It's Not Giving

Elle Bartolome | Senior Executive Officer for Policy, Campaigns, and Communication

Last April, the International Finance Corporation (IFC) approved a Remedial Action Framework and launched a review of its Sustainability Framework. These reforms underscore the critical need for a structured approach to addressing harms linked to IFC investments. It reinforces the undeniable truth that financing requires stronger accountability mechanisms and safeguards.

What is driving these institutional changes? For starters, the current Sustainability Framework is 13 years old. This means its safeguards (Performance Standards on Environmental and Social Sustainability) and Access to Information Policy are no longer aligned with the evolving realities of its growing investment portfolio.

The IFC Board’s greenlighting of the remedy framework also coincides with the 25th year of the Compliance Advisor Ombudsman (CAO), its Independent Accountability Mechanism. The CAO’s history is rooted in the power of people coming together as a community to topple giants: when the community of Alto BioBio, Chile, resisted forced resettlement for the Pangue Dam in the 2000s. It’s striking that only now has a clear-cut remedial action policy been established, when the CAO’s very purpose was to go beyond compliance and truly resolve conflicts and remedy harms brought by IFC-supported projects.

As a result, communities impacted by harmful investments still face opaque remedies and endure years of struggle for justice. Case in point: Nearly eight years after filing a complaint to the CAO, communities in the Philippines affected by 10 coal-fired power plants supported by the IFC through a financial intermediary, the Rizal Commercial Banking Corporation (RCBC), are still waiting for concrete and responsive corrective actions.

Is the new remedy framework enough? While having a forward-looking approach to risk management and accountability is a must, it doesn’t absolve the IFC of harms caused by past investments. This framework isn’t retroactive,  it won’t help to deliver remedies on legacy cases such as the RCBC one. Worse, IFC claims no obligation to address and mitigate harms, limiting its role to conducting assessments and sharing a Management Action Plan to its client.

Delays in remedy from the IFC and RCBC have worsened impacts, as the coal plants continue to operate. New research by the Philippine Movement for Climate Justice shows that communities are now facing intensified health problems, displacement, livelihoods disruption, vilification of community leaders, air and water pollution. All while the threat of further fossil fuel expansion looms.

The struggles faced by communities should not be reduced to a mere learning exercise, a footnote in a document. If the IFC and the World Bank Group are really serious about efficiency and effectiveness, then let them be measured by their ability to deliver on the basics of justice: transparency, accountability, and timely remedy.

Our participation to the #WBGMeetings in Washington DC last week has been a meaningful avenue to remind the IFC that a strong remedy framework is not just a moral imperative—it is a benchmark of legitimacy. Without it, all talk of lessons learned and institutional reform remains empty.