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Dear Secretariat of NGO Forum on ADB and everyone: Thank you for your letter to the Asian Infrastructure Investment Bank (AIIB) and for your comments on the public consultation on AIIB’s Energy Sector Strategy Update. AIIB strongly values public consultation as an integral process in updating its Energy Sector Strategy and as an important opportunity to hear feedback and suggestions from a wide range of stakeholders, including CSOs and NGOs. The public consultation of AIIB’s Energy Sector Strategy Update follows established practices and intends to be transparent, inclusive, and accountable. The consultation is also designed to ensure integrity by requesting for identifiable source of comments. AIIB commits to collate and duly consider all comments received during the public consultation and a summary of comments will be made publicly available. We sincerely encourage you to take full advantage of the consultation by submitting written comments and expressing your specific concerns on the draft strategy to essupdate@aiib.org. In addition, we will be holding two online sessions for CSOs in different time zones as platforms for you to directly communicate your comments and suggestions to the AIIB energy strategy team. Invitations with registration links will be distributed soon. We look forward to receiving your further feedback and suggestions on the draft of updated Energy Sector Strategy. Best regards, Asian Infrastructure Investment Bank Read AIIB’s Call for Public Input on the Energy Sector Strategy Update.

Manila, Philippines (5 May 2022) --- As the Asian Development Bank (ADB) launches the first stage of its 55th Annual Board of Governors Meeting with the theme “Positioning Climate Resilient Green Economy for the Post – COVID – 19 World,” civil society organizations from across the region collectively urged the Bank to reassess financing priorities and modalities, given its track record of investments that exacerbate indebtedness, deprive people of affordable and comprehensive universal health care services, increase levels of chronic hunger amidst the critical shortage of affordable staple foods, and facilitate dependency on fossil fuel reliant infrastructure among borrowing member countries. Rayyan Hassan, Executive Director of NGO Forum on ADB, stated: “The ADB has boldly claimed itself as the Climate Bank of Asia and the Pacific, but in its 2021 Energy Policy, the ADB still does not rule out resource and carbon-intensive infrastructures such as gas power plants, LNG terminals,, and transmission lines along with WTE incinerators.” He also asserted that “ADB’s support for COVID – 19 recovery must not result in creating markets for the private sector at the cost of further cutbacks in public expenditures on key social services. The ADB must avoid providing technical assistance or investments geared towards privatization-related reforms or models of public-private partnerships in the health care, education, energy, and water sectors, which we’ve seen consistently end up leading to violations of workers’ rights, and services that are typically inaccessible and substandard.” Hemantha Withanage, Chair of Friends of the Earth International, and Forum International Convenor for South Asia, explained, “On this occasion, we must not forget that Sri Lanka played a leading role in founding ADB in 1966. Since then, Sri Lanka has received USD 11.5 billion in loans, including 3.5 billion for the transport sector and 1.5 billion for the energy sector. About 13% of the total debts are for the ADB. Yet, Sri Lanka’s public transport sector has deteriorated, and the energy sector is in a real crisis.” He also added that the ADB, as a policy bank that advised Sri Lanka for decades of this development, should also take responsibility for funding corrupt regimes and non-beneficial projects. “The ADB development model has resulted in huge inequities with massive disparities between the rich and poor. Poor people are continuously being exploited in the labor market, being given fewer wages, and the Bank has perpetuated the patriarchal system of oppression.” NGO Forum on ADB firmly disagrees with the Bank’s recently suggested “Four Paths to a Climate-Friendly Energy Transition for Asia and the Pacific,” claiming “oil companies are on the front lines of the energy transition” and that “ESG scores have the potential to attract trillions of dollars in private sector capital to address climate goals .” Just, inclusive, sustainable transitions across South, Southeast, North and Central Asia, the Caucasus, and the Pacific cannot and will not be realized if power is wrested into the hands of the very transnational, multinational, and national corporations that have proven track records of committing human and environmental rights violations across the region. As explained by Tanya Lee Roberts-Davis, Energy Policy and Campaigns Strategist at the NGO Forum on ADB, “Over the past year, although the ADB has sought to showcase blue and green ‘climate smart’ financing, we have seen the Bank retain a business-as-usual portfolio of investments in resource-intensive energy projects that undermine rather than uphold the provisions of the Paris Climate Accord, principles of inclusive, sustainable, just transition, and the latest climate science as elaborated by the recent assessment reports of the Inter-Governmental Panel on Climate Change. This includes advancing loans for large-scale dam projects that have led to community outcry over the loss and damage incurred as well as proposed financing for new gas-powered projects and pipeline infrastructure, such as the highly risky 1600km Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. We affirm our solidarity with communities that continue to speak out against the injustices and rights violations wrought by such projects and our assertion that now, more than ever, it is imperative to shift investments as rapidly as possible towards supporting decentralized, low impact and appropriately scaled renewable energy options.” As the ADB Safeguards Policy Review is underway, the Forum network has also demanded that the Bank should and must not repeat its historical mistakes. In particular, on how the ADB’s continued lack of due diligence in conducting meaningful consultations and timely disclosure of project information which has led to severe harm to communities, from the street vendors in Kolkata to the indigenous Magar communities in Nepal and communities in Mongolia. Nadeen Madkour, Safeguards Policy Analyst of the Forum Network, stated, “The ADB should improve its safeguard delivery system to achieve genuine and pro-people sustainable development outcomes. We call for robust, rights-based, and just safeguard provisions that should not be seen as costs to be managed or risks to mitigate. There can be no genuine recovery if the Bank systematically fails to uphold safeguards, transparency, and accountability in its lending, investment, and technical assistance portfolio. ” The network believes that the ADB must have robust assurances of alignment with all international human rights frameworks, inclusive of the right to a clean, healthy and sustainable environment, as well as ensuring public disclosure and accessibility of associated guidance documents on gas, hydropower, and waste to energy projects.

NGO Forum on ADB Statement on the 55th ADB Annual Governors’ Meeting (First Stage) On the occasion of the First Stage of the 55th Annual Meeting of the Board of Governors of the Asian Development Bank (ADB), we take this opportunity to reiterate unresolved concerns arising from community-based, national and regional civil society organizations that monitor the investments, policies and implications of the ADB across the Asia and Pacific, and to urge the Bank to reassess its financing priorities and approaches. As this year’s virtual event is hosted by Sri Lanka and chaired by the Sri Lankan Finance Minister Ali Sabry, we collectively extend our solidarity with the diverse peoples’ movements across the region – including most notably in Sri Lanka, but also in Myanmar, India and the Philippines among others, mobilizing in defense of social, economic, environmental, gender and energy justice, and ultimately, livelihoods with dignity. We also remain alarmed by –and alert to – the range of devastating repercussions across the region stemming from the war in Ukraine, in particular for those with colleagues, friends and family members in Ukraine and Russia, as well as for those in closest proximity, across Central Asia and the Caucasus. At a time when the ADB has labeled this meeting as a time to advance the “Climate Resilient Green Economy for the Post – COVID – 19 World,” it is crucial that ADB’s support for COVID – 19 recovery does not result in further cutbacks in the developing member countries’ public expenditure on key social services. Specifically, we urge the ADB to avoid providing technical assistance or investments geared towards reforming the health, education, water and energy sectors through privatization or models of public – private partnerships, which we’ve repeatedly seen lead to services becoming less accessible, less accountable to the very people for which these services are supposed to support, and more reliant on workforces that are pushed to accept substandard working conditions. Over the course of 2021, ADB financing of large scale hydropower dams and expansive gas schemes, for example in Pakistan, India and Sri Lanka - despite being labeled as green, resilient or ‘climate smart’ – risk further exacerbating dispossession of affected peoples, depriving them of livelihoods, while placing the future of entire nation states into question (given the potential of carbon lock-in and loss of critical ecosystems relied upon for populations to survive, for example). As major riverbeds are drying up, flash floods, extended periods of drought and other extreme weather events are becoming the norm, it is clear that a just, and equitable process for phasing out fossil fuel dependence will be necessary. However, we firmly disagree with the ADB’s recently suggested “Four Paths to a Climate-Friendly Energy Transition for Asia and the Pacific” claiming “oil companies are on the front lines of the energy transition”, and that “ESG scores have the potential to attract trillions of dollars in private sector capital to address climate goals”. In contrast, from our perspective, it is the communities across the region, living in the most climate vulnerable areas of the world – including coastal regions and small island states threatened by rising sea levels – who are the ones taking the lead in driving forward demands for locally relevant, small-scale and community controlled energy systems. We have seen and felt first-hand the ways that ADB’s investments exacerbate indebtedness, deprive people of affordable and comprehensive universal health care services, increase levels of chronic hunger amidst the critical shortage of affordable staple foods, and facilitate reliance on resource-intensive, extractivist forms of energy. With our perspectives grounded in these lived experiences, we continue to assert that just, inclusive, sustainable transitions across South, Southeast, North and Central Asia, the Caucasus and the Pacific cannot and will not be realized if power is wrested in the hands of the very transnational, multinational and national corporations that have proven track records of committing human and environmental rights violations across the region. With the Asia Clean Energy Forum 2022 now on the horizon, we recall ACEF 2021 as a time when civil society groups spoke out firmly against the ADB’s energy policy (at the time, only a draft). Groups from across Asia and allies globally made a united decision to disengage with the session scheduled by the ADB during the formal program, and instead undertook our own online press conference. This was purposefully opened as a space for groups working with communities directly impacted by ADB financed energy projects to speak out –to explain directly why the ADB needs to stop approving new investments in gas, oil, large-scale hydropower dams, as well as waste-to-energy infrastructure, instead shifting towards decentralized, appropriately scaled renewable energy. Months later, in the lead up to the Board’s approval of the final version of the 2021 Energy Policy in October, civil society groups came together again to call for the Board to suspend the decision and go back to the drawing board. At the time, we urged a reconsideration of the Energy Policy provisions in order to enable a more nuanced consideration of: the current energy and climate challenges facing remote, rural, urban and peri-urban communities across Central, South and Southeast Asia and the Pacific; the latest climate data and analytics available (according to the IPCC Assessment 6 Reports); the need to shift support to enable the roll-out of decentralized, locally controlled and appropriately scaled renewable energy systems, including in island-based, remote and marginalized communities, support for just, inclusive, sustainable energy transitions with nuanced and appropriate approaches grounded in the different realities of Central, South, Southeast and North Asia, the Caucasus and the Pacific, comprehensive assurances of alignment with all international human rights frameworks, inclusive of the right to a clean, healthy and sustainable environment, as recognized by the UN Human Rights Council, and all ILO Conventions, as well as ensuring public disclosure and accessibility of associated guidance documents (on gas, hydropower and waste to energy projects). Although the Board approved the policy in October 2021, we continue to raise our concerns, and now in May 2022, are still reiterating the call for associated guidance notes to be made subject to public comment at a draft stage and public disclosure once finalized. We are also mindful that the ADB Annual Meeting will be a time when ADB looks back at agreements forged during COP 26. In this regard, we would like to remind the Bank of the statement issued by civil society groups across the region during the unveiling of the private-sector oriented Energy Transition Mechanism (coal retirement scheme) at COP26 in Glasgow. At that time, we outlined several key concerns including: the long timeline suggested for winding down operational coal-fired power plants (up to 15 years) and associated implications for local people, environment and economies; the likelihood of undermining national as well as international ambitions to uphold the provisions of the Paris Climate Accord and recommendations of the Intergovernmental Panel on Climate Change; the lack of assurances that the early retirement of coal plants will not result in the expansion of other fossil fuel reliant energy infrastructure; and the severe lack of opportunities provided to date for communities as well as civil society and people’s organizations to engage with the ADB’s processes of formulating this scheme. Up until now, nearly mid-way through 2022, civil society organizations still continue to raise significant concerns, specifically in the Philippines and Indonesia, about the expected piloting phase of this scheme in the year ahead. Finally, as the 2009 ADB Safeguard Policy Statement is currently under review, the Forum reiterates our demands for comprehensive, rights-based safeguards, accompanied by a robust implementation plan. Taking a precautionary approach, considering alternatives (including the no project option), and responding to community concerns should be considered as integral aspects of project implementation from the outset, not simply checkbox exercises. In addition, in light of the ADB’s own claims towards upholding climate resilience, it is time for the Bank to take the cue from MDBs already introducing respect for “no go zones” by integrating provisions as outlined by the model Banks and Biodiversity No Go Policy directly into its updated Safeguard Policy. Going forward, the ADB must also look towards more stringent application of “equivalence and acceptability assessments” prior to taking into consideration the potential use of country safeguard systems. Doing away with these assessments for the sake of flexibility and practical purposes is contrary to attaining more equitable, just development outcomes. Looking ahead, we urge the ADB to consider integrating provisions that would clearly uphold a zero tolerance position in regards to reprisals against community members and allied advocates at – and around – all project sites. There can be no genuine recovery, if the bank continues to systematically fail in upholding safeguards, transparency and accountability in its lending, investment and technical assistance portfolio. Endorsed by the following organizations - 350 Pilipinas, Philippines 350.org Asia, Asia Aksi! for gender, social and ecological justice, Indonesia Asian Peoples' Movement on Debt and Development (APMDD), Regional Bangladesh NGOs Network for Radio and Communication, Bangladesh Bangladesh Working Group on External Debt (BWGED), Bangladesh Bank Information Center, USA Building and Wood Workers International Asia Pacific, Philippines CEE Bankwatch Network, Czechia Center for Energy, Ecology, and Development, Philippines Centre for Environmental Justice, Sri Lanka CLEAN (Coastal Livelihood and Environmental Action Network), Bangladesh Committee for the Abolition of Illegitimate Debt (CADTM),, India Community Empowerment and Social Justice Network (CEMSOJ), Nepal debtWATCH Indonesia, Indonesia Environics Trust, India Environmental public society, Armenia Equitable Cambodia, Cambodia FIAN Sri Lanka, Sri Lanka Freedom from Debt Coalition, Philippines Friends of the Earth US, US Gender Action, Global Growthwatch, India Humane Society International, United States Indian Social Action Forum (INSAF), India Indigenous Women's Legal Awareness Group (INWOLAG), NEPAL Initiative for Rights View,, Bangladesh Life haven Center for independent living, Philippines Mekong Watch, Japan Oil Workers' Rights Protection Organization Public Union, Azerbaijan, OTWatch Mongolia, Mongolia Prakriti Resources Centre, Nepal Recourse, The Netherlands Sri Lanka Nature Group, Sri Lanka The Bretton Woods Project, United Kingdom Youth Group on Protection of Environment, Tajikistan Download PDF here.

