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We are writing to express our collective concerns with the draft text of Asian Development Bank’s Climate Change Action Plan (CCAP), a copy of which has undergone limited circulation but not yet been publicly disclosed on ADB’s website. In this regard, the ADB is now in a laggard position in comparison to other Multilateral Development Banks (MDBs), including the AIIB, which publicly released its Climate Action Plan on 25th September 2023, during its recent Annual Meeting. However, as we understand that the text is still under review, we urge ADB’s management and Board of Executive Directors to take this opportunity to reconsider its provisions and go back to the drawing board to position itself to do no harm in the face of the climate crisis. This would mean first and foremost, ensuring the institution does not continue to approve projects and programs which will exacerbate the climate, biodiversity, ecological, water, food and socio-economic crises within and across the borders of borrowing member countries. Specifically, it is critical for the ADB to proactively screen all current and pipeline financing to sever complicity and partnerships with entities that define their primary business as that of extracting, burning or transporting fossil fuels. It would also mean assuming responsibility for redressing the harm, loss and damage at ADB project sites that are labeled by the Bank as ‘climate finance’ – as well as at the sites of fossil fuel projects that the ADB has helped finance, where community grievances have yet to be resolved. We would have expected the CCAP – which we understand is intended to guide staff – to read as a plan of decisive action, urgently taking direction from the most recent climate science and evidence from first hand realities of climate-change induced havoc witnessed across the region. Instead, the CCAP is underpinned by a set of business as usual assumptions that call for de-risking and spurring on “new business prospects for the private sector,” with the unstated effect of leaving the public – i.e. those who already face the brunt of the climate crisis – to cope with associated risks, harms and damages. In this regard, a reality check is required, as it is the very same corporations now seeking to benefit from elaborate technocratic schemes, staking claims over planetary commons to earn carbon credits or initiate other market-based schemes, that have been – and continue to be – complicit in exacerbating key inequities and injustices faced by communities across the region. While the CCAP suggests the ADB is “aligning its financing with the mitigation and adaptation goals of the Paris Agreement, for 100% of sovereign operations and 85% of nonsovereign operations by July 2023, and 100% of nonsovereign operations by July 2025,” (para 10) the explanatory footnote reads that “ADB follows the Joint MDB Alignment Approach to the Paris Agreement, of which ADB is a signatory, and the common MDB assessment methodologies developed as part of that framework”. Importantly however, the MDB joint methodology and principles fail to follow a strict 1.5C trajectory, simply only identifying extraction and burning of coal and peat as “universally not-aligned”. Other MDBs, such as the World Bank, EBRD and AIIB, have all developed and disclosed additional guidance. In fact, the EBRD opened up its draft Paris Alignment methodology for public consultation. However, so far, the ADB has not provided any explanation to demonstrably show how it will step forward to shift its portfolio towards compliance with a 1.5C trajectory, with ambitious targets and indicators, let alone a commitment to end support for fossil fuel related infrastructure, investments and trade financing. Without any such clear and firm guidance, the suggestion in the CCAP that ADB is taking an ambitious approach to Paris Alignment rings hollow. Whether during ADB’s Annual Meetings, Asia Clean Energy Forums, or policy-related discussions, civil society groups have consistently reiterated the call for ADB to commit to urgently phasing out support for fossil gas infrastructure, stop supporting speculative technologies such as carbon capture and storage/carbon capture, usage and storage (CCS/CCUS), end reliance on fictitious offset arrangements, and avoid continued build-out of large-scale private sector energy, transport, urban, water and agriculture sector projects. Therefore, at a minimum, if the ADB is to genuinely ‘walk the talk’ in averting overshooting global heating thresholds, among the first steps it would take would be to account for the need for a rapid, direct, managed phase out of reliance on fossil fuels. This would require severing of support to expansion of fossil fuel-dependent infrastructure across all sectors, while protecting – not commodifying – planetary commons, and turning away from pinning hopes on the piloting of futuristic techno-fixes or carbon market initiatives. We also reaffirm our position that MDBs, including the ADB as well as the World Bank, are in no position to take a role in the United Nations Framework Convention on Climate Change’s loss and damage facility. Civil society groups worldwide have resoundingly called for the facility to be independent with a just and democratic decision-making structure providing non-conditional, non-debt creating, accessible, readily available, transparent and accountable support. We urge the ADB to avoid (i) interfering in any aspect of the governance of the facility – which should reflect the inclusive and representative nature of existing multilateral climate frameworks – and (ii) standing in the way of global efforts to ensure financing dispensed is additional, without onerous conditionalities and furthermore tackles the question of climate reparations. The arena of loss and damage remains one where ADB is yet to ‘walk the talk’ — which would mean assuming and not absolving itself of its own financial responsibility and accountability for addressing harms and providing reparations for damages where its own investments have been complicit in exacerbating climate-related impacts and risks as well as undermining the climate resilience of affected communities. There is no excuse to delay redressing ecological, social and economic harms wrought by current and past projects, including resolving outstanding grievances of project affected communities across the region. There have been two formal series of online exchanges with civil society and senior staff from ADB’s Climate Change and Sustainable Development Department about the draft CCAP, first in December 2022 and subsequently, in August/September 2023. However, there remains a lack of clear information on how civil society feedback is being taken into account and addressed in the ongoing drafting and revision process. At the current time, we understand the ADB will be aiming to finalize the CCAP before this year’s UN Climate Change Conference of Parties (COP 28), by November 2023. In the interim, while the text is still being finalized, we affirm that any Climate Change Action Plan fit for the purpose of guiding staff and rooted in the realities of the Asia Pacific region would, at a minimum: Be underpinned by an approach which clearly and explicitly references international human rights norms and principles, the precautionary principle and polluters’ pay principles as well as the ADB’s own environmental and social safeguards. Reference and reflect standards incorporated into the latest international agreements on climate, the environment and biodiversity, including for example, the Global Biodiversity Framework. Acknowledge the importance of environmental human rights defenders to advancing climate ambitions, and the context of lack of safe civic space for such advocates to speak out, making it incumbent upon international institutions such as the ADB to ensure its own consultation processes and grievance redress mechanisms make appropriate provisions to limit risk of retaliation and to react when instances do arise. In addition, the CCAP should incorporate commitments to undertake and integrate reprisal risk assessments, specifically in relation to environmental human rights defenders, into all projects and programs being considered as part of the Bank’s climate-related financing. Acknowledge that the heavy burden of sovereign debt faced by many countries across the region will only be resolved by unconditional debt cancellation (not conditioned by restrictive swaps negotiated under duress) – including but not limited to public debts incurred for past financing of fossil fuel infrastructure and associated facilities. Recognize the call for any new public sector-oriented financing to be explicitly non-debt creating. Exclude reliance on debt for nature / climate swaps – which typically introduce onerous conditionalities, include lengthy technocratic negotiations and complex transactions that exclude affected community representatives and fail to be fully transparent, inherently lead to further commodification of the planetary commons as well as the loss of sovereignty over natural resources, and do not provide the additional, accessible financing that is necessary to urgently fortify climate resilience at local and national levels. Avoid approaches that prioritize “de-risking investments” for the private sector (which leave the public sector to bear the burden of risk, typically leading to pressures to introduce austerity measures, including the weakening of environmental, labour and social protections). Acknowledge that not only must a ‘do no harm’ approach be taken in the context of the climate crisis when considering new project-based, technical assistance, bond or equity financing, but that the corollary is also the case, i.e. where harm has been done, redress is required. This includes instances where ADB has supported the expansion of the coal and fossil gas fleet, waste-to-energy incinerators, hydropower projects and large-scale agribusiness, thereby contributing to spikes in GHG emissions, dislocation and negatively impacting communities’ and ecosystems’ climate resilience. Provide clear, scientifically sound screening criteria based on the timelines and recommendations outlined in the most recent reports of the Intergovernmental Panel on Climate Change (IPCC), UN Environment Program (UNEP) and World Meteorological Organization (WMO) to rule out support for activities that fail to take heed of global heating thresholds and planetary limits, including those which are high GHG emitting or lead to spikes in emissions such as through large-scale land and water use changes. This would require setting up clear, unequivocal standards to avoid supporting carbon lock-in across all sectors, based on time-bound, scientifically sound definitions and methodologies. In addition, calculations and estimations of GHG emissions must be considered comprehensively, incorporating the entirety of the project lifecycle as well as processes associated with project development. Among other aspects, this would include: operation of machinery and project components (such as turbine degassing in hydropower dam projects), impacts on soil and water, waste/debris accumulation and management during project implementation, as well as the processes required for decommissioning. Exclude “nature based [climate] solutions” that rely on schemes demarcating areas for ‘offsetting’ greenhouse gas emissions, effectively leading to land, water and resource grabbing from local communities, most especially in cases when areas encroach upon ancestral territories of Indigenous Peoples. Meanwhile, carbon market schemes – which are dependent on the speculative trading of carbon credits and lead to further commodification of planetary commons while enabling high GHG emitting industries to continue business as usual – have no place in an equitable and just response to the climate crisis. In addition, we reiterate that it is incumbent upon responsible ADB staff and management to respect and implement provisions to verify whether communities are collectively providing Free, Prior and Informed Consent (FPIC) throughout the course of project cycles (i.e. being conditional, which may be withdrawn at different stages of project implementation). Account for transboundary implications of projects being developed in border zones and/or intended to provide cross-border connectivity, including in relation to impacts on the climate resilience of ecosystems and communities as well as on shared commons (water, land, air). Include clear provisions that integrate time-bound methane mitigation pathways. Note and encourage the highest level of climate ambition already being taken by some member country governments, including Vanuatu, Fiji, Solomon Islands, Tonga, Niue and Timor-Leste, to endorse the Fossil Fuel Non-Proliferation Treaty. Advance a progressive, proactive approach to alignment with a 1.5C trajectory with no distractions (i.e. IPCC P1 pathway). This would require explicitly excluding financing for CCS/CCUS and similar speculative schemes - which end up diverting finite resources into prolonging dependence on fossil fuels in a range of sectors, and raising risks of negative social, environmental and economic impacts for communities surrounding the associated infrastructure build-out. It would also mean that Nationally Determined Contributions and corresponding National Action Plans should not be used as the sole basis for identifying projects, given they generally follow pathways which will far overshoot the 1.5C threshold. Commit to ensuring that climate-demarcated sub-projects supported via financial intermediary arrangements as well as investments in trade and global supply chains are i) screened to avoid exposure to coal, oil, gas and petrochemicals (for instance, by cross-checking against the Global Coal Exit List and the Global Oil and Gas Exit List), ii) explicitly required to exclude extractivist industries, including mining, smelting and other ecologically and socially damaging projects such as hydropower and waste-to-energy incineration, as none can be reasonably tagged as contributing to climate mitigation/adaptation, and iii) fully disclosed publicly with timely and specific information regarding the sites/operations receiving financing on ADB’s website. FI sub-projects must also be disclosed at project sites, in a manner and form accessible to local communities, as well as information about the ADB’s accountability mechanism. Avoid approaches which allocate green and blue finance for public-private partnerships (PPPs), given these typically involve arrangements that undermine respect for internationally recognized labour, environmental and human rights standards. Screen all FI, blended finance, equity and bond as well as direct financing arrangements to exclude exposure to coal, oil or gas. This would include partnerships with utility companies that have yet to set clear, timebound fossil fuel phase out dates or with consortia that include oil, gas or petrochemical companies. Commit to ensuring communities