Social Safeguards

What are social safeguard policies of international financing institutions?

Social safeguard policies are essential tools to prevent and mitigate undue harm to people during the development process. When identifying and designing a project, safeguards should help assess the potential social risks and impacts (positive or negative) associated with a development intervention. Safeguards should help define measures and processes to effectively manage risks and enhance positive impacts. The process of applying safeguard policies can be an important opportunity for stakeholder engagement, enhancing the quality of project proposals and increasing ownership whatever of the source of financing.

Most International Financing Institutions (IFIs) require the application of safeguards to approve projects, and while protocols and formats vary, the issues considered are common. In addition, an increasing number of countries are enacting the application of safeguards through a range of investment planning, policies and regulations aimed at achieving more sustainable development. Safeguard policies frequently rely on internationally agreed standards and guidance in an effort to not create duplication of efforts or conflicting requirements for project sponsors. Recently there are a range of voluntary standards that have been developed to address environmental and social safeguards necessary for specific sectors, commodities, and actors.

The key issues addressed by social safeguards relate to involuntary resettlement, participation and inclusion of indigenous peoples, forest-dependent people, retrenched workers and affordability of public services. To obtain IFI funding support, national governments must have adequate safeguard systems in place (including institutions and implementation capacities) to be able to manage social risks during the implementation of agriculture and rural development (ARD) investment programmes and projects. IFIs¹ have specific requirements for social safeguards and provide support to borrowing countries for strengthening capacities of staff to meet these requirements. The preparation of any investment action plan/framework requires examination of the relevant national regulations and laws designed to protect people or to provide compensation against negative impacts. In cases where national safeguard systems fall short of what IFIs consider adequate, efforts are made to elaborate project-specific actions to address these shortcomings.

Safeguard policies often provide a platform for the participation of stakeholders in project design through consultation meetings. They can serve as a mechanism for integrating social concerns into development decision-making and have been an important instrument for building ownership among local populations.

Social safeguard policies require an elaboration of adequate responses, which are spelled out in policy documents (see Box 1 below) and implemented as part of the project activities. Policy documents specify the activities, implementation arrangements, institutional responsibilities and monitoring mechanisms.

BOX 1: Key messages

Agricultural investment projects may carry risks for local populations. Social safeguard policies aim to prevent and mitigate undue harm to people and their environment in the development process, to compensate affected people and to restore livelihoods to at least the level prior to development intervention. A preliminary screening, performed at concept stage, establishes whether or not social safeguard policies are “triggered” for a particular intervention. If triggered, the type of response is usually determined by the nature of the project, as follows:

Projects where social risks can be clearly pre-identified: Agencies require the design of a satisfactory Resettlement Plan or Indigenous Peoples’ Participation Plan, which must be implemented throughout the project.
Projects where social risks cannot be pre-identified (for example in the case of demand-driven projects): Agencies require an acceptable Resettlement Framework or Indigenous Peoples’ Participation Framework, which sets the basis for development of site-specific resettlement plans or indigenous peoples’ participation plans as new sites are identified.

Why do you need to know about this?

All of the major multilateral agencies involved in funding agriculture and rural development screen new potential investments at the earliest stages of the programming cycle to assess their consistency with agency policies and country operational priorities. IFIs that have social safeguard policies require mandatory social screening of all investment proposals to determine whether or not they are likely to trigger any safeguards.

The most important social safeguard issues considered by IFIs relate to: (i) acquisition of land and assets and involuntary resettlement as a result of infrastructure development; and (ii) participation and inclusion of indigenous peoples (explained in some detail below). Other social safeguards issues relate to forest-dependent people, retrenched workers and affordability of public services.

