This briefing note – submitted by Oxfam, Wemos, Bretton Woods Project, Centre for International Corporate Tax Accountability and Research (CICTAR), Kenya Medical Practitioners, Pharmacists and Dentists’ Union (KMPDU) – critiques the International Finance Corporation’s investments in private health and education services, arguing that its current environmental and social safeguards are not strong enough to prevent harm to vulnerable communities.
In this note, the civil society groups argue that universal public services like health care and education are essential for reducing inequality and achieving social justice, but privatized, market-based models often exclude poor and marginalized people.
For instance, although IFC paused investments in fee-charging private K-12 schools, it still funds private education through ed-tech, higher education, and advisory services, while continuing major investments in private healthcare. Based on experience with affected communities and complaints to the Compliance Advisor Ombudsman (CAO), IFC-backed projects have caused systemic harms, especially in countries with weak regulation and enforcement, including:
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- weakened access to affordable services,
- labor abuses affecting teachers and healthcare workers,
- patient rights violations,
- poor accountability and weak remedies for harmed communities.
Key recommendations
- Upgrade risk assessment tools, to include more emphasis on systemic risks and impacts posed by the project, as well as include human rights impact assessments and mandatory site inspections where vulnerable groups are found. In addition, all category
A/B/FI projects and advisory projects in the social sectors should require the application of the full assessment suite. - Strengthen protection for vulnerable groups in particular, patients, children, the elderly and any low-income groups being served or targeted. The presence of any of these groups should automatically trigger higher risk categorization (A or FI-1), risk assessment and risk management actions, particularly where said vulnerable groups and weak regulatory enforcement coexist.
- Close all critical implementation gaps identified, with a view to addressing: the culture of tick-box compliance; staff incentives for effective monitoring and supervision of clients; contracting for sufficient leverage at all stages of the project cycle; improve transparency and public disclosures on ESAP implementation; and sanctions for repeatedly noncompliant clients.
- Require effective and functioning ESMS and ESAPs for all FI investments, particularly those engaging in the social sectors.
- Address labour and working conditions (PS2) in particular addressing emerging risks and concerns around casualization, aggressive commercial/ revenue targets that compromise patient care or education quality.
- Improve transparency and disclosures, including the disclosures around: project impacts; co-investor involvement and their E&S responsibilities on the project page; and limiting inappropriate application of non-disclosure agreements that limit transparency
or redress. - Embed consumer protection principles (pricing transparency, product safety, redress) into PS1.