This report aims to carry out a comprehensive and in-depth approach to the Agua Negra International Tunnel (TIAN) project between Argentina and Chile, including its technical, strategic, political, economic, social and environmental dimensions.
Tag Archive for: IFIs
Since 2021, Argentina officially integrates the Asian Infrastructure Investment Bank. For our country, the AIIB represents a new multilateral source of financing for strategic sectors such as infrastructure, energy, telecommunications and transportation, among others. However, the AIIB is a little-known bank. How does it work and what are the implications for the country of joining this institution promoted mainly by China? We present a new report with the analysis.
Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic.
On March 30, 2021, Argentina’s membership of the Asian Infrastructure Investment Bank (AIIB) was made official. The AIIB officially began its activity in October 2014. It is a new multilateral development bank promoted mainly by China with a focus on investments in infrastructure, especially aimed at emerging countries. Its Asian origin does not limit its actions to a single region, since the Bank has a large number of member countries in other continents and projects financed in South America, Africa and Europe.
The model proposed by China has distinctive features. The dominant feature is that the investments are focused on infrastructure, connectivity and industrialization, marking an important difference with Western development financing entities that, in recent times, have oriented their loans mainly to institutional reforms, health projects, education or fighting against poverty, among others.
In this way, it postulates an interesting alternative for the financing of an infrastructure that is largely in deficit in Latin America and, particularly, in Argentina. For our country, the AIIB represents a new multilateral source of financing for strategic sectors and opens an opportunity to help solve its historical deficits in terms of infrastructure and connectivity. For its part, with still little participation from Latin America, the Asian Bank is consolidating itself as a viable option for the region in light of development goals. To date, five effective Latin American members are reported: Argentina, Brazil, Uruguay, Ecuador and Chile.
From its origins, the AIIB was presented as a different option to the historical Western multilateral development institutions such as the World Bank, the IDB or the International Finance Corporation (IFC). However, the AIIB has implemented a regulatory and operational framework very similar to that of those institutions, including policies for access to information, accountability, and environmental and social regulation to authorize disbursements. In turn, it contemplates cooperation and co-financing with other multilateral banks, such as the World Bank and the Asian Development Bank, adhering to their regulatory frameworks.
Despite this, since its entry into operations the Bank has received criticism from various sectors of civil society and affected communities that have questioned its actions in different development projects and even certain weaknesses in its regulatory framework.
In this sense, the implications that admission to the AIIB may have for Argentina depend largely on the type of relationship that the country establishes with the institution and the way in which it manages to take advantage of the potential financing resources for infrastructure that the Bank can provide. . Likewise, it is necessary to avoid repeating the problems related to public participation, access to information and socio-environmental impacts that have historically been associated with development projects financed by multilateral banks.
Given the general ignorance that exists in the country about this institution, it is important to analyze in depth what the Bank consists of, how it works and what the true implications of Argentine membership may be. To contribute to this objective, from Fundeps we present a report that analyzes part of these questions.
More information
The incorporation of Argentina to the Asian Infrastructure Investment Bank – Fundeps was approved
Argentina, one step away from becoming a member of the Asian Infrastructure Investment Bank – Fundeps
Are the brothers united? Profiling of the Sino-Argentine relationship in the government of Alberto Fernández – Fundeps
The role of the AIIB in the New Green Silk Road – Fundeps
Author
Camila Victoria Bocco
Contact
Gonzalo Roza, gon.roza@fundeps.org
In the framework of the review process of the second Action Plan of the IDB Group-Civil Society (2022-2024), more than 20 civil society organizations sent a letter to the President of the IDB, Claver-Carone, with observations and recommendations to strengthen the IDB’s relationship with civil society and affected communities.
“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”.
