For decades, development banks loaned money directly to their clients, mostly companies and large projects like power plants and mines. This allowed them to monitor – and be held accountable for – adverse impacts on human rights and the environment. But following the global financial crisis of 2008, development banks have increasingly outsourced their money to commercial banks and private investment funds, which then lend it onward to end users.
Proponents argue that this approach reduces poverty by increasing access to financial markets in developing countries. But because the money is difficult to track – even for the development banks themselves – it can end up harming the very people it is supposed to help. Concealed by banking secrecy laws and funneled to end users through complex, multi-layered transactions, this money quietly bankrolls human rights abuses and environmental destruction in all corners of the globe.
The International Finance Corporation, the private-sector arm of the World Bank, has spearheaded this change. It invested $50 billion in financial intermediaries such as commercial banks, private equity funds and hedge funds between 2010 and 2015 alone. That’s more than three times what the rest of the World Bank Group invested in education. Other development banks, such as the African Development Bank and the European Investment Bank, have followed suit.
Working with our coalition partners from Recourse, Oxfam, Urgewald, the Philippine Movement for Climate Justice and others, we have shone a light on the problem – and stemmed the tide of the IFC’s hidden investments in destructive projects. When we began following the money in 2016, there were only a handful of cases in which the IFC was known to have channeled money to harmful projects. Our investigation uncovered nearly 150, including hydropower dams that displaced tens of thousands of people and power plants that threatened entire ecosystems. We published our findings in a searchable database.
Based on this evidence, we released a series of investigative reports, entitled Outsourcing Development: Lifting the Veil on the IFC’s Harmful Private-Sector Lending, which looks at how these investments impact people on the ground. We then worked with affected people to file complaints to the IFC’s accountability office, the Compliance Advisor Ombudsman, including an historic class action-style complaint in the Philippines against 19 coal plants that the IFC indirectly bankrolled.
Facing a large body of evidence and relentless pressure from our campaign, the IFC has begun implementing a number of key reforms that we been advocating for over the past decade.
We continue to work with our coalition partners to ensure these commitments are met – and that when harm occurs, affected communities can access justice. We will also continue to push the IFC to codify these reforms in IFC’s Sustainability Policy and take them further, including by expanding the scope of the Green Equity Approach to cover all fossil fuels and all types of financial sector investments.
World Bank’s private sector arm to stop supporting new coal — Climate Home News — April 6, 2023
Can the International Finance Corporation fix what it broke? — Inclusive Development International — May 9, 2022
Watchdog Slams World Bank Group for Helping Bankroll Philippines Coal Boom — Inclusive Development International — April 8, 2022
World Bank’s Back Door Support for East African Oil Pipeline Imperils the Planet, Complaint Alleges — Inclusive Development International — October 14, 2021
Opinion: Can the World Bank clean up its fossil fuel problem? — Inclusive Development International — July 16, 2019
Report finds World Bank’s coal divestment pledge not stringent enough — Mongabay — April 23, 2019
World Bank reportedly financing Indonesian coal mining companies despite ban — The Jakarta Post — April 16, 2019
As climate crisis bites, World Bank further distances itself from coal — Inclusive Development International — January 5, 2019
Facing pressure for coal connections, IFC aims for greater transparency about 'financial intermediaries' — Devex — April 20, 2018
'Green bank' linked to eco-unfriendly project — The Guardian — March 13, 2017
Re-examining our work with financial institutions — Medium — April 10, 2017
World Bank Financing Arm Under Fire Over Burmese Coal Mine Link — Irawaddy — March 30, 2017
World Bank indirectly backs harmful SE Asian projects: report — The Daily Mail — March 17, 2017
Adani coalmine 'covertly funded' by World Bank, says report — The Guardian — December 22, 2016
World Bank, Despite Promises, Finances Big Coal and Industrial Projects That Threaten Water, Communities — Circle of Blue — October 18, 2016
World Bank Helped Fund Controversial Dam: Report — The Cambodia Daily — October 10, 2016
World Bank accused of funding Asia 'coal power boom' — Aljazeera — October 3, 2016
‘World Bank secretly finances Asian ‘coal boom’ — The Manila Times — October 3, 2016
World Bank secretly funding coal explosion in Asia despite President Kim warning, “We are finished” — Inclusive Development International — October 3, 2016
Billions in “out of control” IFC investments into third parties causing human rights abuses around the world — Inclusive Development International — April 2, 2015
World Bank funding 'shrouded in darkness and riddled with abuse' — The Guardian — April 2, 2015
World Bank lending model puts Australian donations at risk — The Sydney Morning Herald — April 2, 2015
Oxfam: World Bank may be blind to harm of financial investments — Reuters — April 1, 2015
Les prêts douteux d’une filiale de la Banque mondiale — Le Monde — April 2, 2015
Moving beyond aspirations? IFC still unable to determine the impact of its financial intermediaries investments — Brettonwoods Project — November 11, 2014
World Bank’s Lending Arm Linked To Deadly Honduras Conflict — HuffPost — January 10, 2014
Investigation finds IFC has a 'don't ask don't tell' policy about human rights abuses in its banking investments — Inclusive Development International — August 11, 2014
World Bank Group implicated in illegal seizures of indigenous land in Cambodia and Laos, communities call for Bank’s help to get their land back — Inclusive Development International — February 9, 2014
IFC oblivious to impact of lending to financial sector — Brettonwoods Project — February 12, 2013
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