affected by projects tagged as part of ADB’s climate mitigation/adaptation portfolio – including via FIs and blended finance arrangements – will be not only fully informed of ADB’s involvement and ways to access ADB’s Accountability Mechanism (i.e. both the problem-solving and compliance review functions), but also are informed of - and can - access channels by which to give substantive input into any climate change, environmental, social and human rights-related risk assessments being done (with corresponding disclosure of information, translated into local languages) to inform project-related decisions and designs from the get-go, grounded in local knowledge and collective awareness. Ensure that any partnerships with insurance companies on climate-related activities (as explained in the draft CCAP) are conditioned on the requirement that insurers are already implementing a clear coal exit policy and have - or are in the process of adopting – a time-bound oil and gas phase out policy, which aligns with recommendations of the IPCC Sixth Assessment Report. Avoid bolstering support for schemes which allow coal/other fossil fuel project operators to pull-out of aging or stranded assets with little to no loss and without accountability, and/or to ‘repurpose’ facilities via ‘fuel-switching’ to fossil gas, biomass, refuse-derived fuels, hydrogen, ammonia and other resource and greenhouse gas intensive technologies Incorporate provisions for plans and preparatory works to be suspended and withdrawn where Indigenous Peoples’ Territories, sacred sites and/or land with ancestral significance to traditional and Indigenous Peoples’ communities, Community Conserved Territories and Areas (ICCAs) or community-based conservation areas may be affected by any of ADB’s climate-demarcated programs, projects or investments, and free, prior, informed consent by affected communities is not obtained. In this regard, we reiterate the critical need for ADB management and staff to respect – in policy and practice – community rights to say no to developments that will impact their lands, territories, resources and/or livelihoods. Provide clarity on implementation and revision processes – including but not limited to explaining how adjustments will be made in a timely manner to reflect the updates to ADB’s safeguard provisions, explicitly providing assurances of adherence to ADB’s Access to Information Policy and indicating how civil society as well as communities affected by projects/programs being tagged as climate-related financing will be able to engage in – and contribute meaningfully – to future reviews and revisions of provisions. The above measures – to align with international norms, avoid further complicity in exacerbating climate harm, and steer clear of approaches that undermine and distract from direct, rapid, equitable just transition in the face of the climate crisis – are non-exhaustive, instead being reflective of key concerns based on our understanding of the current status of the CCAP text. In closing, we look forward to hearing how the revision process proceeds, having clarity on how civil society concerns will be addressed in an updated version, seeing the disclosed action plan posted on the ADB’s website, and receiving information on the process as well as timeline for future revisions. Co-signed by the following organizations: 350.org Asia | Regional 350 Pilipiias | Philippines Accountability Counsel | International Aksi! for gender, social, and ecological justice | Indonesia Asian Peoples’ Movement on Debt and Development | Regional Bangladesh Working Group on External Debt (BWGED) | Bangladesh Bank Climate Advocates | USA Bomenstichting Achterhoek | Netherlands Building and Wood Workers International | International Center for Energy, Ecology and Development | Philippines Centre for Environmental Justice | Sri Lanka CLEAN (Coastal Livelihood and Environmental Action Network) | Bangladesh EarthRights International | International Freedom from Debt Coalition | Philippines Friends of the Earth Japan | Japan Gender Action | International Global Alliance for Incinerator Alternatives-Asia Pacific | Regional Global Forest Coalition | International ​Green Alternative | Georgia Growthwatch | India Inclusive Development International | International Indigenous Women Legal Awareness Group (INWOLAG) | Nepal Indus Consortium | Pakistan Initiative for Right View | Bangladesh International Accountability Project | International KRuHA | Indonesia Life Haven Center for Independent Living | Philippines Mekong Watch | Japan Nash Vek Public Foundation | Kyrgyzstan NGO Forum on ADB | Regional OT Watch | Mongolia PACOS Trust | Malaysia Pakistan Fisherfolk Forum | Pakistan Participatory Research & Action Network​ (PRAAN​) | Bangladesh ​Philippine Movement for Climate Justice | Philippines Recourse | International Rivers without Boundaries Coalition | Regional Rivers without Borders - Mongolia | Mongolia Save Sual Movement (SSM) | Philippines Trend Asia | Indonesia Urgewald | Germany WALHI | Indonesia Download PDF here.

October 2, 2023 To: Independent Accountability Mechanisms Network (IAMnet) members Re: A call to defend the independence of IAMs Dear IAMnet members, As civil society organizations and advocates who support communities to use independent accountability mechanisms (IAMs) harmed by internationally financed projects, we value the role of IAMs in facilitating access to justice, but we are deeply concerned about the escalating threats to the independence of these mechanisms that we have observed in recent years. On the occasion of its upcoming annual meeting in London, we call on the Independent Accountability Mechanisms Network (IAMnet) and its members to reaffirm their commitment to the independence of IAMs. For two decades, IAMnet has been an important convening of IAMs, providing capacity building and legitimacy to its members. As recognized by IAMnet’s name and its criteria for participating in the network, independence from the parent institution is crucial to the legitimacy and effectiveness of these mechanisms. However, recently, we have observed an alarming trend of management interference with – and even capture of – several IAMnet members that have made decisions and findings that the leadership and legal departments of their respective institutions did not like. Recently, there have been several troubling instances of interference that are a direct assault on the independence of IAMs: Efforts to capture and undermine the compliance function at the Compliance Advisor Ombudsman (CAO): Since its inception in 1999, founding CAO Vice President Meg Taylor imbued the Office of the CAO with a vibrant culture of independence, which continued through the term of her successor Osvaldo Gratacos, who came from an oversight background. During this period, the IFC tried to limit the independence of CAO and yet the office nonetheless issued a series of hard-hitting compliance reports that drew public attention to the social, environmental and human rights impacts of IFC projects, prompting a number of systemic reforms that improved the institution. In 2020 CAO Vice President Gratacos’s contract was not renewed by the President of the World Bank after he resisted intense pressure to compromise the independence of the office from management. Rejecting qualified candidates with backgrounds in accountability, the World Bank President then selected a new CAO Director General with a background in bank management at another international financial institution. The Director General has since hired several other CAO staff and consultants with bank management backgrounds, a departure from previous CAO hiring decisions. This included an attempt in 2022 to hire an IFC manager to lead the compliance unit, which members of the undersigned organizations decried. The personnel changes at CAO have occurred as the Office of the General Counsel has stepped up its interference, most notably through the approval of a non-disclosure agreement that impedes CAO’s ability to disclose a forthcoming investigation of child sexual abuse in an IFC project in Kenya (Bridge International Academies). Meanwhile, CAO has removed the former head of the compliance unit - who worked on the Bridge case - and advised staff that he is on leave until further notice, without providing further information. This is amidst reports that CAO staff who raise concerns about the erosion of the office’s independence are marginalized and retaliated against. Retaliation against a Panel member at the Independent Complaints Mechanism: A panel member at the Independent Complaints Mechanism (ICM) of the German, French and Dutch development banks (DEG, Proparco and FMO, respectively) was informed that her contract would not be renewed because he was unhappy with an eligibility determination that the panel made in regards to a complaint about a financial intermediary investment. She was told that they wanted a panel member that is more amenable and cooperative with management. This explicit retaliation against a panel member by management for exercising her independent judgment in making an eligibility determination calls into question whether the ICM is in fact operationally independent from management and meets the criteria for membership in IAMnet. Interference of the General Counsel at the Compliance Review Panel of the Asian Development Bank: We have long-running concerns about interference from the General Counsel’s office limiting the independence of the Compliance Review Panel. The concerns go back more than a decade to when the General Counsel forced the CRP to change one of its recommendations in the Cambodia Railways case calling for ADB to set up a remedial compensation fund. Years later, the Office of the General Counsel issued an interpretation memo regarding the Accountability Mechanism policy that limits the powers of the CRP. This memo was used by management in a recent case to limit the monitoring mandate of the Panel. A panel member at the Compliance Review Panel resigned early from her term in July in protest. Attack on the independence of the Independent Redress Mechanism of the Green Climate Fund: In a recent complaint filed by Nicaraguan Indigenous complainants with the GCF’s IRM, the General Counsel agreed with the IRM to implement a firewall between himself as advising the management, and the Deputy General Counsel as advising the IRM. Despite the firewall, the Deputy General Counsel intervened during the Board deliberations on the case to respond to management related issues around project oversight in the context of the Accreditation Master Agreement with the CABEI, the Accredited Entity. The same Deputy General Counsel who had advised the IRM was then acting as General Counsel and did not respect the firewall. Consequently, the IRM was kept out of discussions by the Board on its draft decision and on the advice of General Counsel, the Board adopted a decision that undermined the monitoring mandate of the mechanism. IRM was prohibited from monitoring whether the project has been brought into compliance, and that assessment was placed in the hands of management, contrary to established procedures and guidelines adopted by the Board. The effect of the decision was to undermine the independence, procedures and mandate of the IRM. Efforts to Undermine the Independence of the World Bank Inspection Panel: In establishing the World Bank Accountability Mechanism (AM) the Bank's Board of Directors seriously compromised the ability of the Inspection Panel to operate independently by requiring that the Panel get approval for its budget through the AM Secretary and by requiring Panel staff to officially report to the AM Secretary. When concerns were raised around this structure, the AM Secretary requested an opinion from the General Counsel in the matter, which is contrary to operating independently of management. Additionally, the AM Secretariat has also sought to prevent cases from moving swiftly to compliance, continuing to pursue the possibility of dispute resolution despite clear indications that requesters have chosen compliance. In one case, these efforts led directly to a government initially refusing to permit a visit by the Inspection Panel for a compliance investigation, delaying the process by several months. Problematic involvement of general counsel offices in IAM policy development: We also understand that representatives from banks’ legal departments have joined the drafting teams of IAM policies, including policies governing the World Bank Inspection Panel/Accountability Mechanism and CAO, and are slated to be a decision maker in the upcoming ADB AM review. While this is not a new development - as IFI legal departments have historically weighed in on IAM policies - we are concerned that their influence over the policy drafting processes is growing and undermining the independence of IAMs. These are but a few examples of efforts to capture IAMs and undermine their independence. In addition to concerns about management capture and interference, we also have concerns about structural independence – several IAMnet members do not have their own office at the parent institution. For instance, the AIIB’s Project-Affected People’s Mechanism (PPM) is housed within the Complaints-Resolution, Evaluation, and Integrity Unit (CEIU), and does not have a direct reporting line to the AIIB Board of Directors. The managing director of the CEIU reports not only to the Board but also to the president, who in fact appoints the director and is responsible for the staffing and resourcing for the PPM. This lack of structural independence may be one of the reasons why the PPM has yet to accept a single complaint since its establishment five years ago. To address these grave threats to the integrity and effectiveness of IAMs, we are calling IAMnet to: Reaffirm independence, both structural and operational, as a criteria for membership to the network; Establish a Standing Committee on the independence of IAMs, which reports regularly on the extent to which each IAMnet member meets the structural and operational criteria, as well as any specific threats to the independence of IAMnet members; Speak out against inappropriate interference and threats to the independence of IAMnet members by the management of parent institutions. Sincerely, Accountability Counsel Arab Watch Coalition Asia Indigenous Peoples Network on Extractive Industries and Energy (AIPNEE) Bank Information Center Both ENDS Bretton Woods Project African Law Foundation (AFRILAW) Center for Research on Multinational Corporations (SOMO) CEE Bankwatch Network Community Empowerment and Social Justice Network (CEMSOJ), Nepal Counter Balance DamSense Friends with Environment in Development Fundeps Gender Action Green Advocates International Inclusive Development International International Rivers Jamaa Resource Initiatives, Kenya Lawyers’ Association for Human Rights of Nepalese Indigenous Peoples (LAHURNIP) Lumière Synergie pour le Développement (LSD, Senegal) NGO Forum on ADB Oxfam Recourse Swedwatch Urgewald Download PDF here.

