitlements can be seen as an incipient regime of ‘simple’ individual rights
beyond the framework of human rights law or more broadly as part of an emerging ‘global
administrative law’.31
The Safeguards were accompanied by a mechanism for their enforcement: In 1993, the Bank’s
Board of Executive Directors established the Inspection Panel, mandated to hear non-compliance
27
World Bank, OP 4.00 Piloting the Use of Borrower Systems to Address Environmental and Social Safeguard Issues in
Bank-Supported Projects (2005), available at policies.worldbank.org/sites/ppf3/PPFDocuments/090224b0822f7333.pdf.
28
See von Bernstorff and Dann, supra note 14, at 24–30; Independent Evaluation Group, Safeguards and Sustainability
Policies in a Changing World: An Independent Evaluation of World Bank Group Experience (2010).
29
See Dann, supra note 3, at 258.
30
Ibid., at 258; Kingsbury, supra note 25.
31
See generally on the former A. Peters, Beyond Human Rights: The Legal Status of the Individual in International Law
(2016); and on the latter S. Cassese (ed.), Research Handbook on Global Administrative Law (2016); B. Kingsbury,
N. Krisch and R. B. Stewart, ‘The Emergence of Global Administrative Law’, (2005) 68 Law and Contemporary Problems 15.
complaints from project affected people. After the Wapenhans report had detailed enforcement
gaps in the Bank’s existing standards in the Narmada project, several types of accountability
mechanisms were discussed. While European countries initially favoured a strengthened internal
evaluation function, they eventually followed an American proposal for an independent panel
hearing individual complaints.32 The Inspection Panel subsequently grew into a quasi-judicial
review institution effectuating the Bank’s environmental and social accountability towards exter-
nal individuals.33 It also provided an avenue to make the Safeguards more effective in the imple-
mentation phase by mobilizing individuals with a direct interest in compliance. This type of
decentralized ‘fire alarm’ control, as opposed to ‘police patrol’ enforcement by Bank management,
can be seen as another element of US influence and catered to the interest of major donor
countries.34
While human rights are not explicitly mentioned in the Safeguards, project-affected people and
CSOs supporting them quickly turned to rights language in the complaints they brought to the
Panel. And indeed, the Panel relied, explicitly or implicitly, on human rights when interpreting
safeguard standards on resettlement, indigenous peoples, and public participation.35 Even though
civil and political rights remained an anathema for the Bank for a long time, the Safeguards and
the Inspection Panel signaled that economic and social rights became increasingly accepted by the
Bank. Overall, the first generation of Safeguards mirrored the increased role of the individual in
international law, leveraging the Bank’s economic and legal authority vis-à-vis member states to
empower individuals while at the same time using rights and review to place some checks on that
very authority of the Bank.
2.2.3 Thematic coverage: Fragmentation and integration of international legal regimes

One of the traditional features (and weaknesses) of the international system that also shaped early
forms of global governance is the fragmentation of policy fields. Each policy area (security, envi-
ronment, trade, development) is regulated in separate regimes and by separate institutions, and there
is no place akin to the plenary of a national parliament to integrate these functionally differentiated
regimes. With the proliferation of international law, institutions, courts, and tribunals in the 1990s,
this fragmentation became an increasing concern for international lawyers.36 In the area of devel-
opment, the general issue of fragmentation vs. integration translated into policy debates about the
notion of development – should the focus be on economic, human or sustainable development? –
and into legal questions as to how broadly or narrowly the mandate and objectives of development
institutions should be interpreted: should they be understood as aiming at economic growth, or
should the World Bank and its peers pursue a more holistic understanding of development that
includes environmental and social concerns, good governance and human rights?
At a general level, these questions correspond to two other principles of development
co-operation law: first, the principle of development, which enshrines a more holistic notion
of development focused on poverty reduction, and second, the principle of coherence, which
requires donors and international institutions to co-ordinate their activities.37 This is reflected
at the institutional level of the World Bank: the Articles of Agreement mandate that only
32
S. Park, ‘Accountability as Justice for the Multilateral Development Banks?: Borrower opposition and Bank Avoidance to
US Power and Influence’, (2017) 24 Review of International Political Economy 776.
33
A. Naudé Fourie, The World Bank Inspection Panel and Quasi-Judicial Oversight: In Search of the ‘Judicial Spirit’ in Public
International Law (2009).
34
On such a conception of administrative law see M. McCubbins and T. Schwartz, ‘Congressional Oversight Overlooked:
Police Patrols versus Fire Alarms’, (1984) 28 American Journal of Political Science 165.
35
Naudé Fourie, supra note 33, at 260; Bradlow and Naudé Fourie, supra note 25.
36
M. Koskenniemi, Fragmentation of International Law: Difficulties arising from the Diversification and Expansion of
International Law, UN Doc. A/CN.4/L.682 (2006).
37
See Dann, supra note 3, at 226, 284.
economic considerations be relevant for projects but this provision has been interpreted broadly to
allow for activities in agriculture, education, good governance and the like. While this ‘mission
creep’ was well under way in the 1990s, the Safeguards were significant in that they legalized
and codified the social and environmental considerations relevant in project appraisal and ap-
proval. From this perspective the Safeguards can, thus, be seen a legal attempt at overcoming frag-
mentation and moving towards greater integration.
At the same time, this attempt at integration faced the Bank with significant questions: Which
non-economic issues should be included in Safeguards? And should the Bank develop its own
standards, or should it rely on norms produced by other international institutions, such as the
International Labour Organization or UN human rights organs? Essentially, the Bank opted
for a cautious incremental approach that preserved its institutional autonomy. The original
Safeguards made a first tentative step to integrate mostly environmental concerns and some social
issues, often proceduralizing them by requiring impact assessments or by granting participation
rights. In terms of social and economic rights, the Safeguard policy on resettlement included sub-
stantive protections for (some) property rights, whereas labour rights or health issues remained
largely uncovered. Likewise, civil and political rights were clearly outside the range of the
Safeguards, and human rights language was avoided entirely. This limited scope is partly explained
by the incremental process in which the Safeguards were introduced; in this process, they emerged
mostly in isolation of wider international law regimes. A second element was the absence of inter-
institutional co-ordination: In its lawmaking process, the Bank rarely consulted systematically
with other international institutions, nor did it follow the normative views of other international
institutions, courts or tribunals in the interpretation of its Safeguards. In fact, the reverse became
true: With its increasingly dense and sophisticated norm production, the Bank itself took on a new
leadership role as a global norm-setter, influencing legal developments well beyond the confines of
its own projects.
2.3 Diffusion: The Bank as global norm-setter

