Module2 Print
Module2 Print
Topic: Welcome
Topic: Policy Overview
Topic: Due Diligence Through the Project Cycle
Topic: Special Applications
Topic: Use of the Borrower’s Environmental and Social Framework
Topic: Addressing Risks and Impacts on Disadvantaged or Vulnerable
Individuals or Groups
Topic: Summary
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The Environmental and Social Policy and the Directives described in this
module detail responsibilities for World Bank staff.
Learning Objectives
Welcome to Module 2 - Environmental and Social Framework, Policy and
Directives. The policy details the responsibilities of the World Bank related to
implementation of the Environmental and Social Framework.
By the end of this module, you will be able to:
Describe the World Bank’s due diligence responsibilities in relation to the
Environmental and Social Framework
Outline how the World Bank carries out and documents its due diligence at
different stages of the project cycle
Explain how the World Bank provides advice and guidance to the Borrower
with respect to the Environmental and Social Standards or ESS
Describe how the World Bank supports the use of the Borrower's
framework in the assessment, development, and implementation of projects
Explain responsibilities of the World Bank staff under the Bank Directive on
Addressing Risks and Impacts on Disadvantaged or Vulnerable Individuals
or Groups
Recognize some helpful approaches, mindsets and behaviors that are key
for successful implementation of the Environmental and Social Framework
Support the Borrower in carrying out early and continuing engagement and
meaningful consultation with stakeholders, in particular affected
communities
Assist the Borrower in identifying appropriate methods and tools to assess
and manage the potential environmental and social risks and impacts of
projects
Agree with the Borrower on the conditions under which the World Bank is
prepared to provide support to a project (as set out in the Environmental
and Social Commitment Plan)
Monitor the environmental and social performance of a project in
accordance with the Environmental and Social Commitment Plan (ESCP)
and the Environmental and Social Standards
Overview Assessment
To support increasing use and strengthening of the Borrower's framework, the
Bank may, at the request of the Borrower, conduct an overview assessment of
the Borrower’s existing policy, legal and institutional framework for addressing
environmental and social risks and impacts, with the objective of identifying
aspects of the existing framework that can be strengthened, and the capacity
building needed to support this.
The overview will not be a prerequisite for the use of all, or part of, the
Borrower’s framework for a specific project. However, where completed, it will
inform the Bank’s assessment of the Borrower’s framework.
Why Does the World Bank Undertake Environmental and Social Due
Diligence of Proposed Projects?
Teresa, the new Task Team Leader for an irrigation and drainage rehabilitation
project, is seeking advice from Aisha, the Senior Environmental Specialist,
regarding environmental and social due diligence at Project Concept Note
stage.
In the meeting this morning, you said something about the due diligence
aspects of the World Bank Environmental and Social Policy.
Could you please tell me a bit more about it? I know that due diligence is about
avoiding unintentional harm to people and the environment.
You’re absolutely right, but it goes a bit beyond that. Here, let me show you in
the Policy itself.
These are the specific objectives of the World Bank’s environmental and social
due diligence process for investment projects:
OK. Let’s look first at what is required at the project concept stage.
Risks
Environmental and social risk is a combination of the probability of certain
hazard occurrences and the severity of impacts resulting from such an
occurrence.
No, this is different. We won’t be using the A/B/C categories any more. Those
categories were based only on the nature and scale and potential risks of the
project itself.
Among other things, we now take a wider range of factors into account, and
the risk classification can be changed over the life of the project.
If new risks emerge during implementation the rating may be increased. It can
also be reduced if risks that were identified during preparation don’t materialize
during implementation or turn out to be less significant than we anticipated.
This approach brings the management of environmental and social risk in line
with the rest of the World Bank’s risk management processes.
Beyond the inherent project risks, you should consider the project’s context
and the capacity and commitment of the Borrower to manage environmental
and social risks and impacts.
So you mean that the same project that is classified as risky in one country
might be less risky in a different one?
However, the same project would be less risky if it is carried out in a country
where the laws are strong and enforced and there is sufficient technical
capacity to manage the materials.
Knowledge Check
Can you identify any other factors that could be important in determining risk?
Here is the World Bank Environmental and Social Framework for your
reference.
Correct Choice
Whether the country has a strong legal framework for that type
of project
Not really. The risk classification should be reviewed on a regular basis during
preparation and appraisal, and also during implementation, and it should be
revised upwards or downwards as needed.
This is important as it will provide the team and World Bank management with
a current assessment of the risk which reflects more closely the reality on the
ground.
This will in turn enable the team and the World Bank to shift resources as
necessary to support the project.
Thanks!
That was very helpful.