2nd May 2022 To: Mr. Jin Liqun, President, Asian Infrastructure Investment Bank (AIIB) Mr. Ludger Schuknecht, V.P. and Corporate Secretary, AIIB Sir Danny Alexander, V.P., Policy and Strategy, AIIB Mr. Bob Pickard, D.G., Communications Department, AIIB – Via Email – Dear AIIB President Jin Liqun, Mr. Ludger Schuknecht, Sir Danny Alexander, and Mr. Bob Pickard: We are writing collectively to express significant concerns about the highly limited parameters of the call for public input on the draft text of the AIIB Energy Sector Strategy Update, and in particular, to urge an immediate reconsideration of the stipulated deadline as well as the unilingual written submission format as posted on the AIIB’s website. Since last September 2021, civil society organizations from across the Asia and Latin America regions as well as European constituencies have proactively raised questions about the Energy Sector Strategy Update process – in writing, in person during COP26 in Glasgow, and online during the civil society information session scheduled in late February 2022. We once again take this opportunity to call on the AIIB Management and Board to open up a transparent, inclusive, participatory and publicly accountable process, engaging community, national, regional and international civil society networks across the global span of the Bank’s membership. Crucially, the requirements for English written submissions within such a short span of time create serious barriers for civil society groups inclusive of all regional and non-regional member states to give meaningful, specific, evidence-based input. Moreover, with all due respect, there is no clarity on the extent to which we can expect comments provided by external actors during this time to be integrated into a revised draft text. In fact, although the draft text of the Energy Sector Strategy Update acknowledges that other MDBs “have updated their energy policies and strategies in recent years” (para 24), there is no indication that the AIIB is seeking to follow similar online public consultation processes on policy revisions that were recently initiated by peer MDBs (such as those of the ADB, which typically span over several months and enable both written as well as discussion based inputs). At a minimum, a more transparent and inclusive process would require: extending the deadline for input beyond 3rd June; posting translated draft texts of the proposed Energy Sector Strategy Update in major languages of regional and non-regional members and enabling options for submissions to be accordingly received and taken into account in other languages; permitting comments on the draft to be submitted anonymously, providing assurances that such inputs will be duly taken into account, publicly disclosing any approach or background paper on the Energy Sector Strategy Update that is informing the revisions proposed (e.g. CEIU’s Early Learning Assessments on energy projects) at the earliest possible date, i.e. during (rather than following) the public consultation period; publicly disclosing a timeline for the update with clearly defined opportunities for civil society inputs, as well as a commitment to disclose a collated list of public comments received with responses from the AIIB (for reference, see: the ADB Energy Policy Review: Summary of Comments from Stakeholders, published during their Energy Policy review in June 2021); scheduling online interactive discussion based sessions (non-webinar format) held in different time zones and languages to accommodate regional and non-regional members, and times for meetings to discuss sub-sector concerns, such as on hydropower dams, gas power projects, LNG terminals and cross-border pipelines (transmission and distribution), as well as those classified as ‘innovative and transformative’ in the draft updated text (e.g. including ‘low-carbon’ hydrogen, biomass methodologies and electricity storage technologies); providing transparent and clear language on the applicability of the Energy Sector Strategy to non-regional member states, including (i) defined expectations on what types of energy investments will be prioritized and promoted outside of the Asian region, and (ii) what types of modalities for financing will be deployed (financial intermediary on-lending; financial Institution/liquidity investments, private /public sector), so that civil society groups from other regions can respond accordingly, and proactively responding to the range of concerns civil society groups have brought forward to the Bank’s management, board and staff about the risk of reprisals experienced by outspoken community members in project affected areas by immediately (i) integrating a Zero Tolerance provision on reprisals within the text of the updated draft on the AIIB Energy Sector Strategy, as well as (ii) operationalising the Bank’s 2021 Environmental and Social Framework commitments to address retaliations by adopting and putting into practice an explicit Zero Tolerance protocol for all external relations, inclusive of the ongoing policy revision process of the Energy Sector Strategy. Socially and Environmentally Risky Investments in the Energy Sector Makes Transparency and Public Accountability of Paramount Importance Based on reviewing the draft text of the updated Energy Sector Strategy, we note that investments suggested in the future include developing hydropower dams, drilling for geothermal resources, burning biomass and/or biofuel for energy, building downstream and midstream gas projects, infrastructure for carbon capture and storage, as well as options for concentrated solar and ‘low-carbon’ hydrogen power. Importantly, civil society groups have already raised considerable concerns about the significant environmental and social impacts expected from energy projects that are in the pipeline but yet to be approved, such as the 280 MW Nenskra Hydropower Plant in Georgia, the Tamakoshi V Hydroelectric Project in Nepal, and the Unique 584MW Meghnaghat Combined Cycle Power Plant in Bangladesh (all of which are listed on the AIIB’s website as proposed “Category A” investments). Such a range of resource-intensive projects being considered across AIIB’s membership can only be expected to take a heavy toll on community and ecological health,[1] potentially leading to rising tensions within border territories when shared resources are at stake (e.g. transboundary watersheds). As project specific decisions made in the energy sector will have long term implications for the economic, social, environmental and geopolitical futures of several of the Bank’s borrowing member countries and their respective populations, a transparent, publicly accountable process for developing the strategic framework for investments in the sector is absolutely imperative. Notably, civil society organizations based in both regional and non-regional member countries are also alarmed by the increasing financial intermediary on-lending portfolio of the AIIB, including in relation to the energy sector – as there is limited systematic public disclosure of what subprojects are receiving financing, or which communities are affected by these investments, let alone translation of project information into locally relevant languages. Accordingly, this raises serious questions of transparency and accountability, given the lack of any effective options for there to be publicly verifiable assurances that loan conditionalities are being met, such as in relation to exclusions placed on coal and associated infrastructure, or for grievance redress.[2] In light of all the issues raised above, we continue to firmly call upon the AIIB Management and Board to extend the deadline beyond 3rd June to deliberate on the draft text of the 2022 Updated Energy Sector Strategy, taking the time to meaningfully listen to – and consider integrating – inputs from a range of societal sectors across the AIIB’s membership in a public, inclusive, accountable and transparent manner. First and foremost, this must include the scheduling of open, participatory online discussion sessions that seek public inputs on specific sub-sectors of project investments expected to be prioritized in the Energy Sector Strategy Update (e.g. inclusive of hydropower, downstream and midstream gas infrastructure, and renewable energy/emerging technologies) adjusted for timezone considerations and with translation options available. We are open to discussing the points raised herein. Given the highly limited timeline, we look forward to hearing a response within the coming two weeks, at the latest by Friday 13th May. For a meaningful, inclusive, multi-lingual, publicly accountable, and transparent consultation process with diverse sectors of civil society, 350.org Asia, Regional 350 Pilipinas, Philippines 3S Rivers Protection Network (3SPN), Cambodia Aksi! for Gender, Social and Ecological Justice, Indonesia Asociación Ambiente y Sociedad (Colombia) Asian Peoples’ Movement on Debt and Development (APMDD), Regional Building and Wood Workers International - Asia Pacific, Regional Bangladesh Working Group on External Debt (BWGED), Bangladesh Both ENDS, Netherlands CEE Bankwatch Network, Czech Republic Center for Energy, Ecology, and Development, Philippines Centre for Environmental Justice, Sri Lanka Centre for Financial Accountability, India Centro de Documentación e Información Bolivia, Bolivia Change Initiative, Bangladesh Civic Advisory Hub, Uganda Coastal Livelihood and Environmental Action Network (CLEAN), Bangladesh Committee for the Cancellation of Third World Debt (CADTM), India Defenders Protection Initiative, Uganda Environics Trust, India Environmental Public Alliance, Armenia Equitable Cambodia, Cambodia Forest Peoples’ Programme, UK Freedom from Debt Coalition, Philippines Friends of the Earth US, USA Fundación Ambiente y Recursos Naturales (FARN), Argentina Fundación para el Desarrollo de Políticas Sustentables /Foundation for the Development of Sustainable Policies (Fundeps), Argentina Gender Action, USA Global Alliance for Incinerator Alternatives - Asia Pacific, Regional Global Responsibility, Austria Growthwatch, India GT Infraestrutura, Brazil Inclusive Development International, USA Indian Social Action Forum, India Initiative for Right View (IRV), Bangladesh International Accountability Project International Rivers Just Finance International, Netherlands Koalisi Pemantau Pembangunan Infrastruktur Indonesia, Indonesia KRuHA - People's Coalition for the Right to Water, Indonesia Latinoamerica Sustentable, Regional Manushya Foundation, Thailand Mekong Watch, Japan Nash Vek, Kyrgyzstan NGO Forum on ADB Secretariat, Regional Oil Workers' Rights Protection Organization Public Union, Azerbaijan Oyu Tolgoi Watch, Mongolia Pakistan Fisherfolk Forum, Pakistan Protection International Mesoamérica, Guatemala Recourse, Netherlands Rivers without Boundaries Coalition, Mongolia Rivers without Boundaries International Coalition, Russia Sustentarse, Chile Urgewald e.V. Germany, Germany VedvarendeEnergi, Denmark Youth Group for the Protection of the Environment, Tajikistan 1 Although the AIIB’s PPM has only received one submission to date on behalf of complainants affected by the Bhola IPP Gas Project, the negative social and environmental implications of several other energy investments advanced by the AIIB since 2016 have been raised by community groups and allied organizations, including in relation to the Upper Trishuli-1 Hydropower Project in Nepal, the Balakot Hydropower Project in Pakistan and the Trans Anatolian Natural Gas Pipeline Project in Azerbaijan. 2 See for example, USD 100 million approved for the BDMG Renewables and Asia Connectivity Facility in Brazil earlier this year. Download PDF here.