To fully understand the significance of the Safeguards, one needs to look beyond projects and take
into account the epistemic authority the Bank came to wield in national and international devel-
opment discourses and policy making.38 With the Safeguards, the Bank also built up its social and
environmental expertise and enhanced its reputation for legal expertise in these fields. An internal
Bank evaluation concluded in 2010 that the main benefit of the Safeguards for the World Bank was
the ‘recognition of its leadership role in setting and promoting benchmarks for environmentally
and socially sustainable projects’.39 Indeed, at the time of their initial enactment, the Bank’s
Safeguards on environmental assessments, resettlement, indigenous peoples etc. were considered
the ‘gold standard’ in development and project finance.
As a result, the Safeguards diffused horizontally into the laws and practices of other MDBs and
private banks and vertically into domestic legal orders beyond individual projects.40 When other
MDBs encountered similar problems in their projects, they often copied the Bank’s Safeguards.
Today, the Inter-American Development Bank, the Asian Development Bank, the African
Development Bank, and the European Bank for Reconstruction and Development have adopted
not only environmental and social standards modeled upon the World Bank’s safeguard polices
38
On this form of authority and its legal relevance see M. Riegner, ‘The International Institutional Law of Information’,
(2015) 12 International Organizations Law Review 50; M. Barnett and M. Finnemore, ‘The Politics, Power, and Pathologies of
International Organizations’, (1999) 53 International Organization 699.
39
Independent Evaluation Group, supra note 28, at 74.
40
In international relations literature, diffusion is defined as a pattern of adoption of similar norms, policies or ideas that
occurs when decisions in a given jurisdiction are systematically conditioned by prior choices made in other jurisdictions or in
international settings, F. Gilardi, ‘Transnational Diffusion: Norms, Ideas, and Policies’, in W. Carlsnaes, T. Risse and
B. Simmons (eds.), Handbook of International Relations (2013), 453.
but also Inspection Panel-type accountability mechanisms.41 The OECD export credit financing
conditions include Bank-type social assessments.42 Through the Bank’s private sector arm, the
International Finance Corporation (IFC), they also influenced the private banking industry, whose
‘Equator Principles on Sustainable Finance’ are largely modelled upon the IFC’s environmental
and social performance standards.43
Member states also modeled their own laws on Bank standards and incorporated their experi-
ence with implementing Bank projects in policy processes. While systematic empirical studies of
this aspect of the Bank’s epistemic authority are still missing, the causal mechanisms developed in
the diffusion literature, namely coercion, competition, learning, and emulation provide a plausible
explanation for observed convergences in national legislation in borrowing countries.44 One
example is the spread of environmental impact assessments:45 They were adopted in jurisdictions
like Mexico, Brazil, and South Asia.46 India introduced a legal basis for environmental
impact assessments with the Environment Protection Act 1986.47 A second example is assess-
ments to manage social risks, mainly in resettlement. Two Safeguard Policies mandate specific
social assessments.48 In China, the 2002 Guidelines of the National Development and Reform
Commission require social assessment in feasibility studies and development investments, and
the practice of social impact assessments has expanded considerably since then.49 In 2013,
India enacted the Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act (LAA), whose overall structure and individual provisions
on social impact assessments bear strong resemblance to the Bank’s OP 4.12 on Involuntary
Resettlement.50 While the Bank did not play a prominent role in the drafting and there is no
41
Park, supra note 32; E. Mitzman, ‘The Proliferation of Independent Accountability Mechanisms in the Field of
Development Finance’, (2012) Rivista Trimestrale di Diritto Pubblico 93.
42
R. K. Morgan, ‘Environmental Impact Assessment: The State of the Art’, (2012) 30 Impact Assessment and Project
Appraisal 5, at 6.
43
M. Riegner, ‘The Equator Principles on Sustainable Finance Assessed from a Critical Development and Third World
Perspective’, (2014) 5 Transnational Legal Theory 489; D. Bradlow and M. Chapman, ‘Public Participation and the
Private Sector: The Role of Multilateral Development Banks and the Evolving Legal Standards’, (2011) 4 Erasmus Law
Review 91, at 95–7; C. Wright, ‘Setting Standards for Responsible Banking: Examining the Role of the International
Finance Corporation in the Emergence of the Equator Principles’, in F. Biermann, B. Siebenhüner and A. Schreyögg
(eds.), International Organizations and Global Environmental Governance (2009), 51.
44
On these mechanisms in detail see B. A. Simmons, F. Dobbin and G. Garrett, ‘The International Diffusion of Liberalism’,
(2006) 60 International Organization 781; Gilardi, supra note 40.
45
World Bank, OP 4.01 Environmental Assessment (1999), available at policies.worldbank.org/sites/ppf3/PPFDocuments/
090224b0822f7384.pdf. It mandates Environmental Assessment, which, according to para. 3, takes ‘into account the natural
environment (air, water, and land); human health and safety; social aspects (involuntary resettlement, indigenous peoples, and
cultural property); and transboundary and global environmental aspects’.
46
R. Burdge and N. Taylor, ‘When and Where is Social Impact Assessment Required?’, (2012) Paper prepared for the
International Association for Impact Assessment Annual Meeting, Porto, Portugal, 2–6, 12; Esteves, Franks and Vanclay,
supra note 19, at 35; Morgan, supra note 42, at 6.
47
See envfor.nic.in/division/introduction-8. Environment Protection Act 1986, sec. 3; made operational by Environment
Impact Assessment Notification S.O.60 (E) of 27 January 1994.
48
OP 4.12 on Involuntary Resettlement, enacted in 2001 in response to the Narmada experience, requires the borrower to
design and implement a resettlement plan or framework for project-affected people. Similarly, OP 4.10 on Indigenous Peoples,
enacted in 2005, requires the borrower to conduct a social assessment during project preparation to evaluate the project’s
potential positive and adverse effects on Indigenous Peoples, see OP 4.10 para. 6(b) and 9. Esteves, Franks and Vanclay, supra
note 19, at 37; Kingsbury, supra note 25.
49
Hinting at a role of MDBs are Burdge and Taylor, supra note 46, at 10.
50
Compare OP 4.12 and I. Serageldin, ‘Involuntary Resettlement in World Bank Financed Projects: Reducing
Impoverishment Risks for the Affected People’, in H. Mathur (ed.), Managing Resettlement in India: Approaches, Issue,
Experiences (2006), 45; H. Mathur, Displacement and Resettlement in India: The Human Cost of Development (2013), 51.
On the process generally see S. Singh, ‘Displacement and Rehabilitation: A Comparison of Two Policy Drafts’, (2006–
2007) 41 Economic and Political Weekly 5307; M. Ghatak and P. Ghosh, ‘The Land Acquisition Bill: A Critique and a
Proposal’, (2011) 46 Economic and Political Weekly 65.
mono-causal explanation in either of these cases, it is quite plausible that experience gained in
Bank projects as well as mechanisms of emulation and learning played a role.
In any event, it is safe to say that the Safeguards had become a globally diffused normative
model for socially and environmentally sound development. Hence, they not only provided a
looking glass on the evolution of global order but had also come to influence to some extent that
very legal order.
3. The 2016 Safeguards reform: Context, process and outcome