The Asian Infrastructure Investment Bank (AIIB) is facing intense criticism for its recent involvement in Cambodia's microfinance and MSME loan market, amid concerns about human rights violations due to predatory lending and abusive collection practices. AIIB approved significant loans to PRASAC Microfinance Institution Plc. and ACLEDA Bank Plc., despite ongoing complaints against them, leading to outrage from civil society organizations. Cambodia's microfinance sector has grown rapidly due to international investments, but this expansion has also given rise to predatory lending, large loan sizes, and high household debt. Lack of client protection mechanisms has led to threats to land tenure security and harm to indigenous communities. PRASAC and ACLEDA have faced scrutiny for their unethical lending practices, including coerced land sales and violations of consumer protection policies and Cambodian laws. Borrowers, often vulnerable, were pressured into loans far beyond their means, using their land titles as collateral, resulting in catastrophic consequences such as debt-induced child labor, forced migration, and loss of homes and livelihoods. The controversy highlights weaknesses in AIIB's Environmental and Social Framework, which fails to directly address predatory practices by microfinance providers. These practices have caused significant social harm. Civil society organizations call for accountability and reform. AIIB's framework needs reinforcement to address the root causes of social harm caused by microfinance activities. Until these issues are resolved, AIIB should reconsider further funding for microfinance providers in Cambodia to protect the nation's poorest and most vulnerable communities from unethical practices. Read the full article here: https://bit.ly/AIIBObserver

The Unique Meghnaghat Power Plant in Bangladesh, financed by the Asian Infrastructure Investment Bank (AIIB), initially seen as a symbol of development, is facing significant challenges. Its costs have skyrocketed, causing financial concerns, and it exacerbates Bangladesh's power overcapacity issue. Moreover, the plant's electricity generation cost is high compared to solar power, and it contributes to carbon emissions, jeopardizing environmental commitments. Ethical and social issues such as land acquisition disputes and inadequate compensation have also arisen. There is a growing call for the AIIB to reconsider its financing of the project and redirect resources toward decentralized renewable energy projects. The AIIB is urged to prioritize sustainability, environmental protection, and community welfare over financial gains. Transparency and accountability in the project's fast-tracking status are essential. The fate of the Meghnaghat Power Plant represents a pivotal moment in Bangladesh's energy future, and the AIIB's choices will impact both the nation's development and global sustainability efforts. Read the full article here: https://bit.ly/AIIBObserver

The NGO Forum on ADB, in collaboration with CLEAN, has filed a serious complaint against the Asian Infrastructure Investment Bank (AIIB) regarding the Bhola IPP project. The complaint reveals a disturbing lack of transparency, allegations of coercion, environmental devastation, and a failure of authorities to address these issues. Key concerns raised in the complaint include: Lack of Transparency and Consultation: AIIB and NBBL have been criticized for not disclosing essential project information promptly. Poor document translation further hinders community understanding. Consultation reports have been treated with disregard, casting doubt on the integrity of the process. Coercion, Fraud, and Intimidation: Middlemen appointed for land acquisition are accused of coercion, fraud, and intimidation. Hindu communities reportedly fear retaliation for voicing concerns. Land acquisition processes violate Bangladesh's laws, and the local grievance redress mechanism (GRM) is ineffective. Environmental Impact and Livelihood Loss: The project has caused severe environmental damage, including siltation of the riverbed due to sand waste disposal, affecting local communities and agriculture. Betel leaf farms, grazing lands, and traditional livelihoods have been severely impacted. Discharge of effluents has rendered communities uninhabitable. The complaint calls for an immediate and comprehensive investigation, as previous efforts to address these concerns with NBBL and AIIB have been met with indifference and inaction. The affected communities deserve justice, transparency, and accountability in the face of the project's negative impacts. It emphasizes the urgent need for AIIB to take action to rectify these grave wrongs and restore justice for the affected communities. Read the full article here: https://bit.ly/AIIBObserver

The Asian Infrastructure Investment Bank's (AIIB) financing of China Everbright International Limited (CEIL) for environmental services raises concerns due to CEIL's questionable track record. Despite AIIB's climate commitments and sustainability goals, providing up to $100 million to CEIL seems contradictory, given allegations of corruption, pollution, and unethical practices. Everbright's global waste-to-energy projects have faced criticism for infringing on community participation and causing pollution. Fly ash disposal and recycling practices have raised environmental concerns. AIIB's partnership with Everbright, despite its actions in China, has led to the exportation of pollution to other countries in Southeast Asia. Everbright has used schemes to quell community resistance near its waste projects, impacting farmers' livelihoods and wastepickers' income. Despite AIIB's claim not to finance coal-related projects, BankTrack has exposed Everbright's investments in coal plants, raising questions about AIIB's transparency and adherence to ethical norms. The AIIB's association with China Everbright Bank, involved in corruption cases, raises concerns about AIIB's due diligence and ethical standards. Calls for increased transparency and accountability within AIIB are growing, emphasizing the need for financial institutions to prioritize the planet's health over short-term gains in the face of the climate crisis and environmental degradation. Read the full article here: https://bit.ly/AIIBObserver

The Bangalore Metro Rail: Progress or Predicament? Unveiling the Hidden Costs of Urban Development Beneath Bangalore's gleaming facade of IT prowess and urban development lies a disconcerting tale of collateral damage, environmental degradation, and human costs. The Bangalore Metro Rail Corporation Limited (BMRCL) embarked on an ambitious expansion project, funded by the Asian Infrastructure Investment Bank (AIIB), aiming to combat traffic congestion. However, as construction nears completion, the toll on the city becomes evident. The project demanded substantial land acquisition and disrupted common property assets, leaving marginalized communities excluded from compensation plans. The expansion affected thousands of individuals and numerous structures, resulting in significant losses for residents and business owners. Environmental concerns include the loss of a substantial number of trees, increased air pollution, and safety risks for workers. Additionally, human displacement due to land acquisition disrupted lives and communities. As Bangalore aspires to become a smart city, stakeholders must acknowledge their profound responsibility in addressing the hidden costs of ambitious urban development. Preserving the city's unique essence goes beyond constructing a modern metro system; it entails safeguarding the environment, protecting residents' livelihoods, and nurturing a sense of community and well-being. Read the full article here: https://bit.ly/AIIBObserver

Civil Society Groups Bring Urgent Calls for Transparency, Accountability, and Redress for Harm Done to the Annual Meeting of the AIIB Sharm El Sheikh, Egypt (26 September 2023) - Members of civil society and community groups have come from across Asia and beyond to join this year’s Annual Meeting of the Asian Infrastructure Investment Bank (AIIB) at the Sharm el-Sheikh International Congress Center to call attention to the Bank’s systematic lack of proactive responses to project-level grievances as well as failure to take steps towards improving transparency or public accountability. Together, they are urging shareholder governments and Bank management to address these concerns, which are grounded in the lived experiences of those affected by the Bank’s project loans and the insights of allied social, economic, environmental and gender justice advocates. As Hasan Mehedi, from CLEAN (Coastal Livelihood and Environmental Action Network) in Bangladesh, emphasized: "Transparent communication is the lifeblood of any institution's relationship with civil society. Unfortunately, the AIIB's absence of a Head of Communications has left a void in its day-to-day engagement with external stakeholders. We emphasize the need for robust, transparent communication channels to facilitate meaningful dialogue and address pressing concerns." Rayyan Hassan, Executive Director of NGO Forum on ADB network, elaborated: "The expanded use of the 'Accountability Framework' (AF) is a profound concern. While the AF enables expedited project approvals, questions loom over risk assessments, transparency, and accountability. It's imperative to reintroduce clarity, transparency, and rationale into the AF's utilization, in line with AIIB's commitment to multilateralism, due diligence, and transparency." Another critical concern civil society groups are bringing to this year’s Annual Meeting is the review of the Project-Affected People's Mechanism (PPM). As Vidya Dinker of Growthwatch asserted: "In the face of the AIIB's increasing investments in large-scale infrastructure and financial intermediary facilities, we must ensure that the review of the Project-Affected People's Mechanism (PPM) is transparent and inclusive. Civil society organizations demand a comprehensive, gender-sensitive process of assessment scrutinizing its effectiveness since inception. For the concerns of project-affected communities worldwide and their demands for effective, meaningful and safe channels for redress to be genuinely addressed, open and accessible consultation processes are essential." Annabel Perreras of NGO Forum on ADB emphasized that: “AIIB should ensure that the upcoming review of the PPM should address the fundamental gaps in the policy. The scope on the applicability of the PPM limiting it primarily to stand alone AIIB – financed projects only and the difficulty in satisfying good faith efforts remain to be barriers in PPM’s accessibility to name a few. Communities harmed by AIIB – backed projects should ultimately have meaningful access to remedy and justice.” Civil society organizations are also highlighting several specific projects that have received support from the AIIB where social and environmental harms remain unaddressed, requiring the urgent attention of the Bank: Tajikistan: The proposed 3600MW Rogun Hydropower Development Project is being built on a transboundary watershed with no appropriate mechanism for responding to cross-border impacts downstream. It is also associated with a range of violations of the rights of those being dispossessed of their lands and livelihoods to make way for its construction. The AIIB has already provided an initial preparatory grant for the project and is being called upon to unequivocally refrain from committing any further financing. Bangladesh: The Unique Meghnaghat LNG Power Plant is associated with violations of the rights of small-scale farming communities during the land acquisition process, questionable assertions of gas availability, and heavy greenhouse gas emissions. Meanwhile, communities affected by the Bhola IPP formally filed a complaint under the AIIB’s Project Affected People’s Mechanism. Although the case was initially dismissed, civil society groups continue to urge the AIIB to reassess the injustices done and complaint filed and proceed with ensuring justice due to the affected communities. In addition, an AIIB/World Bank co-financed Rural Water, Sanitation and Hygiene Project is expected to reduce accessibility and affordability of water for communities that are already struggling to meet their daily needs, increase household indebtedness as well as exacerbate desertification due to the level of groundwater extraction required. Cambodia: Financing for Cambodia's Microfinance Institutions (MFIs) and Micro, Small and Medium Enterprises (MSME) loan market was approved by the AIIB Board despite serious concerns about the complicity in human rights violations connected to widespread and systematic predatory lending and abusive collection practices. Accordingly, civil society groups have been calling on the AIIB to be prepared to respond if/when