Hi, I’ve just been assigned to be the social development specialist for this
irrigation and drainage rehabilitation project, and I’ve been going through the
Project Concept Note.
Mitigation Hierarchy
This is an internationally accepted tiered approach to addressing potential
risks and impacts on a project. The steps are sequential but iterative, as new
information from sources such as environmental and social assessment or
stakeholder input may make it appropriate to revisit an earlier step:
1. Anticipate and avoid the risk and impact
2. Where avoidance is not possible, minimize or reduce risks and impacts to
acceptable levels
3. Once risks and impacts have been minimized or reduced, mitigate
4. Where significant residual impacts remain, compensate for or offset them,
where technically and financially feasible
The Borrower will implement Steps 1 to 3 (avoidance, minimization and
mitigation) to address, as far as possible, the environmental and social risks
and impacts of a project.
The fourth step of the Mitigation Hierarchy is to take measures to compensate
for or offset significant residual adverse impacts, where technically and
financially feasible. However, for many social and some environmental impacts
it may not be possible or appropriate for certain residual impacts to be offset or
compensated.
The Project Appraisal mission is coming up in a few weeks and I just wanted to
run through things with you to make sure I’m fully prepared for it.
I’m sure you know that you will need to confirm that the Borrower has provided
sufficient information to stakeholders on the project’s potential risks and
impacts, as part of its stakeholder engagement process.
OK. Is there anything the World Bank needs to disclose prior to Project
Appraisal?
Has the environmental and social assessment report been disclosed on the
World Bank’s external website?
This is not necessarily required for a Low or Moderate Risk project such as this
one, although it would be for a project classified as Substantial or High Risk.
No, that’s fine. The ESF provides the flexibility to disclose draft documents as
long as they provide adequate information to inform stakeholder engagement
and World Bank decision making. The final draft should be disclosed at a later
point, when it is ready.
What if there are not enough details about the project investments prior to
Project Appraisal to be able to provide this type of documentation?
including the timetable and as many other details as possible, and then
explaining this in the Project Appraisal Document.
Again, this applies specifically for Substantial Risk and High Risk projects.
Hi, Giles. I’m glad I saw you. I wanted to let you know that the Board approved
the project last week.
I wonder if we could get together later for a short meeting. I would like to ask
for your advice regarding my team’s responsibilities for due diligence during
project implementation.
It’s true that with the Environmental and Social Framework, the World Bank is
putting greater emphasis on our responsibility for more continuous monitoring
and implementation support relating to the environmental and social
performance of projects.
Maintaining close attention over the whole of the project’s life cycle is an
important element of risk management.
SUMMARY
Monitoring and implementation support of the environmental and social
performance of projects throughout the project’s life cycle is an important
element of risk management.
Monitoring and implementation support should be based on:
o the Environmental and Social Commitment Plan
o any specific environmental and social management plans that have
been prepared or will be prepared during project implementation
o information obtained from missions and reporting, as well as from
other resources, such as civil society
Alternative Arrangements
There are four circumstances under which the Borrower can use alternative
arrangements, rather than applying the Environmental and Social Standards
directly:
Where, following an assessment by the World Bank, the World Bank and
the Borrower have agreed to use all or part of the Borrower’s framework for
the project
Where the World Bank is jointly financing a project with other multilateral or
bilateral funding agencies, and all parties agree to use a Common
Approach
Where the World Bank is supporting a project involving a Financial
Intermediary, which has been or will be receiving financing from other
multilateral or bilateral funding agencies
Where a World Bank-supported project involves multiple subprojects
Alternative arrangements may be used as long as risks and impacts of the
project will be addressed, and the project is able to achieve objectives
materially consistent with the Environmental and Social Standards.
Common Approach
Under the Common Approach, the World Bank can agree with multilateral and
bilateral agencies and the Borrower on a single set of requirements for the
assessment and management of environmental and social risks and impacts
of the project, as long as it will enable the project to achieve results that are
materially consistent with the objectives of the Environmental and Social
Standards. The World Bank will also coordinate with these partners so that just
one set of project-related documents and materials can be disclosed for
stakeholder engagement, if possible. The World Bank may also choose to rely
on the environmental and social due diligence and supervision provided by
another co-financing agency.
When the World Bank agrees to rely on another co-financing agency’s due
diligence process, this must be documented in written agreements with the
agency and the Borrower. These agreements must ensure that the World Bank
is kept adequately informed on an ongoing basis of:
The status of the project’s compliance with the agreed Environmental and
Social requirements
Any material changes to the co-financing agency’s environmental and
social policies and procedures
Financial Intermediaries
In the case of jointly-financed Financial Intermediaries, the World Bank may
agree to rely on the requirements of the other agencies for the assessment
and management of environmental and social risks and impacts of the project,
including the institutional arrangements that the Financial Intermediary has
already established. Following review by the World Bank, a Financial
Intermediary may be required to enhance its Environmental and Social
Management System if the World Bank considers it necessary to ensure
results materially consistent with the Environmental and Social Standards.