Dhaka, Bangladesh - CLEAN (Coastal Livelihood and Environmental Action Network), a Bangladeshi environmental and human rights organization, and NGO Forum on ADB, an Asian-led network of organizations monitoring the ADB and AIIB based in Manila, formally filed a complaint against the Asian Infrastructure Investment Bank (AIIB) regarding the Bhola Gas Power Plant (Bhola IPP) (Project Number 000057). This is the first complaint filed against the Bank in its 7 years of operation. Bhola IPP is a 220 MW Combined Cycle Power Plant (CCPP) that intends to help improve Bangladesh’s power generation capacity and address shortages but according to impacted communities, this is not true. Grave concerns about the project were raised by impacted communities, particularly on the issue of land grabbing. According to affected families, there was coercion and intimidation from ‘middlemen’ appointed by the project developer, Nutan Bidyut Bangladesh Limited (NBBL) to forcibly acquire their lands at the lowest rates. Hasan Mehedi from CLEAN explained that “the land acquisition practice was in violation of the Bangladesh Acquisition and Requisition of Immovable Property Act 2017, which stipulates landowners to be entitled to thrice the market price from private companies. The company has also taken more land than they bought” There were also no records of sales or transactions on the first phase of the land acquisitions made by NBBL. The project also has harmful environmental impacts. The construction of the power plant, sand, and other structural waste deposited by NBBL has led to the Mandartoli Shakha Khal/River Channel over siltation. The NBBL embanked its northern part with sand sacks and has taken over half of the canal. The sand from the sacks has spilled out into the canal bed, causing siltation and the canal to dry up gradually. As of the moment, the canal is only 1-2 feet deep and has lost its water carrying capacity. Due to the destruction of the Mandartoli Shakha Khal, monsoon water overflows during high tide. It directly floods the Dakshin Kutba village, where an estimated 400 Betel leaf farms have been destroyed, displacing over 2000 families dependent on agriculture. Over 100 households are approximated to be directly waterlogged and left completely disconnected from public services, communication, health care, and other necessary services. In addition, there was no proper water, sanitation, and hygiene (WASH) plan for the labor colony constructing the power plant. The effluent, sewage, and waste are discharged in large amounts into the surrounding villages, leading to uninhabitable living conditions. The project site has also taken over half of all grazing land in the area, directly impacting goat herders, who are mainly women. Other problematic issues were also raised by impacted communities ranging from lack of Information Disclosure and Meaningful Consultation, poor and misleading translation of critical documents, and the absence of documentation or outputs from the consultation reports. Rayyan Hassan, executive director of NGO Forum on ADB, stated “local communities and civil society organizations are exhausted raising these issues to NBBL and AIIB management for the last three years with no meaningful resolution to the problems. This complaint is being sent as a last resort to ensure justice to the aggrieved communities to resolve the problems surrounding Bhola IPP. The AIIB accountability mechanism has never been tested until now, we hope it can deliver on its promised purpose.”

Asian Infrastructure Investment Bank's (AIIB) response to the two letters sent by NGO Forum on ADB network - Follow Up Correspondence Concerning the 2022 Energy Sector Strategy Update Collective Call for a New Forward Looking AIIB Energy Sector Strategy Download PDF version here.

To: Mr. Jin Liqun, President Mr. Ludger Schuknecht, Vice President and Corporate Secretary Sir Danny Alexander, Vice President, Policy and Strategy Members of the Board of Directors of the AIIB In the context of the AIIB’s 2022 update of the Energy Sector Strategy, we are taking the opportunity to outline urgent concerns and reflections shared by both civil society groups and project-affected communities, as represented in the signatories below. As we are still awaiting clear publicly available information on the timeline, scope and approach of this update, in the interim, we are proceeding by clarifying our positions[1] going into this process as set forth below. Nevertheless, in doing so, we are fully cognizant that to date, we have no indication if - and how - the AIIB Management intends to engage in meaningful consultations with concerned civil society groups based in regional and non-regional countries[2] (borrowing and non-borrowing alike). Since the AIIB’s Energy Sector Strategy was adopted in June 2017, we have witnessed the approval of financing for nearly 30 projects dedicated to scaling up large-scale energy infrastructure within Asia, the West Asia-North Africa [WANA/MENA] Region and more recently, Latin America. Over these brief few years, there have been several projects which have resulted in serious concerns and outcry from communities and allied civil society groups, including but not limited to the Bhola Gas IPP Project, the Power System Upgrade and Expansion, and the Dhaka and West Zone Transmission Grid Expansion Project in Bangladesh; the Beijing-Tianjin-Hebei gas project in China; the Upper Trishuli I Hydropower Project in Nepal, and the Balakot Hydropower Project in Pakistan[3]. The imposition of these large-scale hydropower dams, fossil gas-fired power plants and facilities associated with fossil fuel projects since 2017 have already wreaked havoc on the climate resilience of local people and ecosystems, at times garnering the attention of local, national, regional and international press and civil society. Going forward into 2022, projects yet to be approved on the AIIB’s list of proposed energy sector financing include the Nenskra Hydropower Project in Georgia, the Tamakoshi V Hydroelectric Project in Nepal as well as the Southern Chattogram and Kaliakoir Transmission Infrastructure Development Project in Bangladesh – all of which are expected to be accompanied by grave social, ecological, climate and economic risks. We note the Bank’s stated commitments towards aligning it’s portfolio with the Paris Agreement climate imperatives by mid-2023,[4] as well as the recent significant steps taken to ensure subprojects associated with FI facilities exclude coal and, in some cases, large hydropower. We hope that this indicates a shift may be underway to recalibrate energy financing towards less ecologically, socially and economically devastating investments. In this regard, we recognize that if borrowing member countries are to transition towards reliance on grid systems powered by the wind and sun, there remains a major gap in financing which could well be supported in the future by the AIIB. With the opening of such options in the years ahead, we are proactively advancing a common position on considerations for the future of the AIIB’s Energy Sector Strategy. I. 2022 Energy Sector Strategy “Update” Process[5] We urge the Bank to move forward in a clear, transparent and publicly accountable way with the 2022 update of the 2017 Strategy, in particular given the implications of approved and proposed energy sector financing for not only communities, watersheds and ecologies both within national borders as well as across borders, but also in terms of meeting national and international climate ambitions. As a first step, we are calling for the public disclosure of key timelines posted on the AIIB’s website, an approach paper clearly explaining the terms of reference for the update, along with defined times allocated for consultations in both regional and non-regional borrowing member countries in the corresponding major applicable languages and appropriate time zones. Going forward, we hope that any updated strategy will have clear guidance on when the next revisions are envisioned. We also hope that any updated language will clarify that it is applicable to energy sector related financing and FI facilities sited outside the Asia region, including in member countries in Latin America, the WANA/MENA Region and the African continent. II. Changed Energy Landscape We note that the 2017 strategy is based on analysis of the International Energy Agency (IEA) published between 2015-16 as well as on borrowing member countries’ early commitments under the Paris Agreement – information which is by now too outdated to use as a legitimate reference point. Since then, much has changed in terms of climate science, ambition and technologies, not to mention the membership of the Bank of some countries taking leadership in this field. In particular, we would expect that in considering revisions to the Energy Sector Strategy, evidence from recent internationally relevant publications (such as IPCC ‘s AR 6 report, IEA’s Net Zero by 2050 Roadmap,[6] and the United Nations Environment Program’s annual “Production Gap” report[7]) will be duly taken into account, along with high-level commitments made by governments and institutions in the context of COP26. In this regard, we trust that AIIB’s Management, being in attendance at COP26, remains attentive to the fact that several member countries and potential co-financiers, partner FIs and peer MDBs committed to end support for unabated expansion of fossil fuels (e.g. Ethiopia, Canada, Denmark, Finland, Portugal, Switzerland and UK as well as AFD, FMO, EIB, EADB and BDMG).[8] We also note that an increasing number of AIIB’s members are associated with the “Beyond Oil and Gas Alliance” (Denmark, Finland, France, Ireland, Luxembourg, Portugal, Sweden and Wales). Indeed, there could not be a more opportune moment than now for the AIIB to pivot away from supporting any further build out of infrastructure for extracting, transporting, trading, storing, producing or generating power from fossil fuel-related resources. III. Priorities of a 2022 Energy Sector Strategy According to provisions 27-28 of AIIB’s current Energy Sector Strategy, the approach and initial guiding principles[9] are to be reviewed over time in light of scientific advances and economic circumstances, particularly in relation to renewable energy technologies. The stark global health, climate and economic crises that have come to the fore in recent years, taken together with both the ongoing international efforts to spur on inclusive just transitions, and the timely juncture mid-way between COP26 and COP27, provide an apt rationale for the AIIB management to overhaul the original provisions outlined in the Energy Sector Strategy 2017. Indeed, shifting gears towards supporting energy infrastructure fit for purpose – for today and tomorrow – would require the bank to move its resources towards supporting variable renewable energy sources, primarily wind and solar. We urge the AIIB to update its Energy Sector Strategy by: 1. Providing clear, timebound commitments to avert new and continued exposure to fossil fuel related investments; embracing climate ambition and science. As a first step towards Paris alignment, the AIIB must ensure it provides no new direct, indirect o FI on-lending support for coal and coal associated facilities. As outlined above, the scientific consensus on winding down all coal infrastructure is indisputable, and it is incumbent upon the AIIB as a multilateral development bank to support the transition from coal in member countries, both regional and non-regional. This means also leveraging partnerships with clients, project sponsors and institutional investors to close loopholes exposing the AIIB to coal through direct and indirect investment flows (including financial intermediary and capital market projects). This can be done by referring to the most up to date internationally recognized and credible screening criteria already used as a reference point by several financial institutions (including the World Bank Group’s IFC), the Coal Exit List. Furthermore, in order to avoid undermining member countries’ and global climate ambitions, the Bank would need to close off all loopholes for new investments in any gas, diesel and oil power generation projects as well as gas transport and LNG infrastructure. This would mean dropping those projects currently proposed but yet to receive Board approval, and ensuring no new consideration of such projects. It is also imperative that the Bank independently verify whether proposed financing for transmission and distribution infrastructure is associated with oil, gas, coal or nuclear power generation. Proposed financing for any investments ascertained to be affiliated with fossil fuel or nuclear facilities should be dropped from the pipeline without exception. If confirmed that proposed financing for transmission and distribution infrastructure does not have any foreseeable link to fossil fuel power generation, we would hope the Bank could provide such publicly documented affirmation in a timely manner on any online Project Summary. Meanwhile, the Bank’s current investments in fossil fuel-related infrastructure would need to be phased out, specifically by ensuring no additional financing beyond the current approved loans are proposed. Exceptions should be granted only if the Bank is leveraging support for a time-bound clean up and closure of the site in conjunction with a just transition framework for the affected workers and communities. Such cases should only move forward if undertaken through transparent, accountable public consultation processes with the expressed consent of communities and local workforces. 