What it is
IFC Performance Standard 5 is the IFC standard on land acquisition and involuntary resettlement. It forms part of IFC's Sustainability Framework and applies to IFC clients whose projects involve land acquisition, restrictions on land use, physical displacement, or economic displacement.
Governance function
The standard turns displacement risk into a condition of private-sector finance. It requires clients to avoid or minimize displacement, compensate affected people, restore livelihoods, engage communities, and establish grievance mechanisms.
Who is included
People and communities physically or economically displaced by IFC-supported client activities, including people with formal rights, customary claims, or recognized use of land and assets, depending on the circumstances.
Who is left out
People indirectly affected through cumulative impacts, market shifts, downstream effects, informal tenure not recognised in practice, or impacts beyond the project area may be excluded if the client's assessment does not capture them.
Where continuity breaks
Continuity breaks when livelihood restoration is time-limited, when company-managed processes are not connected to public land administration or social services, or when accountability weakens after financial close or project completion.
Why it matters
Performance Standard 5 shows how displacement governance is increasingly mediated by private finance, ESG risk, lender requirements, and corporate due diligence. The political economy archetype is private-risk internalisation: displacement is governed to protect affected people and manage project risk, but public-system absorption remains external to the standard.
Governance coding table
| Political economy archetype | Private-risk internalization |
|---|---|
| Responsibility | The IFC client carries implementation responsibility, with IFC review and supervision. Government authorities may also be involved in land acquisition, permits, compensation, and local service systems. |
| Eligibility | Eligibility is tied to project impact, displacement category, land or asset use, cut-off dates, and client assessment of affected persons and communities. |
| Financing | Financing is project and client-bounded. Costs are carried through project budgets, compensation frameworks, resettlement action plans, livelihood restoration plans, and lender-required mitigation measures. |
| Data systems | Socio-economic baseline surveys, asset inventories, resettlement action plans, livelihood restoration plans, stakeholder engagement records, grievance logs, and monitoring reports form the data architecture. |
| Delivery system | Delivery occurs through client systems, consultants, local authorities, contractors, compensation mechanisms, livelihood programmes, and grievance processes. |
| Portability | Portability is weak unless project records connect affected people to public documentation, land systems, social protection, livelihood services, and long-term local development planning. |
| Accountability | Accountability includes client grievance mechanisms, IFC supervision, lender requirements, disclosure expectations, and potential complaints to the Compliance Advisor Ombudsman where applicable. |
| Time horizon | Project and investment lifecycle, with ongoing monitoring where livelihood restoration or displacement impacts continue. |