What rules must DFIs follow?

Governments and companies that borrow or receive money from DFIs for a development project must comply with the national laws of the country where the project is located — including the human rights obligations of that country. Many donor countries also have laws about how their development finance dollars can be spent in other countries. Germany for instance has a national policy that human rights must be protected in German bilateral or multilateral development finance.

In addition, many DFIs have developed their own set of environmental and social standards.  These policies are often described as “safeguard” policies because they are meant to protect—or safeguard—the communities affected by the project. DFI safeguard policies vary from one institution to another; however common aspects include requirements for social and environmental impact assessment, access to information, or protocols for dealing with resettlement or protecting the rights of indigenous peoples.

While some DFIs have made strides in the development of social and environmental protections, in general, DFI safeguard policies do not adequately protect communities’ human rights. Safeguards can, however, give communities a powerful tool to demand respect for their human rights.

For additional information about different DFIs’ social and environmental policies, follow the links below:

World Bank – International Bank for Reconstruction and Development

World Bank – International Finance Corporation and MIGA

Asian Development Bank

Inter-American Development Bank

African Development Bank

European Bank for Reconstruction and Development

European Investment Bank