Manila,
Philippines (May 1) - Amid a looming infrastructure investment collaboration
between the Asian Development Bank (ADB) and its touted rival the Asian
Infrastructure Investment Bank (AIIB), an international civil society network
challenged the ADB in its 51st Annual Governors Meeting to address the clear
calls for transparency and accountability of its projects and operations.
The
250-member strong NGO Forum on ADB is urging the Bank to implement concrete
policy tools and practices on safeguards and ensure the rights of environmental
defenders as more and more borrowing governments are suffering from shrinking
civil society space. In order to eradicate poverty and inequality in Asia, the
ADB on one hand recognizes the Sustainable Development Goals (SDGs) and the
Paris Agreement but commits to move its funds through the private sector,
disenfranchising the poor and the marginalized. The Forum calls out ADB in its
de-risking private sector to invest in corporate driven infrastructure needs at
the environmental and social cost of local people across Asia.
This
51st AGM, the NGO Forum on ADB explicitly states that infrastructure which does
not address local peoples needs is nothing but a marketing ploy for attracting
new financial players into an asset bubble. Infrastructure is not an asset
class for private investment and profit gains. The role of the ADB as per its
Strategy 2030 approach paper demonstrates the Bank’s intentions to shift its
portfolio in an attempt to compete in fast tracking loans with the China - led
AIIB. While lending rates may go up, the environmental and social risk through
private sector operations remain unmitigated.
Consequently,
there is no indication on how private sector investments will manifest into
particular projects. While bunk loans will flow quickly the Forum fears various
dirty energy projects like Coal plants, and heavy handed hydro-projects may
push through without public accountability.
To
this, Forum reiterates the need for ADB’s open engagement with civil society organizations
especially on private sector lending is indispensable in making the Bank more
accountable and effective in their lending portfolio. The public has the right
to know what sub-projects will surface from financial intermediary lending.
On co-financing
with AIIB, Forum executive director Rayyan Hassan further noted that the 2009
Safeguard Policy Statement (SPS) clearly states that the higher standards of
Safeguards should apply in any ADB-financed project. In recent times projects
such as the Myingyan Gas Project co-financed by IFC, ADB, and AIIB show that
various local grievances surrounding environmental degradation, labor
violations, and displacement are surfacing. Without clear applications of ADB
Safeguards, in this co-financing project, the local people are being left
helpless in the face of private sector operators.
“The
stringent application of environmental and social safeguards with strong human
rights dimension is integral for the ADB to prove that it is indeed a bank for
development.”
Moreover,
Hassan said the ADB-AIIB co-financing initiative would further underline the
glaring gaps in ADB’s delivery mechanism of its safeguards as revealed by the
operational review conducted by its own Independent Evaluation Department (IED)
in 2014.
He
cited the following:
(i)
Lack
of any disclosure and reporting gaps in ADB’s financial intermediary (FI)
private sector projects,
(ii)
Glut
increase in category B projects to avoid more stringent environmental and
social assessments,
(iii)
poor
quality at entry of information in regards to environment, resettlement and
indigenous peoples issues pre-project approval, and
(iv)
Lack
of clear response on project monitoring by ADB on Safeguards with almost
non-existent on site field visit by ADB safeguard staff.
Hassan
further added, “Unfortunately safeguard policies have been perceived by most
development actors, especially public and private borrowers as ‘obstacles’ to
the path of project implementation. ADB should ensure due diligence in design,
implementation, and supervision of its safeguard measures for all projects per
the recommendation of the IED; if it intends to be true to its original mandate
of poverty alleviation in Asia.”
Forum
also expressed serious concern on the shrinking civic space and restriction on
civil society especially in countries where ADB operates such as Lao PDR,
Uzbekistan, and Azerbaijan. ADB has no
policy on mitigating risk on local communities in conflict zones, and continues
to target its lending towards authoritarian regimes.
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