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The World Bank and Natural Habitats

OP 4.04

September, 1995

These policies were prepared for use by World Bank staff and are not necessarily a complete treatment of the subject.

Natural Habitats

Note: OP, BP, and GP 4.04 are a conversion of OPN 11.02, Wildlands, to the OP/BP/GP format. Please discard OPN 11.02. These statements apply to all projects for which a Project Information Document is first approved by the country department director on or after October 15, 1995. The policy set out in OP 4.04 applies to any project financed by the Bank, whether or not the Bank is financing the project component that affects natural habitats. In case of doubt, any determination of what is acceptable to the Bank under this policy is made by the Regional vice president in consultation with the Environment, Legal, and Operations Policy departments. Questions should be addressed to the Director, Environment Department.

1. The conservation of natural habitats,[1] like other measures that protect and enhance the environment, is essential for long-term sustainable development. The Bank[2] therefore supports the protection, maintenance, and rehabilitation of natural habitats and their functions in its economic and sector work, project financing, and policy dialogue. The Bank supports, and expects borrowers to apply, a precautionary approach to natural resource management to ensure opportunities for environmentally sustainable development. Economic and Sector Work

2. The Bank's economic and sector work includes identification of (a) natural habitat issues and special needs for natural habitat conservation, including the degree of threat to identified natural habitats (particularly critical natural habitats); and (b) measures for protecting such areas in the context of the country's development strategy. As appropriate, Country Assistance Strategies and projects incorporate findings from such economic and sector work.

Project Design and Implementation

3. The Bank promotes and supports natural habitat conservation and improved land use by financing projects designed to integrate into national and regional development the conservation of natural habitats and the maintenance of ecological functions. Furthermore, the Bank promotes the rehabilitation of degraded natural habitats.

4. The Bank does not support projects that, in the Bank's opinion, involve the significant conversion or degradation[3] of critical natural habitats.

5. Wherever feasible, Bank-financed projects are sited on lands already converted (excluding any lands that in the Bank's opinion were converted in anticipation of the project). The Bank does not support projects involving the significant conversion of natural habitats unless there are no feasible alternatives for the project and its siting, and comprehensive analysis demonstrates that overall benefits from the project substantially outweigh the environmental costs. If the environ-mental assessment[4] indicates that a project would significantly convert or degrade natural habitats, the project includes mitigation measures accept-able to the Bank. Such mitigation measures include, as appropriate, minimizing habitat loss (e.g., strategic habitat retention and post-development restoration) and establishing and maintaining an ecologically similar protected area. The Bank accepts other forms of mitigation measures only when they are technically justified.

6. In deciding whether to support a project with potential adverse impacts on a natural habitat, the Bank takes into account the borrower's ability to implement the appropriate conservation and mitigation measures. If there are potential institutional capacity problems, the project includes components that develop the capacity of national and local institutions for effective environmental planning and management. The mitigation measures specified for the project may be used to enhance the practical field capacity of national and local institutions.

7. In projects with natural habitat components, project preparation, appraisal, and supervision arrangements include appropriate environmental expertise to ensure adequate design and implementation of mitigation measures.

8. This policy applies to subprojects under sectoral loans or loans to financial intermediaries.[5] Regional Environment Divisions (REDs) oversee compliance with this requirement. Policy Dialogue

9. The Bank encourages borrowers to incorporate into their development and environmental strategies analyses of any major natural habitat issues, including identification of important natural habitat sites, the ecological functions they perform, the degree of threat to the sites, priorities for conservation, and associated recurrent-funding and capacity-building needs.

10. The Bank expects the borrower to take into account the views, roles, and rights of groups, including local nongovernmental organizations and local communities,[6] affected by Bank-financed projects involving natural habitats, and to involve such people in planning, designing, implementing, monitoring, and evaluating such projects. Involvement may include identifying appropriate conservation measures, managing protected areas and other natural habitats, and monitoring and evaluating specific projects. The Bank encourages governments to provide such people with appropriate information and incentives to protect natural habitats.


1. See definitions in Annex A.

2. "Bank" includes IBRD and IDA, and "loans" includes credits, grants, and guarantees. This policy also covers GEF-funded projects. Adjustment loans are not covered by this policy but are subject to the general policies set out in OP 4.00, Environmental Aspects of Bank Work (forthcoming).

3. For definitions, see Annex A.

4. See OD 4.01, Environmental Assessment, to be reissued as OP/BP 4.01.

5. See OD 4.01, Environmental Assessment, to be reissued as OP/BP 4.01.

6. See OD 4.20, Indigenous Peoples, when local communities include indignous peoples. ...........................

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