The African Development Bank’s new labour safeguard



The African Development Bank (AfDB) has become the newest multilateral development bank to require that all of its borrowers must comply with International Labour Organization (ILO)-defined core labour standards, provide written information to workers about their working conditions and rights, comply with basic occupational health and safety standards, and take responsibility for the conditions of "third-party" (subcontracted) workers.

In December the AfDB’s board of directors adopted a new "Integrated Safeguards System", which will enter into effect in June; the bank just posted the definitive version in English and French. It includes “Operational Safeguard 5: Labour Conditions, Health and Safety” (OS 5), on pages 48-51 in the English version and pages 51-54 in the French version.

The other four safeguards covered by the new policy cover involuntary resettlement, biodiversity, renewable resources, ecosystems, pollution prevention and control, and hazardous materials.

The adoption of AfDB’s safeguards culminates a four-year-long process of research, consultation and revision.

The ITUC/Global Unions and African trade unions contributed recommendations during the consultation phases on the design of the labour safeguard.

The real value of OS 5 will, of course, depend on its implementation. The bank has announced that it will develop environmental and social assessment procedures and a safeguards tracking system for this purpose, but trade unions will have to be vigilant that the assessment and tracking procedures are effective and be prepared to monitor AfDB projects regarding compliance on an ongoing basis.

By adopting OS 5, the AfDB follows the examples of the labour performance requirement adopted by the European Bank for Reconstruction and Development (EBRD) in 2008, and the labour performance standard (PS 2) of the World Bank’s private sector arm, the International Finance Corporation (IFC), adopted in 2006.

The World Bank’s public sector lending branches (the International Bank for Reconstruction and Development, or IBRD, and the International Development Association, or IDA) are in the process of revising their social and environmental safeguards policy; trade unions and other civil socity organisations have recommended the adoption of a comprehensive labour standards safeguard.

The World Bank’s draft policy for public-sector lending should be released in mid-2014. Two other major regional development banks – the Asian Development Bank and the Inter-American Development Bank – have not yet taken action to adopt a labour safeguard.

The structure of AfDB’s labour safeguard is similar to those of IFC and EBRD but with differences, some of which reflect suggestions made by trade unions and allies.

For example, the first objective of AfDB’s OS 5 is to "protect workers’ rights", in contrast to the more wishy-washy objective of IFC’s PS 2: "To promote the fair treatment, non-discrimination and equal opportunity of workers".

With regards to subcontracted workers, the AfDB policy instructs that "the borrower or client incorporates these requirements [of OS 5] in contractual agreements with its contractors, subcontractors and intermediaries".

This appears to be firmer than the stipulation of IFC’s PS 2 that "the client will use commercially reasonable efforts to incorporate these requirements [of PS 2] in contractual agreements with such third party employers."

Monitoring by trade unions has played an important role in ensuring compliance with the labour safeguards of the development finance institutions that have adopted them so far. See for example this article about use of the IFC standards by Iraqi trade unions.

However, there have been deficiencies in IFC’s own implementation and monitoring procedures. A case concerning non-compliance with the workers’ rights provisions of PS 2 by Colombia’s Avianca airline, which received IFC financing, led Colombian unions, the International Transport Workers’ Federation and the ITUC to file a complaint more than two years ago with IFC’s Compliance Advisor Ombudsman (CAO).

The CAO is expected to deliver its findings and recommendations in the coming weeks.