grievances arise and to commit to no further approval of any additional financing flows to Cambodia’s MFIs and MSME loan market. India: The Bangalore Metro Rail Project has led to the demolition of a hearing-impaired training center. Affected students and their families continue to seek redress. It remains an open question whether AIIB is prepared to take due responsibility. As Sarita Kumari, one of the mothers of the students formerly attending the training centre that was demolished to make way for the Bangalore Metro Rail Project, passionately stated: “In the heart of every development decision lies the fate of countless communities. It is the moral duty of AIIB to ensure their voices are heard, their concerns addressed, and their well-being prioritized.” Concerns regarding AIIB's increasing use of financial intermediary modalities and opaque capital market financing have also prompted calls from civil society groups for enhanced transparency, portfolio disclosure, along with comprehensive, applicable and effective grievance redress mechanisms. Kate Geary from Recourse said: “This year, fully a third of AIIB’s investments have been through financial intermediaries, like private equity funds and banks. This ‘hands-off’ form of lending brings with it high risks, and is more difficult to find where the money ends up. Simply put, if people don’t know the AIIB is investing in a project harming them, how can they access redress?” As the AIIB announced its first Climate Action Plan in Sharm el Sheikh, civil society groups took this opportunity to raise concerns about the lack of any indication as to when it will be formally opened up for revision and public review, while specifically expressing alarm at its focus on commodification of the commons (for example, turning forests into carbon markets), leveraging support for de-risking private financing (meaning the risks will be borne by the public), and on techno-fixes, rather than pursuing clear, evidence based pathways for rapid, direct, managed and equitable just transitions. To be fit for the purpose of providing support for infrastructure that would avert overshooting heating thresholds of 1.5C, civil society groups reiterated that a credible action plan would be one which would require AIIB to ensure its direct and indirect financing is targeted towards enabling – not detailing – an urgent, managed phasing out of dependency on fossil fuels in regional and non-regional member countries, while staying away from promoting false solutions that would exacerbate environmental and social harms or sovereign indebtedness. Dwi Sawung, from the Indonesian Forum for Environment (WALHI), explained: "While we appreciate AIIB's Climate Action Plan, it must evolve into an unwavering commitment to safeguard our planetary commons. We demand tangible actions by the AIIB to urgently and rapidly phase out fossil fuels from its portfolio, and avoid resorting to false solutions, including any further support for the damming of rivers or incinerating waste in the name of energy transition." Civil society and community groups from countries across AIIB’s membership from member countries will be closely monitoring and evaluating the response of the Bank’s management and shareholder governments to the policy and project-related concerns and questions raised.

To: Mr. Jin Liqun, President Asian Infrastructure Investment Bank (AIIB) Mr. Ludger Schuknecht, V.P. and Corporate Secretary, AIIB Danny Alexander, V.P., Policy and Strategy, AIIB AIIB Board of Directors -Via Email - In the midst of this year’s AIIB Annual Meeting, we are writing collectively – as civil society groups representing constituencies across the AIIB's regional and non-regional membership. We acknowledge the effort taken by AIIB to convene a face-to-face Annual Meeting and appreciate the Bank's intention to invite civil society organizations to attend formally. Nevertheless, participation in this year's Annual Meeting in Sharm el Sheikh has been challenging, especially for civil society groups and affected communities from South, Southeast, West, and Central Asia as well as from Latin America. Visa processes are typically long and cumbersome, requiring AIIB's direct intervention to secure the necessary documents to arrange flights to Egypt. Going forward, we hope AIIB Management will facilitate expedited visa processes for civil society participants registering for forthcoming Annual Meetings, helping to ensure timely and effective participation. In the lead up, during and after this year’s Annual Meeting, we have – and will – continue to engage with the AIIB's management, staff, and Board on policy and project related issues, explicitly bringing forward urgent and real implications that require institutional attention, transparency, and accountability. However, at the time of writing, as the AIIB has yet to bring on board a new Head of Communications, there remains a serious institutional gap in the Bank's day-to-day engagement and communication with civil society and external stakeholders. The AIIB remains behind other multilateral development banks in its Annual Meeting civil society engagement, including in comparison to ADB, WB, EBRD, GCF, and others. It has been seven years since the first AIIB Annual Meeting in Beijing, and we as civil society still need meaningful space (panel discussions organized and moderated by civil society) to discuss key issues around projects, strategies, and policies. The yearly CSO - Management session in the official program has been reduced to a checklist agenda item instead of offering time for project and policy-related concerns and questions to be raised, discussed, and responded to. For example, we have repeatedly raised project-affected community issues, such as the concerns regarding the impacts of the 220 MW Bhola IPP, the Bangalore Metro Rail, and other projects in the CSO - Management session. Yet, as we have seen in the case of the Bhola IPP complaints eligibility assessment, the CEIU and PPM have deemed issues raised during the CSO - Management engagement session (the only formal institutionalized channel for civil society to raise issues to AIIB management) not to be considered as 'good faith efforts' in reaching AIIB management. We also have submitted formal letters during Annual Meetings in previous years which have not received a response other than simply being acknowledged, leading us to further question the purpose and function of these engagements. Seven years on, we continue to be told by responsible Bank personnel that the Bank is 'new,' still in a 'learning phase,' 'listening' but stretched in terms of staff – none of which are encouraging responses from an established multilateral development bank with a global membership. Nevertheless, we appreciate that AIIB President Jin Liqun took the time to sit with civil society during the World Bank Spring meeting, where some issues could be discussed at length with management. We hope to continue exploring meaningful communication channels with his office as and when his schedule permits. During this year's AIIB Annual Meeting, we will be highlighting the following key issues – The Expanded Use of the "Accountability Framework" (AF) As a framework that allows the President to fast-track approval of projects below a threshold of USD 300 million for sovereign-backed projects or guarantees, USD 150 million for non-sovereign projects, and USD 35 million for equity investments outside of board oversight, this raises deep concerns over the validity of risk assessments, as well as questions of transparency and accountability. Specifically, for instance, there remains a lack of clarity on the extent to which environmental, social, climate, and cumulative risk assessments are being bypassed. We also understand that some AIIB Board members do not know how it is used and when they can recall the process. Nor are projects demarcated on the AIIB's website when approvals are made in this manner – both before the decision process and post-approval. We remain aware of and concerned by the fact that the thresholds for approval may increase in the future. In the immediate term, we urge the AIIB to institutionalize practices to ensure more transparency and ensure timely access to information on instances when the AF is being used, as well as clear, logical rationales. However, in the long term, we urge the Board and Management to entirely reconsider this framework as one that has no place in an institution that upholds values of multilateralism, due diligence, and transparency. PPM Review Per the Project-Affected People's Mechanism, the "Policy shall be reviewed no later than five years from its adoption. The MD-CEIU shall initiate and guide the review. The review shall take into account the views gathered through public consultations, including with Project-affected communities, AIIB's Members, clients, and other stakeholders (para. 11.4)." As the policy was approved in December 2018, we understand the PPM review will be getting underway this year. Given this and our past experience in drafting the said PPM, we reiterate our demands to ensure a meaningful, inclusive, and gender-sensitive PPM review, including the following: AIIB's Complaints Evaluation Integrity Unit (CEIU) should embark on an evaluation of lessons learned over the past years as to the effectiveness (or lack thereof) of the PPM since its adoption. To date, there have only been two complaints (or requests) that have been submitted to PPM, both of which were deemed to be ineligible. This poses grave concerns as to the accessibility of the policy itself in addressing concerns of communities that AIIB-financed projects might have potentially harmed. Specifically in relation to the consultation process: The AIIB should release an approach paper for the upcoming PPM review process detailing the clear process of how the consultation will be conducted, the evaluation study, and the clear process on how input collected will be used and integrated into the updated PPM. This approach paper should be shared publicly for comment at least 60 days before the consultation. The consultation process should include hybrid options for in-person and virtual consultations. In-person country and/or regional consultations should be prioritized in the countries with significant AIIB lending portfolios. Online consultations should not be conducted using a webinar format as this limits the space for an open, inclusive, and meaningful dialogue, instead being in a meeting format. Using English as the sole means of communication in these consultations will fail to reach the target CSOs and communities seeking a remedy. CEIU should ensure that consultations at a regional and national level in English are offered in national or other languages. The consultation process should be undertaken over a minimum of between 6 - 10 months. CEIU should ensure that all consultations are conducted in an accessible, impartial, and culturally appropriate way, which enables the most vulnerable and marginalized populations to participate and provide input in an informed manner actively. CEIU should provide the necessary budget requirements for the conduct of the consultation process. CEIU should allow participants to contribute anonymously in countries where the risk of reprisals and repercussions for critiquing the government exists. CEIU should ensure that the consultations will be undertaken in an environment free of any threat or intimidation. Specific Project-Related Concerns and Grievances 1. Mandalika Urban Development and Tourism Project | Indonesia Ongoing human rights violations continue at the Mandalika Urban Development and Tourism Project in Indonesia, where there is heavy military and police presence. Over the past three years, United Nations Special Rapporteurs have repeatedly issued statements to bring attention to the situation, including militarisation, evictions and lack of freedom of expression (See for example: “Indonesia: UN experts alarmed by reports of increased militarisation and intimidation around Mandalika project”) From the outset, the project developer failed to obtain free, prior, and informed consent (FPIC) from affected communities both before construction began and during construction, leading to violations of peoples’ rights, including dispossession of land and livelihoods, as well as ecological destruction. The Bank has been consistently called upon to suspend funding and launch an independent investigation into alleged human rights violations. Nevertheless, the AIIB has yet to take any decisive action to address the range of severe grievances such as forced resettlement and restrictions on residents' movements. 