While we welcome the fact that the IDB is reviewing the Action Plan to strengthen the relationship with civil society and affected communities, we believe that the way the review is being structured inhibits civil society participation in the process. For this reason, the recommendations sent to the President and his Executive Secretary are oriented in two ways:
- On the one hand, the Bank is asked to provide specific spaces and complete and accessible information so that civil society, including indigenous peoples, local communities, people affected by IDB Group projects (including MICI applicants), and organizations critical to the IDB can participate and get involved effectively. In this sense, it is essential that agendas begin to be built in a participatory way, that invitations to consultations are at least 30 days in advance and that they include a wide range of stakeholders. The optimization and adjustment of public consultation processes is also necessary, since they are currently excessively rigid and do not promote a meaningful or direct discussion between the parties, ultimately generating low-productive inputs that continue to weaken transparency and accountability in the Bank.
- On the other hand, it is emphasized that after the consultation or dialogue, the IDB must guarantee continuous communication that keeps the interested parties informed and provide information on how their contributions influenced the decisions taken.
We believe that the IDB Group’s commitment to civil society and communities affected has been and continues to be worryingly weak compared to other peer institutions. The IDB president has the opportunity to lead the change towards a more responsible bank and must foster an institutional culture in which it is accepted that the Bank makes mistakes and is more responsive not only to interactions and constructive criticism from external actors, including civil society and affected communities, but also to their internal accountability mechanisms.
To access the complete letter sent to the IDB, access here.
More information
How can the IDB Group strenghthen engagement with civil society and projects affected communities? – Bank Information Center (BIC)
Carta Grupo BID-Relacionamiento con Sociedad Civil
Recommendations to strengthen the IDB Group’s relationship with civil society and affected communities – Coalición para los Derechos Humanos en el Desarrollo
Author
Camila Victoria Bocco
Contact
Gonzalo Roza – gon.roza@fundeps.org
Last April 2021, the Office of Evaluation and Oversight (OVE) of the Inter-American Development Bank (IDB Group) published the Evaluation of the Independent Consultation and Investigation Mechanism (MICI). After the evaluation, the MICI has modified its policy, excluding the clause that prevents the registration of complaints that are part of open national judicial processes.
The evaluation carried out tried to determine if the MICI is effective and efficient in three areas: (1) the resolution of complaints, (2) the promotion of institutional learning, (3) accessibility, objective independence, impartiality and transparency. Finally, OVE made 5 general recommendations on how the Board, the Bank, and the MICI can improve the application of the IDB’s social and environmental safeguards.
In general, the document identified elements that impede the effective functioning of the MICI, including accessibility barriers, unnecessary limitations to its independence, and a systemic lack of remediation by the IDB Group when projects do not comply with safeguards. Fundeps, together with other civil society organizations, decided to publish a response and send recommendations / comments to the MICI.
Below, we summarize our points of discussion and concern for each of the recommendations made by OVE:
Recommendation # 1 – Implement and improve the Bank’s management system for environmental and social claims: We agree with OVE’s findings that show that the requirement for communities to make prior contact efforts with the Administration is a problematic barrier for access to the MICI. Affected persons who present complaints to the MICI have experienced first-hand the ineffectiveness of presenting certain complaints to the Administration. However, OVE’s proposal to establish a Bank’s own management mechanism is a measure that we consider incomplete. To ensure the effectiveness of the mechanism and the Bank, it would be best to remove the requirement that the communities first contact the Administration.
Recommendation # 2 – Repeal the legal exclusion: The report’s findings on the impropriety of the legal exclusion, and its severe restriction on accessibility, are clear. We applaud the report for mentioning that the legal exclusion should be removed. The role of an accountability mechanism within an institution is unique and different from judicial procedures. A mechanism should examine compliance with the institution’s own standards, a mandate that does not overlap with the courts or tribunals. With the approval of the OVE Evaluation by the Board, the decision to remove the legal exclusion becomes effective as of July 1, 2021. However, the resolution approving the removal of the legal exclusion should be publicized or published. to ensure that the decision to remove this requirement is widely known.