Acquisition of land and assets and involuntary resettlement:

This policy covers direct economic and social impacts that result from investment projects. Such impacts may be caused by the involuntary taking of land resulting in: (i) relocation or loss of shelter; (ii) loss of assets or access to assets; or (iii) loss of income sources or means of livelihood, whether or not the affected persons must move to another location. These impacts may also result from the involuntary restriction of access to legally designated parks and protected areas resulting in adverse impacts on the livelihoods of the displaced persons. A resettlement policy framework must include measures to ensure that the project affected persons are: (i) informed about their options and rights pertaining to resettlement (including land and asset acquisition); (ii) consulted about, offered choices among, and provided with technically and economically feasible resettlement alternatives; and (iii) provided with prompt and effective compensation at full replacement cost for losses of assets attributable directly to the project. If the impacts include physical relocation, measures must ensure that the displaced persons are: (i) provided assistance during relocation; and (ii) provided with residential housing or housing sites or, as required, agricultural sites for which a combination of productive potential, location advantage and other factors are at least equivalent to those of the old site.

Participation and inclusion of indigenous peoples:

This policy contributes to poverty reduction and sustainable development by ensuring that the development process fully respects the dignity, human rights, economies and cultures of indigenous peoples. When projects proposed for financing will affect indigenous peoples, the borrower is expected to engage in a process of free, prior, informed consultation that results in broad community support for the project by the affected communities. Measures include: (i) avoiding potentially adverse effects on indigenous peoples’ communities; or (ii) when avoidance is not feasible, minimizing, mitigating, or compensating for such effects. Projects should also be designed to ensure that indigenous peoples receive social and economic benefits that are culturally appropriate and gender-inclusive and intergenerational. Projects that involve the physical relocation of indigenous peoples or commercial development of their cultural resources, or that touch on rights to their land and natural resources, must be subject to “special considerations” and a higher threshold of consultations leading to broad community support.

The range of safeguard issues relevant to the agricultural sector is presented in Table 1 below:

Table 1. Safeguard Issues Relevant to the Agricultural Sector

Type of project or activity	Examples of social safeguards issues and other negative social impacts
	Acquisition of land and assets, and involuntary resettlement	Participation and inclusion of indigenous peoples	Other
Irrigation	Human displacement and land/asset acquisition in area to be flooded by dam or as a result of canal construction Land/asset acquisition caused by rehabilitation (e.g. widening of canals, change in canal layout, displacement of encroachers on the right-of-way)	Effects of new institutions, such as Water User Associations (WUAs), on the traditional ones Impacts on indigenous livelihoods (such as changes in crops)	Dam safety Loss of employment opportunities for agricultural labourers as a result of on-farm labour-saving measures Affordability of water fees if cost recovery is envisaged
Agricultural restructuring/ privatization	Any activity involving land acquisition caused by new building construction (ministry buildings, etc.)	Effects on terms of trade of the produce grown by indigenous peoples	Retrenchment of agricultural staff for restructuring of Ministries of Agriculture and parastatal organizations Loss of employment by plantation workers
Forestry/forest conservation	Commercial concessions or other forestry development causing human displacement or loss of forest land or access rights Loss/restriction of access to non-timber forest products	Loss of customary land rights of forest-dependent indigenous peoples Impact on indigenous livelihoods (such as restriction of shifting cultivation or sedentarization of shifting cultivation practitioners)	Impact on forestry-related employment
Fisheries	Fishing area demarcation or granting of fishing rights causing loss of access to water Fishing quota imposition causing loss of catch	Impact on indigenous livelihoods (such as sedentarization of maritime peoples)	Loss of employment for boat crews resulting from reduced number of fishing licenses
Agriculture development/ agricultural services	Any activity involving land acquisition, human displacement or expropriation of property	Impact on indigenous livelihoods	Any activity involving retrenchment of workers Affordability of extension services if cost recovery is envisaged
Livestock/ range management	Enclosure of common grazing land causing loss of land ownership/use rights	Impacts on indigenous livelihoods (such as sedentarization of nomadic groups	Affordability of veterinary services if cost recovery is envisaged
Community infrastructure development	Any activity involving land acquisition, human displacement or loss of assets	Inclusion of traditional structures (such as community halls/cultural houses) as public infrastructures

How are social safeguard policies applied?

