Environmental Review: Policy and Guidelines

Abstract

Abstract The International Finance Corporation (IFC) is the private- sector financing affiliate of the World Bank Group. Because it works solely with the private sector in developing countries, its clientele and its project cycle are very different from that of the more traditional business carried out by the World Bank. Nevertheless, as a member of the World Bank Group, IFC is subject to the World Bank’s broad policies and guidelines regarding environmental and health and safety (EH&S) matters. IFC’s Environment Division is responsible for reviewing prospective investments and the existing investment portfolio for compliance with World Bank EH&S policies and guidelines. This review must be carried out in the context of local laws and regulations as well as the IFC-specific project cycle. The World Bank guidelines are in a period of transition as the World Bank updates its environmental guidelines for various industrial sectors and specific pollutants. The approach taken by IFC to environmental review and to implementation of the relevant World Bank policies and guidelines is described, with special reference to various types of investment in the oil and gas industry. In general, IFC requires all investments to be in full compliance with all relevant local laws and regulations and consistent with applicable World Bank policies. The Bank’s EH&S guidelines are used to evaluate the acceptability of the project’s pollution controls and health and safety practices with respect to broadly defined international norms. Detailed environmental impact analyses carried out by the project sponsor may provide a basis for accepting project-specific standards of performance. Public disclosure of the environmental aspects of a proposed IFC investment is required for all projects. The approach to public disclosure, as well as requirements for public consultation on environmental matters in certain cases, will depend greatly on the type of project and the social and cultural context of the host country as well as its environmental regulations.