2. Rogun Hydropower Development Project | Tajikistan The proposed 3600 MW Rogun Hydropower Dam in Tajikistan is under development in a highly seismic area along the transboundary Amu-Darya River, with no appropriate built-in mechanism for responding to cross-border impacts downstream in Uzbekistan, including if ever there were to be a dam breach. It is also associated with rights violations of those who have already been required to relocate to make way for the project, and is expected to have further devastating impacts on the livelihoods of those who still reside along the river as well as on local ecologies. In addition, it will inevitably lead to heightened geopolitical tensions given the implications for transboundary water access and raises the spectre of a heavy debt burden for Tajikistan. With construction beginning in 2016, reservoir filling is only expected to be completed in 2033. Already, in 2019, local people reported a crack in the structure, which was attributed to use of poor quality construction materials. (See: Business and Human Rights Resource Center, 2022). Despite these risks, the AIIB already provided a preparatory grant of USD 5 million for the project in early 2023. We collectively urge the AIIB not to proceed with any further financing of this economically, environmentally and socially disastrous project. 3. COVID-19 Microfinance Facilities (PRASAC and ACLEDA) | Cambodia In early 2022, two separate financial intermediary investments in Cambodia's Microfinance and Micro, Small and Medium Enterprises (MSME) loan market were approved by the AIIB Board despite serious concerns of widespread and systematic predatory lending and abusive collection practices, including associated with the two identified recipient institutions, PRASAC Microfinance Institution and ACLEDA Bank. With an oversaturated microfinance landscape, alongside inadequate consumer protection frameworks and unethical lending practices, commonly documented violations include forceful land dispossession and Indigenous Peoples’ loss of access to ancestral domains through improperly issued land titles used as collateral in debt-driven land sales. Although AIIB's Environmental and Social Framework applies to financial intermediaries, in the context of MFIs and MSME lending markets, it fails to adequately address problems within those management systems, includingthe predatory lending and abusive collection practices. Accordingly, urgent reform of the AIIB's Environmental and Social Framework is needed to address deficiencies in due diligence, project and client management, and the absence of effective mechanisms for community complaints and accountability, applicable to the entire scope of financial intermediary institutions and facilities. Without addressing these concerns promptly, AIIB's additional investments could exacerbate harm to the poorest and most vulnerable communities, including in Cambodia, where marginalized communities can no longer endure the consequences of unethical practices perpetrated by microfinance lending institutions. As the AIIB Management is aware, a complaint was filed with the IFC’s Compliance Advisor Ombudsman in relation to the practices of six banks and microfinance institutions (MFIs), including ACLEDA and PRASAC, due to harms inflicted by predatory and deceptive lending practices. Compliance investigation is ongoing. In addition, the Netherlands’ OECD National Contact Point is pursuing further assessment of allegations that the Dutch-based investor Oikocredit is in violation of the OECD Guidelines for Multinational Enterprises due to its role in providing financing for three Cambodian MFIs, including PRASAC, and resulting contribution to perpetrating human rights abuses connected to predatory lending practices (See:“Initial Assessment NGOs vs Oikocredit”). We trust the AIIB management and project officers are closely observing these processes and urge them to not only be willing to also address grievances if/when they arise but also to commit to no further approval of any additional financing flows to Cambodia’s MFIs and MSME loan market. 4. Bangalore Metro Rail Project-Line 6 | India In November 2019, the Technical Training Centre for the Deaf (TTCD) in Bangalore was demolished to make way for Line R6. The plans to close and demolish the school without practical alternative options in place meant that from 2018 onwards, 43 students faced an abrupt end to their progress towards Industrial Training Institute certification and eventual job placement. As most of them belong to socially and financially marginalized families, the job opportunities they could have pursued after the two year program were considered as a key to greater financial security and a dignified future. In effect, then, the students have fallen through the cracks created by this project, as from the outset there was no practical social impact assessment conducted and a complete disregard for safeguard standards. Over two years ago, this situation was brought to the attention of the AIIB as well as the EIB, as co-financier, in order for both Banks to duly step in and address the safeguard violations accordingly. However, to date, no concrete action has been taken by the AIIB. Nearly three years since the demolition of the Training Centre, there has been no resolution reached to adequately address the rehabilitation needs of these students. Among the demands being advanced by the students, their families and allied civil society organizations, is the call for redress and reparations, including specifically for dignified jobs and compensation for the time lost, harm done as well as mental and emotional anguish experienced. It remains an open question whether the AIIB is prepared to take due responsibility. 5. Unique Meghnaghat LNG Power Plant | Bangladesh This 584 MW combined cycle fossil gas project, designed to use regasified LNG, is associated with a highly problematic land acquisition process, as land was usurped from people across three villages who were paid at rates which were below accepted market prices, and even undercut those outlined under Bangladesh's 2017 Acquisition and Requisition of Immovable Property (ARIP) Act. In addition, over the course of developing the project, sand piles have been deposited on local agricultural fields, and lands used for livestock grazing have been taken over without any compensation being provided to people. In addition, the plant’s boundary wall along Meghna River has meant people can no longer continue to fish there as they have for generations or use the water for daily necessities. Taken together, these impacts have caused a severe deterioration in the quality of life of local people, specifically due to loss of access to land and waters relied upon for day to day survival. Furthermore, sustained availability of gas for the power plant remains questionable, as Bangladesh needs to import all the LNG it requires, purchased on the spot market, which is subject to high price volatility as well as availability. Meanwhile, although the project is claimed to be designed as ‘hydrogen-ready’ (i.e. in preparation for future options to use hydrogen as a fuel), Bangladesh has no such hydrogen plant or source developed yet, or planned in the foreseeable future. In addition, concerningly, realistic emissions calculations demonstrate that the greenhouse gases emitted by this project alone is expected to be higher than any other ever built in Bangladesh. 6. Bhola IPP | Bangladesh Last year, communities affected by this 220 MW combined cycle gas turbine project officially filed a complaint under the AIIB’s Project Affected Peoples’ Mechanism, outlining key concerns including: (i) coercion and intimidation faced by local communities, (ii) land acquisition practices in violation of national laws (including grabbing of lands relied upon by communities without payment), (iii) siltation of the local canal due to negligent construction practices, and (iv) loss of ability to use land for farming, grazing of livestock, and for household purposes due to water-logging, effluent and waste discharged into surrounding areas. Subsequently, in February 2023, the then Managing Director of the PPM responded formally, dismissing the case on the grounds that “the PPM finds that the Requestors did not make good-faith efforts as required under the PPM Policy Clause 5.1.8 to raise their concerns with AIIB Management or to satisfactorily explain why they were unable to do so.” As explained in correspondence dated May 2023 to the current Managing Director of the PPM, several engagements with AIIB management and the project site management took place between mid-2018 until late 2022. We continue to urge the PPM to reassess the injustices suffered as well as the complaint at hand, and take all steps required to ensure justice still due to the communities is no longer delayed. Although existing project financing provided by AIIB was replaced in mid-2022 by commercial bank debt provided by a syndicate of multinational banks, it is still incumbent upon the AIIB to address the complaints’ concerns and provide urgent redress. We reiterate the assertion that the closure of financing arrangements for the project does not exempt the AIIB from addressing the harm that it had already caused to the communities. 8. Rural Water, Sanitation and Hygiene for Human Capital Development Project | Bangladesh This Rural Water, Sanitation and Hygiene Project, co-financed by AIIB and the World Bank, is situated in a drought prone area, and considered by local civil society groups to be contributing towards undermining – rather than fulfilling – peoples’ rights to affordable, accessible, clean water sources. Specifically, it will require the extraction of groundwater through large and small-scale water piping schemes, and as a result is expected to exacerbate desertification in the area and reduce accessibility for communities that are already struggling to meet their daily needs. The infrastructure being developed as part of this project has also led to local families being concerned for their very survival due to possible forceful eviction from their homes. However, to date, people remain unaware of any effective, accessible grievance redress mechanism channels that exist for them to use to have problems that arise – including any violations of their rights to housing, water and livelihood – meaningfully addressed. One of the implementing agencies, Palli Karma-Sahayak Foundation (PKSF), is tasked with disbursing MFI loans to local people identified as water and sanitation ‘entrepreneurs’ as well as loans for people to build water and sanitation servicing facilities. However, the costs of dependency on MFIs is being borne by local people who are becoming caught in increasing levels of indebtedness. A further component of this project that has raised concern among civil society organizations is the support being provided for drafting a new National Strategy for Water Supply and Sanitation, and the likelihood it would lead to privatization of the water sector (risking increased challenges to hold service providers accountable to meet the needs of the public as rightsholders, especially in terms of quality, accessibility and affordability, as well as lower labor and health and safety standards in sector workplaces). Concerns over AIIB’s Growing Use of FI Modalities and Capital Market Financing Over the past year, the AIIB has scaled up the number of loans issued through financial intermediaries and capital market investments. Without transparency regarding which subprojects are being supported, it's unclear how affected communities and allied civil society groups would even be aware of AIIB's role as a financier. It also needs to be clarified how AIIB, as an institution, is duly taking the required steps to ensure projects align with its policies and frameworks with periodic on-site monitoring. Specific concerns include the following: Inconsistencies in disclosure between AIIB and financial intermediary clients' websites There remain issues with portfolio disclosures, environmental and social policies, and grievance redress mechanisms, with only a small fraction of projects having monitoring reports, and many links to client websites that require fixing/review. This lack of transparency hinders access to information and accountability, requiring a proactive response from the AIIB. Questionable application of AIIB’s Environmental and Social Framework Although revisions to the AIIB's Environmental and Social framework have led to greater policy related application to FIs, there remains a significant disclosure gap on the practical side, leading to severe restrictions on access to remedy for those affected by subprojects and a lack of accountability. Lack of requirements related to project-level Grievance Redress Mechanisms While some financial intermediaries have mechanisms for addressing grievances, the AIIB must consistently inform people about these mechanisms. The reality is that this lack of information creates an additional barrier for civil society groups and communities to communicate concerns or file complaints. Lack