The World Bank wants to use the results a project achieve as the biggest determining factor on if the money is lent out. The environmentalists say that this could include projects that could harm the natural resources.
From the Guardian, writer John Vidal explains the controversy further.
The proposal, called A New Instrument to Advance Development Effectiveness: Programme-for-Results Lending (P4R), would lend money according to results achieved by projects. The proposal was published in February, and phase II consultations ended recently. Board approval is expected by the end of the year. Some of the NGOs that keep an eye on the bank's activities – International Rivers, Friends of the Earth US and Bank Information Centre – say the clear intention is to allow countries to sidestep dozens of tough, and expensive, social and environmental safeguards which recipients of World Bank loans must normally meet.
According to the proposals, the new instrument would eliminate or greatly dilute 25 existing safeguards and policies. They include those that apply to forced resettlement, natural habitats, physical and cultural resources, indigenous peoples, forests, safety of dams, natural habitats, and environmental action plans. Most of these policies have taken years of pressure by NGOs to secure.
The bank, which lends more than $50bn a year, is one of the world's largest providers of loans for mega-projects, many of which are particularly damaging to local people, the environment and the climate. If countries wanting to build giant dams, roads, power and water projects are to be largely freed from acting in a socially responsible way, the NGOs fear bank lending could lead to more forced evictions and human rights abuses.