The new Asian Infrastructure Investment Bank must develop strong safeguards
Currently, on the initiative of China, the Asian Infrastructure Investment Bank (AIIB) is being set up. As the ‘Chinese alternative to the World Bank’, AIIB will focus on financing large-scale infrastructure projects in Asia. The bank promises to be ‘lean, clean and green’, or in other words: non-bureaucratic, non-corrupt and environmentally friendly. Nevertheless, civil society organisations fear there will be disastrous consequences for local populations and the environment, considering China’s poor track record in these areas. In a letter to AIIB and in a press release, our partner 'NGO Forum on ADB' calls on the bank to develop strong safeguards.
The AIIB was founded last year on the initiative of China and has 57 founding members, including the Netherlands. During the upcoming months, the exact setup of the bank will be negotiated, such as the voting structure and provision of capital. To ensure there will not be negative effects on people and the environment, the NGO Forum on ADB urges AIIB to integrate strong safeguards into its core principles. Safeguards are criteria for projects or policies that have to be met to make them sustainable and socially responsible. By focusing solely on people and the environment, AIIB can serve as an example for other multilateral development banks.
‘Lean, clean and green’
In the letter, the Forum emphasises that AIIB has to comply with national and regional legislation and, in particular, with the traditional rights of local population groups. It is essential that AIIB respects the traditions and knowledge of indigenous groups and cultural minorities. It is also crucial that AIIB-financed projects will not harm local ecosystems and biodiversity. In the letter, the Forum urges AIIB to fulfill its promise of becoming ‘lean, clean and green’. The NGO Forum on ADB is keen on actively contributing to developing AIIB’s safeguards. As a network of NGOs, the Forum has long-standing experience in safeguards and extensive knowledge of the negative effects of large-scale infrastructure projects in the region.
What is Both ENDS' role?
Both ENDS will appeal to the Dutch government on its responsibilities as a member of the AIIB. The Dutch government should be committed to aiming for the application of the highest international standards. Both ENDS also supports the NGO Forum on ADB in setting up a new forum of Asian civil society organisations that aims to make AIIB’s policy sustainable and socially responsible.
The NGO Forum on ADB is a coalition of Asian civil society organisations that critically follows the Asian Development Bank (ADB). Previously, the Forum closely examined ADB’s safeguard policy and collaborated with Both ENDS to make the bank’s policy sustainable and socially responsible.
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Both ENDS submission to Phase One of the ESF review of the AIIB, March 20 2020
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more cost-effective, forms in place. Safeguards policies are of crucial importance for project affected people to hold banks to account. However, Environmental and Social Frameworks (ESF) nowadays replace safeguards at banks. The ESF model leads to a reduction of a Bank's direct and mandatory role in overview, including due diligence, monitoring, and evaluation, of Bank funded activities and investments, along with a shift towards a greater reliance on client self-assessment and self-reporting. Our main ask is a return to binding, rules-based safeguards policies at banks.
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The bank's flexible requirements for clients and national standards for risky projects dilute safeguards. Project approval should be predicated on specific and binding targets for compliance and reflect input from communities involved.