ADB's reputation faces test over its safeguard policies

MANILA, Philippines - The Asian Development Bank’s reputation will be put to a test as it begins with its multi-stakeholder consultation on its Safeguard policies on Wednesday at its Manila headquarters. Civil society has expressed its strong dissent over the Bank’s second draft of the Safeguard Policy Statement (SPS), calling it as a dilution of the existing Safeguards. The Safeguards, which is the Bank’s set of policies on environment, indigenous peoples, and involuntary resettlement, have been up for review since 2005. However, due to continuing discontent and protest from civil society organizations across the globe, and members of the Bank’s board of directors and staff as well, the process has dragged for more than three years. “The second draft of the SPS is a complete manifestation of the Bank’s intention to weaken its Safeguard Policies, contrary to ADB president Haruhiko Kuroda’s pronouncements, assuring civil society that the review will not result in the dilution of the Safeguards," NGO Forum on ADB said in a statement. It said that Bank’s move of coming up with its 2nd SPS draft is dangerous since it will be devolving its authority over its projects to its borrowing governments/clients or the private sector. Next: ADB safeguard policies not transparent, group says ADB safeguard policies not transparent, group says With the 2nd SPS draft, the ADB is clearly devolving its authority over its funded projects to borrowing governments and private sector, as a result, passing on the accountability issues to them. “In the midst of the financial crisis, the ADB is proposes significant deregulation, significant decrease in transparency and reduced diligence for highly risky alternative investments including the controversial off-shore private equity funds," Forum further said. Stephanie Fried of Environmental Defense said, “while the financial institutions all over the world are improving their policies to increase transparency and safeguards measures, the ADB is doing otherwise." The 2nd SPS draft includes the replacement of clear terms for implementation and processing requirements with vague phrases. It also lacks integration of safeguard principles with implementation measures and requirements from borrowers and clients. The Bank even resorted in using less binding words in the draft like changing “must" to “may"–a clear manifestation of providing its clients with an alternative of not complying with its set safeguards standards. The 2nd SPS draft has also significantly reduced the period for the public to post their objection and comments on private-sector-implemented projects financed by the ADB from 120 days to 60 days. Next: Proposed ADB policies ease environmental impact rules Proposed ADB policies ease environmental impact rules Inside the Bank, its Office of the General Counsel (OGC) said in an internal memo that the 2nd SPS lacks a clear statement on environmental assessment and lack of screening and classification of projects based on risks and impacts on the environment, indigenous peoples and resettlement. It said that there has been a dilution of the bank’s policy on pollution prevention and that there has been no inclusion in the new draft of an up-front disclosure for projects that have significant impacts to the environment, indigenous peoples, and resettlement at the early stages of field work. The OGC also said that with the analysis of the ADB resource requirements and the implementation plan for the SPU, “it is not clear that the operational departments and resident mission will have sufficient and expert resources to successfully execute and implement these greater responsibilities." Forum said that weakening the Safeguards will only create more poverty, contrary to ADB’s pronouncement earlier this year that Asia will be free from poverty by 2020. It added, that the 2nd draft “also implies that President Kuroda has been unable to convince the ADB bureaucracy to uphold and support his vision of the ADB—as elaborated in countless speeches and in Strategy 2020—as the leading regional development organization on climate change and poverty alleviation."