FREQUENTLY ASKED QUESTIONS

What is the NGO Forum on ADB?

The NGO Forum on ADB is a network of civil society organizations (CSOs) that has been monitoring the projects, programs and policies of the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB).  

The Forum has been active since 1992.

The forum has been assisting project, program and/or policy-specific campaigns led by its members, and has been conducting capacity building workshops.

NGO Forum on ADB NEITHER accepts money from the ADB nor is it in any way part of it.

The Forum Secretariat is based in Quezon City, Philippines.

How was the Forum established?

The NGO Forum was established in 1991 as the NGO Working Group on the ADB by a coalition of NGOs from the Philippines, Asia, and the Pacific, as well as from Europe and the USA.

 

At that time, activists felt that little attention was given to the ADB, which is an influential international financial institution in Asia and the Pacific, as compared with the World Bank and the International Monetary Fund. Since then, the Forum has expanded its core members in each of the five ADB-defined Asian subregions, namely: Central Asia, South Asia, Southeast Asia, Mekong subregion and the Pacific, as well as in the Bank’s major donor countries such as Japan and the US. 

What are the activities and campaigns that the Forum has initiated in the past?​

The NGO Forum launched a series of campaigns to make the ADB accountable for the negative impacts of its funded projects. This has resulted in the establishment of the First Inspection Mechanism in 1995 and the New Accountability Mechanism in 2004. It has also supported campaigns on the ADB’s policies on gender, Safeguards, Energy, and disclosure, among others.

 

In addition, Forum has also been involved in local campaigns on ADB-funded projects such as the Highway 1 Project in Cambodia, Samut Prakarn Wastewater Management Project in Thailand, Chashma Right Bank Irrigation Project in Pakistan and Southern Transport Development Project in Sri Lanka.

How can my organization become a member of the Forum?

The Asian Development Bank (ADB) is a Multilateral Development Bank (MDB) with the mandate of reducing poverty by increasing growth in Asia and the Pacific. It provides the following services to its member countries: loans, technical assistance, grants, guarantees and equity investment.

 

The Bank is owned and financed by its 67 member countries, of which 48 are from the region and the remaining 19 countries are from other parts of the globe.

Does my organization have to be a member of the NGO Forum to participate in its activities?

In general, the NGO Forum only works with its member and partner organizations. Though, there may be exceptions to this rule as the need arises like, for an instance, a non-member organization is seeking assistance for its campaign on a certain policy or project of the ADB.

What is the ADB?

The Asian Development Bank (ADB) is a Multilateral Development Bank (MDB) with the mandate of reducing poverty by increasing growth in Asia and the Pacific. It provides the following services to its member countries: loans, technical assistance, grants, guarantees and equity investment.

The Bank is owned and financed by its 67 member countries, of which 48 are from the region and the remaining 19 countries are from other parts of the globe.

How does the ADB provide money for development?

There are three basic mechanisms with which the ADB provides development assistance. The first is in the form of grants. Grants comprise a relatively small amount of the ADB’s expenditures and are often given in the form of technical assistances (TAs) which helps borrowing governments plan a particular project and build its capacity for development.

 

The second mechanism is in the form of concessional loans made through one of the three special funds, the largest of which is the Asian Development Fund (ADF). This is the “soft lending” arm of the ADB — loans that are given at interest rates well below market levels and on terms more flexible than any commercial bank could provide. The ADF is only available for the Bank’s developing member countries DMCs with low per capita incomes and limited debt-repayment capacity.

 

The third is the Ordinary Capital Resources (OCR) of the ADB, which functions pretty much like a loan made through a private sector bank, with the borrower repaying at market interest rates in a timely manner. Only countries in some measure of economic hardship are eligible for “soft lending”, while others are only eligible for OCR lending.

Who can borrow from the ADB?

Unlike private banks, which lend largely to individuals or private companies, the primary borrowers of the ADB are its DMCs. ADB has a private sector lending arm which lends to private companies.​

How does the ADB make decisions?

The highest decision-making body of the ADB is its Board of Governors, consisting primarily of finance ministers from the 67-member countries. The Governors meet once a year at the ADB Annual Meetings. In the interim, all operational decisions of the ADB are made by its member governments through officials sent to the ADB’s Board of Directors, often from the member government’s ministry of finance.

