BRICS bank "ignores" transparency on environmental issues, refuses to involve civil society for policy framework
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| WB President Jim Yong Kim and NDB President KV Kamath after signing MoU in September 2016 |
By Our Representative
Amidst the high-profile BRICS summit entering the second day
in Goa, two senior experts, Juana Kweitel, Programs Director of Conectas Human Rights in Sao Paulo,
Brazil, and Srinivas Krishnaswamy, CEO of Vasudha Foundation in New
Delhi, have said that even a year after BRICS launched its New Development Bank (NDB) has failed to be
a “tooled” as a “real engine for sustainable development.”
“The NDB is now up and running – having approved in its
first year USD 911 million worth of infrastructure and energy projects within
the BRICS countries”, the experts have said in a commentary, adding, “This first tranche of projects
includes various energy investments, with an encouraging nod to renewables,
including rooftop solar, and wind.”
“Another factor distinguishing the NDB is that it has
started to lend to countries in domestic currencies, rather than pegging all
loans to the dollar, a practice which has tended to saddle countries with more
debt”, they point out.
Following this, the experts say, the NDB “has its sights set
on scaling
up – adding
additional member countries, allowing financing
outside of the five BRICS countries, and expanding operations to
include lending to the private sector.”
However, the experts warn, “The BRICS Bank works to position
itself as a major player for sustainable development, several big obstacles
stand in its way.”
“First and foremost”, they point out, “The NDB has not yet
defined what it sees as sustainable development or set forth sustainability
criteria for its investments. While the Bank has an exclusion
list, which identifies certain investments as ineligible for NDB financing,
that list does not include, for instance, unsustainable fuel sources like coal.”
“If the NDB is going to be something new, it will need to
break away from the export-oriented, extractivist development model that has proven
itself a failure. And that break will take a clear roadmap”, the experts
add.
“Second”, the experts say, “While the Bank has given a nod
to environmental sustainability, it has doggedly ignored the basic tenets of
social sustainability – transparency and participation. The Bank did not
involve civil society in the formation of its social and environmental policy
framework, despite repeated
calls for consultation.”
“While the Bank released an Interim
Policy on Information Disclosure, it hasn’t put in place the necessary
measures or mechanisms to ensure that communities who might be impacted by NDB
investments have the information they need, the opportunity to influence
project decisions, and access to remedy if they are harmed”, the experts
underline.
“Finally”, the experts underline, “It is questionable
whether the NDB’s new
policy framework is robust enough to ensure sustainability or to
prevent harms. In its social and environmental framework, the NDB opted for
more aspirational principles rather than concrete requirements for
environmental and social performance.”
In fact, they say, “the framework allows the NDB to
preference the use of countries’ domestic systems, without clear criteria or
processes by which such standards will be assessed. While Bank
officials have stated that they will work to ensure enforcement of
local laws and regulations, this loophole is a major concern since many
countries are systematically dismantling their national environmental and
social protections, as is the
case with Brazil.”
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