IFC Primer and Opportunity to Improve Standards for Indigenous Peoples’ Rights
When IFC standards are strongly and clearly applied, they can help prevent harm and support more equitable outcomes. When they are weakly or inconsistently implemented, they can normalize practices that sideline Indigenous Peoples’ decision-making while still being presented as “responsible” investment.
Tallgrass Institute’s primer on the International Finance Corporation (IFC), the private lending arm of the World Bank Group details Indigenous Peoples’ rights in the IFC’s sustainability framework and performance standards. Beyond lending activities, the IFC shapes how global private finance approaches environmental and social risks. From the article:
IFC investments directly support private sector activities, including sectors such as mining, infrastructure, agribusiness, and energy–many of which operate on or near Indigenous Peoples’ lands and territories. In addition, IFC-financed projects are often located in regions with significant Indigenous populations, including Latin America, Africa, and Asia and intersect with Indigenous lands and territories, natural resource governance, cultural heritage, and livelihoods. As such, Indigenous Peoples’ rights, including rights to land, self-determination, and decision-making in development pathways must be integral to project design and risk assessment when financed by the IFC.
IFC’s Performance Standard 7 (PS7) focuses on Indigenous Peoples and requires clients to identify and assess impacts on Indigenous Peoples, undertake meaningful consultation and participation and establish an ongoing relationship with affected communities, and obtain free, prior, and informed consent (FPIC) in limited high-risk circumstances.
The IFC is currently reviewing its Sustainability Framework and will update the Performance Standards. As part of this review, Indigenous Peoples have identified areas where further clarity and strengthening are needed. These include how FPIC is applied in practice, the conditions under which consent is required, and how outcomes are assessed beyond procedural compliance.
In response to the review, Indigenous Peoples’ organizations have formally submitted a joint letter to the IFC with two significant requests: 1) conduct a dedicated consultation process for Indigenous Peoples beyond general stakeholder engagement, and 2) establish an Indigenous Peoples Advisory Group (IPAG).
This IFC’s review provides an opportunity to address multiple issues, improve accountability, and better align standards with evolving international norms on Indigenous Peoples’ rights. The updated standards will shape how billions of dollars in private finance interact with Indigenous lands and communities over the next decades.