Social safeguard policies are implemented by means of a number of key steps during the design phase of a project or programme. The first step consists of a preliminary screening, at concept stage, to establish whether or not social safeguard policies are “triggered”², i.e. whether they should be addressed for the project.

If safeguard policies are triggered, the type of response is usually determined by the nature of project:

Projects where social risks can be clearly pre-identified: Agencies require the design of a satisfactory Resettlement Plan or Indigenous Peoples’ Participation Plan, which must be implemented throughout the project.
Projects where social risks cannot be pre-identified (for example in the case of demand-driven or other types of projects where potential negative impacts cannot be determined in advance): Agencies require an acceptable Resettlement Framework or Indigenous Peoples’ Participation Framework (see example from Viet Nam³). The framework sets the basis for development of site-specific resettlement plans or indigenous peoples’ participation plans on a continuous basis, as new sites are identified during the course of programme implementation.

For projects that trigger social safeguard policies or that have explicit social or poverty objectives, a detailed social analysis is required as an input for appraisal (See also Social Analysis).

The detailed social analysis includes – or will determine – the following:

Classification of the future investment operation with regard to its likelihood of triggering agency safeguard policies and the magnitude of the expected impact on affected people;
A list of issues to be addressed and a list of future social safeguard inputs required to comply with safeguard policies (when an operation is likely to trigger a social safeguard policy or when it is not clear whether or not a policy might be triggered);
A list of social issues to be addressed and a plan for more detailed social investigations at later stages of the programming and project cycle (for operations that have explicit social development objectives);
A list of potential social issues for further (voluntary) consideration by the design team (for operations that do not trigger social safeguards and have no explicit social development objectives).

The results of social analysis will help the counterpart, e.g. national Governments prepare the above-mentioned action plans or frameworks which comply with the safeguard policies. Their implementation should be programmed into project implementation plans, and regularly reviewed during supervision. Conversely, for projects that do not trigger agency safeguard policies, use of social assessment findings is mostly voluntary. It is usually left to the mission leader or project manager, with the guidance of the social scientist, to determine which of the social assessment findings and recommendations will be reflected in the project design [See also Social Analysis for the value added of social analysis in project design].

Footnotes:

¹ The International Fund for Agricultural Development (IFAD) is different from other IFIs because its main emphasis is on proactive targeting of assistance directly to the poor and food-insecure. Therefore, IFAD does not have a social safeguard policy but, instead, has a targeting policy that requires poverty and gender analysis as a basis for all Country Strategic Opportunities Programmes (COSOPs) and project design documents.

² For the World Bank, for example, if policies on involuntary resettlement or indigenous peoples are triggered, a social assessment must be conducted during the preparation.

³Viet Nam: Northern Mountains Poverty Reduction Project 2 – Policy Framework for Compensation and Rehabilitation of Project Affected People (http://www.worldbank.org/projects).

Key Resources

Social analysis sourcebook (World Bank, 2003)	It provides a conceptual framework for social analysis within the project cycle and highlights good practices in Bank-funded projects. It features five dimensions of social development: social diversity and gender; institutions, rules and behavior; stakeholders; participation; social risk.
Policy and social impact analysis (PSIA) user’s guide (World Bank, 2003)	The Poverty and Social Impact Analysis (PSIA) analyses the impact of social well-being and welfare policies on different stakeholder groups, with particular focus on the poor and vulnerable. PSIA also addresses issue of sustainability and risks of policy reforming in a social perspective.
Policy and social impact analysis (PSIA) toolkit (World Bank, 2003)	This Toolkit (TK) website collects best practices, techniques and tools for Poverty and Social Impact Analysis or PSIA. These tools are applicable to various policy contexts, from the simplest to the most complex ones. In some cases, softwares are also made available.
CFS Principles for Responsible Investment in Agriculture and Food Systems (2014) (RAI)	The RAI Principles apply to all types and sizes of agricultural investment and can be used by both public and private stakeholders in investment planning to think through the key issues for food security and nutrition that need to be considered.