3.1 The changing context: From unipolar to competitive multilateralism and multiple
contestations
When the Bank embarked on its Safeguard reform process in 2012, it was motivated by several
considerations. In part, the reform responded to various criticisms that the Safeguards had
attracted over the years. At the same time, it was a reaction to the considerable changes in the
geopolitical and economic context, which put the Bank’s entire business model as well as its in-
ternational authority into question. To some extent, the Safeguards had also become a victim of
their own success: Other MDGs not only copied the Bank’s standards, but also developed and
improved them, so that the Bank’s old system had actually fallen behind, especially in comparison
to the IFC.51
While the Safeguards had considerably increased the normative reach and impact of the Bank,
they had in equal measure triggered contestation. Instead of resolving questions about its legiti-
macy and satisfying critics, the Safeguards had led to new kinds of criticisms and concerns.52
Rising powers as well as weaker states criticized the Safeguards as bureaucratic burden and inap-
propriate conditionality from the outset. They were considered as too detailed a corset for bor-
rowers and as imposing specific normative values on them, for instance the fields of indigenous
peoples or resettlement. The Indian government, for example, by no means welcomed World
Bank standards such as those on resettlement. Like many other governments, it opposed in par-
ticular compensation for informal occupants, often considered illegal squatters under national
law.53 Like structural adjustment, the Safeguards came to be seen as a conditionality. Within
the Bank and in concrete projects on the ground, states pushed back or adopted strategies of se-
lective (non-)compliance.54 The Inspection Panel, designed as institutional guardian of the poli-
cies, faced criticism for its role in enforcing the Safeguards.
At the same time, the rise of China, India and other emerging economies initiated a gradual
transition from a unipolar to a multipolar global system.55 Economic growth especially in the
BRICS countries, but also in some other transition states, has increased their share of the global
economy and is set to surpass that of the OECD countries in the foreseeable future.56 Private cap-
ital flows to emerging markets have soared and let flows of Official Development Assistance
51
On the broader development see Dann, ‘Global Administrative Law’, supra note 20, 547–53; Dann, supra note 3, 138–54;
Independent Evaluation Group, supra note 28.
52
On the connection between increased authority, legitimacy problems, and contestation see Zürn, supra note 9, at 21.
53
World Bank Interview 1, on file with authors. India resisted World Bank resettlement standards for decades. President
McNamara’s files show considerable pushback, and President Wolfensohn also met with resistance.
54
S. Randeria, ‘Cunning States and Unaccountable International Institutions: Legal Plurality, Social Movements and Rights
of Local Communities to Common Property Resources’, (2003) 44 Archive of European Sociology 27.
55
O. Stuenkel, The BRICS and the Future of Global order (2015); W. Burke-White, ‘Power Shifts in International Law:
Structural Realignment and Substantive Pluralism’, (2015) 56 Harv. Int’l L.J. 1; Dann, supra note 3, at 138; J. Humphrey
and D. Messner, ‘China and India as Emerging Global Governance Actors: Challenges for Developing and Developed
Countries’, (2006) 37 IDS Bulletin 107.
56
UNDP, Human Development Report 2013: The Rise of the South: Human Progress in a Diverse World, (2013).
(ODA) pale in comparison.57 Emerging powers increasingly mobilize domestic capital for invest-
ments at home: In 2010, the Brazilian Development Bank (BNDES) disbursed the equivalent
of roughly US$100 billion, surpassing the World Bank’s worldwide disbursements of US$40 bil-
lion by far.58 Even as they integrate into the global economy, China, Brazil and India promote a
variation of the ‘developmental state’ as an alternative to the Washington Consensus-type devel-
opment model.59 China has been at the forefront of this development.60 Emerging economies have
become capital exporters and development donors themselves. In the relations with recipients,
they at least rhetorically emphasize sovereignty and non-intervention, offering an alternative
to established donors’ conditionalities and infusing competitive pressures into the system.61
Indeed, they assert an alternative vision for wider international law that is more sovereignty ori-
ented and less individual-centred, as epitomized by the Declaration of the Russian Federation and
the People’s Republic of China on the Promotion of International Law, signed in Beijing on 25
June 2016.62 The new powers want to move from the position of norm takers to that of norm
shapers.63
While the rise of emerging powers has thus ended the unipolar moment of the 1990s, the new
multipolar system does not end multilateralism but rather transforms its nature. The BRICS coun-
tries pursue a double strategy: They combine engagement in established institutions with the cre-
ation of new competing outfits, trying to gain voice within the existing system but also contesting
it from without.64 This indicates a transition towards a more contested or competitive multilater-
alism.65 China exemplifies this development. On the hand, it increasingly engages with existing
multilateral institutions. Its own ecological problems have pushed it to embrace environmentalism
in regional trade agreements, and it emerged as a champion of the 2015 Paris Agreement after the
US’s exit.66 It has also stepped up its engagement with the World Bank, became an IDA donor in
2009, and increased its IDA contribution in the 2012 replenishment round.67
57
H. Janus, S. Klingebiel and S. Paulo, ‘Beyond Aid: A Conceptual Perspective on the Transformation of Development
Cooperation’, (2015) 27 Journal of International Development 155.
58
BNDES Annual Report 2010, available at www.bndes.gov.br/SiteBNDES/export/sites/default/bndes_en/Galerias/
RelAnualEnglish/ra2010/Rel_Anual_2010_ingles.pdf; World Bank, Annual Report 2010, available at siteresources.
worldbank.org/EXTANNREP2010/Resources/WorldBank-AnnualReport2010.pdf. To compare, in 2008 BNDES had dis-
bursed US$39 billion, BNDES Annual Report 2008, available at www.bndes.gov.br/SiteBNDES/export/sites/default/
bndes_en/Galerias/RelAnualEnglish/ra2008/rel_anual2008.pdf; the Bank had disbursed US$21.5 billion, World Bank
Group, Annual Report 2008, see siteresources.worldbank.org/EXTANNREP2K8/Resources/YR00_Year_in_Review_English.pdf.
59
C. Ban and M. Blyth, ‘The BRICs and the Washington Consensus: An Introduction’, (2013) 20 Review of International
Political Economy 241; G. Chin and R. Thakur, ‘Will China Change the Rules of Global Order?’, (2010) 33(4) The Washington
Quarterly 119.
60
S. Breslin, ‘China’s Emerging Global Role: Dissatisfied Responsible Great Power’, (2010) 30 Politics 52.
61
N. Woods, ‘Whose Aid? Whose Influence? China, Emerging Donors and the Silent Revolution in Development
Assistance’, (2008) 84 International Affairs 1205.
62
V. Churkin and W. Haitao, Letter dated 8 July 2016 from the representatives of China and the Russian Federation UN
Doc. S/2016/600. Cf. Burke-White, supra note 55.
63
A. Peters, ‘After Trump: China and Russia Move from Norm-Takers to Shapers of the International Legal Order’, EJIL
talk!, 10 November 2016, available at www.ejiltalk.org/after-trump-china-and-russia-move-from-norm-takers-to-shapers-of-
the-international-legal-order/.
64
See Zürn, supra note 9; O. Stuenkel, Post-Western World: How Emerging Powers are Remaking Global Order (2016);
S. L. Kasten, M. M. Pearson and C. Rector, ‘Invest, Hold up, or Accept? China in Multilateral Governance’, (2016) 25
Security Studies 142.
65
G. de Búrca, ‘Contested or Competitive Multilateralism? A Reply to Julia C. Morse and Robert O. Keohane’, (2016) 5
Global Constitutionalism 320.
66
On environmental clauses in China’s regional trade agreements see H. Gao, ‘China’s Evolving Approach to
Environmental and Labour Provisions in Regional Trade Agreements’, ICTSD, 25 August 2017, available at www.ictsd.
org/opinion/china-3. See generally A. Najam, ‘Developing Countries and Global Environmental Governance: From
Contestation to Participation to Engagement’, (2005) 5 International Environmental Agreements 303.
67
Xu, supra note 10, at 230.
Despite this increased engagement, the Chinese voting share in the Bank has remained largely
unchanged. Resistance from developed countries, country classifications and conservative indica-
tors for economic growth impeded substantial shifts in voting power, and US Congress refused to
ratify the Bank’s 2010 ‘voice’ reform altogether until late 2016.68 At the IMF, China did not fare
much better: Even though the IMF’s voice reform went ahead, China’s voting share reached only