2. Supporting Scientifically Sound Renewable Energy Options We acknowledge the first steps taken by the AIIB to exclude large-scale hydropower dams from eligible financing from some approved FI facilities in recent months. However, we urge the Bank to not only make this standard practice, but also going forward, end direct financing of large dams and associated facilities. Taking such an approach would require the AIIB’s management to withdraw current proposals for developing large-scale hydropower projects yet to be approved by the Board of Directors (e.g. Tamakoshi V and Nenskra Hydropower Projects), and commit to no new financing for large hydropower developments, including preparatory works under the Project Preparation Special Fund (PPSF). For current investments in large hydropower dams, such as in Nepal, no expansion should be approved. This would enable the AIIB to uphold the “Joint statement on the human rights of people affected by dams and other water infrastructure” issued by several UN Special Rapporteurs in the lead up to COP26 (Nov. 2021) calling on “financial institutions to halt planned new large hydropower dams”. The reasoning advanced by these UN experts is applicable to both regional and non-regional members, as they point out that better, less socially and environmentally destructive renewable energy options exist in light of the consistently incalculable costs to peoples’ livelihoods and vast disruptions to watershed ecosystems. We urge the AIIB management to strictly withdraw any funding being considered for future waste-to-energy (WTE) projects from its urban and energy sector portfolio as well as under the Project Preparation Special Fund, and bring to a close those tranches committed. Burning plastics and other waste for energy is neither a sustainable nor socially, economically or environmentally forward-looking investment in the infrastructure needed for communities, workers or local businesses to embark on a just transition. Nor is such an investment aligned with the climate imperatives and science of today. We are highly aware of the impacts of such projects financed over the years by other Multilateral Development Banks, locking local municipalities into contracts with service providers that require quotas of garbage to be incinerated; stalling innovative zero waste solutions while contaminating the air with noxious fumes as well as local waterways and soil with toxic ash. Likewise, we have witnessed the concerning toll the AIIB’s co-financed venture into a waste-to-energy facility in the Maldives has had on the health and well-being of local populations, and on surrounding fragile ecosystems. Any further financing for such projects should only be used in cases where there are time-bound, rights-based and transparent initiatives underway for supporting plant closure, clean up and just transition of workers into other sectors. Given the resource intensive and risky production and disposal chain for nuclear fuels, it can neither be considered a sustainable, climate-aligned technology, nor part of a just transition. As a result, we urge the Bank to commit to steering clear of any investments that would support the operation or maintenance of nuclear facilities, providing clear assurances that any direct or indirect financing will not be granted for this sector. This would require the Bank to reaffirm section 38 of the current 2017 Strategy and close off remaining investment options. Moving forward, financing for so called ‘green’ emerging technologies and infrastructure projects, including pilot Carbon Capture, Utilization and Storage schemes (CCUS), the use of green or blue hydrogen associated with petroleum or coal industries, or the installation of floating solar panels within large-scale dam reservoirs, risk spurring on unforeseen damage to the environment, exacerbating economic and social inequality, and jeopardizing peoples’ health.[10] We therefore recommend the Energy Sector Strategy provide assurances that the Bank’s limited financing will not be used to invest in CCUS, experimental hydrogen power developments or any other carbon offsetting technology (via direct or indirect financing). To date, the Bank’s current Energy Sector Strategy suggests that in light of the “lack of consensus” on carbon pricing, the Bank will ”test the robustness of its economic analyses” with different carbon prices (Section 41). If the AIIB ventures into adopting more specific shadow carbon pricing benchmarks, the initial agreed upon rate should be subject to continuous upward standardization in order to align with the latest evidence-based recommendations of peer-reviewed climate research and clearly incorporate the social cost of carbon. By taking into account human mortality costs of carbon, for instance, the latest scientific data in the field suggests that the actual cost of carbon per metric ton should be set above USD 250 as of 2021. 3. Ensuring robust application of Commitments to Transparency and Provision of Access to Grievance Redress We have taken note of the AIIB’s growing portfolio of FI on-lending support, including the recent “BDMG Renewables and Asia Connectivity Facility” to Brazil. However, there is to date no clarity on what subprojects will receive support, and no commitment from the AIIB to clearly publish information that would enable civil society groups, local authorities and people affected by the infrastructure built to understand the AIIB’s involvement. We also note that in this case of support to BDMG, no Portuguese language information is available on the AIIB’s website. Going forward, we urge the AIIB to disclose all subprojects receiving financing via on-lending, ensure all project documents are duly translated according to locally relevant languages, and provide assurances that people affected by these subprojects could bring grievances forward through the AIIB’s Project-affected Peoples Mechanism. We also continue to assert that it is imperative that the Bank adopt specific principles to ensure gender and human rights based risk and impact assessments are carried out independently, publicly disclosed and meaningfully taken into consideration. Corresponding commitments to ensure the application of grievance redress is responsive to the local socio-economic context are also long overdue, particularly in relation to gendered and ethno-cultural dynamics as well as to acknowledging informally/communally shared lands and territories. 4. Committing to Support Infrastructure for Tomorrow that Upholds Sustainable, Inclusive, Just Transitions Although the 2017 Energy Sector Strategy currently suggests the “Bank will assist client countries in reducing local and regional pollution” (Section 36), there is nothing in the policy to provide assurances that the Bank’s financed projects will not be implicated in encroaching on “No Go Zones” – including, but not limited to: (i) ecologically sensitive areas as designated by international agreements, conventions and institutions (e.g. UNESCO, FAO, International Maritime Organization or IUCN), (ii) free-flowing rivers, (iii) intact forests, (iv) areas protected by national or subnational laws and regulations, (v) protected or at-risk marine or coastland ecosystems, (vi) Indigenous Peoples’ and Community Conserved Territories and Areas (ICCAs), and (vii) areas where the free, prior, informed consent of Indigenous and Local Communities have not been obtained. We therefore urge the Bank to explicitly incorporate provisions to respect No Go Zones – where any developments related to energy sector infrastructure will not be financed or incentivized by the Bank. In order to meaningfully uphold the 2021 joint MDB Just Transition High-Level Principles, we urge the Bank to address questions of how it will support a just transition in communities already displaced and affected by energy projects it financed since its inception (including the Bhola IPP and Myingyan CCGT projects), and how it will uphold the principles at the sites of future energy sector investments. At a minimum, as outlined above, this must include conditions to exclude infrastructure associated with coal, fossil gas and oil, large scale hydropower, waste-to-energy incinerators and large scale geothermal, as well as those which extend into No Go Zones. Although the current 2017 Energy Sector Strategy references investments in distributed and decentralized energy, this policy provision is not reflected in the Bank’s current energy portfolio. Going forward, we urge the AIIB to make clear time-bound targets and commitments to shift the bulk of new energy financing into supporting the development of appropriately-scaled non-resource intensive VRE options, particularly in the case of ‘last mile’ communities in writing, specifically for instance, integrated into the Strategy’s “Results Monitoring Framework”. IV. Conclusions While we are cognizant that the above recommendations will require the AIIB to fully overhaul the existing Energy Sector Strategy, including revisions to its “Results Monitoring Framework”, it is our collective conviction that there is no better time than now – in the midst of ongoing urgent realities related to overlapping climate, health, food, water and energy crises. We trust that clarity on the parameters of the update, draft revisions, and specific timelines for written as well as online input will be forthcoming from the AIIB, and look forward to providing further input at that time. For a Future where Economic, Social, Environmental, Climate and Energy Justice is a Reality for All, 350 Pilipinas, Philippines 350.org Asia, Asia Asian Peoples’ Movement on Debt and Development (APMDD), Asia Bank Information Center, USA Building and Wood Workers International Asia Pacific, Philippines BWGED (Bangladesh Working Group on External Debt), Bangladesh CEE Bankwatch Network, Czech Republic Center for Energy, Ecology, and Development, Philippines Centre for Environmental Justice, Sri Lanka Centre for Human Rights and Development, Mongolia Change Initiative, Bangladesh CLEAN (Coastal Livelihood and Environmental Action Network), Bangladesh Committee for the Cancellation of Third World Debt (CADTM), India Derecho Ambiente y Recursos Naturales, Perú Ecological public society, Armenia Environics Trust, India Environmental Public Society, Armenia Equitable Cambodia, Cambodia Freedom from Debt Coalition, Philippines Friends with Environment in Development, Uganda Fundeps (Foundation for the Development of Sustainable Policies), Argentina Growthwatch, India Inclusive Development International, United States Indian Social Action Forum (INSAF), India Initiative for Right View(IRV), Bangladesh International Accountability Project, United States of America International Rivers, USA KRuHA, Indonesia Latinoamérica Sustentable, Ecuador Lumiere Synergie pour le Developpement, Senegal Mekong Watch, Japan Nash Vek, Kyrgyzstan Oil Workers' Rights Protection Organization Public Union, Azerbaijan Oyu Tolgoi Watch, Mongolia Pakistan Fisherfolk Forum, Pakistan Progressive Plantation Workers Union, India Recourse, Netherlands Rivers without Boundaries, Russia Rivers without Boundaries Coalition - Mongolia, Mongolia urgewald e.V., Germany Youth Group on Protection of Environment, Tajikistan [1] In this regard, we also recall the briefing, “Ten Essentials for AIIB’s Energy Strategy”, published in November 2021. [2] Specifically, for example, there are corresponding implications for the “Strategy on Financing Operations in Non-Regional Members”, as per the Bank’s accompanying Technical Note (Principle 1, para. 10) and accordingly, it is hoped the Bank will be addressing this within the context of the 2022 Strategy update. [3] We note that prior to the AIIB’s Energy Sector Strategy being approved, financing was advanced to projects which similarly have raised serious concerns amongst local and international civil society groups, including the Myingyan Gas Power Project in Myanmar and the Tarbela Hydropower Project in Pakistan. [4] In this context, we interpret upholding the Paris Agreement as adherence to the Principles for Paris Aligned Financial Institutions, requiring a full pivot away from financing (i) any infrastructure that would incentivize the continued extraction or production of fossil fuels, encroach on intact forest areas, or violate the human rights of surrounding communities – with specific attention to those who identify as Indigenous Peoples – and (ii) any discredited mitigation schemes such as offsetting, carbon capture and sequestration, growing vast areas with of monocrop trees, or planting of new mangroves in place of those that can no longer survive in destroyed habitats. [5] Given that section 27 of the 2017 Strategy clearly includes the provision for a periodic review to “take into account the lessons of experience and also integrate the advances in scientific knowledge, technological progress, and changed economic circumstances,” but lacks any corresponding terminology to define the parameters of an “update,” there remains no such definition on what is intended to be taken into account within the 2022 process now underway. [6] According to the IEA’s Net Zero by 2050 Roadmap, while no new coal projects should be built from now on (0% share in the global energy mix by 2050), usage of large-scale oil power projects must fall to zero by 2030, and the usage of gas fired power projects must decline globally, at a minimum rapidly shrinking to just 0.4% of its 2020 existing share in the entire global energy sector by 2050 (p.117). Similarly, following the publication of the IPCC AR 6 report last year, UN Secretary General Antonio Guterres asserted: “OECD countries must phase out existing coal by 2030, with all others following suit by 2040. Countries should also end all new fossil fuel exploration and production...” [7] Launched just prior to COP 26, the Production Gap Report recommended not only that governments worldwide “[c]hart the course towards a rapid, just, and equitable wind-down of fossil fuel production as part of overall decarbonization plans, ” but critically, that “International financial institutions also have a key role to play: they can restrict financing for fossil fuel projects and direct it to just transition measures.” In addition, the report concluded that “to avoid locking in levels of fossil fuel supply that are inconsistent with climate goals…there should be moratoria, bans, or limits on all or certain types of fossil fuel exploration and extraction (such as offshore or unconventional drilling) or infrastructure (such as oil pipelines or liquefied natural gas (LNG) terminals).” (p. 65) In fact, the IEA’s 2021 “Net Zero by 2050” report likewise suggests that LNG facilities in the planning and construction stages will not ever be of use by 2050(p. 102). [8] While the AIIB remained absent from the list of institutional signatories, it nevertheless became apparent that endorsing governments make up over 20% of the AIIB’s shareholders. [9] Guiding principles listed in the current ESS are as follows: energy access and security, energy efficiency, reduction of carbon intensity, pollution management, catalyzing private capital, and promoting regional connectivity. [10] Examples of concerns arising include cases of CCUS CO2 pipeline ruptures and leakages. Further, the vast resource-intensive infrastructure required for carbon capture and hydrogen developments themselves promote reliance on the production and consumption of fossil fuels, and are yet to be proven functional at-scale anywhere in the world. Download PDF version here. Read AIIB's Response here.

