NGO Forum on ADB Statement
55th Asian Development Bank (ADB) Annual Meeting
of the Board of Governors
Open Statement: Critical Questions to ADB's Management during the 55th Annual Meeting
Introduction
At the 55th Annual Meeting of the Board of Governors of the Asian Development Bank (ADB), CSOs and communities adversely affected by the Bank's policies and projects across Asia and the Pacific take this opportunity to raise our collective concerns to you, Mr. President. From the outset, we express a deep sense of solidarity with the diverse peoples' movements across the region – including those calling attention to the debt crisis and political upheaval in Sri Lanka, the severe consequences of the recent floods in Pakistan that wreaked havoc on people's lives and livelihoods, and to the pervasive shrinking of civil society space coupled with intensifying reprisals against human rights defenders, including in Myanmar, the Philippines, and Mongolia, to name a few. As we are shifting into a post - COVID - 19 recovery period, we cannot ignore how the pandemic has deepened inequalities and exposed our fragile health system, weak governance, unsustainable dependence on resource-intensive energy systems and underdeveloped public transportation systems.
Devastation of Ongoing Climate-Related Disasters
Mr. President, we want to bring your attention to the super typhoon Karding (international name Noru), which blasted the Philippines' main Luzon Island, causing damage and losses of P141.38 million to the agricultural sector. Super typhoons and the pandemic have taught us that neglecting critical issues such as public health, energy access, and village-to-hospital infrastructure can lead to a massive human and capital cost; the ADB cannot pursue a pathway that remains bound to private profit in the name of development. Recently, Pakistan has also experienced one of the worst environmental disasters in the world; one-third of the country was submerged underwater, proving that the urgency of the climate crisis is upon us. According to Pakistan civil society groups, the current monster monsoon rainfall has affected more than 40 million people, causing damage to over two million homes and vast areas of agricultural land, the loss of an estimated one million livestock, damage to thousands of kilometers of road infrastructure, and the collapse of at least three hundred-and-fifty bridges in the country. It is urgent that the MDBs, including ADB, support Pakistan by systematically cancelling outstanding debts, free of any austerity conditionalities.
Pakistan accounts for 0.7% of GHG emissions but is ranked the 8th most vulnerable country to climate change globally. Amidst this critical situation, ADB continues to this day to dispense financing to support the development and operations of the 600 MW super-critical coal-fired power unit of the Jamshoro Power Company Limited (JPCL)' and has also recently financed large scale hydropower schemes such as the Balakot Dam, displacing village households and destroying climate resilient river ecosystems.
Pakistani civil society groups urge the ADB to bring an immediate halt to its support for all fossil fuel related facilities in Pakistan, including the Jamshoro Power Project, and reorient all the future investment portfolios towards the deployment of solar and wind energy projects for ensuring a just energy transition and sustainable economic growth.
As referenced above, the Forum Network calls for greater attention to be placed on addressing the debt crisis and political situation in Sri Lanka. Mr. President, according to national civil society voices, Sri Lanka is suffering from a serious debt crisis, energy crisis, and food crisis due to the failed neoliberal policies and corrupt system of capitalism implanted in the country. Many multilateral development bank financed infrastructure projects and borrowing initiatives have become sources of corruption in the past two decades.
Mr. President: ADB should take responsibility for it’s role in exacerbating these systemic problems, and as a policy imperative, should take immediate steps to cancel illegitimate and unfair debts, while encouraging other multilateral and bilateral lenders to do the same. Furthermore, it is time for the ADB to not only respond proactively to the humanitarian crisis, but also denounce draconian laws such as the Prevention of Terrorism Act which is being used explicitly to repress peoples’ voices in the midst of the political and socio-economic crises.
Safeguards Policy Revisions
The ADB is also in the midst of the Safeguards Policy consultation process with no clear indication if the new provisions will be progressive, rights-based, and pro-community. The ADB Safeguard Policy is supposed to protect the rights of development-affected communities. The ADB must consult affected people, and information must be disclosed formally. The language must be accessible to them to understand better the project plans to avoid, minimize, or mitigate adverse environmental, social, cultural, and many more impacts, especially for Indigenous Peoples and marginalized communities. Yet, according to civil society groups working with – and in – ADB project-affected communities, including for example in Nepal, the Bank has repeatedly failed to meaningfully consult with local people and explain the projects' risks, consistently leading to direct adverse impacts on people and the environment. Before project approval, Mr. President, diligent meaningful consultation and information disclosure are integral – if the ADB is to deliver on upholding its own safeguard standards.
