Country Safeguard Systems approach at the ADB
By Jennifer Kalafut / International Accountability Project
This summary is adapted from a November 2007 briefing paper published by the NGO Forum on the ADB: “ADB’s Selective Trumpeting and Downplaying at the Same Time: ‘Hitches’ Inherent in the Country Systems Approach.”(www.forum-adb.org)
The Paris Declaration on Aid Effectiveness
The concept of using country systems (CS) in development projects traces its roots to the United Nations (UN) Millennium Development Goals (MDGs) and the 2005 Paris Declaration (PD) on Aid Effectiveness. With more than a decade of evolution through the “aid harmonization” process, the PD includes a significant set of donor commitments to improve the effectiveness of aid in order to best achieve the 2015 Millennium Development Goals and reduce poverty and inequality.
Where World Bank leads, Asian Development Bank follows
Various IFIs responded to the Paris Declaration and aid harmonization process in different ways. The World Bank, along with producing a number of studies on the need for a more “flexible” approach to lending particularly in middle-income countries, was the first to experiment with a “country systems approach” through a series of pilot projects in 2005. The use of country systems was intended to prove a more effective method of development assistance as it was supposed to lesson procedural burdens of countries and be most specific to the country context.
In December 2005, as an initial step towards use of country systems, the ADB developed a Technical Assistance (TA) program for strengthening country safeguard systems, which aims to develop an approach and methodology for assessing country safeguard systems by analyzing the safeguard frameworks in ADB’s developing member countries. Country safeguard systems, according to the ADB, “means applicable national laws, regulations, procedures and standards and country’s institutional capacity in implementing these laws, regulations, procedures and standards at national, subnational or sectoral levels.”1
Under the TA, one of the main components is the on-going analytical studies and assessments of country safeguard systems in five developing member countries, including: the People’s Republic of China, India, Kyrgyzstan, Philippines and Vietnam. The target date for completion of the TA was on June 30, 2007, but, according to an ADB Director, “The CSS [RE]TA is still on-going. The country reports are under preparation by consultants. Preliminary TA findings will be shared during the SPU consultations, and we expect to have reports available later in 2008.”2
At the same time it is developing the country systems TA and after producing a series of internal studies on such things as institutional efficiency, the Bank’s role in middle income countries (MICs) and managing for results, the ADB commissioned an update to its three safeguard policies (Environmental Assessment, Involuntary Resettlement and Indigenous Peoples) in order to formally adopt the use of country safeguard systems for all its lending instruments.
“Hitches” Inherent in the Country Systems Approach
The application of country systems “involves greater dependence on a country’s existing policies and practices when those are equivalent in intent, spirit and content to ADB policies.”3 Simply put, the ADB will heavily rely on national procedures and laws instead of the Bank’s current policies, and in doing so, raise to prominence the role of the national government.
Not widely known and much less openly discussed, the Bank’s motivation in adopting country systems was fuelled by the trends in the global development context — the apparent escalating competition among funding institutions to “entice” as many borrowers as possible, without the cumbersome conditionalities historically attached to the assistance. Particular emphasis is placed on the need for the Bank to improve its strategy for “attracting” member developing countries.
Interesting aspects of the issue surrounding the implementation of country systems including the following:
• Aid Effectiveness—Aid effectiveness goals, as defined by the PD, lack ambition and clear targets and benchmarks. If there are loopholes in the basic framework of PD commitments (ownership, alignment, harmonization, managing for results, mutual accountability) consequently, the assumptions made under this flawed framework are likewise punctured.
• Country Driven and not Donor Imposed—If the goal of the ADB’s country systems TA is to strengthen national capacities and improve country systems, why is the TA based on donor demands and not on the specific requirements of each country? The ADB should consider donor-partner country relationship, where countries truly exercise “ownership”, that is, effective leadership over their development policies and strategies and coordinate development actions.
• Country Context Sensitive and not Donor Agenda Perspective—The national situation and context is not given due consideration in the aid effectiveness process, when in fact this should be the cornerstone of development efforts.
• Multistakeholders Participation and not Dominated by Technical Consultants—Country ownership should apply not only to the government, but should include a broad range of stakeholders. In a democratic system, it is unacceptable that the interests of a limited few are the only ones reflected in the national development agenda. ADB should provide an enabling environment for multistakeholder participation. Equally important is creating mechanisms and processes as well to ensure that the voice of communities is recognized.
• Transparency—ADB’s culture of secrecy and selective disclosure of information makes it even more difficult for the public, including CSOs, to obtain relevant and needed information from the Bank. The public disclosure policy on country systems should explicitly include pertinent information on the policy framework, policy requirements, methodology and tools for assessing country systems, accountability, evaluation of pilot projects and costs.
• Meaningful Participation of Project-affected people—The approach to country systems should guarantee space for meaningful participation, especially of project-affected people.
• Managing Capacity Development—It is anticipated that the use of country systems will require enhanced supervision by the ADB, which in turn necessitates expert capacity of the Bank. However, the ADB’s track record calls into question the Bank’s capacity in this regard.
• Assessing Equivalency and Acceptability—This is a crucial component of a country systems approach in order to protect against taking the lowest common denominator when it comes to safeguard requirements.
Recommendations
The introduction of country systems in the draft safeguard policy hearkens and undermines the on-going review process of the safeguards. The Asian Development Bank should carefully look into the experiences of the World Bank in its use of the country systems, which is said to have been “plagued by over-optimism about political commitments and institutional capacity.” The ADB should:
• Uphold the safeguards. “Uphold and ensure compliance with international human rights, labor and environmental laws, convention and norms.”4
• Create an enabling mechanism for multistakeholder participation.
• Support national development strategies that are country oriented and demand driven.
• Demand for accountability.
• Adhere to the highest standards of transparency and disclosure.
The use of country systems, essentially, would mean that the discourse on safeguards will shift to the national level. Given this context, CSOs need to regroup and reassess their strategic advocacy approach. There is to need to strengthen CSO collaboration at the national and international level and advocate for an enabling environment for CSO participation in the national processes.
Notes
1 http://www.adb.org/documents/PIDs/39186012.asp, Strengthening Country Safeguards Systems: Regional.
2 E-mail of Nessim Ahmad (Director, Environment and Social Safeguards, Asian Development Bank) to Mishka Zaman (Manager, Asia Program, Bank Information Center), October 20, 2007.
3 Technical Assistance Report. Technical Assistance for Strengthening Country Safeguard Systems, Asian Development Bank. December 2005.
4 Appendix 3, page 42, ADB Draft Safeguard Policy, Asian Development Bank.