Background The Asian Development Bank has been undertaking a review and update process of their Safeguards Policy Statement (SPS) 2009. The way we understand development is changing and development financing continues to evolve and adopt different ways which are less transparent and more difficult to track. At a time where the COVID-19 pandemic and the climate crisis are widening inequality, the safeguard policy remains critical to support community resilience and inclusive, just transition across the region. The NGO Forum on ADB has been campaigning to improve the safeguards system and ensure a robust, just, and rights-based policy. This demand is broad and requires a deep-dive into what we mean by this call. This document was developed as a metrics tool to evaluate the Safeguards policy drafted by the ADB. What do we mean when we say we want a robust, just, rights-based Safeguard policy? A robust, just, right-based policy is a policy which can be implemented regardless of uncertainty. It is a policy which recognizes the severity of large-scale development on social and environmental systems. It is a policy which prioritizes the principle of avoidance and ‘Do No Harm’ before ‘minimizing’ or ‘mitigating’ the harm after it happens. Robust is a broad term. This is why we developed the following checklist to help guide our approach to the policy. Is the policy informed by adverse impacts from poor or no compliance of the SPS 2009 implementation? Is the policy maintaining and stressing on the assessment of risks upfront prior to the approval of projects? Does the policy prioritize transparency and accountability in investments, its risks and impacts in a way that is timely, accessible, and culturally and socially suitable for affected people? Does the policy assess and manage direct and indirect environmental and social impacts of the investment in a way that is proportional to potential impacts? Does the policy strengthen the binding requirements for both sovereign and non-sovereign lending? Does the policy have a coverage framework for implementation in cases of emergency assistance, recovery and disaster risk loans, technical assistance, and associated facilities? Just can mean different things to different people. But a just policy is a policy which is based on the principles of equity. We need to ask ourselves: Does the policy seek to protect the rights, health, safety, and livelihoods of people including, children, women, Indigenous Peoples, and other vulnerable or disadvantaged groups? Does the policy adopt a strong social protection framework which seeks to adequately compensate and improve the lives and livelihoods of project affected people who were physically, socially and economically displaced? Does the policy assess the impact of the project on climate change and its impact on communities? Does the policy strengthen and expand guidance for involuntary resettlement safeguard to include gender, economic, and climate-induced displacements? Does the policy introduce & uphold a strong just transition & climate safeguard framework which adheres to IPCC Pathway 1 of 1.5 C? Does the policy make a commitment to recognise and protect tangible and intangible cultural heritage? A rights-based policy is supported and underscored by international laws, agreements and best-practices.

Mr. Jin Liqun President Asian Infrastructure Investment Bank (AIIB) Beijing, China Cc: Sir Danny Alexander, Vice President Policy and Strategy Mr. Ludger Schuknecht, Vice President and Corporate Secretary Members of the Board of Directors of the AIIB --Via Email-- Re: Follow Up Correspondence Concerning the 2022 Energy Sector Strategy Update Dear President Liqun, We are collectively writing to follow up on the civil society letter sent to you on 23rd September 2021 (“Key issues regarding the AIIB Annual Meeting 2021”). Nearly four months have lapsed since the letter was received by your office, and still we are yet to hear any substantive response to the range of questions raised. Going forward into 2022, we would like to specifically reiterate our request for clarification on the expected timeline and process related to the update of the Energy Sector Strategy this year, which we duly note was discussed during the last year’s meeting of the Board of Directors, Dec. 14-16, 2021. With all due respect, we are requesting the AIIB management team confirm when we – as civil society groups and project affected communities – can expect: Public disclosure of any existing approach paper guiding how the overall Energy Sector Strategy update process is being undertaken Public disclosure of additional guiding documents for the update, such as a CEIU review of the energy sector portfolio financed to date Public disclosure of the overarching timelines for the update on the AIIB website (including identification of allocated times for public comment and input) Clarification on whether the 1st (and any subsequent) drafts of the policy update will be made public and open to comment, with accompanying expected timelines Clarification on whether the management is open and willing to engage in country level discussions, regional consultations adjusted to timezones, or sector specific dialogues with concerned civil society organizations Clarification if there will be any point during the review process when public comments will be collated with responses and posted online (for reference, see: the ADB Energy Policy Review: Summary of Comments from Stakeholders, published during their energy policy review in June 2021) Clarification on whether any updated Energy Sector Strategy will apply to non-regional borrowing members, and if so, whether the current Strategy on Financing Operations in Non-Regional Members will be revised to reflect the changes incorporated in any updates (for ex. in relation to Paris Alignment) Whether drafts and any public online consultations will take into account translation into the major languages of regional borrowing countries (e.g. Bengali, Hindi, Urdu, Sinhala, Tamil, Thai, Chinese, Turkish, Russian, etc.) and also those outside the region (Spanish, Portuguese, Arabic) We hope and trust that given the timeliness of these concerns[1], you will duly respond with the requested clarifications as soon as possible. Thank you. Sincerely, NGO Forum on ADB Aksi! for gender, social and ecological justice, Indonesia Asian Peoples’ Movement on Debt and Development (APMDD), Asia Bank Information Center, USA BWGED (Bangladesh Working Group on External Debt), Bangladesh CEE Bankwatch Network, Czech Republic Center for Energy, Ecology, and Development, Philippines Centre for Environmental Justice, Sri Lanka Centre for Financial Accountability, India CLEAN (Coastal Livelihood and Environmental Action Network), Bangladesh Derecho, Ambiente y Recursos Naturales (DAR), Peru Grupo Regional Sobre Financiamiento e Infraestructura, Argentina/Colombia/Peru Equitable Cambodia, Cambodia Friends of the Earth US, US Green Advocates International, Liberia Growthwatch, India Healthy Public Policy Foundation, Thailand Inclusive Development International, United States Indian Social Action Forum (INSAF), India Initiative for Right View(IRV), Bangladesh International Accountability Project, Global International Rivers, USD Jamaa Resource Initiatives, Kenya Japan Center for a Sustainable Environment and Society (JACSES), Japan Koalisyon sa Karapatan sa Sapat na Pagkain (National Food Coalition), Philippines Latinoamérica Sustentable, Ecuador Lumière Synergie pour le Développement, Sénégal Nash Vek, Kyrgyzstan Oil Change International, United States Oil Workers' Rights Protection Organization Public Union, Azerbaijan Oyu Tolgoi Watch, Mongolia Pakistan Fisherfolk Forum, Pakistan Peoples Development Institute, Philippines Protección Internacional Mesoamérica, Guatemala Recourse, Netherlands Rivers without Boundaries Coalition, Mongolia Rivers without Boundaries International Coalition, Russia Sustentarse, Chile Urgewald, Germany WomanHealth Philippines, Philippines Youth Group on Protection of Environment, Tajikistan [1] In this regard, we also refer you to a briefing outlining some key recommendations for updating the Energy Sector Strategy which was published by civil society groups in November 2021: “Ten Essentials For AIIB’s New Energy Strategy”. Download PDF version here. Read AIIB's response here.

24 January 2022 Dear AIIB President Liqun and Members of the AIIB Board of Directors, We are writing to collectively urge an immediate reconsideration of proposed financing for a new 1.4GW gas power project and 33km gas pipeline in Thailand (Hin Kong Gas Fired IPP Project). We are alarmed not only by the proposal for expanding large-scale fossil fuel dependent infrastructure in the Mekong region - at a time when communities are already positioned at the frontlines of the climate crisis - but also by the fact that with no clear evidence-based rationale for the project, the AIIB nevertheless appears willing to hasten approval of non-sovereign financing worth USD100 million (A loan) and syndicated loan participation of up to USD289 million (B loan) within the 1st Q of 2022. As this is a Category A project, we would have expected the AIIB to undertake its own due diligence considerations of the track record of the project’s sponsoring entity, Hin Kong Power Company, and proposed project plans within the current national and international energy, climate and pandemic related contexts. Below, we elaborate why deploying the AIIB’s limited resources to facilitate the building of such an unnecessary, risky and resource intensive project lacks foresight – most especially given the urgent need to support borrowing member countries to rapidly scale up options for reliance on locally relevant, decentralized renewable energy. I. Background: Failing to Align with Climate, Economic and Energy Imperatives Hin Kong Power Company is set up as a special purpose vehicle jointly shared by two Thai power sector conglomerates, RATCH Group and Gulf Energy Development PCL,[1] that proposed to build the Hin Kong Gas Power Project nearly two years ago (in early 2020). Project plans and rationales are therefore based on an outdated version of Thailand’s Power Development Plan (PDP 2018), as opposed to the revised PDP of 2020 (PDP 2018 Revi.1). As explained by the IEA in December 2020: With the global trend towards energy transition and renewable energy, Thailand has a broad set of policies to cost-effectively accelerate the uptake of cleaner energy….endorsed by the Cabinet in October 2020.” In effect, by supporting this project, the AIIB would be impeding, rather than hastening, the shift to renewable energy infrastructure and a just transition in Thailand. As outlined by the IEA in December 2020, Thailand is prioritizing grid modernisation “in response to the rapid uptake of emerging technologies” and promoting “community-based power plants using local infrastructure and renewable energy resources, particularly biofuels in rural areas.” Likewise, as indicated in the most recent IEA Global Electricity Markets analysis (July 2021), the Thai government is in the midst of considering revisions for the power development plan to reflect net zero commitments. Along with accompanying policies (such as the Alternative Energy Development Plan), this plan is expected to be forthcoming shortly, meaning that from the get-go, the project design and proposal would be out of line with the most up to date government policies. Notably, this proposal also fails to consider the pledges that were made at COP26 in Glasgow, including by Thailand’s Prime Minister Prayut, who was quoted as saying that though Thailand has a goal to hit net zero emissions by 2065, “with adequate and equitable support for technology, finance, capacity building, as well as cooperation under the convention, I trust that Thailand can level up our GHG emissions reduction target (the mid-term target set by 2030) to 40%, which would then facilitate us to reach the net-zero emissions within 2050.” Yet it is precisely such emerging national commitments being adopted by borrowing country members and evidence based climate science which proposed AIIB financing should stringently take into consideration. II. Project Sponsors on Exclusion Lists of Several Global Asset Managers Notably, RATCH Group stock currently is excluded by Robeco AM (Dec 2021) State Street Global Advisors (Oct 2021), and Storebrand, among other responsible global asset managers due to its poor social, environmental and human rights record. Likewise, Gulf Energy stocks are also on the exclusion lists of Storebrand as well as other international investors for similar reasons. Given the track record of the companies involved, supporting the Hin Kong Power Project would indicate a failure to duly heed indicative risks to human rights as well as other social, environmental, economic and climate considerations. III. With Thailand’s Generation Overcapacity, No Realistic Project Rationale Alarmingly, there is no evidence that the project sponsor conducted any up-to-date comprehensive assessment of realistic power needs, demands, or options for ensuring better uptake of RE in the surrounding districts of the country. Instead, the reasoning for the project advanced by Hin Kong Power Company outlined in the documents posted on the AIIB’s website comes from the outdated assumption that the decommissioning of other amortized gas projects in the country in the coming years requires replacement by new large-scale fossil gas dependent infrastructure (i.e. the 1400MW Hin Kong IPP Project, sited at the location of the recently decommissioned 700MW Tri Energy Project). Yet, as outlined by the IEA in December 2020: With the lower than expected demand growth in recent years (less than 3% annual growth), Thailand’s power sector is facing the issue of generation overcapacity and a high reserve margin, which has been in the range of 40%. This situation is expected to become more prominent in the coming years due to the impact of Covid-19. A number of options are being considered… to allow for an effective utilisation of existing power plants in the system. It can only be concluded then that in fact there is no proven need for this project, leaving no economic, energy-related or socially prudent rationale at hand for the AIIB to provide support for the Hin Kong Gas Power IPP. IV. Undermining National, International and Institutional Climate Commitments If financing for the Hin Kong Power Project were to go forward as outlined on the AIIB’s website, the reality is that it would undermine the AIIB’s own stated institutional pursuit of Paris alignment and joint MDB climate commitments. According to analysis undertaken as part of the 2021 IPCC Assessment Report 6 as well as by the IEA in their 2021 “Net Zero by 2050 Roadmap”, ramping up construction for new fossil gas infrastructure at this scale is unequivocally incompatible with the action required to meet the Paris Agreement goals of limiting global heating to 1.5C. For instance, as outlined by the IEA, a ‘net zero by 2050’ global trajectory would require large scale gas‐fired generation to peak globally by 2030, becoming limited to 90% less of the 2020 power mix by 2040, and the electricity sector would need to be completely decarbonized by 2040 worldwide (pp 116-117). Taken alongside Thailand’s pledge towards carbon neutrality by 2050, a pathway towards significantly powering down gas operations would mean new large fossil gas projects such as the Hin Kong IPP (that would have a project lifespan beyond 2050) should simply not be built.