The IFC’s Investment Policies and Legal Structure: Reconciling Social, Environmental and Human Rights Objectives with Commercial and Financial Markets Realities

Document Type : Original Article


1 Lecturer in Law, West Tehran Azad University, Faculty of Law. (Corresponding author).

2 Associate Professor, University of Tehran, Faculty of Law.


Many believe that the International Finance Corporation (IFC) portfolio as a member of the World Bank Group, could make positive difference based on its standards in order to eliminate the extreme poverty and promote shared prosperity. However, a close examination of the evidences on this matter indicates otherwise. In this paper, the question whether the IFC is on the right track with regard to its investment policies and legal structure will be examined. In order to answer to this question, reference will be made to issues such as, IFC standards, IFC and human rights, legal constrains and limitations and project financing in the light of some specific projects carried out by the IFC. Since the IFC in fact, acts as a bridge and actually a hybrid place for financing between the private and public sectors, its performance in the private sector usually creates a profitable policy, this not only makes the corporation far from its intended goals but also creates tension in the financing path in order to generate revenue instead of achieving its goals. This issue turns away the IFC from the nature of an international organization and instead makes it act as a private investment bank. The article concludes that with regard to the IFC’s actual performance, it becomes clear that, the IFC has not fully and accurately complied with its required standards while this diverts the corporation from its original purpose, which must be reformed and monitored.