1. Performance Standards John Butler WB Safeguards Training Workshop November, 2013

2. Outline/Objectives Overview of the Performance Standards Outcomes Requirements Review key differences between Performance Standards and Safeguard Policies

3. IFC Business Model Large share of business is investment in existing projects and companies Infrastructure projects normally entail an awarded concession prior to IFC involvement

4. IFC vs. Bank Project Cycle IFC/MIGA typically arrive late in client’s project development process:  Marketing, feasibility, design studies already completed  Costs & benefits already considered  Safeguards (EIA) work often already well underway or completed ( and approved by Govt authorities)  Prospective client looking for project financing; IFC is an option

5. IFC Performance Standards (Updated 2012) PS 1: Assessment and Management of Environmental and Social Risks and Impacts PS 2: Labor and Working Conditions PS 3: Resource Efficiency and Pollution Prevention PS 4: Community Health, Safety, and Security PS 5: Land Acquisition and Involuntary Resettlement PS 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources PS 7: Indigenous Peoples PS 8: Cultural Heritage

6. PS 1: Assessment and Management of Environmental and Social Risks and Impacts Identify and evaluate E&S risks and impacts Adopt a mitigation hierarchy (avoid, minimize, compensate/offset) Improve E&S performance of clients through effective use of [risk] management systems Establish a responsive and effective grievance mechanism Develop an effective community engagement program for the life of the project

7. PS2: LABOR AND WORKING CONDITIONS Promote fair treatment, non-discrimination, and equal opportunity Establish, maintain, improve worker-management relationship Promote compliance with national law Protect workers, including children, migrant workers, workers engaged by third parties, and workers in the supply chain Promote safe and healthy working conditions, and the health of workers Prohibit the use of forced labor

8. PS3: RESOURCE EFFICIENCY AND POLLUTION PREVENTION Consider ambient conditions and apply technically and financially feasible resource efficiency and pollution prevention principles and techniques (GIIP –> WBG EHSGs) [ Good International Industry Practice ] Resource efficiency Cleaner production principles GHGs Water consumption Pollution prevention GIIP/WBG EHSGs Wastes Hazardous material management Pesticide use and management

9. PS4: COMMUNITY HEALTH, SAFETY, AND SECURITY Community Health and Safety Infrastructure and equipment design and safety Hazardous materials management and safety Ecosystem services [resulting in H&S risks] Community exposure to disease Emergency preparedness and response Security Personnel Direct or contract workers Government security personnel

10. PS5: LAND ACQUISITION AND INVOLUNTARY RESETTLEMENT Avoid, minimize displacement by exploring alternative designs Avoid forced eviction Anticipate, avoid, minimize adverse social and economic impacts from land acquisition or restrictions on land use by: Providing compensation for loss of assets at replacement cost Ensuring that resettlement activities are implemented with appropriate disclosure, consultation, and informed participation Improve or restore livelihoods and standards of living for displaced persons Improve living conditions among physically displaced persons through provision of adequate housing with security of tenure

11. PS6: BIODIVERSITY CONSERVATION AND SUSTAINABLE MANAGEMENT OF LIVING NATURAL RESOURCES Protection and Conservation of Biodiversity Modified habitat Natural habitat Critical habitat Legally protected and internationally recognized areas Invasive alien species Management of Ecosystem Services Sustainable Management of Living Natural Resources Supply Chain [Where a client is purchasing primary production that is known to be produced in regions where there is a risk of significant conversion of natural and/or critical habitats]

12. PS7: INDIGENOUS PEOPLES Avoidance of adverse impacts Participation and consent Circumstances Requiring FPIC Impacts on lands and natural resources subject to traditional ownership or under customary use Relocation of IPs from lands and natural resources subject to traditional ownership or under customary use Critical cultural heritage Mitigation and Development Benefits Private Sector Responsibilities where Government is Responsible for Managing IP Issues

13. PS8: CULTURAL HERITAGE Protection of Cultural Heritage in Project Design and Execution Comply with national law and internationally recognized practices Retain competent professionals Chance find procedures Consultation Community access Removal of replicable cultural heritage Removal of non-replicable cultural heritage Critical cultural heritage Project’s Use of Cultural Heritage

14. OP 4.03: World Bank Performance Standards for Private Sector Approved by World Bank Board in June 2012 Applies to projects (or components) that are designed, owned, constructed and/or operated by a Private Entity Optional: OP sets out the circumstances under which the WB PS may be applied, but application is not mandatory Objectives: to facilitate Bank support for private sector-led projects (by applying an approach better suited to private sector) To enhance policy coherence and cooperation across the World Bank Group (e.g. a common approach for WB Group staff and Borrowers, for jointly financed projects) The actual PS (1-8) are the same as for IFC and MIGA; some differences in how they are applied Interim Guidance Note for WB staff on implementation procedures (closely parallels IFC procedures)… final instructions under preparation

15. Definition of “Private Entity” Any natural or legal person, whether privately or publicly owned, which: Is carrying out or is established for a business purpose and is operating on a commercial basis; Is financially and managerially autonomous; and Has day-to-day management that is not controlled by the government Examples of Private Sector Activities: Public-Private Partnership (PPP) – e.g. in infrastructure sector Activity involving medium or long term management contracts, concessions, build-own-operate arrangements, etc. Activity involving a financial intermediary, if sub-projects supported by WB are implemented by Private Entities

16. Private Sector Activity comprises the entire project Bank applies WB PS to the entire project Private Sector Activity comprises part of Bank- supported Project, rest of which is non-Private Sector Activity Private Sector Activity falls within the “Area of Influence” of a Bank- supported project, rest of which is non- Private Sector Activity Bank applies WB PS to the Private Sector Activity and WB Safeguard Policies to the rest of the project

17. WB Safeguard Policies, not Performance Standards Apply to: Activities involving provision of goods, services, or civil works for facilities that will be operated by public sector (i.e. Private sector involvement is limited to winning a public service contract) Activities where responsibilities for identifying, assessing and managing Env. & Social risks are shared between Private Entity and member country and can’t be separated (then WB Safeguard policies apply) OP 7.50 (International Waters Policy) applies to any WB- supported Private Sector Activity. Notification of Riparians may be done by Private Entity, Government or WB Group