of Disclosure and Transparency Disclosure of FI portfolios should be applied without exception, consistently and rigorously, with limited redaction. Notably, while private equity funds are required to disclose where financing is flowing, other intermediary facilities/institutions are not. Investments in capital markets, particularly in corporate bonds and securitized loans remain opaque. The current lack of information being disclosed makes it nearly impossible for rightsholders to raise questions, understand where funds are flowing or respond in any meaningful way. A much greater degree of disclosure of information about these investments is required, if there is to be accountability towards both those impacted by the developments resulting from the financial flows as well as the broader public, including AIIB’s own shareholders. Updated Energy Sector Strategy Over the past ten months of the Bank's Energy Sector Strategy Update being applied in practice, community-based groups and civil society organizations have witnessed how the provisions are being used to legitimize the bankrolling of large-scale resource-intensive energy projects and opaque FI subprojects promoted in the name of energy transition. Specifically, the provisions uncritically assume that continued expansion of gas power projects and liquefied natural gas (LNG) are necessary to meet a 'growing demand,' promoting obsolete claims that such developments could serve the needs for 'transition' and suggesting that coal-to-gas switching can be part of an effective effort towards 'reducing pollution.' This predisposition towards gas financing is not just in policy but evidenced by the fast-tracked sealing of loan agreements amounting to USD 110 million for the Unique Meghnaghat IPP in Bangladesh and USD 268 million for the 1,560MW Surkhandarya gas-fired combined-cycle gas turbine in Uzbekistan. Amid the undeniable havoc brought on by climatic heating and ever-nearing tipping points, it is long overdue for the AIIB to deal with the realities of what the times demand of it – to urgently shift gears towards a rapid phase-out – not expansion – of its current gas portfolio with no exception, supporting members in managed - but direct and rapid - powering down of fossil fuel assets. In relation to hydropower, the updated Energy Sector Strategy language enables support for "multi-purpose, storage reservoir-based, run-of-river and pumped storage hydropower investments" that can be "of different scales" as long as it's "technically, economically and financially viable and environmentally and socially sound." Notably, the latter qualifier remains left to interpretation, which would be very different from the perspective of those whose livelihoods, cultures, and identities are intertwined with the existence of rivers proposed to be dammed and who will be forced to make way for such projects as compared to those in the office towers in capital cities where market fluctuations are viewed online, and business deals are brokered. Meanwhile, there is no proviso for how legacy social and environmental harms will be resolved in cases when AIIB proposes and approves re-financing hydropower projects or support for projects where coerced resettlement has already occurred, such as the case of the Dakdrinh dam in Vietnam, the Xekaman Dams in Lao PDR and the Rogun Dam in Tajikistan. In this regard, we note with particular alarm that the latter two projects are sited on transboundary watersheds. The AIIB has no institutional procedures developed to support remedy, resolve grievances, or address other emerging issues when projects have impacts in multiple countries. Before approving more hydropower projects, we urge the AIIB management and Board to take stock of the actual human and ecological toll, taking the opportunity to acknowledge that less damaging energy generation options exist and that any decision to refurbish or expand existing projects must be weighed carefully against the option of decommissioning. We also note that AIIB's increasing portfolio of large-scale renewable energy projects requires a clear precautionary approach, one which also excludes consideration of waste to energy, refuse-derived fuels, biomass, hydrogen, and ammonia as viable energy solutions in light of the associated environmental, climate, economic and social harms. Finally, in recent months, we have also seen an increase in non-regional energy projects being advanced, including through additional FI loans, without any expansion of effort to be transparent, accountable, and engage with civil society as well as project-affected people in appropriate languages or publish corresponding materials in the required regional languages. Concerns Re: AIIB’s Paris Agreement Alignment Methodology and Climate Action Plan We also take this opportunity to articulate serious concerns with the AIIB’s new Paris Alignment Methodology, specifically in relation to its lack of evidence based rigour and failure to support a trajectory towards limiting global heating as close as possible to 1.5C. An urgent overhaul is needed to withdraw criteria and guidance that promotes further investments in fossil gas as well as speculative technologies which serve to prolong the life of fossil fuel projects, such as carbon capture and utilization schemes, along with unverified arguments against renewable energy. In addition, the suggestion that large scale hydropower projects are “automatically PA aligned … if corresponding GHG emissions are confirmed to be negligible,” requires a re-write based on documented findings related to lifecycle emissions associated with hydropower as well as accounting for ecological and social impacts. In this regard, it’s important to note the reality that there is a large pulse of methane emissions typically associated with the initial 10-20 years of dam operations, which coincides with the precise limited window of time we have to minimize greenhouse gas emissions and avoid overshooting 1.5C. Furthermore, greenhouse gas emissions that result over the years from the eutrophication of dam reservoirs, from turbine degassing, and during the decommissioning phase all require consideration. This implies that any support for a build-out of hydropower at this time would decisively contribute to undermining the recommendations of the Intergovernmental Panel on Climate Change (Assessment Report 6) and the concerted global effort to comply with provisions of the Paris Agreement. The serious social and environmental havoc wreaked by the development of hydropower projects also undermine both peoples’ and ecosystem resilience to climate change. In addition, urgent revisions of the methodology are needed in relation to the references to Waste-to-Energy Projects (WTE), which should in no case be considered aligned with a 1.5C pathway, being neither environmentally, economically or socially sound nor sustainable. Incinerator ash contains persistent organic pollutants (POPs), requiring handling and disposal as hazardous waste, not as ‘recyclables’ as suggested in the AIIB methodology. Similarly, effluent and emissions are also toxic (containing for example, residues of heavy metals, dioxins, furans, and polyfluoroalkyl substances among others) causing corresponding airborne, water and land contamination. As a result, WTE projects undermine local, national and global efforts towards climate resilience, adaptation and mitigation, instead exacerbating harm, damage and losses of local livelihoods. In relation to the AIIB’s response to the climate crisis, we note that the Bank’s first Climate Action Plan was released during this year’s Annual Meeting. While we appreciate the words of AIIB President Jin Liqun featured in the Plan’s Foreword, providing assurances that it is a “living framework that can and will need to be finetuned and adapted,” glaringly, there is no explanation in the document to indicate when it will be formally opened up for public review, input and revisions. As the it stands, we are highly alarmed by the key assumptions and priorities underpinning the Plan, including: the commodification of commons – as for example in the suggestions to “establish nature and biodiversity as an impactful asset class” and proposing “financing high integrity forest protection initiatives linked to carbon markets” (pg 21), “developing the right conditions for greater private climate financing” (pg 3)– leading to the conclusion that the “primary focus [of the Bank] will be on providing solutions to de-risk private financing”(pg 25)--meaning the burden and risks will be borne by the public sector, and investments in technofixes, illustrated by the Plan’s claim that the “climate challenge can only be addressed with increased technological innovation” (pg 3). On the contrary, to be fit for the purpose of providing support for infrastructure that would avert overshooting heating thresholds of 1.5C, a credible plan would require AIIB to ensure its direct and indirect financing is targeted towards enabling – not detailing – an urgent, managed phasing out of dependency on fossil fuels in regional and non-regional member countries, while staying away from promoting false solutions that would exacerbate environmental and social harms or sovereign indebtedness. Examples of such maladaptive distractions that should be explicitly avoided include any support for Carbon Capture and Storage (CCS)/carbon capture, use and storage (CCUS), CCS with bioenergy (BECCS) or experimental direct air carbon capture and storage (DACCS), as well as piloting of fuel switching/blending reliant on so-called ‘clean’ [potentially fossil gas derived] hydrogen, ammonia, biomass or refuse derived fuels. In addition, debt for nature swaps – which are generally associated with burdensome conditionalities and subject to lengthy, technocratic negotiations – and dependency on so-called ‘nature based solutions’ (such as carbon credit schemes which rely on the acquisition of vast expanses of land) – which typically lack transparency, fail to seek or obtain the free, prior and informed consent of land users, and subject land, territories, watersheds and coastal areas to commodification – can only be expected to exacerbate the marginalization of affected and climate vulnerable communities as well as the risk of further dispossession. A Climate Action Plan fit for purpose would be grounded in rights-based praxis, upholding transparency and accountability, while also requiring proactive efforts on the part of the AIIB to provide redress in cases where the institution has been complicit in exacerbating climate risks and harm, including past and current fossil fuel dependent projects. With these considerations in mind, we look forward to hearing an identified timeline for its update, in line with emerging climate science and lived impacts. Though the above list of concerns and considerations is non-exhaustive, we are enumerating them in writing in the hopes that this year, AIIB management will take the time to respond, either in matrix or paragraph form, to each of the issues raised in turn. We look forward to receiving such information. Sincerely, Rayyan Hassan Executive Director NGO Forum on ADB Endorsed by the following organizations: 350 Asia, Regional 350 Pilipinas, Philippines Accountability Counsel, Global Africa Network for Environment and Economic Justice(ANEEJ), Nigeria Aksi! for gender, social and ecological justice, Indonesia Asian Peoples’ Movement on Debt and Development (APMDD), Regional Bangladesh Working Group on External Debt (BWGED), Bangladesh BRICS Feminist Watch, Global Center for Energy, Ecology, and Development (CEED), Philippines Centre for Human Rights and Development, Mongolia Coastal Livelihood and Environmental Action Network (CLEAN), Bangladesh Conseil Régional des Organisations non gouvernementales de développement, DR Congo DamSense, USA Environics Trust, India Freedom from Debt Coalition (FDC), Philippines Friends with Environment in Development, Uganda FUNDEPS, Argentina GAIA Asia Pacific, Regional Gender Action, Global Green Advocates International, Liberia Growthwatch, India Indian Social Action Forum (INSAF), India Indus Consortium, Pakistan Latinoamérica Sustentable, Ecuador Legal Rights and Natural Resources Center, Philippines Lumière Synergie pour le Développement, Senegal Nash Vek PF, Kyrgyzstan Oil Workers' Rights Protection Organization Public Union, Azerbaijan, ONG FIMA, Chile Oyu Tolgoi Watch, Mongolia Pakaid, Pakistan Pakistan Fisherfolk Forum (PFF), Pakistan Participatory Research & Action Network (PRAAN), Bangladesh Peace Point Development Foundation (PPDF), Nigeria Recourse, The Netherlands Rivers without Boundaries Coalition, Mongolia Rivers without Boundaries PF, Kazakhstan Sustentarse, Chile The Indonesian Forum for Environment (WALHI), Indonesia Trend Asia, Indonesia urgewald, Germany VOICE, Bangladesh WomanHealth Philippines, Philippines Download PDF here.