3.81 per cent, a fraction of its 12.4 per cent share in world GDP.69 In fact, from 2009 to 2014
developed countries actually gained voting shares in the Bretton Woods institutions relative to
their share of world GDP.70 When a new President was set to be appointed at the Bank in
2012, the US government again imposed its own candidate, Jim Yong Kim, against increasing
resistance from recipient countries.
Against this background, China started to pursue an alternative strategy of contestation through
counter-institutionalization. This strategy aims at creating competing multilateral institutions,
which not only help bypass the established institutions but also put competitive pressure on them.
The Chinese government has led the establishment of the Asian Infrastructure Development Bank
(AIIB) and of the New Development Bank (NDB) by the BRICS states.71 China holds the largest
share in the AIIB and is on a par with the other BRICS members of the NDB, hosts both headquar-
ters (in Beijing and Shanghai, respectively), and the Chinese Jin Liqun became the first AIIB presi-
dent (whereas the NDB is headed by an Indian national). Attempts by the US government to prevent
its allies from joining the AIIB failed embarrassingly.72 The AIIB and the NDB offer not only a
competing source of capital investment but also an alternative development model based, at least
rhetorically, on a stronger role for sovereignty and the state.73 This puts the Bank’s business model
under economic pressure, given the importance of rising powers as clients, and also challenges the
Bank’s normative role. This double challenge posed a dilemma for the Bank and for its Safeguards
reform: Can the Bank compete as an efficient lender while at the same time retaining its leadership
role as a global norm-setter?
The task of the Safeguards reformers was further complicated by the fact that counter-institu-
tionalization by rising powers was not the only form of contestation the Bank experienced. The
increased normative and epistemic authority of the Bank also faced criticism and protest from a
range of societal actors. CSOs continued the critical observation of the Bank, focusing not only on
its projects but also on its normative role and knowledge activities.74 Trade unions criticized the
Bank’s approach to labour rights, embodied in its influential Doing Business indicators.75
68
R. H. Wade and J. Vestergaard, ‘Protecting Power: How Western States Retain The Dominant Voice in The World Bank’s
Governance’, (2013) 46 World Development 153; R. H. Wade, ‘Emerging World Order? From Multipolarity to Multilateralism
in the G20, the World Bank, and the IMF’, (2011) 39 Politics & Society.
69
R. Biswas, Reshaping the Financial Architecture for Development Finance: The New Development Banks, LSE Global
South Unit Working Paper No. 2 (2015).
70
R. H. Wade and J. Vestergaard, ‘Still in the Woods: Gridlock in the IMF and the World Bank Puts Multilateralism at Risk’,
(2015) 6 Global Policy 1.
71
X. Wu, ‘Friendly Competition for Co-Progressive Development: The Asian Infrastructure Investment Bank vs. the
Bretton Woods Institutions’, (2017) 16 Chinese Journal of International Law 41; D. Chow, ‘Why China established the
AIIB’, (2016) 49 Vanderbilt Journal of Transnational Law 1255.
72
Eventually most OECD countries signed on, except for the US and Japan.
73
Wu, supra note 71; O. Stuenkel, ‘New Development Banks as Horizontal International Bypasses: Towards a Parallel
Order?’, (2017) 111 AJIL Unbound 236; P. Y. Lipscy, ‘Explaining Institutional Change: Policy Areas, Outside Options,
and the Bretton Woods Institutions’, (2015) 59 American Journal of Political Science 341.
74
T. Kramarz and B. Momani, ‘The World Bank as Knowledge Bank: Analyzing the Limits of a Legitimate Global
Knowledge Actor’, (2013) 30 Review of Policy Research 409; Bretton Woods Project, ‘The World Bank as a Knowledge
Bank: Selected Critical Comments’, 5 November 2001, available at www.brettonwoodsproject.org/2001/11/art-16309/;
L. Mehta, ‘The World Bank and Its Emerging Knowledge Empire’, (2001) 60 Human Organization 189.
75
P. Bakvis, ‘The World Bank’s Doing Business Report: A Last Fling for the Washington Consensus?’, (2009) 15 Transfer:
European Review of Labour and Research 419. See generally F. Ebert, ‘Labour Standards and the World Bank Group. Analysing
the Potential of Safeguard Policies for Protecting Workers’, in P. T. Stoll and H. Gött (eds.), Labour Standards in International
Economic Law (2017), 113.
Environmentalists levelled increasing criticism at the Bank’s approach to climate change and
brought cases against coal-fired power plants to the Inspection Panel.76 Human rights activists
mounted campaigns against displacement in Bank-financed resettlement projects.77 Overall, this
form of societal contestation led to an increasing politicization of Bank policy in general and of the
Safeguards reform in particular.78
3.2 The 2016 reform process and objectives: From incrementalism to systematic overhaul and
organized multi-stakeholderism
In light of this context, Bank management chose to frame the objectives of the Safeguards reform
as ‘enhancing development effectiveness’ in project financing. The stated objective of the new gen-
eration of Safeguards was to define aims and responsibilities more clearly, to develop an integrated
and uniform normative structure, to accommodate the different needs of the diverse borrowers,
and to cover additional environmental and social risks, for instance, in the domains of climate and
labour.79
The reform process lasted four years and involved not only intergovernmental negotiations but
also three public consultation rounds. In these hearings, representatives of governments, civil
society, indigenous groups, academia, and other stakeholders were consulted on different aspects
of the new Safeguards (objective and structure, the text of the first draft, and feasibility). They
involved around 8,000 stakeholders in 64 member states.80 This makes the Safeguards reform
the Bank’s most inclusive and transparent legislative process thus far and it is read by some
observers as an instance of global deliberative democracy.81 The organized multi-stakeholder pro-
cess is also a far cry from the incremental approach during the 1990s: The new ESF is the outcome
of a single legislative process and systematically covers all thematic areas and structural questions
considered relevant.
This participatory approach, however, also made consensus building difficult. The documen-
tation of the consultation feedback from representatives of various countries offers insights into
the contrasting positions taken during the negotiations.82 Generally speaking, civil society organ-
izations and donor states urged that protections standards be preserved or even raised. ‘No dilu-
tion’ became their rallying cry. In contrast, borrower states sought greater flexibility in the
implementation of the standards and greater autonomy for their own national legal systems.
Some thematic standards were particularly controversial in the negotiations, such as land acqui-
sition and resettlement, indigenous peoples and labour rights. Among the disputed structural
aspects were the introduction of a non-discrimination principle, explicit references to human
rights, and the use of borrower country systems.83 In the consultations, participants from
China emphasized its role as third-largest shareholder well positioned to play a ‘constructive role’;
they claimed to speak for developing countries when they argued that many of them were frus-
trated at the onerous work required to fulfil the standards. They insisted that the Bank stick to its
76
World Bank Inspection Panel, ESKOM Investment Support case (Report No. 64977-ZA, issued 21 November 2011).
Generally Park, supra note 19.
77
Maitra, supra note 12; Serageldin, supra note 50; Randeria, supra note 54.
78
On politicization as contestation see Zürn, supra note 9, at 11.
79
World Bank, The World Bank’s Safeguard Policies Proposed Review and Update: Approach Paper (2012), 7–9.
80
World Bank, Review and Update of the World Bank’s Safeguard Policies: Environmental and Social Framework (2016),
9–11. On the law-making process of the World Bank in general see Dann, supra note 3, at 188; Hunter, supra note 17.
81
R. Houghton, ‘Looking at the World Bank’s Safeguard Reform through the lens of deliberative democracy’, in this issue
(doi:10.1017/S0922156519000281), with further details on the consultations.
82
Negotiating positions are in part documented on the consultations website of the World Bank, available at consultations.
worldbank.org/consultation/review-and-update-world-bank-safeguard-policies; Press releases on the position of the US gov-
ernment are available at www.treasury.gov/resource-center/international/development-banks/Pages/operational_policies.
aspx.
83
World Bank, supra note 80, at 11.
development mandate and not adopt a one-size-fits-all approach to borrowers.84 Participants

