Sunday, February 3, 2008

The Asian Development Bank’s Safeguard Policies


Introduction

On July 25, 2005, the ADB announced that it was conducting an ‘update’ of its safeguard policies for purposes of “enhancing its effectiveness, and ensure its relevance to changing client needs and new lending modalities and instruments.”1 The ADB recognizes that the implementation of its policies on the ground has been a problem. A key aspect of the update is a plan to streamline operations and consolidate the three safeguard policies into one.

At present, ADB’s Social and Environmental Safeguard Division (RSES) within the Regional Sustainable Development Department (RSDD) is leading the safeguard policies update. A steering committee, and internal and technical working groups were formed to facilitate and discuss the safeguard issues. They are in charge of distilling the principal policy elements of the SPU and drafting the policy paper (also known as the W-Paper).

ADB’s expects to finish the entire update process is in November 2007 where the Board is expected to review the final policy paper. Between July and October 2006, the ADB will have its own internal consultations. After which, the Bank will conduct external consultations.

ADB’s Safeguard Policies

The ADB’s safeguard policies require the Bank to avoid, minimize, or mitigate adverse environmental and social impacts from its funded projects extended to its Developing Member Countries (DMCs) in Asia and Pacific region. Currently, the ADB has three safeguard policies:

· Involuntary Resettlement Policy (1995)

· Indigenous Peoples Policy (1998)

· Environment Policy (2002)

The Involuntary Resettlement Policy states that forcible resettlement should be avoided whenever possible. Resettlement plans must be developed in consultation with affected communities. Affected people should be fully informed about the resettlement. They should be justly compensated and provided with appropriate land, housing and infrastructure, among others.

Affected communities must be at least as economically and socially well off after the project as they were before the project.

The Indigenous Peoples Policy states that the ADB should ensure that equal opportunity for indigenous peoples are provided. Projects should be implemented with the informed consent and participation of the IPs. Interventions that will affect the IPs should be consistent with their needs and aspirations.

The Environment Policy states that the environmental impacts of projects should be evaluated and minimized. The public should be involved in the evaluation of environmental impacts. Environmental impact assessments should be conducted and disclosed to the general public.

The safeguard policies are very important to the civil society organizations (CSOs), concerned stakeholders and affected communities because these are the basic guiding principles that ensure the Bank’s accountability as regards the environmental and social impacts of its projects. When the operational policies and procedures are violated, affected communities and concerned stakeholders can file a complaint with the ADB’s Accountability Mechanism. Complaints are filed with the Office of Special Project Facilitators for problem-solving purposes, and elevated to the Office of Compliance Review Panel for compliance.

Problems with the Safeguard Policies

There are some key problems with the safeguard policies. One is that they do not allow communities to say “no” to a certain project. The policies only help lessen potential social and environmental impacts. Another one is that the ADB has a poor track record in implementing its own policies. Despite the existence of the safeguard policies, evidence suggests that many ADB projects have damaged the environment and caused social and economic harm to vulnerable communities.

Some high profile ADB-funded projects have exposed serious shortcomings, such as the Southern Transport Development Project (STDP) in Sri Lanka, Chashma Right Bank Irrigation Project (CRBIP) Phase III in Pakistan, and the Samut Prakarn Wastewater Management Project (SPWMP) in Thailand, just to name a few.

Another issue is the lack of accountability for safeguard compliance. In STDP (Sri Lanka), ADB’s own Compliance Review Panel (CRP) reported that “the ADB management has not complied with most of the proposed remedial action in the CRP report prepared in July 2005 to solve the problems of the STDP.” The ADB rarely sanctions its clients or its own staff and management for failure to comply with the safeguard policies.

CSOs’ concerns with the Update

CSOs are concerned that the update will weaken the safeguard policies that could result in ADB being less accountable for its projects and interventions. CSOs believe that the present update is related to ADB’s ability to successfully compete with export credit agencies and other development financiers in the region that do not require borrowers to follow stringent safeguard policies. CSOs are also concerned that the ADB is following what the World Bank did in the mid-1990s when the latter initiated a similar process and resulted in the simplification of its safeguard policies.

Another concern of the CSOs is ADB’s adoption of a ‘country systems’ approach in addressing social and environmental safeguard issues. This approach means that for certain projects it finances, the Bank will rely on the borrowing government’s own environmental and social systems rather than its own safeguard policies. National systems will be evaluated against a set of the Bank safeguards and if judged ‘equivalent’, they will be used for project preparation and implementation. Although CSOs have always advocated the strengthening of social and environmental standards and the building of institutional capacity at the national level, they have been concerned that the shift towards country systems will result in a dilution of the Bank’s own responsibilities for its safeguard policies.2

What Do CSOs Want?

CSOs want the ADB to stop supporting highly destructive projects and to be held responsible and accountable for social and environmental damages its projects bring. The ADB should seek the informed consent of affected communities before developing projects, and retain this strong voice throughout the project cycle. These strong requirements, among others, should be part of the safeguard policies. CSOs want the ADB to view environmental and social planning as a way to minimize problems arising in the future, rather than as a constraint on competitiveness. In evaluating the effectiveness of its safeguard policies, CSOs believe the ADB needs to listen to the voices of project affected people and civil society from developing countries.

In response to ADB’s Discussion Note in March 2006, forty eight CSOs sent an open letter to the ADB, expressing concerns about the update. The letter contained a number of recommendations for the ADB to strengthen its environmental and social standards and hold ADB management accountable for policy implementation. These include: complying with international human rights, labor and environmental laws, conventions, and norms; developing clear and comprehensive social and environmental policy frameworks; establishing mechanisms for compliance and ensuring accountability for results on the ground; and protecting the rights of all affected communities and ensuring respect for indigenous peoples’ internationally guaranteed rights.

(Footnotes)

1 See http://www.adb.org/Safeguards/policy.asp

2 For more information on the recent trends at the World Bank, see Shannon Lawrence “Retreat from the Safeguard Policies: Recent Trends Undermining Social and Environmental Accountability at the World Bank,” January 2005, available at

http://www.environmentaldefense.org/documents/4279_RetreatSafeguardPolicies_0105.p

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