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June 13, 2023 As civil society organizations that have observed – and in some cases engaged – in the Asian Development Bank’s annual Asia Clean Energy Forum (ACEF) over the years, we have taken note of ADB’s consistent framing of national, multinational and transnational corporations as the leaders in the field of energy transition, prioritization of large-scale infrastructure and promotion of speculative technologies that are ecologically, socially and economically untenable. We refuse to turn a blind eye to the reality that while the corporate actors provided with a platform at ACEF have been – and continue to be – implicated in exacerbating the climate crisis as well as social, economic and environmental injustice in the region (including Adani, Engie, Summit Corporation and Tata), ADB’s own role in advancing resource intensive mega-projects also has real social and environmental damages associated (including large hydropower, solar and wind parks and drilling for geothermal resources in the midst of thriving rural communities). As environmental, labor, gender, climate, community, Indigenous Peoples’, and human rights defenders, we are well aware that just, equitable, rights-based and swift energy transitions will not come from simply replacing old technologies with new ones. Nor do we expect just energy transitions to be delivered by conglomerate corporate actors with track records in developing energy projects where systemic human rights and environmental violations are reported, or by the ADB – having witnessed firsthand the social and environmental impacts of ADB supported coal, gas, hydropower, waste-to-energy, geothermal drilling and large-scale wind projects. As stated on the ACEF 2023 website, the gathering this year is intended to be “a forum for clean energy practitioners to come together and share insights into how we take action using clean energy solutions….” with a key objective being “[i]ncreased private sector participation and leadership in the delivery of clean energy innovation”. References to climate vulnerable and marginalized peoples across the region are noticeable by their absence, making it clear that it is corporate interests and purposes that these ‘clean energy solutions’ are intended to serve. We object to such positioning of corporations as key proponents for renewable energy options as we have seen consistently how private sector interests trump those of workers, affected communities and the public’s right to affordable, reliable, non-polluting energy sources. It is in this context that we fail to see ADB’s ACEF as a meaningful space for critically examining the practical renewable energy solutions required for a swift and just energy transition in the region. Urgent Commitment to Phase Out Fossil Gas Dependence Required Until and unless ADB institutionally commits to phasing out support for fossil gas and to excluding resource-intensive projects that have no place in the category of ‘clean energy solutions’, including greenfield hydropower dams, waste-to-energy incinerators coal-to-gas switching projects as well as hydrogen and carbon capture and storage schemes that serve the interests of the oil and gas industry, its legitimacy as a convenor of a ‘clean energy’ forum remains highly questionable. In fact, ACEF 2023 features sessions highlighting the piloting of carbon capture usage and storage (CCUS), bioenergy carbon capture and storage (BECCS) as well as hydrogen, shifting the focus to technical distractions primarily promoted by the oil, gas, mining and agribusiness industries. Wasting time and resources betting on non-viable, speculative as well as unsustainable technologies and schemes – including scaling-up dependence on hydrogen, BECCS, CCUS and carbon markets – diverts much needed attention and resources needed for real, just and immediate emissions reductions – necessary if we are to avert overshooting the 1.5C target and catastrophic thresholds for global climate heating. Meanwhile, an ACEF session focusing on the situation of the Pacific Islands defines the transition to renewable energy as a ‘hard choice’, despite the fact that already several of the Pacific Island states are championing the need for a Fossil Fuel Non-Proliferation Treaty. From our perspective, a planned and deliberate shift to renewable energy, ending the continued extraction of fossil fuels, is not only critical, it is the only choice we have if we are still to find a pathway forward within planetary boundaries. Alarmingly, among the ACEF discussions on hydrogen, is a session co-sponsored by gh2.org, a lobby group spearheaded by corporate interests including India’s Adani, Korea’s Hyundai Motor Group, Australia’s Fortescue Metals, Germany’s Thyssenkrupp, and the Korea Zinc Company. Even if the source of hydrogen is categorized as ‘green’ (i.e. from large-scale solar, wind or hydropower), its production requires onerous amounts of water, which risks exacerbating water stress and over usage, placing a burden on local people who rely on ground and surface water for daily survival. This year’s ACEF also includes promoting BECCS as an “energy innovation”, which is highly concerning given the reality of significant concerns related to land speculation, land grabbing, encroachment into Indigenous Peoples’ ancestral lands, unsustainable use of water and carbon emissions (including from land use change and burning biomass); even the most recent IPCC Assessment Reports from Working Groups II and III note potential impacts on biodiversity, food security and land rights. Examples of carbon capture and storage also feature during the discussion scheduled on ‘decarbonizing East Asia’, despite the fact that the build out of CCUS infrastructure alongside existing fossil fuel facilities does nothing to actually accelerate the phase out of dependency on coal, oil and gas or to support the rapid cuts in greenhouse gas emissions that are imperative at this time. Revealingly, ADB’s energy sector pipeline increasingly reflects a similar agenda, for instance with a current proposed technical assistance grant for partnering with India’s Ministry of Petroleum and Gas to develop pilot projects and sector plans for expanding uses of hydrogen in such industries as oil refining, blending into compressed fossil gas and pipelined gas, fuel cells, heating and power generation. Similarly, the ADB has a proposed technical assistance grant to the Indian Oil Corporation Ltd. for carbon capture, utilization and storage piloting, including for application in refineries in Northeast India, and has been supporting the development of CCUS demonstration projects in China – including at a plant of Yanchang Petroleum Group as well as in the coal-fired power subsector and coal-chemical industry. Earlier this year, the ADB also approved a loan for a coal to fossil gas switching project in Kazakhstan, despite simultaneously suggesting it will support feasibility studies for the piloting of an Energy Transition Mechanism scheme in the country. Market-Based and Export Oriented RE Options: Violating People’s Rights, Lacking in Accountability We have seen how market-based and export-oriented strategies for energy development depend upon sacrificing the health and cohesion of communities while wreaking havoc on forests, rivers and coastal areas. Promoting these models going forward is neither acceptable nor sustainable. For instance, ADB’s active loans for Nam Ngiep Hydropower Project in Lao PDR, which was built on the assumption it would lead to 500,000 tons of avoided CO2 emissions in Thailand by exporting power, required over 3000 Indigenous Hmong and Khmu Peoples to involuntarily resettle into prefabricated homes away from the designated inundation zones. Despite the project now being operational, families resettled continue to raise unresolved grievances in relation to the inadequacy of the livelihood support and replacement infrastructure provided by the Nam Ngiep 1 Power Company. Meanwhile, the biodiversity offset plan, which was proposed to make up for the destruction of critical habitats and forest areas through a ‘no net loss’ framework has continued to be beset by problems. Similarly, although the ADB’s recently approved support for the export-oriented Monsoon Wind Power Project in Lao PDR is featured for example in one of the ACEF sessions, its development requires land acquisition from 378 households across 22 villages and the loss of communally used lands relied upon for non-timber forest product harvesting by over 2000 people across 25 villages, the majority of whom are Indigenous Peoples. Despite land acquisition being underway, according to local news reports, affected families are reportedly still waiting for compensation and remain uncertain where or how they will continue to graze livestock as well as retain their livelihoods due to the loss of agricultural and forest lands. Given the current context of constrained civic space, there are limited options for community members to vocally raise grievances, let alone bring such concerns forward to international financiers such as the ADB. Nevertheless, the ADB – as reflected in this year’s ACEF sessions – continues to feature plans for building up hydropower and large-scale solar for cross border exports. In these cases, energy project sites in exporting countries often become sacrifice zones, and there remains a lack of corresponding consideration for how people will secure remedy when impacts may not be limited within the borders of one country, such as when dams are sited on transboundary rivers. The sidelining of the very real social and environmental implications of large-scale energy infrastructure is particularly glaring this year, at a time when the ADB is championing itself as an institution prepared to bring about ‘just transition’ in the region. It’s also a notable exclusion at a time when communities are facing the brunt of rising energy costs, austerity plans being imposed by states burdened by indebtedness and the impacts of the climate crisis. Climate Financing: A Matter of Justice Though the ADB has announced a plan for scaling-up financing for climate adaptation and mitigation, the support is primarily in the form of loans, meaning nothing more than an exacerbation of indebtedness. In the context of ACEF 2023, we note that there is absolutely no updated framework released by the ADB publicly that provides clear defining terms and directions for the Bank’s ‘clean’ investments in the energy sector, despite repeated calls from civil society for versions of the guidance notes being developed on gas, hydropower, waste to energy and Paris Alignment (associated with the 2021 Energy Policy) and a draft Climate Change Action Plan to be disclosed. We therefore reiterate that these documents should not only be made publicly available on the ADB’s website, but before finalization should be open to a robust series of inclusive, participatory public consultations across the region with a clear commitment to meaningfully incorporate feedback, particularly from communities already affected by the ADB’s current energy portfolio. Similarly, in regards to the ADB’s Energy Transition Mechanism (ETM), despite the first pilot project being proposed in Indonesia, and feasibility studies being undertaken in several countries in the region, there is an absence of options for meaningful ways communities affected by coal power projects – including those financed by the ADB in the past – as well as civil society and independent workers’ organizations could engage with decisions, plans and processes related to project selection, decommissioning, and any remedial action being taken. If the participation of communities in shaping plans that will affect their livelihoods, futures and their possibilities for seeking reparatory justice is sidelined, the transition being pursued risks merely exacerbating injustice and inequality. This would also require ADB to develop specific guidance for protecting against – and responding to – retaliation and reprisals directed at community members, workers as well as other human rights and environmental defenders giving input into the ADB’s ETM (and associated just energy transition partnerships), and for ensuring people can freely and safely engage with – as well as monitor – implementation processes. Issuing a Collective