Evaluating Environmental and Social Effects of International Projects


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This presentation outlines lessons from evaluating envrionmental and social effects of development projects implemented by the International Finance Corporation.

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Evaluating Environmental and Social Effects of International Projects

  1. 1. Evaluating Environmental and Social Effects inInternational Finance Corporation projects 10th European Evaluation Society Biennial Conference October 3 – 5, 2012, Helsinki, Finland Jouni Eerikainen Senior Environmental Specialist Independent Evaluation Group Private Sector Evaluation jeerikainen@ifc.org 1
  2. 2. Setting the stage- Environmental & Social (E&S) performance evaluation at IFC E&S sustainability is a strategic pillar at International Finance Corporation (IFC), EBRD and several other private sector multilateral development banks (MDB) IFC’s 2006/2012 Performance Standards (PSs) for E&S Sustainability have been adopted by Equator Principle Financial Institutions and EBRD IEG has evaluated E&S Effects in IFC projects since 1996 and prepared E&S review reports with performance indicators since 2004, and MIGA evaluations since 2010 Annually ̴ 100 IFC & MIGA evaluations, 5-10 site visits IEG’s evaluation approach follows ISO 14031 standard “Environmental Performance Evaluation” Introduction of PS framework enables evaluation of E&S impacts as the change of performance indicators during the project course 2
  3. 3. Independent Evaluation Group (IEG)Private Sector Evaluation (IFC and MIGA) Board President Director-General, World Bank Evaluation (DGE) Group Multilateral World Bank Inv. Guarantee Agency Independent Evaluation Group Public Sector Private Sector Country, Corporate Strategy, & Learning & Evaluation Evaluation Global Evaluation communication 3
  4. 4. Environmental and Social (E&S) risks and opportunities in IFC projects 4
  5. 5. IFC’s self-evaluation system Expanded Project Supervision Report (XPSR)50% sample of mature projects (5years since approval) Highly Unsuccessful Mostly Mostly Successful Highly unsuccessful unsuccessful successful successful1. Development Outcome PartlyProject’s impacts on: Unsatisfactory Unsatisfactory Satisfactory Excellent Business success Economic sustainability E&S Effects Private sector development2. IFC’s Investment Outcome  Loan  Equity3. IFC’s Work Quality: Screening, appraisal, structuring Supervision 5 Role and contribution
  6. 6. IEG evaluation instructions: rating Environmental and Social Effects (ESE) of real sector projects Material compliance with S&E Manag. BeyondRATING Current Environmental & Social (E&S) standards (= At-appraisal requirements (ERS, EIAs) based on WBG System compliance Role model IFC Performance Standards) Safeguard Policies (SEMS)Excellent (E) YES and YES Excellent YesSatisfactory (S) YES or YESPartly NO and NOUnsatisfactory but deficiencies are addressed(PU)Unsatisfactory NO and NO(U) mitigation is unlikely or non-compliance resulted in environmental damageNo Opinion Relevant information for rating is not obtainable, e.g. missing AMRs – lastPossible (NOP) resort, consider a site visitNot Applicable Category C projects with no E&S reporting requirements and no adverse(N/A) impacts through the lifetime; if factual impacts are known then actual rating should be applied (infrequent) 6
  7. 7. Example of E&S Evaluation SummaryA chemical plant in the East Europe and Central Asia region 7
  8. 8. Example of Environmental and Social EffectsEvaluation – detailed analysis on air emissions 8
  9. 9. ESE evaluation results on projects committed 1999- 2006 and evaluated 2004-2011 Environmental and Social Effects 100% 1996-2011 XPSR average ESE success rate ESE success rate 90% 80% 70% ESE succ. rate high (CL=95%) 60% ` 50% ESE succ. rate 40% low (CL=95%) 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 100% 1996-2011 XPSR rolling 3 year average ESE success rate ESE success rate 90% 80% 70% ESE succ. rate high (CL=95%) 60% ` 50% ESE succ. rate low (CL=95%) 40% 96-98 97-99 98-00 99-01 00-02 01-03 02-04 03-05 04-06 05-07 06-08 07-09 08-10 09-11 Success rate % = (S+E) / (U+PU+S+E) 9
