PANNA: Pesticide and Biotech Companies: The Wrong Partners for the World Bank

Guidelines for assessing potential private sector partners
The World Bank has developed guidelines to ensure that its private sector partnerships are compatible with its mission. ² The guidelines state that the core principles underpinning all Bank Group guidelines and policies, including the Safeguard Policy on pest management, apply to private sector partnerships wherever relevant. The guidelines also require the Bank to evaluate each proposed partnership against the following key risk areas before entering into the partnership:
• Reputation: “Does the company have a good reputation (no serious red flag issue areas), especially in areas of corporate social responsibility?”³
• Conflict of Interest: “Is the company only or primarily looking for procurement opportunities or money from the World Bank Group?”⁴
• Unfair Advantage: Would the relationship allow “special advantages to accrue to the partner, such as access to information, market advantage or procurement under projects financed by the World Bank Group”?⁵
• Governance: “Is the partnership aligned with priorities in relevant World Bank Group country and/or sector strategy?”⁶

In cases where the risks are deemed high, the Guidelines state clearly that the partnership should not take place. Partnership relations must not adversely affect the Bank Group’s ability to act independently, its reputation of neutrality/impartiality, or its ability to act as an ‘honest broker’ in decision-making and providing advice to its clients. The examples below illustrate ways in which the World Bank, by entering into partnerships with pesticide and biotech companies, has failed to comply with its business partnership guidelines.

Note: The WB Guidelines apply to all stages of the partnership cycle, including the initial step of brainstorming on partnership possibilities and identifying suitable partners. Furthermore, a formal review process is required for all proposed private sector partnerships that pose a major reputational risk to the Bank Group.⁷

Reputation
The World Bank has entered into partnerships with some of the most notorious and aggressive producers of hazardous pesticides. Within the framework of the Bank’s staff exchange program, personnel exchanges routinely occur between the World Bank and the major pesticide companies (e.g., Rhône- Poulenc Agro (now Aventis), AgrEvo (now Aventis), Novartis (now Syngenta) and Dow AgroSciences).⁸ These companies have a long list of “red flag” issues in which the companies have placed their commercial interests above public interest: illegal toxic shipments, chemical dumping and accidents, Superfund sites, chemical testing on humans, false advertising, and racketeering convictions. Furthermore, these companies have histories of unethical manipulation of pesticide registration decisions, corruption, refusal to withdraw products that are known to cause high frequency of casualties and use of massive public relations budgets to deceive the public about the health and environmental risks of their products, even when concerns have been raised by independent sources. (See company profiles for details.)

World Bank President James Wolfensohn has initiated the first phase of a new partnership cycle by inviting CEOs of the major pesticide and biotechnology companies to a roundtable discussion in December 2000, the stated purpose of which was to identify possible areas of collaboration. This type of high level consultation, the staff exchanges, Bank management’s ongoing meetings with pesticide industry representatives and its actual partnerships with these companies pose serious reputational risks to the Bank Group and should have been prevented by adherence to the Partnership Guidelines.

Governance
World Bank guidelines state that private sector partnerships should be pursued only if they advance the priorities identified in country and sector strategies, such as reducing reliance on pesticides, alleviating poverty and protecting the environment. It is difficult to imagine how a partnership with a pesticide company could be aligned with the Bank’s policy on pest management, which seeks to reduce reliance on pesticides. Even World Bank partnerships with pesticide companies that focus on so-called “safe use” training are unlikely to lead to reduced or even safer use of pesticides.

Even World Bank partnerships with pesticide companies that focus on so-called “safe use” training are unlikely to lead to reduced or even safer use of pesticides. Field studies and inde- Pesticide Action Network North America World Bank Accountability Project pendent assessment of industry’s “safe use campaign” have found no credible evidence that these trainings have reduced either use or incidence of pesticide poisoning. In some cases they have had the opposite effect, particularly when used as a marketing tool to showcase products.⁹ In addition, as these and other studies have shown, most safety measures are impractical in the context of farming in developing countries. For example, protective clothing and equipment is either too costly or too uncomfortable to use in hot tropical conditions common in developing countries.

Moreover, partnerships with pesticide and biotechnology companies that are vigorously promoting their products in the ways described above and in the attached corporate profiles are unlikely to facilitate the Bank’s efforts to reduce poverty and may even exacerbate it. In Indonesia, for example, a World Bank-financed project supplied farmers with pesticides and provided chemical companies with new opportunities to advertise their products in remote areas.¹⁰ As their use of pesticides rose, many participating farmers were subsequently unable to repay the cost of these inputs and fell deeper into debt.¹¹ Meanwhile, the pesticide companies that gain access to rural communities through Bank partnerships, continue to introduce products that poison millions around the world, particularly poor farmers and their children in many of the Bank’s client countries.¹²

World Bank partnerships with pesticide and biotech companies are also likely to conflict with the Bank’s commitment to environmental protection. The corporations that develop and market these products have consistently placed their immediate commercial interests over the long term health of the environment. As a result, pesticides aggressively promoted by industry continue to contaminate soil, water and air, harm wildlife and disrupt the balance of ecosystems,¹³ while the release of inadequately tested transgenic crops into the environment brings new threats to biodiversity; can cause genetic contamination of crops and their wild relatives; threatens food safety; and poses serious risk of allergenicity to humans.¹⁴