[2] V. Questions of Transparency and Accountability Concerningly, the project documents suggest that due to the realities of the pandemic, in-person consultation schedules were - and will continue to be - scaled back. Given the barriers of online engagement for rural farming community residents in the area, it is not clear how project affected people would become fully aware of the involvement of the AIIB, as well as the associated option to avail of the AIIB’s Project Affected Peoples Mechanism in situations where the client GRM is inaccessible or ineffective. This is most particularly a concern at a time when not only is the day-to-day movement and work of civil society groups highly restricted, but also local people face pressure to refrain from gathering to discuss different perspectives on the proposed project site. A decision by the AIIB to boost the finances available for the construction of the Hin Kong gas project and pipeline in this context - before consultations can be thoroughly conducted - will lead to serious gaps in transparency and accountability. Indeed, if the project is built as proposed by the Hin Kong Power Company, it would inevitably incur severe and unnecessary health and environmental risks to surrounding areas.[3] VI.Alarming Track Record of Project Sponsors In the Event of A Project Accident Finally, we note that RATCH has - and continues to - play the role of construction advisor and co-sponsor of the Xe Pian - Xe Namnoy Dam in Lao PDR, which collapsed before becoming operational in July 2018, killing at least 49 people, leaving at least 22 missing and over 7000 riparian villagers without homes or land to cultivate. In addition, an estimated 8000 + additional people living downstream (including across the border in Cambodia), lost land and assets along the river banks. Over three years later, reparations, including provision of decent housing for those displaced, have yet to be provided by RATCH and the other project sponsors. Given this dubious track record of RATCH in relation to responding to an urgent project accident and repairing incurred damages in neighbouring Laos, people to be impacted by the Hin Kong pipeline and power project are rightfully left to wonder if they too would face a similar fate in case of a leak, spill or explosion. ::: We understand that the ADB was initially considering support for this project but withdrew as of late September 2021. It is with the above reasons in mind that we urge the AIIB Management and shareholder governments to similarly take the most prudent, forward-looking decision at this time, firmly withholding any support for a project that is mis-aligned with the climate, environmental, economic and social imperatives of today. Sincerely, Cc: Martin L. Kummig, CRO, Risk Management Department Hamid Sharif, Managing Director, CEIU [1] In light of AIIB’s regard for its own “ESG credentials”, please note that while RATCH Group has received a high risk ESG rating by Sustainalytics, Gulf Energy has received a severe risk ESG rating by Sustainalytics within ‘the Global Universe’ of companies assessed. In addition, as assessed by MSCI in their most recent ESG ratings (November 2021), both companies involved are categorized as international climate-misaligned laggards: while “RATCH Group Public Company Limited has an Implied Temperature Rise of 3.50°C and is on track for warming that would impede global climate goals,” “Gulf Energy Development Public Company Limited has an Implied Temperature Rise of over 4°C and is on track for warming that would contribute to a climate disaster”. [2] In this regard, according to the Hin Kong project documents appended on the AIIB website (Draft ESIA: 5-94), project operations would require extraction of gas from offshore reserves and imports of LNG.Not only would this further undermine national and international climate ambitions, but the building of associated infrastructure (e.g. a new LNG terminal to accommodate imports) would also expose local people and surrounding environments to toxic effluent and airborne contaminants, cause serious environmental harm, and be expected to lead to exorbitant fuel cost hikes due to the international market volatility of LNG. [3] According to the ESIA on the AIIB’s website, the sponsor has selected a pipeline route expected to enable the greatest accessibility for machinery during the initial construction period (1-24), facilitating the work of companies providing engineering, procurement and operational (EPC) services, such as those publicly identified with the project, including Mitsubishi Power and Mitsubishi Heavy Industries (MHI). However, this means that “most of land uses along the project gas pipeline are agricultural lands, such as rice fields, casava [sic.] farms, sugar cane fields, and accommodations/villages,” crossing in the vicinity of several schools, temples and public community areas (1-14; 1-24; 1-25). In addition, based on project plans outlined by the Hin Kong Power Company, diesel may be used as a back-up fuel if local gas shortages arise. Not only does the use of diesel take a heavy environmental and climate toll, but in the case of any accident, consequences for the local workers and communities could be devastating. Download ENG PDF here, THAI PDF here.

The Covid-19 pandemic coupled with the climate crisis and widening inequality is reversing decades of poverty alleviation. We are witnessing the catastrophic impacts of non-inclusive disaster response and market-oriented planning which undermines environmental, economic and social well-being. The demand for stronger accountability and binding respect for international rights based frameworks from public institutions in improving social and environmental governance while simultaneously achieving growth objectives should be at the heart of the development agenda. The Asian Development Bank’s (ADB) safeguards policy remains critical at a time when international public financing is required across the region to support community resilience and inclusive, just transition. Since the adoption of the Safeguards Policy Statement (SPS) 2011, civil society organizations (CSOs) and trade unions have engaged the Bank in achieving the policy objectives of avoiding harm, mitigating or redressing risks from ADB’s development projects by supporting project-affected communities in seeking redress and compensation, providing context-specific expert views on environmental and social risks, and in forwarding analysis on policy and operational gaps in the implementation of the SPS. As such, CSOs and trade unions around the world hold this review process with utmost importance and attention. While the Bank’s approach presents promising reforms, we are alarmed that the key directions stated in its approach papers could lead to the dilution of important safeguard commitments. Collectively, we raise these points before the process leads to an SPS with tremendous substantial and procedural problems when the current demand is to reform toward international laws, standards and norms. In pursuit of the shared objective of reforming the safeguard system, we forward our key recommendations: Improve the safeguard system toward a review process strongly informed by the costly and grave adverse impacts from policy gaps, and poor or noncompliance SPS implementation. The approach papers dismiss reports from the Accountability Mechanism, other non-Bank sanctioned independent evaluations, and views from civil society supporting project-affected communities as bases for policy development. The Bank is obliged to shift from “avoiding harm” to “preventing harm” under progressing international norms and laws when undertaking development projects. Moving forward to meeting the new demands has to be informed by the history of damaging conflict between private sector, government, and community interests particularly in a region of significant challenges in addressing human rights, transparency, and climate change risks and vulnerabilities. We believe the lessons from project-affected communities should be the primary considerations for shaping a new SPS, rather than aligning with the needs of the private sector and borrowing governments. And thus, the approach should strongly include equity as a key objective, as well as effectiveness and efficiency. 1 | Maintain the current risk categorization assessment for environment, indigenous peoples (IPs) and involuntary resettlement and create binding requirements for each category. The current categorization system has been a useful instrument for identifying and planning for the contextual severities of potential harm to various key sectors at risk. Integrating the categories for the different issues currently addressed by the SPS will be a major step-back in avoiding harm to the environment and communities. A project in an Indigenous Peoples’ community categorized as high risk (category A) for IPs with possibly moderate impact on environment (category B) can downgrade the severity of the risk faced by Indigenuous Peoples. Indigenuous Peoples have been facing the perilous outcomes of development aggression socially, culturally and economically for decades now. The adoption of an integrated categorisation risks exacerbating the marginalization of local communities. Moreover, IED’s evaluation and research show problems of under-categorization of high risk projects to moderate risks through inadequate risk scoping, deliberate alterations of data on affected communities, over-reliance on third-party consultants, and the lack of meaningful consultations with communities, to allow them to input in the definition of the severities of risks and vulnerabilities. In other cases, arbitrary applications of the risk categories and reluctance of clients to conduct thorough considerations of alternatives have been problematic in designing mitigation plans. These cases show that the exercise of due diligence in risk categorization and poor client monitoring are more important issues which need to be addressed in this update process, especially on financial intermediary (FI) projects, than changing the current risk categorization system. Integrating the categories only addresses the demands of the private sector and borrowing-governments for faster and lower lending costs at the risk of undermining the wellbeing of current and future generations. 2 | Maintain front-loaded requirements or quality of entry reports such as EIA and SIAs prior to board project approval and the time-bound release of documents. In paras 18-21 of the Policy Architecture study, the Bank outlines the rationale to moving to a Performance Standards Model. This rationale contains relatively little detail on the Bank’s supervision responsibilities compared with its existing safeguards, notwithstanding the current shortcomings in oversight and accountability documented and analyzed by the Independent Evaluation Department (IED) in their recent 2020 evaluation.[i] The IED study underscored the importance of spelling out clear and precise due diligence responsibilities to the Bank and the borrower/client to improve on safeguard outcomes. For instance, under its Performance Standards, the International Finance Corporation relies mainly on client self-reporting for policy compliance. In the case of the Tata Mundra Coal Power Plant, the Office of the Compliance Advisor Ombudsman (CAO), the accountability mechanism for projects supported by IFC, found that the environmental and social reports which came from the borrower have indicated no potential adverse harm to local populations and fisheries. In fact, CAO found that a number of IFC’s standard requirements including on land acquisition and biodiversity conservation was not applied, and due diligence was disregarded despite the adverse physical, economic and environmental harm caused by the Tata Mundra Coal Power Plant to the community and the environment. Furthermore, the identification of risk for Gender, Climate, Land Acquisition, and Cultural heritage should be made in the concept stage of a project and the disclosure of information to stakeholders should be made within a time-bound frame (e.g. 60-120 days for Category A projects). Include transparency clauses in loans and contract agreements with FIs and enforce public disclosure & reporting requirements. MDBs such as the ADB have cited their increased focus on promoting transparency in development financing. However, decades of CSO monitoring of private sector & FI operations have shown these lack transparency. The TA on Strengthening ADB’s Safeguards Policy Provisions and Procedures launched by the Bank showed a weakness in client safeguards capacities in private sector financing. This has resulted in more complex social and environmental risks. As the Bank’s private sector lending portfolio doubles, there is a growing need for unambiguous and specific transparency clauses in contract agreements which includes timely, open, and accessible reporting similar to those seen in sovereign loan and projects agreements 3 | Maintain the use of equivalency and acceptability baseline for the use of the country safeguards system (CSS). The principle of country ownership is not a justification for allowing human rights violations and putting populations at risk. Based on the IED evaluation, only a few high income member-countries have the capacity to meet SPS requirements despite more than 40 million USD in TAs to improve CSS. The revised SPS should set a higher standard for borrowing governments with poor national environmental and social laws and regulations. In some countries where they have adequate policies, budgeting and implementation for safeguards requirements are often subjected to the political landscape. The IED recommendation that "the approach followed under the SPS to adopt CSS in ADB-supported projects through equivalence and acceptability assessments needs to be replaced" should be adopted. 4 | Strengthen the binding requirements for both sovereign and non-sovereign lending and avoid the IFC open-ended approach to compliance. In para 20 the Bank outlines an “approach to compliance .... achieved over agreed time frames .... provide an opportunity to borrowers to demonstrate their ownership ....”. This statement does not offer any clarity on how the objectives of country ownership do not override the Safeguards’s risk management objectives. The World Bank’s Independent Evaluation Group’s learning review “Managing Environmental and Social Risks in Development Policy Financing” (2015)[ii] cautioned on how policy ambiguities can lead to inconsistent policy compliance. This delegation of safeguard responsibility to weaker safeguard systems can have disproportionately damaging and irrevocable social and environmental impacts on the poor. For instance, under the Oyu Tolgoi copper mining complex in Mongolia which was financed by the IFC, Rio Tinto poorly assessed the risks culminated by the mine and the power plant on the environment and analyses from Bank Information Center show that communities’ pastureland were adversely impacted by the project and they were severely undercompensated. While the IFC’s own performance standards require clients to produce an ESIA for projects with large-scale adverse impact, these ESIA’s are not required to be completed before approval. The ESIA’s role is to prevent and mitigate harm BEFORE not AFTER it happens. Rio Tinto refused to acknowledge the project’s cumulative impact and take corrective action. 5 | Strengthened guidance for involuntary resettlement safeguard to include gender, economic and climate-induced displacements and cultural issues. While the current IR safeguard recognizes both physical and economic displacements, most IR plans only compensate for physical displacement in the project area without having clear plans or compensation schemes for communities, economic sectors and households that will be marginalized as a result of the shift in land use due to ADB’s project. The SPS should also integrate IR issues in countries where rights to own land for women and other cultural groups are not recognized by customary law, yet they depend and cultivate the land marked for ADB projects. Furthermore as global temperatures continue to rise, large infrastructure projects funded by the ADB can exacerbate climate-induced impacts on communities. This can lead to further displacement and resettlement. The update of the Safeguards policy should therefore improve its guidance for IR based on these experiences and contexts. 