The potential role of strategic environmental assessment in the activities of multi-lateral development banks

Over the last 10 years, strategic environmental assessment (SEA) has become an important policy instrument for national governments, particularly in Europe. Many of the countries that have experimented with SEA at the national level have begun to extend its use to bilateral development cooperation. Despite these innovations, SEA has yet to gain a serious foothold in the work of multi-lateral development banks (MDBs), although significant advances have been made by the World Bank. In a number of ways, the activities of MDBs are ideally suited to SEA. Unlike most national governments where responsibility for policies, plans, and programs (PPPs) is divided among departments and jurisdictions, MDBs tend to have more control over the different levels of the PPP hierarchy. This means that one of the core focuses of SEA, the notion of “tiering,” is perhaps more readily achieved in MDBs than elsewhere. As a consequence, there are genuine efficiency gains to be had, along with potential improvements in environmental outcomes in recipient countries. This paper presents an outline of a generic, comprehensive SEA system that could be applied to the lending and granting activities of MDBs. The main focus of the paper is the design of a linkage between SEA and the programming cycle of MDBs, where decisions are made about investments in recipient countries.