U.S. Position on Evaluation of the Initial Phase of the Pilot Program for Use of 

Country Systems for Environmental and Social Safeguards: Lessons Learned and 

Management Proposal for an Incremental Scale-Up of the Program, January 31, 

2008 

The U.S. supports strengthened country systems as a core development objective. Thus, 

we are generally supportive of experimenting with UCS largely because of the 

opportunity it offers to strengthen safeguard capacity and enhance borrowing country 

ownership of the safeguards process. Building such capacity and ownership is especially 

important in those countries where non-MDB lending is growing in relative importance. 

That said, UCS must be based on mutually verifiable and agreed best practices as well as 

adequate implementation capacity. 

The Bank is now asking to expand the pilot UCS program. We appreciate that 

Management has conducted an evaluation and returned with a set of recommendations 

based on an interim evaluation of the UCS to date. We concur with many but not all of 

the recommendations. Underlying our concerns is that the logical linkage between 

evaluation findings and some recommendations is not entirely clear; we suspect this is 

due to the preliminary nature of the evaluation. An added reason for our caution 

regarding the scaling-up and other proposed changes is that the Bank’s UCS program is 

being used as a model for IDB, ADB, and AfDB – it’s critical for the Bank to ‘get it 

right’ before others roll UCS out more broadly. 

Scaling up to National or Subnational Level 

We understand that staff time and travel contribute to high preparation costs for UCS, 

and that the recommendation to scale up UCS to the national or subnational level is based 

in part on the finding that fixed costs would be easier to absorb if spread over a number 

of transactions rather than just one. However, presumably there are also additional fixed 

and variable costs associated with such a scale-up. Unfortunately, the evaluation findings 

do not shed light on whether the cost-spreading benefits are worth the incremental costs, 

nor are data available on the incremental costs to borrowers, nor where funds would be 

sourced to cover these incremental costs. 

 

Flexibility in Determining Equivalence 

We understand that borrowers want the Bank to be more flexible in determining 

equivalence. According to the evaluation paper (p. 30): “If equivalence analysis can be 

made more pragmatic in order to accept alternative ways of achieving the safeguard 

objective, it will allow more country systems to be found equivalent.” Aside from 

recording borrower perspectives, the evaluation sheds little light on whether this is 

achievable, or advisable. None of the pilots had undergone a full supervision mission 

focusing on the implementation of country systems, and, according to the paper, it is too 

early for tangible outcomes to be fully evaluated. Without data on tangible outcomes, we 

can’t tell how well the safeguard objective was achieved under a given equivalence 
determination. 

The Bank is contemplating a short-cut approach (no pilot projects required) for EU 

accession countries, those in which higher environmental standards are to be part of 

regional trade agreements, and parastatal companies. Following an analysis of 

equivalence, the Bank would move to full use of country systems for some or all sectors. 

 The rationale given on p. 31 (based on only one pilot) is that EU accession or trade 

agreements imply that such countries already have adequate environmental safeguard 

capacity. The evaluation paper presents no data to support this conclusion, and we would 

urge a more rigorous and complete analysis before lurching to ‘fast-track’ determination 

of equivalence. 

Flexibility in Gap-Filling 

We do not see how the evaluation findings as presented support greater flexibility in gapfilling. Given that a key goal of UCS is to strengthen long term country capacity, we 

would have thought that more attention would be devoted to determining the extent to 

which gaps were filled on the basis of laws or published regulations based on rulemaking 

processes versus temporary guidelines that may not be enforceable beyond the Bank 

operation in question. This flexibility does not seem relevant to a transition to national 

level UCS. If anything, a move to national level pilots should be accompanied by a move 

to require permanent capacity-building measures that can be implemented ahead of 

individual operations. 

The Bank would like to adopt the approach that those safeguard provisions for which 

there is not a country counterpart (such as prohibition on conversion of critical habitat) do 

not require gap-filling. Again, this proposal does not appear based on empirical 

evaluation findings but rather on stakeholder perceptions. Our view is that the World 

Bank’s safeguard policies represent a model of international good practice, and that 

specific provisions exist not just to protect the Bank from reputational risk but because 

they promote sustainable development. We are concerned that such flexibility in gapfilling would undermine the UCS goal of strengthening country capacity. 

We understand that OP4.00 allows gaps in equivalence to be filled through administrative 

measures undertaken at the project level preferably prior to approval when feasible and 

during early project implementation where it makes sense to do so. In its response to one 

of our questions, the Bank acknowledged that “not all gap-filling measures necessary for 

compliance with OP4.00 can reasonably be expected to be completed prior to Board 

approval.” We are concerned that 1) there is no publicly available deadline as to when 

gaps must be filled, 2) it is unclear what standards prevail in the interim, and 3) the 

incentive to fill gaps after a project is approved diminishes, especially given uncertainty 

about how to cover the incremental costs of implementation and supervision, to both the 

borrower and Bank. Also, this sequencing flexibility seems geared to project-level UCS; 

scaling up to country-level UCS would seem to preclude the application of temporary 

measures. 
Clarify Costs and Benefits 

We are disturbed by the Evaluation’s assertion (p. 33) that, this far into the UCS program, 

the benefits from UCS are not clear to country and sector managers. Providing a clear 

road map of the potential benefits (i.e., enhanced borrower capacity, more effective risk 

management, and ownership of the safeguards process) will help build support for the 

UCS approach among country and sector managers, if lack of clarity is merely a function 

of communicating these benefits more effectively. Unfortunately, the evaluation does not 

indicate whether this is the case or whether the presumed benefits themselves are, in fact, 

illusory. 

Conclusion 

The transition to full use of country systems must be underpinned by best practice and 

sufficient implementation capacity at the country level. The pilot program for 

environmental and social safeguards is a step in the right direction, but we believe it has 

not yet yielded sufficiently robust data and findings to justify all of the recommended 

changes at this time. Rather, we recommend the following: 

We would prefer to see this pilot phase extended, by a period of 9 or 12 months, if not 

longer, in order for a more robust set of findings and conclusions to emerge, rather than 

rushing to scaling-up prematurely. 

If and when UCS is scaled up to the national or subnational level, we suggest that the 

Bank publish the methods and criteria for conducting each Safeguard Diagnostic Review, 

the findings on equivalence, and the gap-filling measures to be required. 

We would welcome input from the Inspection Panel regarding the evaluation of the pilot, 

given their earlier input to the formulation of OP4.00. 

Finally, we would welcome an IEG review after two years.