Multilateral Development Banks

The multilateral development banks have been criticized for funding projects that imposed unacceptably high environmental costs on borrowing countries. GAO found that the banks, led by the World Bank, have taken significant steps to ensure that meaningful public consultation takes place on the environmental implications of the projects they fund. However, the banks could take further steps to (1) ensure that executive directors receive complete and accurate documentation about the consultation practices that have been used to develop proposed projects and (2) more consistently provide the public with timely access to environmental information on these projects. The banks have adopted guidelines that require sponsors to consult with the public in developing projects and created systems to provide worldwide public access to information on these projects--including information on their environmental impact. Generally, public consultation on the projects that GAO reviewed was adequate or better, and bank intervention improved sponsor practices on nearly every project. Nevertheless, consultation on 25 percent of the projects, mainly those supported by the International Finance Corporation or sponsored by the Chinese government, was less than adequate. Also, documentation given to the executive directors provided incomplete or inaccurate information about the consultation measures used on many projects. The banks' internet home pages were inconsistent in meeting their own guidelines for providing public information concerning public profiles and environmental assessment reports.

GAO noted that: (1) the multilateral development banks, led by the World Bank, have taken significant steps to ensure that meaningful public consultation takes place on the environmental implications of the projects they fund; (2) GAO believes, however, that the banks can take further steps to build on the progress that has been achieved by ensuring that executive directors receive complete and accurate documentation about the consultation practices that have been employed in developing proposed projects, and by more consistently providing the public with timely access to environmental information on these projects; (3) the banks have adopted guidelines that require sponsors to consult with the public in developing projects, and created systems to provide worldwide public access to information about these projects--including information on their environmental implications; (4) generally, public consultation on the projects that GAO reviewed was adequate or better, and bank intervention improved sponsor practices on nearly every project; (5) several factors contributed to the quality of consultation; (6) for example, good consultation was associated with projects employing community-based approaches to project development, as well as those having a high profile because of recent adverse publicity on similar projects; (7) also, in general, World Bank-supported projects received higher ratings than the projects supported by the other banks GAO reviewed; (8) nevertheless, consultation on 25 percent (11 of 44) of the projects, primarily projects supported by the International Finance Corporation or sponsored by the government of China, was less than adequate; (9) also, documentation given to the executive directors provided incomplete or inaccurate information about the consultation measures employed on many of the projects; and (10) the banks' Internet home pages were inconsistent in meeting their own guidelines for providing public information concerning project profiles and environmental assessment reports.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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