  10. 10. Evaluation of E&S Effects of Performance Standards (PS) projects PSs implemented since 2006 and evaluated from 2011 Environmental and Social Effects Environmental and Environmental and Social Performance Social Impacts•Assessing performance against •Changes in performanceIFC requirements and PS criteria •Wider impacts, sector & region•Indicators rated at appraisal andsupervisionThe new evaluation system recognizes the E&S impacts and changes between appraisal and evaluation 18
  11. 11. E&S Effects Evaluation for PerformanceStandards projects (Case: Petrochemical Plant in Africa) 4 Rate E&S Effects and Impacts based on rating matrix and demonstration effect 3 Rate overall E&S Performance at Appraisal and Evaluation 2 Rate PS 1-8 at Appraisal and Evaluation 1 Rate sub-indicators at Appraisal and Evaluation 19
  12. 12. E&S evaluation of Performance Standards projectsBuilding a pyramidfrom indicators….…to measureE&S footprint 20
  13. 13. Challenge to present E&S performance and impact concisely in complex projects  E&S Footprint is presented in a Performance Standards Diamond – key aspects at one glance  The goal is to show how IFC’s intervention has reduced the E&S Footprint area Project: IEG Petrochemical Plant Upgrade Project RATINGS Project: Project: Vicat-SOCOCIM Petrochemical Plant Upgrade Project Country: Project: OVERALL SCORE 2011 Africa Country: Country: Senegal Africa 12345 ID: Country: ALL COUNTRIES ID: 12345 ID: 25363 E&S Category: projects Number Category: E&S of B E&S Category: B 10 PS1 B PS1 A & B E&S Category: E&S Effects: S 4 PS1 PS1 E&S Effects: E&S Effects: S S 4 PS1 E&S Effects: E&S Impact: Impact: S PS8 PS2 E&S S PS8 PS2 4 S 4 3 E&S Impact: S PS8 PS2 3 E&S Impact: S 4 E&S Performance at evaluation: S S NOP PS8 PS2 E&S E&S Performance at evaluation: Performance at evaluation: S NOPNOP PS8 PS2 3 NOP 3 E&S E&S Performance at evaluation: S 2 Performance at appraisal: PU E&S Performance at appraisal: PU 2 3 E&S Performance at appraisal: PU E&S Performance at appraisal: PU NOP NOP 2 2 E&S Manag.Manag. Systems PS1: E&S Manag. Systems PS1: S E&S Systems PS1: S S NOP 1 2 E&S Manag. Systems PS1: S 1 Labor and H&S PS2: S PS2: Labor and S PS2: Labor and H&Sand H&S PS2: S U PU S S E NA PU 1 UU PU PU E NA NA 1 PS7 U PU SS EENA Labor H&S S U PU S NA NA PS3 1 PS7 PS7 U PU S E NA PS3 0 Pollution Prevention PS3: S PS3: Pollution Prevention PS3: S PS3: Pollution Prevention S 0 Pollution Prevention S PS7 U PU S E NA PS7 U E 0 0 0 PS3 PS3 PS3 Community H&S PS4: S PS4: Community H&S PS4: S Community H&S S Community H&S PS4: S Land Acq.& Acq.&Resettl. PS5: NOP LandLand Acq.& Invol. PS5: NOP Acq.& Invol. Resettl. Resettl. PS5: Land Invol. Invol. Resettl. PS5: NA S NOP Biodiversity & Res. mgt. PS6: NA PS6: PS6: NA Biodiversity & Res. & Res. mgt. Biodiversity E Biodiversity & Res. mgt. PS6: S Indigenous Peoples Peoples PS7: Indigenous PS7: NA Indigenous Peoples PS7: NA PS7: NA Indigenous Peoples E PS6 PS6 PS6 PS6 PS6 PS4 PS4 PS4 PS4 PS4 Cultural HeritageHeritage PS8: Cultural PS8: NA Cultural Heritage PS8: NA NA Cultural Heritage PS8: S ESAP Implementation: ESAP Implementation: S ESAP Implementation: S ESAP Implementation: S S EHS Guidelines: S PS5 PS5 Appraisal PS5 EHS Guidelines: S EHS Guidelines: S Appraisal PS5 EHS Guidelines: S Appraisal Evaluation Evaluation 21 Appraisal Appraisal Appraisal Evaluation Evaluation Evaluation Evaluation Host Country EHS laws: S laws: Host Country EHS Host Country laws: S S Appraisal Evaluation
  14. 14. Opportunities and challenges The PS framework provides an opportunity to evaluate E&S impacts Calculating of ratings is underway and weighing of indicators will be piloted Challenges:  lack of baseline and monitoring data  corporate investments to several facilities  large number of performance indicators  evaluation of wider impacts in the region and industry sector  presenting evaluation results concisely and coherently in complex projects  Integrating E&S evaluation to IFC’s project cycle 22
  15. 15. Thank you very much on your attention Jouni Eerikainen jeerikainen@ifc.org Independent Evaluation Group 700 19th Street, NW, M9B-919 Washington DC, 20431 USA Tel: +1 202 458 2690 http://ieg.worldbankgroup.org/ 23