To assess the Borrower’s framework, the World Bank has to look at what the
Borrower has in place for the preparation and implementation of the project,
and how this addresses the environmental and social risks of the project. This
means that the Bank should look at:
The policy, legal and institutional framework, including national, subnational
or sectoral implementing institutions as relevant to the risks and impacts of
the project
Applicable laws, regulations, rules and procedures
Implementation capacity
Track record of implementation on previous projects
The World Bank will engage with relevant stakeholders so that their views can
inform the assessment, and may consider recent studies, reviews and other
assessments relevant to the proposed project. When an assessment has been
completed, the Bank will disclose a summary of the assessment on its website.
What are the key elements to keep in mind while assessing the Borrower’s
environmental and social framework?
What happens if the World Bank’s assessment concludes that the Borrower’s
environmental and social framework cannot enable the project to achieve
objectives that are materially consistent with the Environmental and Social
Standards?
In some cases, the World Bank may conclude that the Borrower’s framework
can be used for implementation of the project if some specific gaps are filled.
This may involve strengthening any element of the Framework-policies, laws or
regulations, or institutional capacity for implementation or monitoring and
enforcement. Specific “gap-filling” measures should be agreed with the
Borrower and set out in the Environmental and Social Commitment Plan,
including appropriate timelines and indicators.
In other cases, the World Bank and the Borrower may agree that key gaps
cannot realistically be filled in a time frame that is relevant to the project, and
that use of the Borrower’s framework is therefore not appropriate for that
project.
The final decision as to whether or not the Borrower’s framework will be used
for a given project in place of the whole or part of the Environmental and Social
Standards lies with the World Bank (specifically, the Chief Environmental and
Social Standards Officer).
Knowledge Check
The Scenario
A Borrower has proposed to use its own environmental and social framework
to implement a slum upgrading project which will involve demolishing about six
hundred informal residences and businesses, clearing and cleaning the 200
hectare site, and constructing two modern, low income public housing
complexes on that site. It is expected that most of the new residences will be
occupied by the former residents of the slum area, who will qualify for rent
subsidies. The World Bank project team carried out an assessment of the
Borrower’s framework relevant to the project and concluded that the country’s
environmental laws and regulations and institutional capacity provide an
adequate basis for achieving the Environmental and Social Standards.
However, the applicable national laws on housing and on land tenure and
expropriation only allow for compensation to property owners with legal titles,
and only provide rent subsidies to married couples and single mothers who are
either widows or legally divorced. These are identified as gaps between the
Borrower’s framework and ESS5.
Correct Choice
Inform the Borrower that the Bank will not support the project
until the applicable laws have been changed
Advise the Borrower that the Bank will not support the project
unless it is revised to avoid any needs for land or property
acquisition
X Invite the Borrower to work with the World Bank to identify and
agree on measures and actions to address these gaps
Knowledge Check
Where the World Bank has agreed to apply a common approach or to rely on
the requirements of other agencies, it may choose to rely on the environmental
and social due diligence carried out by those agencies for project preparation
and appraisal but not for supervision and implementation support.
This statement is:
Correct Choice
True
X False
The term “disadvantaged or vulnerable” refers to those who may be more likely
to be adversely affected by a project’s impacts and/or more limited than others
in their ability to take advantage of a project’s benefits. Such individuals or
groups are also more likely to be excluded from/unable to participate fully in
the mainstream consultation process and as such may require specific
measures and/or assistance to do so. This will take into account
considerations 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 whom they depend.
Some other examples of factors which could lead to people being
disadvantaged or vulnerable, depending on their circumstances, include those
listed below:
Gender
Ethnicity
Religion
Physical or mental disability
Social Status
Civic Status
Health Status
Sexual Orientation
Gender Identity
Economic Status
Indigenous Status
Dependence on unique natural resources
Any of the above may make an individual or group more likely to be adversely
impacted by a project, or less able to take advantage of project benefits.
What are the Team’s Responsibilities Under the World Bank Directive?
The team is responsible to determine that:
The Borrower has identified all disadvantaged or vulnerable stakeholders
for the project
The Borrower has ensured that all such groups are able to participate fully
in the consultation process. This means that the Borrower has made special
accommodations for vulnerable stakeholders, where required
When assessing risks and impacts, the Borrower has identified specific
issues or needs of such groups, and developed appropriate and
differentiated mitigation measures where necessary
This sounds like a lot of responsibility, and it seems to require information that
we might not have. How do we go about verifying these things?