Mr. President, as the current Safeguards Policy of the Bank is being reviewed, we continue to demand that the ADB develop strong safeguards now. We remind you if the Safeguards Policy is to be progressive and forward looking, it cannot turn a blind eye to the situation of human rights defenders, laborers, and a private sector operating outside the view of public disclosure.
Financing for Coal Retirement
The Forum Network is also raising to the fore concerns regarding the Energy Transition Mechanism (ETM) scheme that the Bank is preparing to pilot in the region. Mr. President, there remain ambiguities over how the mechanism will be implemented, leaving many of us skeptical. As coal and other fossil fuel prices today bring record high electricity rates amid skyrocketing costs of living, ADB and its partners must prioritize a rapid phaseout of costly coal power that will not pass on the burdens of ill health to future generations or exorbitant expenses to household level consumers, nor open the door for other carbon intensive fuels like fossil gas, blue hydrogen, waste-to-energy or woody biomass, to take coal's place.
Coal companies and financiers must shoulder their part in early closure expenses, including reparative and just transition costs. Any transition mechanism must not undermine progress towards aligning with IPCC Trajectory 1 (1.5°C), but rather help to shift to affordable, accessible, decentralized energy systems in borrowing member countries, harnessing 100% renewable energy sources. We have repeatedly stated in recent years that a just, inclusive, and sustainable transition across Asia and the Pacific cannot and will not be realized if the Bank continues to finance false solutions such as WTE incinerators, large hydropower dams, fossil gas, and carbon capture schemes. In this regard, we note that the accompanying guidance notes to the 2021 Energy Policy for screening investments in hydropower, fossil gas and waste-to-energy have yet to be finalized and publicly disclosed. Mr. President, there is no excuse for delay, ADB must support an equitable, forward-looking green recovery with clear assurances of adherence to international human rights standards without exception.
Shrinking Civic Space and Reprisals
There is also the pervasive shrinking of civil society space and reprisals against human rights defenders across the region, including in Myanmar, the Philippines, and Mongolia. As we move towards the post - COVID - 19 era, it is undeniable that the pandemic has deepened inequalities and exposed a fragile health system, weak governance, and poorly designed infrastructure systems. For example, in the name of post-COVID-19 economic recovery, the Mongolian Minister of Justice declared on August 3, 2022, that anyone objecting to strategic infrastructure projects would be investigated for criminal acts stipulated in Criminal Code 19.4 and 19.6 as sabotage and unlawful collaboration with foreign entities and individuals. This statement was followed by opening criminal investigations and arrests of civil society and community activists. It also opened doors for businesses to file retaliatory charges against activists and community groups they consider stalling their projects, claiming payment of onerous amounts to make up for "lost opportunity costs" without substantiated evidence.
Investigations, intimidation, and arrests of community rights advocates continue to date. It remains to be seen if the ADB will remain silent in the face of this context, simply continuing to provide loans and technical assistance to a government that makes reprisals an official tool for moving ahead with environmentally and socially harmful projects. Mr. President, we urge the ADB to take clear measures to respond to the unacceptable risks this situation poses to project-affected communities and their allies.
In regards to broader ADB policies, we seek specific answers to the following Institutional and/or Policy Issues:
On the Safeguards Review Process and Accountability Mechanism
As the ADB is gearing towards the culmination of the safeguards consultation process, how can the Bank ensure that the proposed policy will be progressive, rights-based, and pro-community?
Recognizing the realities of being a human rights defender and voicing dissent in these difficult times, will the Bank specifically adopt a zero tolerance of intimidation and reprisals built into the proposed policy?
Similarly, we are increasingly alarmed with the opaqueness of the private sector operations department, the different financing modalities such as financial intermediaries, multi-tranche facilities, joint ventures, and bonds that the Bank is aggressively promoting. How will ADB ensure that there are adequate safeguards in place on these emerging modalities?
At this point, is ADB already considering how the Accountability Mechanism will be updated, considering the several policy changes? How will ADB ensure that recourse for project-affected communities is made easier, accessible, expedient, and attuned to the actual expressed concerns of local people?
On the Energy Transition Mechanism (ETM)
According to ADB documentation, when the Energy Transition Mechanism scheme is operationalized at the project or utility level, it will provide compensatory loans for the coal project sponsors, offering incentives for retiring projects some years ahead of the original power purchase agreement terms. The project operator will need to earn proceeds over this time so they will be able to repay the loan and invest in clean greenfield investments, requiring the project to continue burning coal for an estimated 10-15 year timespan.