6 | Meaningful inclusion of more and urgent safeguards issues supported by a coherent umbrella of safeguards systems and tools. We welcome the broadening of the themes to include labor, persons with disabilities, child rights and sexual abuse and harassment in the safeguards as a response to the progressing international laws, standards and norms. a | The SPS should have explicit commitment and references to international laws, agreements and standards including but not limited to the ILO Core Conventions and relevant International Standards like those on Occupational Safety Health and Elimination of Gender-based Violence (C190) amongst others, , UN Guiding Principles on Business and Human Rights, Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, ASEAN Agreement on Transboundary Haze Pollution, FAO International Code of Conduct on the Distribution and Use of Pesticides, Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, United Nations Framework Convention on Climate Change, POP Air Pollution Protocol, Stockholm Convention on Persistent Organic Pollutants, Stockholm Convention on Persistent Organic Pollutants, Convention Concerning the Protection of the World Cultural and Natural Heritage, CEDAW, Declaration on Human Rights Defenders, UN Declaration on the Rights of Indigenous Peoples and Convention on the Rights of Persons with Disabilities. The inclusion of these themes should be cohesively and coherently integrated in the umbrella policy of the safeguard system which include the SPS, the sector policies, operations manual, technical notes and guidance notes to staff. The stakeholder engagement policy and the grievance redress mechanisms should then be revised to include the contextual needs of labor, peoples with disabilities, women, children, LGBTQ+, indigenous peoples, involuntary displaced populations, the elderly, and other marginalized groups to participate meaningfully in policy and project-level decision making processes. b | The 2030 Agenda for Sustainable Development, including the Sustainable Development Goals, advances an integrated environment, social and economic planning. This is an opportunity for introducing SPS reforms which avoid and mitigate social and environmental harm from its sectoral assistance through its different lending modalities and instruments, including technical assistance projects that lead to long-term inequities, climate change risks, biodiversity damage, and loss of cultural heritage. The safeguard system should include baselines and risk assessments that aid in identifying the most critical hazards of assistance for biodiversity, public health, cultural heritage both intangible and tangible, climate change, and economic resilience on privatization schemes, identify the severity of these risks to at-risk populations, identify actions to address the needs of at-risk populations into planning, and specifically account for hazards that require prolonged recovery. This upstream assessment of risks systematically linked with the downstream supervision and monitoring of mitigation plans should be a key part of the Bank’s safeguard reform. 7 | Introduction of a climate safeguard and inclusion of high-GHG emitting activities in the Bank’s list of prohibited investment list. In response to the climate crisis, we welcome the Bank’s intention to include climate safeguarding. In this regard, we urge the Bank to ensure standard meaningfully complies with the provisions of the Paris Agreement, upholds the recommendations of the most recent IPCC Assessment Report 6, and fully incorporates outcomes of the most recent agreements sealed during COP26.As a first step, the Bank should establish its overall cap on all emissions (i.e. not only Scopes 1 and 2 but also Scope 3 [investments, assets, etc.]) by 2030 with specific time-bound goals for fragile island states and countries with high vulnerabilities to climate change (including regional countries identified within the V20) in consultation with local and regional civil society and locally knowledgeable experts, as well as develop transparent, actionable and time-bound plans to ensure both direct and indirect investments fully adhere to the IPCC Pathway 1 of 1.5C – without resorting to risky, resource intensive technologies, such as CCUS, ammonia/blue hydrogen production, which have no proven track record. These climate targets should then be the basis of priorities for partnerships on climate and green financing with member-countries and the private sector. Specifically, the SPS must: a | Divest from companies with a tarnished track record of Safeguards application or associated with high-carbon development projects and sectors unless transparent, time bound, low-cost, low-carbon, pro-poor, and sustainable Paris-aligned plans are established in a transparent and participatory manner with at-risk populations to climate change. It should also explicitly expand the ADB’s prohibited investment activities by incorporating a firm exit of all direct and indirect financial flows to coal, as well as oil and gas value chains[iii], specifically by referencing and making use of the internationally applicable and publicly accessible databases compiled within the Global Coal Exit List and Global Oil and Gas Exits List. b | Require publicly disclosed, independently verifiable baseline data and annual reporting on direct and indirect GHG emissions for all of its current approved projects and those for approval including energy, electronics, regional production centers, transportation, waste and landfill facilities and agriculture as key GHG emitting sectors and its associated facilities; and set mandatory annual reporting for private and public sectors on GHG emissions[iv]. Further, the SPS must have a strong focus on improving the capacities of member-countries government bodies [and interested civil society representatives?] in regulating and monitoring GHG emissions through public, transparent databases that incorporate stringent and most up to date standards as provided by the IPCC 8 | Ensuring better protection of cultural heritage through recognition of the importance of both tangible and intangible cultural heritage for present and future generations. It is widely recognized that tangible and intangible cultural heritage are important assets and are an integral part of the continuity of cultural identity and practices (including traditional skills, knowledge, beliefs and/or minority dialects and languages). In this regard, ADB’s Safeguard policy statement 2009 does not include even the minimum requirements set out under international legislation and conventions. The Bank's safeguards evaluation (2020) acknowledges that even the required physical cultural resources safeguards have been infrequently applied by the Bank in its projects. Therefore SPS should aim to: a | Protect Cultural Heritage from damage, inappropriate alteration, disruption, removal or misuse and adopt the mitigation hierarchy approach from adverse impacts arising from the project b | preserve and safeguard both tangible and intangible Cultural Heritage c | promote of the equitable sharing of benefits from the use of Cultural Heritage based on the full consent and ongoing consultation (FPIC, not Broad Based Support) with concerned populations and their collectively agreed upon representatives, and d | ensuring meaningful consultation with stakeholders regarding preservation, protection, utilization and management of Cultural Heritage The new policy should ensure that Cultural Heritage is preserved, protected and promoted in project activities in a manner consistent with UNESCO Cultural Heritage conventions or any other national or international legal instruments that might have a bearing on the use of Cultural Heritage[v]. To achieve its goal, SPS should ensure assessment of potential direct, indirect, irreversible and cumulative risks and impacts to Cultural Heritage from project activities and carry out Heritage Impact Assessment[vi]. The detailed procedures in line with best international standards should be provided for legally protected cultural areas, archaeological sites, built and movable heritage, landscapes and natural features with cultural significance. Meaningful public participation of concerned parties in case of risks and impacts to their tangible and intangible Cultural Heritage should be undertaken. The risks and impacts should also include threats of decontextualization, commodification and misrepresentation along with physical ones, appropriate mitigation and safeguarding plans should be prepared and implemented under the Bank’s detailed scrutiny. In cases of irreparable damage or harm of sacred sites, for example due to the filling of hydropower dam reservoirs, full reparations should be agreed upon by communities prior to the losses incurred. 9 | Ensure biodiversity is protected. Full-scale environmental impact assessment (EIA) should also be required. Element IV of the EIA report should include assessing the cumulative impacts with other projects or plans adversely affecting the area: (iv) anticipated environmental impacts, cumulative impacts and mitigation measures. Point 28[vii] of the Biodiversity Conservation and Sustainable Natural Resource Management provision [?] should be modified to ensure that: “No project activities whose residual impacts on critical habitats remain significant should be implemented”. To date, there are yet to be any examples where compensatory (offset) measures have not proven to be overly weak, effectively undermining the viability of critical ecosystem zones required not only for endemic animal and plant species’ survival, but also for the livelihoods of local communities.[viii] There is no scientific way to prove “no net loss” of biodiversity or “no significant net degradation”. Additionally, authors of EIA reports and environmental management plans (EMP) tend to underestimate the actual impacts by taking the best-case scenario in case of scientific uncertainty, thus violating the precautionary principle. Critical habitat should include not only habitat of Endangered and Critically Endangered species, but also habitat of Vulnerable species as defined by the IUCN Red List of Threatened Species or as defined in any national legislation. Vulnerable species are likely to become endangered unless the circumstances that are threatening their survival and reproduction improve. Critical habitat should also include intact primary forests and vulnerable, secondary forest ecosystems, including but not limited to boreal, temperate, and tropical forest landscapes; free-flowing rivers (defined as bodies of water whose flow and connectivity remain largely unaffected by human activities); protected or at-risk marine or coastland ecosystems, including mangrove forests, wetlands, reef systems; any Indigenous Peoples and Community Conserved Territories and Areas (ICCAs), community-based conservation areas, formally, informally, traditionally, customarily held resources or areas, Indigenous Territories, sacred sites and/or land with ancestral significance to traditional and Indigenous communities’ areas where the free, prior, informed consent of Indigenous and Traditional Communities have not been obtained.[ix] Point 30 of Biodiversity Conservation and Sustainable Natural Resource Management should be modified to incorporate nationally and internationally recognized protected areas, including those not only legally protected according to national law, but also areas recognized by international conventions and agreements including but not limited to the Bonn Convention, Ramsar Convention, World Heritage Convention and Convention on Biological Diversity, or other international bodies such as UNESCO (Biosphere Reserves, UNESCO Global Geoparks, etc) or Food and Agricultural Organization (vulnerable marine ecosystems), International Maritime Organization (particularly sensitive areas), IUCN Designated Areas (Categories IA – VI). 10 | Expansion of safeguards coverage to emergency assistance, recovery and disaster risk loans, technical assistance, and associated facilities. The Bank and the borrower must apply the rule of law, including safeguards due diligence, information disclosure, meaningful public participation, non-retaliation and access to grievance mechanisms in these loans. Our monitoring of the Typhoon Yolanda and COVID-19 loans indicate disbursement without safeguards due diligence requirements in the name of efficiency and flexibility yet the projects address outputs including policies, roads, and assistance that bear long-term impacts for communities. Additionally, lack of information disclosure has paved the way for massive corruption and delays of recovery assistance to at-risk populations. Instruments such as Technical Assistance (TA) and associated facilities also comprise a growing proportion of the Bank’s portfolio. The deployment of these instruments often leads to policy reforms. Yet, TAs and associated facilities are not covered by Safeguards which are meant to protect against harms to communities, who are not also often not consulted during these non-investment lending activities. In Nepal, we note that the ADB lends for technical assistance for feasibility studies, EIAs, project preparation, etc. which are later transformed into projects.[x] Yet, safeguards are not applied in such technical assistance projects which are categorized low on risks. When the actual construction happens in line with the feasibility or EIA supported by the ADB, there is displacement and other impacts on indigenous and other affected communities. Given their potential to cause harm, the new Safeguard policy should extend its application to TAs and associated facilities. Extended period for filing a complaint from two years after project closure to five years. Weak SPS due diligence exacts long-term repercussions for communities, sectors, biodiversity and climate and the environmental and social consequences may take longer to be analyzed by affected communities. A sector reform intervention will take years beyond the project life before retrenchments are completed and or consequences are made tangible. Adding three more years from the current two years after closure of the project as the prescribed period for filing a complaint should be part of the SPS reform. 11 | Due diligence on meaningful consultation and participation for all types of assistance. ADB must undertake a study as part of its SPS approach of its transparency and its stakeholder engagement operationalization at the policy, program and project levels especially in the context of shrinking spaces for civil society. Given the power imbalance experienced by communities, we recommend that the SPS integrate a proactive approach, especially for private sector and FI projects to ensure that risks and mitigation plans are meaningfully consulted, project assessment terms of reference and when a full assessment draft is available, in accordance with Bank safeguards for consultation and participation in a timely, manner free of fear, coercion and retaliation, with prior provision of information in a language and manner accessible to affected communities; and local communities and affected people have knowledge about and access to an effective and independent complaints mechanism. The past years of implementation have shown that social conflicts from poor safeguards implementation are costly for society at large. 