2nd ANNUAL GOVERNORS’ MEETING, CSO Dialogue Session
GOOD AFTERNOON, President Jin Liqun, Members of the Management, Ladies, and Gentlemen.
On behalf of the members of NGO Forum on ADB, we congratulate you on this occasion of AIIB’s 2nd Annual Governors’ Meeting. This dialogue with you is most welcome for it gives us the opportunity to raise some important issues from the communities that we work with across the region.
As a strong civil society network from the South engaging with the Banks in Asia, the NGO Forum on ADB and our community partners have been monitoring ADB programs and projects for over twenty years. Our memberships’ long engagement with ADB provides us the experience to support and back up our analysis on AIIB’s current policies and implementation of its projects. As the Bank continues with its operations beyond the 2nd AGM, it would be vital to take a step back and see how things stand and where it is heading to.
On Projects
AIIB’s current and stated aim to invest in infrastructure projects in the region raises some critical questions on our part as shown in the projects that are now being implemented either as stand-alone or co-financed.
AIIB has committed to addressing "legacy issues' of the past projects which left tens of thousands of people displaced. Many are still without justice to this day so a commitment to address past harms is welcome. However, a first step must be to develop baseline data on who were affected and what harms remain, to ensure that any remedy is sufficient and reaches all those who need it. There are issues surrounding displacement and compensation for the construction of both the transmission lines and the grid station required for the Tarbela 5 project. Local farmers have expressed concern about the lack
of adequate consultation, availability of information in local languages and accessible forms, confusion on whether adequate compensation will be available for more than one crop cycle for the construction and operation of the transmission line and towers, and lack of access to affordable energy and other utilities. As the Islamabad West grid station is clearly an 'associated facility' of Tarbela 5, the Resettlement Action Plan should be released and consulted upon as part of that project, rather than treated as part of a separate project.
On the Myingyan project, communities have raised concerns on their livelihoods, specifically:
how the impacts on the river Ayerwaddy will affect the livelihoods of fisherfolks and what the plans for rehabilitation of their livelihoods will be
whether the project will provide affordable energy for locally affected populations
whether fair compensation will be available for land take required for the water pipeline and the transmission line construction and operation.
In addition, there has been inadequate information disclosure and consultation at the local level, resulting in communities facing confusion over their rights, and who they can appeal to if things go wrong.
Along with the European Investment Bank, European Bank for Reconstruction and Development and the Asian Development Bank, the AIIB has considered a loan for the 280 MW greenfield hydropower plant project in Georgia. The Nenskra HPP developed by Korean StateK water represents one of 34 hydropower plants planned in the Upper Svaneti. The project will impact the Svans, Georgian sub-ethnic group, that preserved a traditional justice and governance system, and religious-cultural practices. They speak Svan language, considered by UNESCO as endangered. However, the renewed ESIA (2017) fails to address how the just and fair compensation for traditionally owned lands and livelihood restoration will take place. Meanwhile, Government already transfers around 160 ha to the project sponsor. It also fails to study properly the cumulative impact of all planned project, not to speak about the absence of Strategic Impact Assessment, at least for the Engure river basin. Finally, yet importantly, project locates in the potential emerald site, the European system of protected areas. The Bern Convention on the Conservation of European Wildlife and Natural Habitats will address the complaint on violations of a number of its articles in September 2017.
On Transparency
While it is encouraging to see that the Bank committing to a public consultation on complaints handling mechanism, it is still unclear what defines the Compliance Effectiveness and Integrity Unit (CEIU). The AIIB's CEIU is charged with working in a broad variety of areas, including quality control, evaluation, anti-corruption efforts, training for staff, etc. This accumulation of tasks in a single department carries inherent risks of conflict of interest. A department charged with monitoring and evaluation will hardly be able to function as an independent entity that deals with external complaints which may call its own findings that it can question. A compliance review, an independent investigation into whether the bank has adhered to its own policies, is also of fundamental importance. In cases where investigation results show the poor implementation of policies, it creates the possibility of learning from experience. A learning curve, if you will, for the Bank’s future operations.
On Social Responsibility
AIIB’s direction to invest more with private capital for infrastructure needs and on the other hand, governments’ enthusiasm to absorb more sectoral and infrastructure loans to fast-track their growth targets is a double-edged sword translating to greater control of private capital on social services, key economic sectors and natural resources. To ensure that loans are expeditiously disbursed at least costs, safeguards are set aside that limit the ability to protect human rights. In our experience, these have become more evident due to disappearances, employment of paramilitary in project management, and lack of public disclosure and means of redress.
In summary
In this occasion, and under the leadership of President Jin Liqun, we expect the Bank to uphold the values of dignity, justice, and honor by ensuring that the Bank stays true to its purpose of “fostering sustainable economic development in Asia”. We expect AIIB to support countries by mobilizing public funds in relevant social sectors like health, water and sanitation, and education. These sectors must be supported through the provision of more grants to ensure that the most marginalized and vulnerable have free access to public service. Moreover, we strongly urge the Bank to finance member countries to fund their Sustainable Development Goals (SDGs) targets and the Nationally Determined Contributions (NDCs) under the Paris Agreement.
Further to this, in order to sustainably keep the dialogue and interaction with civil society organizations regarding policies and projects that can best be implemented in the least risks, AIIB should establish specific mechanisms and a department that could handle CSO affairs. And in the member countries that have accepted investments, there should also be established civil society consultation and dialogue mechanism. AIIB dialogue and interaction with Chinese civil society should be more frequent and regular regarding AIIB headquartered in Beijing, China. Lastly, recognizing that space of civil society activities in China is narrowing, the Bank should try its best to maintain existing dialogue with its partners and expand interaction with Chinese civil society.
More specifically, we call on you President Jin Liqun with the following questions for this year’s dialogue with CSOs:
Can you ensure that the Environmental and Social Framework can prevent any risks that could impact communities?
How does AIIB intend to remedy the harm and injustice done by projects prior to the approval AIIB’s Accountability Mechanism?
How does AIIB intend to decarbonize Asia recognizing the limited carbon budget available in the region? Consequently, how does AIIB intend to support governments to achieve NDC’s and fulfil the Paris agreement of 1.5 degrees Celsius?
***Delivered during the AIIB Management Dialogue with CSOs, 2nd Annual Governors’ Meeting, June 17, 2017, Saturday, International Convention Center, Jeju, Korea.