How will the Bank avoid overpaying the coal operating company or utility company over this extensive timeline of 10-15yrs and who is supposed to pick up the tab for the harm and damage wrought on communities (including premature deaths and chronic respiratory diseases) as well as continued contamination of the surrounding air, water, and land?
How will the ADB ensure its support for operating coal projects for another 10-15 years does not undermine the trajectory of 1.5 C when we know, according to recent IPCC reports, that the best chance we have to avert catastrophic global heating is to make the shift towards reliance on renewable energy? We have no time for false climate solutions; it's incumbent upon the ADB to support the financing of the infrastructure needed to make this shift – especially since the Bank itself has a history of investing in coal in the region – not supporting a dying industry.
Recent news reports have revealed that in Indonesia, coal power projects will be repurposed in some cases by retrofitting the project to accommodate co-firing with ammonia, hydrogen, or woody biomass. We have also heard how battery development for energy storage is spurring the growth of coal projects to power smelting operations.
Will the ADB consider co-firing options as part of the process of repurposing coal projects under the ETM?
What kind of measures is the ADB taking to avoid complicity in financing energy transition technologies (false solutions) that rely on fossil fuels, delaying and diverting needed financing from long-term solutions that meet the energy needs of the populations across the region?
Given that the ETM will function through a blended fund vehicle, what measures will be taken to ensure people living around the targeted pilot projects can avail of the ADB's Accountability Mechanism?
For the people who continue to suffer from the impacts of ADB's investment in the Visayas Baseload Coal Power Project, including chronic pulmonary diseases (Project 43906-014), when can we expect that the ADB will finally commit to supporting project closure and a just transition at this site, including remediation of the land, retraining for workers, installation of air quality monitoring devices with that offer up to date, publicly accessible data and reparations for the harm and losses inflicted? The ADB's books may be closed, but that does not diminish the culpability of the Bank. In Cebu, communities are still mobilizing for justice and expect answers.
Mr. President, in light of the above issues described, we urge you to uphold the public interest and the public need above all interests, especially given the Bank’s mandate as a public multilateral development finance institution. We remain vigilant and engaged with you and ADB management on whether ADB’s next lending phase is pro-people and pro-environment. We hope that under your leadership, you will allow the Bank to remain open to hearing critical views from the ground when it deviates from that agenda.
Sincerely,
Rayyan Hassan
Executive Director
NGO Forum on ADB
Endorsed by the following organizations -
350 Pilipinas, Philippines
350.org Asia, Asia
Accountability Counsel, USA
Bangladesh Working Group on External Debt (BWGED), Bangladesh
Bank Information Center, United States
CEE Bankwatch Network, Czechia
Centre for Environmental Justice, Sri Lanka
Centre for Human Rights and Development, Mongolia
CLEAN (Coastal Livelihood and Environmental Action Network)), Bangladesh
Derecho, Ambiente y Recursos Naturales (DAR), Perú
Equitable Cambodia, Cambodia
Freedom from Debt Coalition, Philippines
Friends of the Earth Japan, Japan
Friends with Environment in Development, Uganda
GAIA Asia Pacific, Asia
Gender Action, Global
Global Rights, Nigeria
Green Advocates International, Liberia
Growthwatch, India
Indian Social Action Forum (INSAF), India
Indus Consortium, Pakistan
Japan Center for a Sustainable Environment and Society (JACSES), Japan
Legal Rights and Natural Resources Center, Philippines
Lumière Synergie pour le Développement, Senegal
Mekong Watch, Japan
Nash Vek, Kyrgyzstan
Observatoire d'Etudes et d'Appui à la Responsabilité Sociale et Environnementale, Congo
Oil Change International, USA
Oil Workers' Rights Protection Organization, Azerbaijan
Oyu Tolgoi Watch, Mongolia
Pakistan Fisherfolk Forum, Pakistan
Peace Point Development Foundation -PPDF, Nigeria
Prakriti Resources Centre, Nepal
Recourse, The Netherlands
Rivers without Boundaries Coalition, Mongolia
Sustainability and Participation through Education and Lifelong Learning (SPELL), Philippines
urgewald e.V., Germany
WomanHealth Philippines, Philippines
Youth Group on Protection of Environment, Tajikistan
Download PDF here.