12 | Application of Free, Prior and Informed Consent (FPIC) for all communities affected by ADB projects and not only for Indigenous Peoples. New laws and safeguards mechanisms have recognized that inadequate consultations with communities could seriously compromise the delivery of both local and global benefits and the long-term sustainability of development projects. For instance, even the provisions of the UN REDD include the application of the FPIC to forest-dependent communities[xi]. Humanitarian interventions also apply this to internally displaced communities. In data governance, FPIC has been pivotal in protecting privacy issues.[xii]FPIC can support the Bank and its borrowers in ensuring that they have obtained an accurate situational analysis and help them manage operational, legal, financial, compliance and reputational risks. 13 | Introducing protections for human rights defenders. In accordance to the OHCHR and historical cases of disputes against borrowers and affected communities, the SPS must include a principle on zero-tolerance to retaliations and a detailed approach integrating contextual and project-related assessment of reprisal risks, addressing risks as they arise, proactive engagement to prevent reprisals, and a response protocol so that when threats and reprisals materialize the Bank is positioned to respond in a timely and effective manner to minimize and remedy harm, and to prevent future attack. 14 | Human rights due diligence. A sound system of human rights due diligence at project level all through the project cycle, via dedicated ex-ante screening and Human Rights risk assessments conducted by the bank, and with participatory Human Rights impact assessment to be required from the client when risks are identified. This sound system also commands continuous monitoring of the situation on the ground in order to ensure that projects respect the international standards on human rights. Full coherence with international labour standards. This includes labour safeguards that protect loan project workers or workers affected by projects, and procedures that ensure alignment of policy advice, strategies, and policy-based lending with international labour standards. There are three complementary areas of ADB policy where this can occur: a | A binding labour safeguard for all projects, ensuring that international labour standards are upheld. b | Systematic incorporation of the core and international labour standards into all thematic and sector strategies. Strategies should also draw upon ILO instruments relevant to the sector or topic. For example, the ADB energy strategy should uphold just transition by integrating the ILO Guidelines for a just transition towards environmentally sustainable economies and societies for all. c | Employment results measurement that tracks the job impacts from ADB lending, including ex-ante and ex-post impact assessments that account for employment loss or degradation of working conditions and labour rights, and tracking the quality and quantity of direct post-project jobs operating assets built with ADB support. The performance of ADB projects should be judged in substantial part by employment results, not only financial outcomes. Finally, it is imperative that a meaningful consultation is ensured throughout the review process. We outline these critical points at a time when the spaces provided for the stakeholder engagement remain online and insular, lacking in meaningful engagement with civil society groups and the diverse range of sectors across Central, South, and Southeast Asia as well as the Pacific . The level of stakeholder engagement we have witnessed to date reinforced the exacerbation of the shrinking civic space in the context of the current pandemic which inhibits critical debates on necessary reforms. Development financing plays an important role across the region, but the consistently weak degree of accountability to local people and populations has long-term and devastating impacts on economies, communities, sectors, biodiversity, and the climate. Robust, rights-based, and just safeguard provisions should not be viewed as simply costs to be managed or risks to mitigate, but as investments in long term equitable socio-economic development, helping to drive forward opportunities for inclusive, locally relevant just transitions in each and every borrowing country context. Endorsed by the following organizations: Aksi! for gender, social and ecological justice, Indonesia Asian Peoples' Movement on Debt and Development (APMDD), Regional Bank Information Center, USA Building and Wood Workers International, Philippines BWGED (Bangladesh Working Group on External Debt), Bangladesh Center for Energy, Ecology, and Development, Philippines Change Initiative, Bangladesh CLEAN (Coastal Livelihood and Environmental Action Network), Bangladesh COMPPART Foundation for Justice and Peacebuilding, Nigeria Environics Trust, India Environmental Public Society, Armenia Equitable Cambodia, Cambodia Gender Action, North America Growthwatch, India Indian Social Action Forum (INSAF), India Nash Vek, Kyrgyzstan Oil Workers' Rights Protection Organization Public Union, Azerbaijan Oyu Tolgoi Watch, Mongolia Pakistan Fisherfolk Forum, Pakistan Recourse, Netherlands Rivers without Boundaries Coalition, Mongolia Sri Lanka Nature Group / FIAN Sri Lanka, Sri Lanka Urgewald, Germany Youth Group on Protection of Environment, Tajikistan [i] https://www.adb.org/sites/default/files/evaluation-document/448901/files/safeguards-evaluation2020.pdf [ii] https://ieg.worldbankgroup.org/sites/default/files/Data/reports/Managing_ES_Risks_in_DPF.Sept18.2015.pdf [iii] Annex 5 of the Safeguards Policy Statement 2011. [iv] Australia’s climate safeguard mechanism https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1819/Australias_climate_safeguard_mechanism [v] These conventions include The Hague Convention (for Protection of Cultural Property in the Event of Armed Conflict) (1954), The Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property (1970), The Convention on the Protection of the World Cultural and Natural Heritage (1972), The Convention for the Protection of the Underwater Cultural Heritage (2001), The Convention on the Safeguarding of the Intangible Cultural Heritage (2003) and the Convention for the Protection and Promotion of the Diversity of Cultural Expressions (2005). See also the work of the WIPO Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore (IGC) relating to intellectual property and the protection of traditional knowledge and traditional cultural expressions [vi] For example, see the ICOMOS Guidance on Heritage Impact Assessments for Cultural World Heritage Properties. Where supported activities may affect natural World Heritage sites, see IUCN World Heritage Advice Note on Environmental Assessment. [vii] Page 40 https://www.adb.org/sites/default/files/institutional-document/32056/safeguard-policy-statement-june2009.pdf [viii] see point 94 of the review as an example https://www.adb.org/sites/default/files/evaluation-document/448901/files/safeguards-evaluation2020.pdf [ix] see here https://banksandbiodiversity.org/the-banks-and-biodiversity-no-go-policy/ [x] See, for example, https://cemsoj.wordpress.com/2020/12/01/indigenous-newar-communities-in-khokana-and-bungamati-call-on-un-mechanisms-in-geneva-for-immediate-actions-to-protect-their-rights-threatened-by-the-construction-of-fast-track-expressway-and-other-in/ [xi] UN-REDD Programme, Free and Prior Informed Consent. http://www.cbd.int/doc/meetings/tk/wg8j-09/other/wg8j-09-ifap-en.pdf [xii] FPIC is already operationalized by IFAD, through its policies on Improving Access to Land and Tenure Security (2008) and Engagement with Indigenous Peoples (2009). The principle is also mentioned in the IFAD Policy on Environment and Natural Resource Management (2011) and in IFAD’s Social, Environmental and Climate Assessment Procedures (2014). IFAD is the first international financial institution to adopt FPIC as an operational principle in its policy documents.

More than 60 Asian CSOs call on ADB to clarify details of its coal retirement mechanism proposal before COP26 announcement The Asian Development Bank (ADB) must delay soliciting financial support for its coal buy-out scheme in Southeast Asia at COP26 until it has addressed a number of practical concerns about this proposal, including the risk it could undermine an ambitious, swift, and just transition from coal in targeted areas, an alliance of non-governmental organizations from across Asia said on Monday. On November 3, the ADB plans to launch its Energy Transition Mechanism (ETM), a private-sector-led initiative to retire existing coal power plants early, starting with a pilot phase in the Philippines, Indonesia, and Vietnam. In an open letter to ADB management and board members, major donor governments, and supporters of the initiative including Prudential, SE4All, Rockefeller Foundation, and Bezos Fund, more than 60 civil society organizations instead demanded ADB forego the announcement. The CSO signatories, almost all of which are from the Asia region, are insistent that injustices wrought on communities by coal power projects come to an end as soon as possible, but they point out that there are no assurances the ADB’s ETM will actually shorten rather than prolong the lifespan of coal facilities. It’s also unclear that it will hasten the transition to renewables and protect end-users from exposure to increased costs of power. Power plants in the target countries are not subject to market pressures and thus any buy-outs will have to contend with state support and opaque power purchase agreements. Analysis from the Institute for Energy Economics and Financial Analysis suggests that, if designed poorly, such a scheme could actually create direct or indirect incentives for coal-fired power plant operators to prolong the operations. Meanwhile, civil society and community stakeholders from these countries have yet to be informed of the details of the ETM in their own languages, to have opportunities to be consulted, seek clarity, and provide input. “We urge ADB not to gamble with our climate survival and the possibility of ending coal in a swift, just, and genuinely transformative manner with a premature buy-out scheme that remains shrouded in uncertainty,” the letter says. The main concerns include: A lack of clarity as to why the estimated timeline for winding down coal-fired power plants operating under the ETM may be up to 15 years, subjecting people to years more of unreliable, inefficient, and polluting coal-fired power, while cheaper renewable energy sources that could have come online would be left untapped; No assurances that capacities lost to early retirement of coal plants will be replaced by renewable energy sources (as there are no explicit safeguards to avoid a corresponding expansion in infrastructure for fossil gas-fired power); A lack of clarity in relation to how the ETM would avoid overpaying - or creating incentives for - operators of older plants to extend their planned lifespan in the expectation of receiving finance; The involvement - or potential involvement - in the scheme of financiers and developers implicated in the build-out of the coal fleet elsewhere in the region or even the same countries; Whether electricity end-users will be forced to shoulder additional costs; and The severe lack of opportunities provided to date for communities and civil society and people’s organizations to engage with the ADB’s processes of formulating the ETM. Gerry Arances, executive director of Center for Energy, Ecology and Development (CEED) in the Philippines, said: “While it could be a step in the right direction to free developing nations from the clutches of coal, the ETM as it stands gives no assurance that it will actually shorten the life of coal-fired power plants. The ADB has not even provided adequate consultation with civil society over issues such as whether electricity users will bear the costs of bailing out coal plant operators.” [See full quote below.] The ADB acknowledges some of the constraints on the ETM in its project-related documents but has yet to address the overarching questions underpinning their approach raised by civil society groups. Rushing to drum up support in time for COP26 risks making the mechanism as it stands a “fait accompli” in the eyes of the world climate community, argue the CSOs. They contend that given the ADB’s legacy of investing in coal and other fossil fuel reliant infrastructure, it is time for the Bank to ‘consign coal to history’ -- but in a manner that is “transparent, genuinely transformative, aligned to climate imperatives” and prioritizes access to clean, affordable, and sustainable energy in the communities of the Bank’s borrowing member countries. Tanya Lee Roberts-Davis, Energy Campaigns Strategist, NGO Forum on ADB stated: Given the legacy of the ADB's past and ongoing support for coal projects, it is most certainly incumbent upon the Bank to shift priorities towards supporting a just and inclusive energy transition in coal-affected regions of borrowing member countries. However, it is far from clear how the ADB's planned coal buy-out schemes -- which are geared towards private sector buy-in -- will not put profit margins above the needs of communities already ravaged by the devastating impacts of such toxic power facilities. There is no indication whatsoever how their ETM model will avert sidelining the rights of communities in the targetted areas for redress of the harm and damage inflicted, or avoid undermining collective aspirations for a truly transformative energy transition, grounded in land, water, gender, and socio-economic justice. This is most especially the case if the coal 'retirement' phase ends up being drawn out over several years, or if 'alternative' sources of power are to be derived from no less resource-intensive, extractivist models, such as fossil gas, waste to energy incinerators and large scale hydropower dams. Why hastily leap into this coal transition initiative that remains full of risky burdens to both people and the environment? There are so many other ways the ADB should be deploying its limited financing so that it can genuinely contribute towards supporting locally relevant, just energy transitions scaled to meet the needs of communities, fully accountable to -- and in control -- of the public. The open letter can be found at this link. Media contacts: Aryanne De Ocampo Advocacy, Networking, and Communications Program Head Center for Energy, Ecology, and Development (CEED) Phone/WhatsApp/Signal: +63 929 594 0057 Email: adeocampo@ceedphilippines.com Tanya Lee Roberts-Davis Energy Policy and Campaigns Strategist NGO Forum on ADB Phone/WhatsApp/Signal: +1 (778) 788-0782 Email: tanya@forum-adb.org Jen Derillo Communications Coordinator NGO Forum on ADB Phone" +639175088841 Email:jen@forum-adb.org Gerard Arances, Executive Director of the Center for Energy, Ecology, and Development (CEED) said: “Civil society organisations and communities from around South East Asia have called on the ADB to address glaring concerns on the alignment of the proposal to genuine energy transition and transformation before seeking political and financial support for it, yet the Bank seems fine with ignoring such concerns. While it could be a step in the right direction to free developing nations from the clutches of coal, the ETM as it stands gives no assurance that it will actually shorten the life of coal-fired power plants. The ADB has not even provided adequate consultation with civil society over issues such as whether electricity users will bear the costs of bailing out coal plant operators. As climate-vulnerable and economically burdened people, we cannot afford having ADB gamble with premature coal phase-out plans, which to us is no less than a matter of life and death.” (Contact: gerry.arances@ceedphilippines.com) Note for editors Background analysis: IEEFA: High stakes for Asian Development Bank’s ambitious coal power retirement plan