from India and Brazil also complained about excessive implementing cost.85 South African rep-
resentatives explicitly worried that with added requirements, the Bank risked becoming uncom-
petitive compared to the AIIB and the NDB.86 As a result, the final version of the ESF must be
viewed as a compromise package and the outcome of a complex attempt to reconcile the interests
of 189 states, particularly those of the main shareholders, while also satisfying CSOs in the North
and the South.
3.3 The outcome of the reform: Overview of the new structure

The outcome of the reform is a unified legal text, the ESF, whose structure differs from the pre-
vious Safeguards. Previously, they were spread over a total of nine OP/BPs.87 An OP typically
listed the duties of both the borrowers and the World Bank, as well as material standards and
procedural principles; the corresponding BP spelled out the procedural steps and the internal
responsibilities within the Bank. The new ESF differs in that it is a so-called ‘integrated framework’
that includes three components: A vision statement, an Environmental and Social Policy (ES
Policy), and ten Environmental and Social Standards (ESS).
The ‘Vision Statement’ is novel and has no equivalent in the old safeguard system.88 In this
statement, the World Bank expresses its commitment to the principles of ecological and social
sustainability and to the Universal Declaration of Human Rights.89 These principles apply to
all Bank activities, and not just to investment projects;90 in this respect, the scope of application
thus extends beyond the previous Safeguards, which only covered project financing. However, the
vision statement specifies no legally binding obligations. In fact, it has an aspirational thrust and
specifies a non-binding guidance – and potentially interpretive – function.91 The second compo-
nent, the ES-Policy, summarizes all the duties of the World Bank in one instrument, whereas
before they were scattered over a number of OP/BPs in no particular order.92 The third compo-
nent, the ten ESS, stipulate the obligations incumbent on the borrowers.
ESS 1–10 define the material standards of protection, procedural requirements, and individual
rights of the project-affected communities, which borrowers must comply with and whose fulfil-
ment the World Bank must supervise and guarantee. The new standards carry over numerous
environmental and social requirements from the previous Safeguards, modify some of the older
requirements, and introduce entirely new ones. Procedural rules concerning environmental im-
pact assessment are now extended to include social impacts (ESS1 – previously OP/BP 4.01).
84
World Bank, Review and Update of the World Bank’s Environmental and Social Safeguard Policies Phase 3 Feedback
Summary (China), 27 October 2015, available at the World Bank consultations website, supra note 82.
85
Summary (India), 5–6 November 2015, available at the World Bank consultations website, supra note 82; Review and Update
of the World Bank’s Environmental and Social Safeguard Policies Phase 3 Feedback Summary (Brazil), 1 March 2016, avail-
able at the World Bank consultations website, supra note 82.
86
Summary (South Africa), 1 December 2015, available at the World Bank consultations website, supra note 82.
87
Can be accessed at policies.worldbank.org/sites/PPF3/Pages/Manuals/Operational%20Manual.aspx.
88
However, OP 1.00 already obligates the bank to use a poverty-oriented development approach.
89
World Bank, ‘World Bank Environmental and Social Framework’, 1, para. 3, available at www.worldbank.org/en/projects-
operations/environmental-and-social-framework. For more details, see Section 4.2 below.
90
Ibid., para. 4.
91
World Bank Environmental and Social Framework, supra note 89, at ix, para. 2.
92
The Bank’s duties are further concretized in two additional legal acts: An ‘Environmental and Social Procedure’ defines
internal responsibilities and specifies procedural obligations within the management, e.g., risk classification, due diligence, and
monitoring. The ‘Bank Directive: Addressing Risks and Impacts on Disadvantaged or Vulnerable Individuals or Groups’
requires particular attention to the disadvantaged and vulnerable groups in project appraisal and compensatory measures.
Standards on land acquisition and resettlements (ESS5 – OP/BP 4.12), biodiversity (ESS6 – OP/BP
4.04, 4.36), indigenous peoples (ESS7 – OP/BP 4.10) and cultural heritage (ESS8 – OP/BP 4.11) are
carried over and in part modified. Newly formulated Standards include labour and working con-
ditions (ESS2), resource efficiency, environmental pollution, and climate change (ESS3), as well as
health and security of project-affected communities (ESS4 – in part in OP/BP 4.37). Finally, the
procedural rules for financial intermediaries (ESS9) and for stakeholder participation and infor-
mation (ESS10) are carried over and expanded in independent standards.
Like the old Safeguards, the ESS are not directly legally binding on the borrower but specify
conditions to be fulfilled before a loan agreement can be concluded and become legally binding
when they are incorporated into the loan agreements. This incorporation now takes the form of
a so-called Environmental and Social Commitment Plan (ESC-Plan), prepared in negotiations
between the Bank management and the government of the borrower country.93 The ESC-Plans
constitute the legal link that binds Bank regulations to borrowers’ duties. They identify specific
measures that borrower states must undertake to comply with the ESS in the execution of the
project, and lay the legal basis for corresponding information and control rights, as well as
rights to legal remedies, accorded to the Bank. The ESC-Plans consolidate in a single standard
document several types of plans under the old Safeguards that are now deemed mandatory for
all projects.94 The ESC-Plans are not just a technical, managerial feature of the ESF, but a deci-
sive legal locus where the relative bargaining power of Bank and borrower will play out in the
future.
4. The Safeguards reform as a reflection of competitive multilateralism

For a more in-depth analysis, we now return to the three dimensions used above to analyze the
original Safeguards. The new ESF reconfigures: (i) the relationship between the Bank and (some)
borrowing states; (ii) has clarifying as well as ambiguous effects on the legal role of individual; and
(iii) materially expands thematic integration while eschewing closer inter-institutional
co-ordination. Against the historical and conceptual background developed above, the question
is now how these changes reflect the new geopolitical context and the various forms of contestation.
4.1 Relationship between Bank and member states: Institutionalizing inequality in the
Safeguards
The relationship between the Bank and its borrowing member states was one of the main battle-
fields in the negotiations between donor states and Bank on one side and borrowing countries
(rising powers as well as weaker states) on the other side. The outcome of this battle now recon-
figures this relationship through two countervailing legal changes in the ESF: The first change is
the extension and intensification of Bank requirements for the implementation phase of the proj-
ect, which further curtails borrower state collective autonomy and expands Bank authority over
this hitherto problematic aspect of the Safeguards. The second change is a much more permissive
approach towards the use of country systems: The ESF makes it much easier to replace some or all
ESS with the national law of the borrower. This ‘escape clause’ is mainly aimed at emerging powers
with relatively strong legal systems and administrative capacities and significantly enhances their
93
Environmental and Social Policy in World Bank Environmental and Social Framework, supra note 89, at 19, paras. 46–8;
World Bank, supra note 80, para. 88.
94
The previous safeguards listed a series of optional plans, such as ‘Environmental Management Plans’ (OP 4.01, Annex C);
mandatory, were the so-called ‘Indigenous Peoples Plans’ (OP 4.10, Annex B) and ‘Resettlement Plans/Policy Frameworks’
(OP 4.12, para. 17, at 25).
flexibility and ownership. At the same time, it institutionalizes inequality between borrowing
states at the level of secondary law: In the future, Safeguards will not apply equally to all borrowing
members but discriminate between the strong and the weak among them.
The extension of Safeguards requirements for project implementation addresses the weak-
ness of compliance in the application of Safeguards. As analysed above, the first Safeguards
mostly focused on upstream regulation, i.e., had stringent requirements to be met before a loan
or grant agreement was approved but left compliance to the borrower.95 The ESF does not
change the basic model of Bank-financing combined with national execution, as this model
is fundamentally linked to the Bank’s identity and role as a financing institution, and not as
an administrative agency specialized in road construction, dam building, urban planning
etc.96 But ESS10 now requires the participation of stakeholders throughout the entire project
cycle, including the implementation phase. In addition, borrowers must institute project-based
grievance mechanisms which allow affected people to bring complaints on the ground in the
implementation phase.97 The ES-Policy stresses the duty of the Bank to continuously supervise
project implementation, in addition to the due diligence obligation in the preparation phase.98 If
taken seriously, these requirements go some way to addressing the implementation deficits of
the Safeguards – if they apply at all, that is.
This expansion of Bank requirements is contrasted by a second, potentially dramatic, change in
the ESF: The application of the ESF can now differ from borrower to borrower. The central
instrument to manage this is the use of country systems (UCS). UCS was previously applicable
only to pilot projects, under the restrictive conditions of OP 4.01 and thus, rarely implemented in
practice.99 In the Safeguards reform negotiations, China, India, Brazil, and South Africa emerged
as strong champions of the UCS. China used the language of ‘mainstreaming the use of national
systems’, indicating that it saw the use of its own law as the new rule rather than the exception.100
In a similar vein, South Africa demanded the Bank’s point of departure should be the host coun-
try’s environmental and social parameters.101 India declared that its own environmental and social
system was more robust than the proposed ESF.102 Brazil demanded even more flexibility in the
UCS than initially proposed.103
The ESF eventually adopted now offers more opening clauses facilitating the use of the country
system instead of the World Bank ES-Standards. This possibility also includes high-risk projects
and does not restrict the volume. The pre-condition for using country systems is that the envi-
ronmental and social standards of the country achieve ‘objectives materially consistent with’ the
ESS.104 This requirement is results-based. The Bank is required to check in advance if the requisite
outcome equivalence is present and, if necessary, it must agree on supplementary measures with
the borrower to develop capacity.105
95
See Section 2.2.1 supra; Bernstorff and Dann, supra note 14.
96
This role is changing, though, with the Bank’s new self-understanding as knowledge-bank. On this, see Riegner, supra
note 38, and in detail M. Riegner, Informationsverwaltungsrecht internationaler Institutionen (2017).
97
As per Environmental and Social Standard No. 10. For details see World Bank Environmental and Social Framework,
supra note 89, at 97.
98
World Bank Environmental and Social Framework, ibid., at 3.
99
The Independent Evaluation Group’s Safeguard Evaluation of 2010 cites a total of 15 such pilot projects in which the
country system was used at least in part. See Independent Evaluation Group, supra note 28, at 85–7.
100
World Bank, supra note 84.
101
102
World Bank, Feedback Summary (India), supra note 85.
103
World Bank, Feedback Summary (Brazil), supra note 85.
104
World Bank Environmental and Social Framework, supra note 89, at 6, para. 23; ibid., at 17, para. 19.
105
The criteria for this consistency test have not been further specified in the Environmental and Social Framework; the
management has only submitted a non-binding interpretation aid for assessing the environmental and social standards of the
borrower, see World Bank, ‘Information Note: Assessing the Borrower’s Environmental and Social Framework’ (Draft of 4
August 2016).
The use of borrower systems is potentially the most consequential change in the reform. The
increased use of the country system corresponds, on the one hand, to the principle of national
ownership and allows the Bank to adjust environmental and social project management to the
different capacities and needs of the borrower, as efficient elements of the country’s legal and
administrative systems can take the place of the corresponding parts of the ESS. It also provides
the Bank with leverage to raise standards with national law generally rather than promoting iso-
lated projects with high standards.106 Furthermore, given the diffusion of the Bank’s environmen-
tal and social standards into domestic legal systems, as described above, it seems logical from the
perspective of the Bank to assume that national law today is better able to handle complex projects
than it was 20 years ago.
On the other hand, allowing a too-generous handling of the opening clause carries the risk
that World Bank standards will be undermined. This can also represent a risk for project-
affected people and the environment, if they are not adequately protected under the country
system. How real this risk is depends on how generously the management interprets the crite-
rion of material consistency regarding country systems. If country law is to be applied, it is also
necessary to ensure that this is brought on par with the protection levels offered by the ESF
before the project begins to be implemented. Even if the Bank found national systems to guar-
antee material consistency, it remains important to continuously monitor this consistency dur-
ing the implementation phase and, where necessary, to strengthen country systems before such
risks can materialize. Previous experiences with the UCS show that national regulations and
processes, in particular in the social realm, are generally not as protective as the World
Bank standards.107 Likewise, effective law enforcement and compliance with rule of law prin-
ciples are not per se guaranteed.
Ultimately, the extension of UCS can be seen as a legal institutionalization of inequality in the
Safeguards regime. The application of the Safeguards, and thus borrower autonomy, now depends
on the capacity of legal systems, which must ensure ‘outcomes materially consistent with the ESS’;
the capacity of the national legal system thus becomes the criterion for differentiation among bor-
rowers. This criterion differs from the standard used in the voice reform at the level of primary
law, which depends on economic capacity as measured by share in the world economy. In sum,
rising powers have left this main battlefield in the negotiations with considerable success. Though
it is not openly laid down, it is to be expected that the domestic systems of stronger powers are
more likely to get approved as ‘materially consistent’ and hence exempted from the ESF. China
gets a better deal than Mali – and the collective autonomy of some is better protected than that of
others. This is also in the interest of the Bank, as it helps it to remain competitive and attractive to
its major clients, while still claiming a normative leadership role. Ultimately, UCS is also likely to
have facilitated compromises and solutions in other areas, especially with regard to the role of the
individual.
4.2 Role of the individual: Expansion and differentiation

