The World Bank, through its arms—the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA)—has released a new framework designed to provide a structured approach for addressing harm arising from the environmental and social (E&S) impacts of projects supported by IFC and MIGA. The framework focuses on prevention, preparedness, access to remedy, and contribution to remedial action. It aligns with the IFC/MIGA Sustainability Frameworks (SFs) and complements the Compliance Advisor Ombudsman (CAO) Policy.

The Remedial Action Framework (RAF) applies to all investment projects supported by the IFC and all projects covered by MIGA’s political risk insurance (PRI) guarantees, for which a complaint could be found eligible under the Compliance Advisor Ombudsman (CAO) Policy.

Why a New Framework Was Needed
When big development projects like dams, factories, roads, or power plants are built, they can sometimes harm the environment or the people living nearby—especially if proper guidelines aren't followed. Over the years, there have been many such cases where communities suffered or nature was damaged because projects didn’t fully consider their social and environmental impact.

To make sure that future projects are safer and more responsible from the very beginning, the World Bank Group has introduced a new framework. It’s meant to guide companies and project developers to follow all the right steps—putting environmental and social safety first—before any loans are given or work begins.

This framework comes from two key arms of the World Bank Group: the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), which help fund and support large-scale development across the globe.

How It Works
The Remedial Action Framework (RAF) applies to all investment projects supported by the IFC and all projects covered by MIGA’s political risk insurance (PRI) guarantees, for which a complaint could be found eligible under the Compliance Advisor Ombudsman (CAO) Policy.

Under the IFC/MIGA Sustainability Frameworks, clients are responsible for managing environmental and social (E&S) risks and impacts, as well as funding and implementing remedial actions. As development institutions, IFC/MIGA play a role within the broader ecosystem of remedial actions. However, they cannot act as guarantors of E&S outcomes or as insurers for costs related to remedial actions for project-related harm.

IFC/MIGA’s support for remedial actions will vary on a case-by-case basis, considering factors such as the type of investment/intervention and proximity to harm. In cases of adverse E&S impacts causing harm, IFC/MIGA may contribute to remedial actions through: (a) financial, contractual, and/or relationship influence with clients and other responsible parties, and (b) enabling activities, such as fact-finding, technical assistance, capacity building, and/or community development activities. When determining the nature and scope of enabling activities, IFC/MIGA will consider factors like their role and exposure, harm assessment, existing remedial actions, client capacity, leverage, and potential risks.

Enabling activities are expected to be the primary form of IFC/MIGA’s contribution to remedial actions in most cases where they choose to supplement remedial actions taken by clients and other parties. However, the RAF does not preclude IFC/MIGA from considering and proposing other options for remedial actions. Direct funding of remedial actions involves operational, legal, and financial risks, which have been carefully considered during the development of the RAF. The primary focus on enabling activities aims to minimize these risks.

The proposed RAF incorporates feedback obtained from public consultations with a broad range of external stakeholders, including civil society organizations (CSOs), independent accountability mechanisms (IAMs), IFC/MIGA clients, the International Bank for Reconstruction and Development (IBRD), and other development finance institutions (DFIs), as well as technical engagement with the CAO.

The RAF was approved on April 3, 2025, by the Boards of Directors of IFC and MIGA for implementation under an interim approach for three years (Q4FY25 – Q4FY28). During this period, IFC/MIGA will engage regularly with various stakeholders and provide updates to the Boards. At the end of the interim period, a final assessment will be conducted in consultation with the CAO, and lessons learned and suggested refinements will be incorporated into a final policy.