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The World Bank is the largest multilateral development bank, and through its entities – the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) – has traditionally held the largest global portfolio of “marine-related” investment projects (~ $USD 1.8 billion in 2014) of any organization in the world.
The World Bank seeks to achieve the following primary objectives by 2030:
While following the U.N. Millennium Development Goals, the Bank is “demand-driven” and provides low-interest loans, zero to low-interest credits, and grants to developing countries. These support a wide array of investments in areas such as education, health, public administration, infrastructure, financial and private sector development, agriculture, and environmental and natural resource management. Some of the Bank’s projects are co-financed with governments, other multilateral institutions, commercial banks, export credit agencies, and/or private sector investors.
The Bank can also provide or facilitate financing through trust fund partnerships with bilateral and multilateral donors. These partners sometimes ask the Bank to help manage initiatives that address needs across a wide range of sectors and developing regions.
Finally, the Bank also offers support to developing countries through policy advice, research and analysis, and technical assistance. This analytical work often underpins World Bank financing and helps inform developing countries’ own investments. Capacity development within client countries and policy education are among the Bank’s core competencies.
Fisheries investments occur primarily through knowledge products and country projects.
The Knowledge Products (KPs) on fisheries have been technical research papers and policy pieces (mostly on fisheries economics). These products support Bank work at the country level, and have helped raise the level of attention of fisheries issues at governance levels and with the Bank’s donors.
Country Projects occur through IDA grants and IBRD loans, and range from infrastructure investments to governance reforms and capacity building. Close to 99 percent of the Bank’s investments in fisheries occur through this mechanism.
In July 2014, the Bank initiated a major reorganization. A key element in this reorganization is the restructuring of all work areas into thematic “global practices” rather than by geographic orientation. For fisheries subsidies reform, most relevant is the Environment and Natural Resources Global Practice, which has sole responsibility for the Bank’s oceans portfolio. However, the Agriculture Global Practice and Trade & Competitiveness Global Practice also have knowledge about fisheries subsidies and could be potential channels for activity.
GOVERNANCE AND DECISION-MAKING
The Bank’s organizational leadership structure is comprised of a Board of Governors, a Board of Executive Directors, and a president. The Board of Governors is the highest decision-making body and consists of one governor for each member country. The governors, who are generally finance ministers, meet annually. They delegate day-to-day authority over operational policy, lending, and other business matters to the Board of Executive Directors.
The Bank is owned by its member governments, and each member government is a shareholder of the institution. The largest shareholders include the United States, Japan, Germany, United Kingdom, and France. Together these five countries hold approximately 40 percent of the total shares. On the Board of Directors, each of these shareholders has an individual seat. The remaining members are represented by 20 executive directors, who are elected every two years by groupings of countries. Each executive director has one vote.
Decisions are typically decided by consensus and are based on traditional practices and agreements rather than formal rules or guidelines. Outward opposition is not common and is taken as a significant action. If there is dissent, countries typically abstain or are silent.
Decision-making for KPs occurs at the Global Practice level and only requires the approval of the senior director. Small KPs are usually completed within a one-year period. Larger KPs typically take two to three years and can require multiple levels of approval before being initiated, if they are interdepartmental.
Decision-making for country-level investments is more complex, and typically occurs over a development and review period of two years or more. Project requests must be made by a client country. In this process, various fiduciary, social, and environmental safeguards need to be met.
HISTORY AND EXPERIENCE OF the WORLD BANK ON FISHERIES SUBSIDIES
Within the World Bank, fisheries are already identified as a key part of the global food security solution, both in an anti-poverty agenda as well as a vital source of nutrition for the world’s poor. However, fisheries subsidies have not yet been the main subject of a KP and/or an investment project.
In the knowledge product Sunken Billions, the World Bank and the FAO reported that due to the poor state of the world’s marine fisheries, the loss of economic benefits is estimated to be about $USD 50 billion annually. The paper suggests that if the governance of marine fisheries is improved, the world economy could recover a substantial part of this economic loss. This report included significant commentary on fisheries subsidies.
The Global Partnership for Oceans (GPO) also had an objective to reduce subsidies that promote overfishing (by 2020). The GPO was a partnership initiative led by the World Bank with governments, civil society organizations, private sector companies, associations, research institutions, U.N. agencies, development banks, and foundations. In January 2015, the Bank announced that it would no longer continue the GPO as an independent platform, and will address the objectives of the GPO through the Bank’s common agenda on environment and natural resources.
What could the WORLD BANK produce/do on fisheries subsidies?
The Environment and Social Framework sets the conditions on which the Bank lends, and every project is reviewed against it. The Bank is currently updating the Framework. The Bank could advance a policy on fisheries subsidies through the Framework. This would be the most effective way to ensure that harmful subsidies to fisheries do not occur.
The Bank could produce a KP on the need to eliminate harmful fisheries subsidies, which would inform the Bank’s country staff, clients, and Board of Directors. KPs are the primary way that the Bank advances policy across its country clients. They are important because they represent the official position of the World Bank. Although not binding, a product on fisheries subsidies would be very influential as countries take this guidance seriously in the development of their proposals and projects.
The Bank, in conjunction with a country government, could initiate a project to redirect funds from harmful fisheries subsidies programs towards initiatives to promote sustainable fisheries and community resilience. This could occur through a governance reform type project, but might be difficult and/or lengthy to put into place.
The World Bank Headquarters
1818 H Street, NW
Washington, DC 20433
Phone: +1 202 473 1000
Fax: +1 202 477 6391
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