Civil society organisations call for the World Bank to reconsider its policy advice on public-private partnerships
Over the years the World Bank has developed a number of “guidance tools” on public-private partnerships (PPPs) aimed to support public authorities to implement PPP projects. One of them is the Guidance on PPP Contractual Provisions, which support developing country authorities to draft PPP contracts. Earlier this year the World Bank opened the 2019 version of this document for public consultation. As a response, 20 civil society organisations (CSOs) including Eurodad members and partners from the global north and south and signatories of the PPP manifesto campaign supported a submission to the Guidance on PPP Contractual Provisions.
The submission was developed by legal experts at Foley Hoag, the International Institute for Sustainable Development, and the Observatory for Sustainable Infrastructure, and calls on the Bank to review the tool in depth to tackle the fundamental lack of balance between private and public interests, before releasing it to governments.
After several postponements, the updated Guidance on PPP Contractual Provisions was open for public consultation to feed into the new edition on 5 February for a period of three months. This new consultation process aims at fostering a “better and more comprehensive understanding of a number of essential provisions in a PPP agreement, such as force majeure, termination payments and dispute resolution”. Three additional chapters have been added and cover contracting authority step-in rights, termination events and handback of assets at the end of the PPP agreement.
The CSOs’ submission stresses:
- that the fundamental lack of balance seen in the 2017 version remains in place
- concerns about the new paragraphs on sustainable development and climate change
- that the three new chapters – on Contracting Authorities’ Step-in Rights; on Termination Events; and on the Handover of Assets at End of Contract – are written in an even-handed manner that squarely addresses the rights of the contracting authorities
- that the submission encourages governments to voice their concerns to reorient the guidance toward a more internally consistent and balanced document, which clearly sets its objective as the sustainable development of the host country with fair and equitable allocations of risks and rewards, along with rights and responsibilities, between the contract parties.
In addition to making the document available for virtual review, a stakeholder workshop took place in April. Held in Singapore, just one CSO representative was able to participate. it is unfortunate that no consultation meeting took place in Africa.
The World Bank announced that at the end of the consultation period, a matrix will be released disclosing all comments and recommendations. This matrix will also set out if and how these comments and recommendations were addressed in the final version of the 2019 Guidance, which is expected to be published by the end of June 2019. However, the CSOs recommend the World Bank to delay publishing a revised guidance for another year until thorough changes and updates are made based on their submission. Even more so as the added value of publishing this edition is relatively small compared to the importance of addressing the need for balance in the existing set of provisions and what remains absent to be able to achieve the sustainable development goals.
The submission’s authors also encourage governments, particularly the World Bank’s client country governments, to actively participate in the public consultation on the Guidance to voice their opinions and share their experiences.
CSOs will carefully monitor this process and assess the extent to which their recommendations have been taken into account.
This submission has been endorsed by AFRODAD, Africa ; Alliance Sud, Switzerland ; Amis des Étrangers au Togo – ADET, Togo ; Analytica think tank, Macedonia; Bank Information Center, USA; Centre national de coopération au développement, CNCD-11.11.11, Belgium ; DAWN (Development Alternatives with Women for a New Era), Fiji; Derecho Ambiente y Recursos Naturales, Peru ; Eurodad, Belgium; FARN – Fundación Ambiente y Recursos Naturales; Initiative for Social and Economic Rights (ISER), Uganda; International Trade Union Confederation, International; Jubilee Debt Campaign, UK; LATINDADD, Latin America; ODG, Spain; Rural Area Development Programme, RADP, Nepal; Society for International Development (SID), Italy; Stamp Out Poverty, UK; The Equality Trust, UK; WEED, Germany.