The voting power is determined by the amount of investment in the ADB. For example, though India has a population of more than one billion and sometimes has accounted for nearly 15 percent of the ADB’s total expenditures, it only has 6.137% voting power (as of February 2007). The 44 DMCs combined only account for about 40% while the non-borrowing ADB member countries enjoy 60% of the total voting power. The largest contributors to the ADB are Japan and the USA, each with 12.756% of the total voting power.

Who keeps the ADB accountable?

 Since its establishment, the ADB (or any MDB) cannot be subjected to any judicial proceedings or even to the United Nations framework. It enjoys judicial immunity through it as prescribed in its organizational charter, Article 50. As a result, it is very difficult to hold the ADB accountable when it violates national laws or internationally accepted norms and declarations, such as those established through the United Nations.

In response to worldwide concerns and call for the effectiveness of its development aid, the ADB began adopting a set of policies in the 1990s to ensure its compliance with the Inspection Mechanism approved in 1995. This mechanism came under critique in 1999, when the government of Thailand refused to allow inspectors to visit the Samut Prakarn Wastewater Management Project. More importantly, the ADB’s BoD failed to approve the report of the inspection panel, which concluded ADB’s non-compliance with some of its own policies. There was also a growing concern that the Inspection Mechanism focused primarily on the ADB’s compliance (or lack thereof) without directly addressing problems faced by affected people brought by the Bank’s intervention. As a result, the ADB approved the new Accountability Mechanism replacing the previous Inspection Function. It has a problem-solving arm in addition to ensuring its compliance with its own policies. 

What are the types of ADB policies?

ADB policies are divided into two: business policies, which have to do with the way the ADB conducts business internally, and Operational Policies (OPs), which have to do with the way ADB conducts its core business. Some examples of OPs include the Safeguard Policies and the Energy Policy. From the perspective of civil society, OPs are more important as these are the ones with which the ADB can be held accountable through the Accountability Mechanism. Civil society tends to see policies as guidelines with which the ADB must adhere to. In fact, when one reads the many ADB policies and strategies, there are very few parts that are explicitly binding. Instead, the policies often read like a mixture of pieces of advice on best practices and statements on what the ADB hopes to achieve. From the perspective of civil society, ADB’s policies should be binding to keep the Bank accountable.

Given the ADB’s overarching goal of poverty reduction, why should we continue our campaign on the ADB?

Though it has adopted poverty reduction as its overarching goal in 1999, civil society should still continue monitoring the operations of the ADB in Asia and the Pacific. Since its establishment, the Bank has implemented projects that have adversely affected the environment and the local communities. Even with its poverty reduction strategy, it has still continued to support projects that have violated the rights of the poor and benefited only a fewnumbers of individuals. Thousands of people have been displaced by the Bank’s so-called development projects. From 1994 to 2006, the Bank has displaced more than 1.77 million people, according to a special evaluation study (SES) of the Operations and Evaluation Department. It added, “projects approved in the last five years were expected to affect 100,000 to 150,000 people every year.”

 

In spite of its latest pronouncements that it supports energy efficiency and resource conservation, it continues to fund fossil fuel projects such as dirty mega coal projects and other infrastructure projects that have proven to be increasing carbon emissions in the region, such as freeways and highways. Such types of projects have contributed to climate change. There are also big hydropower projects that have not only adversely impacted downstream communities but has dramatically ruined ecosystems of major rivers such as the Mekong river.

 

Finally, with its Strategy 2020, the Bank has shown its bias for corporate interest, clearly abandoning the poor in Asia and the Pacific.

, the ADB will not risk losing its reputation as the EXIM banksCivil society should remain vigilant. With the strong competition posed by commercial and lending bank in the region. From introducing misleading terms such as “clean coal” in the premiere past to the weakening of its own policies such as the case in the ongoing Safeguard Policy Update.

 

For more information, you may write to secretariat@forum-adb.org.

© 2019 by NGO Forum on ADB

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85-A Masikap Extension, Diliman, Quezon City, Philippines | +632 436-1858 | +632 921-4412 | secretariat@forum-adb.org