The role of the individual and the protection of human rights were the central question for most of
the CSOs and Western donor states when the Safeguards reform began. The original Safeguards
had made tentative but important steps by introducing individual rights in the context of an
international institution in the first place and by establishing the Inspection Panel as an institutional
enforcement mechanism. The new ESF clarifies the Bank’s general commitment to human rights,
strengthens and expands prior procedural guarantees, and establishes new entitlements in
the areas of labour and non-discrimination. At the same time, enhanced UCS signifies a new
differentiation between individuals in borrower states with strong and weak national systems.
106
For more on that see Independent Evaluation Group, supra note 28, at 48.
107
Ibid., at 85–7.
This differentiation implies new ambiguities and potentially reduces greatly the role of individuals
and of the Inspection Panel as an accountability mechanism for stronger borrowers.
In a first for the Bank, the ESF Vision statement expresses an explicit commitment to human
rights.108 The inclusion of this commitment in the non-binding Vision Statement and the concrete
formulation represent a compromise that must be read against the backdrop of the non-political
mandate of the World Bank and diverging views on human rights among donors and borrowing
countries.109 China, in particular, had insisted that the Bank stick to its non-political development
mandate and flagged human rights, along with labour rights, as ‘politically very sensitive’. As the
reference to human rights is made only as a non-binding commitment, it does not live up to the
standards of the binding Human Rights Impact Assessments (HRIA), practiced, for instance, in
the UN Development Programme and other UN agencies.110
Yet the ESF represents a major step forward for human rights in two respects: First, human
rights are concretized through explicit reference to the Universal Declaration of Human Rights
(UDHR). This is significant because the UDHR guarantees not just economic, social, and cultural
rights but also civil and political rights. Previously, the Bank had always denied that civil and
political rights were covered by its legal mandate.111 Second, the wording of the commitment
– ‘prevent any negative impact on human rights’ – for the first time recognizes the dimension
of respect for human rights as relevant for the Bank itself. Previously, the Bank had only unequiv-
ocally recognized its role in supporting member states in the fulfilment of social and economic
rights and considered the respect dimension only in the event of gross violations by member
states.112 Now the Vision statement offers an additional argument to corroborate widespread legal
interpretation in academic writing, according to which World Bank is already under the obligation
to respect human rights by virtue of general international law. This interpretation holds that the
Bank is prohibited from aiding and abetting human rights infringements committed by its bor-
rowers, particularly by financing projects that are problematic from a human rights perspective.113
It is possible to build on this progress in the practical application of the ESF: the Vision Statement
opens up the possibility to interpret the Bank’s binding obligations in the ES-Policy in the light of
human rights law, an interpretation that the Inspection Panel already pursues in its own practice.
This will become relevant for interpreting, for instance, rules on non-discrimination and the pro-
tection of housing in resettlement processes.114
The individual ESS strengthen and expand the procedural and substantive entitlements for
project affected individuals and other stakeholders. ESS10 defines the notion of ‘meaningful
consultation’ with greater precision by integrating aspects of the Inspection Panel case law,
extends consultation requirements into the implementation phase, and introduces mandatory
108
World Bank Environmental and Social Framework, supra note 89, at 1, para. 3 reads: ‘In this regard, the World Bank’s
activities support the realization of human rights expressed in the Universal Declaration of Human Rights. Through the proj-
ects it finances, and in a manner consistent with its Articles of Agreement, the World Bank seeks to avoid adverse impacts and
will continue to support its member countries as they strive to progressively achieve their human rights commitments.’
109
World Bank, supra note 80, at 18–19, paras. 49–51.
110
UNDP, Social and Environmental Standards (2014), 9, para. 16; H. Aust, ‘The UN Human Rights Due Diligence Policy:
An Effective Mechanism against Complicity of Peacekeeping Forces?’, (2015) 20 Journal of Conflict and Security Law 61. On
human rights due diligence, see also R. Mares in this issue (doi:10.1017/S0922156519000244)
111
On the non-political mandate of the World Bank and its significance for human rights see Dann, supra note 3, at 267;
S. Killinger, The World Bank’s Non-Political Mandate (2003).
112
R. Danino, ‘The Legal Aspects of the World Bank’s Work on Human Rights: Some Preliminary Thoughts’, in P. Alston
and M. Robinson (eds.), Human Rights and Development: Towards Mutual Reinforcement (2005), 509; World Bank, Legal
Opinion of the Senior Vice President and General Counsel dated 11 July 1995, SecM95-707 (1995).
113
On the doctrinal justifications see W. van Genugten, The World Bank Group, the IMF and Human Rights: A
Contextualized Way Forward (2015); Dann, supra note 3, at 269; M. Darrow, Between Light and Shadow: The World
Bank, the International Monetary Fund and International Human Rights Law (2003); S. Skogly, The Human Rights
Obligations of The World Bank and The International Monetary Fund (2001).
114
On the protection of human rights in the previous safeguards see Naudé Fourie, supra note 33, at 260.
project-based grievance mechanisms.115 ESS5 on land acquisition requires borrowers to give