Challenge Going forward, we challenge the ADB to stop hiding behind the rhetoric of clean energy, just transition and ‘climate friendly’ solutions, taking genuine steps to end its role in perpetuating social harm, ecological injustice and the climate emergency by: Ending its partnership with the oil, gas and other extractivist industries, including those promoting the use of hydrogen, ammonia and carbon capture, Explicitly setting an urgent time bound phase out for current investments in oil and gas companies and infrastructure with a commitment for no new support, Ending consideration of support for coal to gas switching, ‘repurposing’ coal power projects to enable co-firing (including biomass, ammonia, refuse derived fuel or other waste products), waste-to-energy incineration and greenfield hydropower dams, Disclosing its draft Paris Alignment Methodology, Climate Change Action Plan along with all Guidance Notes associated with the 2021 Energy Policy and subjecting these documents to robust, inclusive country-level consultations, integrating public inputs before approval, Ensuring all projects, technical assistance and other support does not undermine efforts to keep global heating thresholds below 1.5C, and Ensuring that any Energy Transition Mechanism being piloted from the outset: includes a process by which coal project affected communities, workers and their independent representative organizations along with civil society groups are involved through participatory, inclusive fora in any forthcoming decommissioning and remedial action plans, incorporates clear principles of transparency related to negotiations with project operators, provides clear assurances that legacy issues will be resolved with reparatory provisions for all harm and damage inflicted, and strictly adheres to ADB’s own safeguard standards, enabling unhindered access to the Bank’s Accountability Mechanism. Endorsed by: 350.org Asia | Regional (Asia) 350 Pilipinas | Philippines 3S Rivers Protection Network | Cambodia Asian Peoples’ Movement on Debt and Development (APMDD)| Regional (Asia Pacific) Bangladesh Working Group on External Debt (BWGED) | Bangladesh Building and Wood Workers International Asia Pacific | Philippines Center for Environmental Justice | Sri Lanka Center for Energy, Ecology and Development| Philippines CLEAN (Coastal Livelihood and Environmental Action Network) | Bangladesh Community Resource Centre | Thailand DamSense | USA debtWATCH Indonesia | Indonesia EarthRights International | United States Environics Trust | India Environmental public society | Armenia Freedom from Debt Coalition | Philippines Friends of the Earth Japan | Japan Gender Action | Global Global Alliance for Incinerator Alternatives (GAIA) – Asia Pacific | Regional (Asia Pacific) Growthwatch | India Indigenous Women Legal Awareness Group (INWOLAG) | Nepal Indian Social Action Forum (INSAF) | India Indus Consortium | Pakistan International Accountability Project | Global Initiative for Right View | Bangladesh Japan Center for a Sustainable Environment and Society (JACSES)| Japan Legal Rights and Natural Resources Center - FoE Philippines | Philippines Mekong Watch | Japan Mines, Minerals & People | India Nash Vek Public Foundation | Kyrgyzstan NGO "Youth Group on Protection of Environment" | Tajikistan NGO Forum on ADB | Regional/Asia Pacific Oil Workers' Rights Protection Organization Public Union | Azerbaijan OT Watch | Mongolia Pakaid | Pakistan Pakistan Fisherfolk Forum | Pakistan Peace Point Development Foundation (PPDF) | Nigeria People's Coalition for The Rights to Water (KRuHA) | Indonesia Philippine Movement for Climate Justice | Philippines Recourse | Netherlands Rivers without Boundaries Coalition | Mongolia Urgewald | Germany Witness Radio - Uganda | Uganda

24th May 2023 For a Swift Closure of Cirebon Coal-Fired Power Project Unit 1; Keeping Unit 2 Out of Operation: Open Solidarity Statement We extend our solidarity with community members from West Java, Indonesia who are taking a public stand in Tokyo this week to assert the need for a swift closure of the Cirebon Coal-Fired Power Project Unit 1 and to question the rationale for bringing the adjacent Unit 2 facility into full operation. As the Asian Development Bank (ADB) is now in the process of considering options to refinance Cirebon Unit 1 as the first proposed pilot under the Energy Transition Mechanism (ETM), we urge the ADB to be accountable to the very people who will be affected by this upcoming transaction, heeding and acting upon their demands. Notably, Cirebon Unit 1 was not identified by ADB’s own scoping studies as a priority for the ETM. Instead, ADB has suggested that the project was selected in part due to the track record of the operating company (Cirebon Electric Power) on corporate social responsibility (CSR) and community engagement. Yet the reality is that since plans for the development of the Cirebon Unit 1 were made public in 2007, local residents have mobilized tirelessly to call for the project to be canceled and operations suspended. Now, as a consequence of the facility’s operations over the past 13 years, residents have lost the ability to carry on key income generating activities that they depended upon for survival – including harvesting shrimp and undertaking artisanal salt production. Toxic fly ash has also contaminated the surrounding residential areas causing residents of all ages to experience severe chronic respiratory problems. However, there has never been compensation, reparations or remedy for such losses. Voluntary CSR programs for local schools and clinics or tree planting, for instance, do not ameliorate the loss of livelihood dignity, health and community well-being. Looking ahead, it remains to be seen if Cirebon Electric Power is genuinely prepared to respond to community concerns if plans for the plant’s decommissioning process get underway, specifically how the social and environmental havoc caused by the plant’s operations will be remedied, who will pay, and what time-bound benchmarks will be agreed upon. As the ADB is currently undertaking a social and environmental audit of the site as part of an assessment of existing gaps with its own safeguard standards, we echo the concerns of residents in their assertion that they, as affected community members, should be involved in guiding such an assessment process from the outset, helping to ensure it realistically captures the range of issues that require remedy and reflects site-specific rights-based recommendations. It is incumbent upon the ADB to clearly commit to ensuring that the resolution of social and environmental harms identified in this audit will be in line with its own safeguard standards and that residents of the surrounding communities will have unhindered access to its Accountability Mechanism. We also note that the ADB has made no commitment to disclose the terms and conditions of the renegotiated power purchase agreement (PPA) of Cirebon Unit 1 to local people, workers or concerned civil society groups. In this regard, we support residents and allied civil society organizations calling for public disclosure of any revised PPA, and reiterate the call for Cirebon Unit 1 to be closed at the earliest possible time. Alarmingly, ADB has suggested that ‘fuel switching’ may be considered at ETM sites, including Cirebon Unit 1. We join with concerned community members and other allied civil society organizations in denouncing any initiative to enable the extension of the life of this coal power project or others selected for piloting under the ETM in the future, through co-firing with hydrogen / ammonia or biomass or resorting to reliance on Refuse Derived Fuels/other waste products. Any consideration of development of carbon capture and storage facilities is also unacceptable.These are dangerous distractions which will serve to keep carbon and resource-intensive, polluting projects like Cirebon 1 in operation rather than helping to pivot towards reliance on appropriately scaled renewable energy options. Finally, we join with residents and allied civil society organizations in questioning why the very same corporate interests involved in building and operating the 660MW Cirebon Unit 1 are engaging in the ADB’s ETM, while simultaneously bringing online the larger 1000MW Cirebon Unit 2. Not only is this contradictory, it exposes a cavalier willingness to keep business operating as usual at all costs – including to people’s livelihoods, the climate and planetary commons. There is no rational reason for the same companies to pursue kickstarting the operations of Cirebon Unit 2 at full capacity, as it will inevitably lead to continued and exacerbated health and livelihood problems for local people. It is crucial that loan disbursements be suspended as called for by residents from the surrounding communities. By getting involved in initial negotiations for the refinancing of Cirebon Unit 1, the ADB cannot turn a blind eye to the realities of Cirebon Unit 2 and dismiss it as simply unconnected but rather should be addressing it head on in their discussions with the parent company and project proponents. This is most especially in the context that the ADB, and Cirebon Unit 1 project proponents consistently suggest the ETM is being pursued in the interests of a just transition. Going forward, we urge the ADB to respond directly to the residents of communities surrounding Cirebon Units 1 and 2, providing assurances that if they continue to pursue negotiations for piloting Cirebon Unit 1 under the ETM: The process will be proactively reshaped to ensure local people are involved through participatory, inclusive fora in any forthcoming decommissioning and remedial action plans, Priority will be placed on swift closure of the plant and reparatory justice as a matter of urgency, Unhindered access to the ADB’s own Accountability Mechanism will be assured, and Any options that would serve to extend the life of the project and/or continue to have devastating social and environmental consequences will not be pursued by the ADB or ETM partner institutions. Organizational Endorsements: 350.org Asia, Asia 350 Indonesia, Indonesia 350 Pilipinas, Philippines Accountability Counsel, Global Aksi! for gender, social and ecological justice, Indonesia Africa Coal Network, Regional (Africa) Asian Peoples' Movement on Debt and Development (APMDD), Regional Bangladesh Working Group on External Debt (BWGED), Bangladesh Bank Information Center, USA Buliisa Initiative for Rural Development Organization (BIRUDO), Uganda Campaign for Sustainable Rural Livelihoods (CSRL), Bangladesh Center for Energy, Ecology, and Development (CEED), Philippines Climate Watch Thailand, Thailand CLEAN (Coastal Livelihood and Environmental Action Network), Bangladesh Consumer Foundation, Mongolia Environmental Defender Law Center, USA Environmental Public Society, Armenia Freedom from Debt Coalition, Philippines Friends of the Earth Japan, Japan Germanwatch e.V., Germany Global Alliance for Incinerator Alternatives (GAIA) — Asia Pacific, Regional (Asia Pacific) groundWork/Friends of the Earth - South Africa, South Africa Growthwatch, India Haki Jamii Rights Centre, Kenya Indian Social Action Forum (INSAF), India Indigenous Women Legal Awareness Group (INWOLAG), Nepal Initiative for Right View (IRV), Bangladesh Initiatives for Dialogue and Empowerment through Alternative Legal Services (IDEALS, Inc), Philippines International Accountability Project, Global Japan Center for a Sustainable Environment and Society (JACSES), Japan Jubilee Australia Research Centre, Australia Kiko Network, Japan Nash Vek, Kyrgyzstan NGO Forum on ADB, Regional Network Movement for Justice and Development, Sierra Leone Oil Workers' Rights Protection Organization Public Union, Azerbaijan Pakistan Fisherfolk Forum, Pakistan Peace Point Development Foundation (PPDF), Nigeria Phenix Center, Jordan Philippine Movement for Climate Justice, Philippines Recourse, Netherlands SPELL (Solidarity for People's Education and Lifelong Learning), Philippines Trend Asia, Indonesia Urgewald, Germany Youth Group on Protection of Environment, Tajikistan Read the statement by residents living around the Cirebon Coal Power Project which was also addressed to ADB President Asakawa here and signed by over 60 civil society organizations from across the Asia Pacific and beyond (original in Bahasa Indonesia)