In 2005, the Executive Directors of the World Bank (Bank) authorized the use of country systems (CS), to be governed by OP 4.00, “Piloting the Use of Borrower Systems to Address Environmental and Social Safeguard Issues in Bank-Supported Projects.” Under this approach, the Bank relies on the borrower country’s “system,” i.e. its laws and institutions, instead of the full suite of current Bank safeguard policies, procedures and institutional units to help avoid, mitigate or minimize adverse impacts of Bank supported projects.
The Bank is currently conducting a series of low-risk CS pilot projects. Some of these have received Board approval and are analyzed in a longer CIEL report. The Bank conducts a Safeguard Diagnostic Review (SDR) for each project to determine whether the relevant legal framework is “equivalent” to principles of the Bank’s safeguard policies, and to assess whether the country’s institutional capacity and implementation track record are “acceptable.”
We ask three fundamental questions about each pilot project. First, are the environmental and social safeguards approved for use under the country systems approach as strong as the existing Bank safeguard policies? Second, is the use of CS facilitating enduring, legally-binding improvements in the borrower countries’ systems that will apply to future projects? Finally, will accountability of the Bank to communities be as effective under a CS approach as it is under the current Bank approach to safeguards? Our evaluation of the experience thus far reveals serious risks and unclear benefits.