women due consideration and clarifies that forced evictions are prohibited unless all provisions
of national law and ESS5 have been fully complied with.116 ESS2 on labour for the first time estab-
lishes minimum standards for the protection of workers and bans child labour in Bank projects.117
ESS1 introduces mandatory social impact assessments for all projects and recognizes a non-
discrimination principle.118 This non-discrimination assessment is a novelty, and its inclusion
was controversial in the negotiations until the very end. In particular, member states were unable
to agree on a conclusive definition of discriminated and vulnerable groups. In light of that, ESS1
includes a footnote outlining some abstract criteria and giving non-exhaustive examples, namely
older people and minors.119 These criteria are somewhat specified in an internal Bank Procedure
and a Directive that concretize the Bank’s due diligence obligations.120 This non-discrimination
principle is an entry point for a human rights-conforming interpretation advocated above:
Protected groups can be identified by referring to the anti-discrimination provisions of interna-
tional human rights agreements ratified by the affected borrower state.121
The role of the Inspection Panel, a central mechanism to effectuate the Safeguards as an indi-
vidual rights regime, has become more ambiguous with the reform. On the one hand, the inclusion
of new rights expands the Panel’s role and ability to interpret them. On the other hand, the increased
possibility to escape the ESS and apply domestic law through the UCS mechanism may diminish its
reach significantly. This will depend on the role the Panel will play if country systems replace the
ESS. Two different interpretations are conceivable: a narrow interpretation would be that the Panel
restricts itself to examining whether the management was justified in assuming that country systems
achieved outcomes materially consistent with the ESS. This would restrict the scope of the
Inspection Panel considerably and empower Bank management.122 A second, wider, interpretation
would be that the Panel not only controls the consistency test but also investigates violations of
national laws and procedures insofar as they replace specific ESS. This would considerably enhance
the role of the Panel. The first, narrower, interpretation seems more in line with wording of the
Inspection Panel Resolution of the Board, which does not give the Panel a mandate for reviewing
115
World Bank Environmental and Social Framework, supra note 89, at 99–100, paras. 22–6. See, for the case law, A. Naudé
Fourie, The World Bank Inspection Panel Casebook (2014).
116
World Bank Environmental and Social Framework, supra note 89, at 56, para. 18 and 59, para. 31. On ESS5, see also
M. Brunori, ‘Protecting the access to land for indigenous and non-indigenous communities: A new page for the World Bank’,
in this issue (doi:10.1017/S0922156519000232)
117
Cf. F. Ebert and M. V. Cabrera Ormaza, ‘The World Bank, human rights, and organizational legitimacy strategies: The
case of the 2016 Environmental and Social Framework’, in this issue (doi:10.1017/S0922156519000268)
118
Ibid., at 23, para. 5b.
119
Ibid., at 19. Footnote 28 on this page reads: ‘Disadvantaged or vulnerable refers to those who may be more likely to be
adversely affected by the project impacts and/or more limited than others in their ability to take advantage of a project’s
benefits. Such an individual/group is also more likely to be excluded from/unable to participate fully in the mainstream con-
sultation process and as such may require specific measures and/or assistance to do so. This will take into account consid-
erations relating to age, including the elderly and minors, and including in circumstances where they may be separated from
their family, the community or other individuals upon which they depend.’
120
The Bank Directive makes it mandatory for the Bank staff to require the borrower to assess disadvantaged and vulnerable
groups and, if necessary, to also consult independent experts in the field; in addition, the Directive also provides a non-
exhaustive list of possible grounds for discrimination (including sex, ethnicity and sexual orientation), see Information
Note, Sec. II para. 1: ‘by virtue of, for example, their age, gender, ethnicity, religion, physical, mental or other disability, social,
civic or health status, sexual orientation, gender identity, economic disadvantages or indigenous status, and/or dependence on
unique natural resources’.
121
They include, in particular, race and skin colour, sex, religion, political orientation, national or social origin, property,
and birth, see 1966, International Covenant on Civil and Political Rights, 999 UNTS 171, Art. 26 1966, International Covenant
on Economic, Social and Cultural Rights, 993 UNTS 3, Art. 2(2); 1965, International Convention on the Elimination of All
Forms of Racial Discrimination, 660 UNTS 195, Art. 1; 1979, Convention on the Elimination of All Forms of Discrimination
Against Women, 1249 UNTS 13, Art. 1.
122
Critical N. Bugalski, ‘The Demise of Accountability at the World Bank’, (2016) 31 American University International
Law Review 1, at 32, 35.
compliance with national law. On the other hand, oral statements by the Bank’s Operations Policy
Country Services department (OPCS) seem to favour the second, wider, interpretation. Given these
ambiguities introduced by the Safeguards reform, the Bank announced a separate reform process of
the Inspection Panel in fall 2017, which might bring clarification on this point.
In sum, the overall trend is ambivalent. On the one hand, donor countries and CSOs seem to have
stood their ground in this second negotiation battlefield. They have not only defended most pre-
existing individual entitlements but also succeeded in expanding them in the ESS and in including
an explicit reference to human rights in the Vision statement. The latter is a major achievement for
CSOs, even though their demands had gone much further. On the other hand, the Vision statement
is non-binding and the entitlements in the ESS potentially have limited application if country sys-
tems are used widely, in which case the Inspection Panel’s role is also likely to be diminished. In fact,
the provisions on the role of the individual extend the inequality between weaker and stronger mem-
ber states to the citizens of those states, with reverse effects: Citizens in Mali will be better protected
under the ESF than under the old Safeguards. Citizens in China and India will not be able to rely on
international protection to the same extent as before. Where country systems are applied, all will
depend on the effective protection of individual rights in national legal systems.
4.3 Thematic coverage: Material integration, inter-institutional fragmentation