If the Team feels this is not the case, you should first try to work with the
Borrower to find ways to address the issues and find an acceptable solution
that is consistent with the objectives of the Environmental and Social
Standards.
In that case you would need to bring the situation to the attention of the
Operations Environmental and Social Review Committee.
In the end, all of this contributes to the World Bank’s decision as to whether or
not to support the proposed project, and under what conditions.
Let’s say we want to proceed with the project, but only under specific agreed
conditions.
What do we do then?
That’s where the Environmental and Social Commitment Plan comes in.
The Team ensures that the Environmental and Social Commitment Plan, which
is part of the project’s legal agreement, reflects the measures and actions
agreed between the World Bank and the Borrower to address risks or impacts
on disadvantaged or vulnerable individuals or groups.
We can make sure all the right assessments are done and appropriate
measures are included in the Environmental and Social Commitment Plan and
the Stakeholder Engagement Plan.
You’re right. And this can be a particularly high risk when we’re dealing with
deeply embedded prejudices or a long history of discrimination.
That’s why the World Bank Directive doesn’t stop at Board approval of the
project. It also says that during project implementation, the World Bank
monitors the implementation of the Borrower’s obligations, as set out in the
Environmental and Social Commitment Plan and the Stakeholder Engagement
Plan.
SUMMARY
The responsibility of the World Bank team is:
o To ascertain whether the environmental and social assessment
process has properly identified any disadvantaged or vulnerable
individuals or groups, and
o To ensure that appropriate differentiated mitigation measures have
been incorporated into the project design and documented in relevant
project documents
If this is not the case, the team works with the Borrower to find ways to
address issues and find an acceptable solution that is consistent with the
objectives of the Environmental and Social Standards
If an acceptable solution cannot be found, the Operations Environmental
and Social Review Committee will assess the situation
Finally, the World Bank will make a determination as to whether or not to
support the proposed project, and under what conditions
For a project that proceeds under specific agreed conditions, the World
Bank Team ensures that the Environmental and Social Commitment Plan
reflects the measures and actions agreed between the World Bank and the
Borrower to address risks or impacts on disadvantaged or vulnerable
individuals or groups
During project implementation, the World Bank will monitor the
implementation of the Borrower’s obligations, as set out in the
Environmental and Social Commitment Plan and the Stakeholder
Engagement Plan, including:
o Reviewing information provided by the Borrower, and
o Collecting its own information, when appropriate, and
o Engaging, where necessary, independent third party specialists or
consulting with stakeholders to verify monitoring information
Sure, the World Bank has been building its internal capacity to address these
complex issues. For example, we now have a Sexual Orientation and Gender
Identity advisor, an Indigenous People’s advisor, a Disability advisor and an
advisor on Labor and Working Conditions. There are also specialized training
courses available.
But in our case we’re actually concerned that identifying some of these groups,
and requiring differentiated mitigation measures for them, could actually create
risks of harm for them.
And frankly, we might need to be a bit worried about possible implications for
our own safety…
In that case, the World Bank Directive says you need to seek the advice of the
Operations Environmental and Social Review Committee (OESRC).
They will advise you on how to handle this type of situation, and will also
advise you on whether or not to proceed with the project and, if so, on what
basis.
In any case, all along the way you need to document the Team’s good faith
efforts to apply this World Bank Directive and the Borrower’s response to these
efforts.
Recap
Here is a quick recap of the main points covered in this module.
World Bank’s Responsibilities
Risk Classification
Due Diligence
World Bank Directive
Alternative Arrangements
Tools
Risk Classification
Definition: Environmental and social risk is a combination of the probability
of certain hazard occurrences and the severity of impacts resulting from
such an occurrence
Types:
o High
o Substantial
o Moderate
o Low
Due Diligence
Reviewing information and requesting additional information if required
Providing guidance to the Borrower in developing measures consistent with
the Mitigation Hierarchy
Classifying environmental and social risk levels
Reviewing project design and implementation arrangements
Monitoring project implementation
Recommending corrective action to the Borrower if required
Alternative Arrangements
Following an assessment, the World Bank and the Borrower agree to use
all or part of the Borrowers ESF for the project
The World Bank jointly finances a project with other agencies, and all
parties agree to use a Common Approach
The World Bank supports a project involving a Financial Intermediary,
which has been or will be receiving financing from other multilateral or
bilateral funding agencies
A World Bank-supported project involves multiple sub-projects
Tools
The environmental and social assessment of the project
The Stakeholder Engagement Plan
The Environmental and Social Commitment Plan