The last dimension, that of thematic coverage of the Safeguards and of integration vs. fragmenta-
tion, also embodies some significant change. The ESF covers a range of additional risks and issues
and brings the Bank materially closer to other international legal regimes. In contrast to this
material integration, fragmentation largely remains at the institutional level.
The expansion of thematic coverage occurred in particular with ESS2 on labour and with ESS3
in respect of climate change. ESS3 for the first time adopts explicit guidelines for the reduction of
greenhouse gases in World Bank financed projects.123 China had agreed with this standard, simply
demanding that ‘thresholds be acceptable to developing countries’, whereas Brazil suggested an
even stronger alignment with the international climate regime, especially the Paris Agreement.124
Enhanced convergence was also achieved in ESS7 on indigenous people, which is now largely
equivalent to procedural and material standards of the International Labour Organization
(ILO)’s Indigenous and Tribal Peoples Convention, 1989 (No. 169) and the UN Declaration
on the Rights of Indigenous Peoples, without expressly referring to them. In particular, ESS7 in-
troduced the requirement of Free, Prior and Informed Consent (FPIC), in cases where indigenous
land rights or cultural goods are particularly affected or in the event of impending resettlements.125
In contrast, ESS2 on Labour and Working Conditions proved to be among the most divisive
issues in the negotiation process.126 Under the old Safeguards, the World Bank did not have a
corresponding standard, and many borrowers strongly opposed the introduction of strong labour
standards significantly exceeding their domestic labour law protections. China, in particular,
argued that the Bank’s labour standards needed to be matched with the ‘level of development
of the country’ and should not be used as a tool to intervene in the political sphere.127 A particu-
larly controversial aspect in the negotiations was the relationship of ESS2 to the ILO’s minimum
international law standards. Even if the Bank claims that the final ESS2 embodies the ‘core
principles of ILO Fundamental Principles and Rights at Work’,128 no direct references are made
123
World Bank, supra note 89, ESS3 Resource Efficiency and Pollution Prevention and Management, paras. 2, 13, 15–16.
124
World Bank, Feedback Summary (Brazil), supra note 85; World Bank, Feedback Summary (China), supra note 84.
125
On these aspects, see also Ebert and Cabrera Ormaza, supra note 117, and Brunori, supra note 116. On international law
protections for land rights accorded to the indigenous peoples see D. Inman, ‘From the Global to the Local: The Development
of Indigenous Peoples’ Land Rights Internationally and in Southeast Asia’, (2016) 6 AsianJIL 46.
126
See in detail on this standard Ebert and Cabrera Ormaza, supra note 117; Brunori, supra note 116.
127
128
World Bank, supra note 80, para. 95.
in the wording of ESS2 to concrete ILO standards; instead, the Standard repeatedly refers to
national law, without requiring national law to be compatible with ILO minimum standards.
This is particularly evident in collective labour law: If freedom of association of workers is not
guaranteed in the borrower state, this will not prevent project financing.129
Compared to the original Safeguards, the ESF has expanded substantive convergence with
other norms of international law and re-integrated the Safeguards with other international legal
regimes to some extent. One factor that contributed to this result was the inclusion of other
international institutions in the consultation process. At the drafting stage, some inter-institutional
co-ordination thus occurred. However, the application of the Safeguards in daily practice remains
characterized by inter-institutional fragmentation: The Safeguards themselves do not stipulate any
requirements for consultation with other international institutions in the application of the stand-
ards, nor do they prescribe interpretation according to the principle of systematic integration or
require taking into account interpretations of parallel norms by other institutions, human rights
mechanisms or international courts and tribunals. The Bank, thus, retains full authority to inter-
pret its standards subject to its own logic and constraints. At the same time, a different form of
inter-institutional co-operation might increasingly shape the global order of the twenty-first
century: The Bank has recently concluded co-financing agreements with the AIIB making the
new multilateralism look much less competitive than one might have thought.
5. Conclusion
The World Bank’s new environmental and social Safeguards are a reflection of the new geopoliti-
cal context in which the Bank operates. This context is best described as competitive multilater-
alism. For the Bank and the ESF process, this competition had several elements: Political
contestation by rising powers, especially by China through the foundation of the AIIB and
NDB; economic competition from other lenders (private banks, philanthropic lenders, national
agencies of rising powers); and politicization through the increased observation and criticism by
CSOs. The new ESF is one element of several reforms with which the Bank tries to reposition itself
in this environment. These reforms include the new Safeguards and other elements of secondary
law such as a new lending instrument, the Program for Results, a new Access to Information
Policy, and the formalization of knowledge products.130
The common denominator of these repositioning efforts and general answer to this new con-
text seems to be a strategy of cautious adaptation, which ultimately confirms institutionalized
inequality. This much less affects primary law and the institutional structure of the Bank, such
as voting rights and the selection of its president. One could say that the Bank avoids changes
in the ‘engine room’, i.e., in institutional or power structure. Instead, institutional inequality is
now introduced into secondary law Safeguards through the UCS. The overall intention of these
reforms seems to be to satisfy new international forces, namely rising powers and civil society,
without cutting too deeply into the flesh of established structures.
A comparison of old and new Safeguards along our three analytical categories allows three
tentative conclusions on the evolution of global order and the role of international law in it.
First, the Safeguards reform has strengthened member state sovereignty in those cases where
country systems are used: international standards retreat and national law takes centre stage.
At the same time, this strengthened sovereignty is an unequal one because only stronger bor-
rowers will enjoy this privilege whereas weaker borrowers are subject to broadened and deepened
standards of the Bank. Interestingly, the legal criteria for differentiating between strong and weak
129
Environmental and Social Standard No 2, in World Bank Environmental and Social Framework, supra note 89, at 33,
para. 16.
130
Riegner, supra note 38; M. Malli, ‘Assessing Capacity Development in World Bank Program-for-Results Financing’,
(2014) 47 Verfassung und Recht in Übersee 250.
depends on the strength of the respective legal and administrative system – and not economic
performance, which is the criterion for weighted voting in primary law. This shift from economics
to law might be the ultimate victory of the Bank’s good governance agenda: Sovereignty becomes
contingent upon good governance. The Bank has, thus, repositioned itself as the arbiter of sover-
eignty. This indicates that member state sovereignty and the Bank’s international authority are not
in a zero-sum relationship: The Bank may have lost financial leverage but it has successfully built
on its epistemic and legal authority in the Safeguards reform.
A similar dynamic can be observed with respect to the second analytical dimension, the role of
individuals. While individual entitlements in the new ESF have been expanded, fewer individuals are
likely to enjoy these expanded rights, as UCS will become the norm at least in stronger borrowers
and hence individual entitlements based on the ESF retreat. This does not necessarily mean than
individuals are worse off: national systems may offer equivalent (or even better) protection, at least
in some cases. Conversely, expanded international rights do not necessarily improve the situation of
individuals on the ground. To the contrary, critical legal scholars have long pointed out that ‘main-
streaming’ individual rights, and particularly human rights, in international institutions may muffle
their emancipatory potential and actually result in institutional self-empowerment. Critics might be
wary of the Bank deploying its epistemic and legal authority in ever new areas of rights such as
labour, now empowered by the ESF. They may, for instance, discern a tendency to depoliticize la-
bour rights through a focus on individual protections at the expense of collective mobilization rights.
Finally, the third dimension points to substantive integration but institutional fragmentation of
international legal regimes. This may reinforce international norms, but given their indeterminacy,
institutional interpretations will matter greatly. Hence, the enhanced interpretive reach of the Bank
may ultimately reinforce fragmentation unless the Bank engages in a meaningful dialogue with com-
petent institutions like the ILO, UN human rights bodies, and climate governance actors.
Taken together, the developments in these three analytical dimensions also point to conclu-
sions for the role of international law in the new global order more generally. For one, legalization
continues: borrowers and donors continue to choose the form of law to negotiate interests and
express compromise. The Bank continues to use law in a functionalist logic: Reforming the
Safeguards was about effectuating its development mandate. What changes is the nature of
law and of the lawmaking process: In terms of form, secondary law becomes the decisive locus
for negotiating and making global norms. Process-wise, organized multi-stakeholderism has
replaced state-led lawmaking dominated by powerful donors. Substance-wise, the universalization
of ‘Western’ norms through international lawmaking is yielding to a pluralization of international
law, which becomes normatively and ideologically more differentiated and more complex.
Whether this increases legitimacy remains an open question.
Finally, through the lens of the Safeguards reform, the debate about unipolar vs. competitive
multilateralism requires some differentiation. On the one hand, the Safeguards reform confirms
emerging powers’ double strategy of continued engagement in old institutions combined with the
creation of new ones. On the other hand, it seems less clear that the new multilateral banks like the
AIIB and the MDB will actually compete with the World Bank across the board. Early practice also
indicates co-operation in the form of co-financing agreements, and the AIIB has emulated the
Bank to some extent by establishing its own set of social and environmental standards that
are not, at least on paper, indicative of a fully-fledged race to the bottom. In any event, the
Bank retains a competitive advantage in respect of its own epistemic authority and legal expertise,
which the Safeguards reform is likely to enhance. Reports on the death of World Bank are, thus,
greatly exaggerated. Its role as a lender may diminish, but its international authority as a norm-
setter and epistemic actor is likely to endure under new geopolitical conditions.
Cite this article: Dann P. and Riegner M (2019). The World Bank’s Environmental and Social Safeguards and the evolution of
global order. Leiden Journal of International Law 32, 537–559. https://doi.org/10.1017/S0922156519000293

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Leiden Journal of International Law (2019), 32, 537–559

INTERNATIONAL LAW AND PRACTICE: SYMPOSIUM ON THE WORLD

The World Bank’s Environmental and Social Safeguards

1. Introduction: The Safeguards as a lens on the evolution of global order

2. First generation Safeguards – in the first generation of global governance

2.2.2 Role of the individual: Rights and quasi-judicial accountability

2.2.3 Thematic coverage: Fragmentation and integration of international legal regimes

2.3 Diffusion: The Bank as global norm-setter

3. The 2016 Safeguards reform: Context, process and outcome

development mandate and not adopt a one-size-fits-all approach to borrowers.84 Participants

3.3 The outcome of the reform: Overview of the new structure

4. The Safeguards reform as a reflection of competitive multilateralism

4.2 Role of the individual: Expansion and differentiation

project-based grievance mechanisms.115 ESS5 on land acquisition requires borrowers to give

4.3 Thematic coverage: Material integration, inter-institutional fragmentation

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