Recommendation # 3 – Strengthen the independence of the MICI: The importance of the independence of the MICI, as well as other accountability mechanisms, cannot be stressed enough. Independence is an essential condition for other attributes such as objectivity, impartiality, and transparency. The report finds the need for the MICI to ensure the approval of the Bank’s Board of Directors before starting the investigations, as a major problem that has generated “situations that compromise the independence of the mechanism.” From civil society we believe that to ensure its independence, the MICI should have the authority to determine when to initiate an investigation without approval from the Board. This is a good practice that, as noted by the report, is adhered to by many other mechanisms. As an alternative to the current policy, to mitigate the detrimental effect on the independence of the MICI, the policy should be updated by specifically and closely outlining the technical reasons for the Board to review the MICI’s decision to initiate an investigation.
Recommendation # 4 – Ensure corrective action when there are findings of non-compliance and associated damage: The Evaluation clearly stated the lack of remedy for cases of verification of compliance being that “they have not had concrete results for the applicants, despite the findings of non-compliance and related damages established by the MICI ”. We have seen this in our case work. The recommendation of the Evaluation so that all the actors – the Board of Directors, the Administration and the MICI – adhere to the practice of consistently providing corrective actions, is a step in the right direction. However, this result would be best achieved with a clear change in the policy that includes points such as: (a) Consultations during the development of corrective action plans, (b) approval of action plans based on their sufficiency, (c) monitoring compliance with action plans, and (d) alerting the Board of Directors in cases of non-compliance with the plans. Finally, while OVE’s assessment documents multiple instances in which communities have been left without remedy, despite compliance verification reports finding a cause of harm in the Bank’s non-compliance, unfortunately no recommendation is provided for these communities.
Recommendation # 5 – Strengthen the internal capacity of the MICI: One of the focuses of the MICI Evaluation of its internal functioning is the dependence on the model of consultants for the staff. The importance of MICI staff in relation to their effectiveness in resolving complaints is evident. The Bank should commit to providing the human and financial resources necessary to implement this change and avoid that the lack of human resources translates into delays during the complaint processes. The Bank should also ensure the increase of its capacity in terms of resources as necessary.
Now, from civil society we consider that public and inclusive consultations are required for the implementation of all the recommendations. Likewise, we believe that the implementation of these recommendations will require changes to the MICI policy. The steps taken to ensure compliance with social and environmental safeguards and accountability in cases of non-compliance should be reported by those affected by the projects (who live and work in the implementation sites). To hear from those affected and their representatives, the IDB and the MICI should consult publicly about their plans to implement the
OVE recommendations.
The MICI plays a fundamental role within the IDB, providing a channel for the people affected by the projects, beneficiaries of the Bank’s work, to file their claims in search of remediation. However, as OVE’s Evaluation makes clear, there are gaps in the current practices of the MICI – and related practices of the Board and Management – that prevent the effectiveness of the mechanism. To ensure the legitimacy of the MICI, the Bank has to act to address these issues fully.
More information:
Internal IDB evaluation raises the need for reforms in the operation of the MICI
Autora:
Agustina Palencia
Contacto:
Gonzalo Roza – gon.roza@fundeps.org
On July 5, the Board of Directors of CAF – Development Bank of Latin America – elected Sergio Díaz-Granados as the new Executive President of the institution by majority, in a blended meeting held at the National Palace of Mexico. Colombian Díaz-Granados will take office on September 1, 2021 for a period of 5 years.
“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”
The Development Bank of Latin America, formerly known as Corporación Andina de Fomento (CAF), is a leading multilateral financial institution in Latin America whose mission, according to its website, is to support the sustainable development of shareholder countries and integration regional. Since 1970, the institution has served the public and private sectors, supplying multiple financial products and services to a wide portfolio of clients, made up of the governments of the shareholder states, financial institutions, and public and private companies.
CAF’s Board of Directors appointed Sergio Díaz-Granados as the institution’s new Executive President on July 5 at a blended meeting that took place at the National Palace of Mexico. In the election, the Colombian Díaz-Granados surpassed the Argentine candidate Christian Asinelli, current undersecretary of International Financial Relations for Development of the Secretariat of Strategic Affairs of the Presidency, who will occupy one of the vice-presidencies of the entity.
The election of the new president comes after the resignation of the previous Executive President, the Peruvian Luis Carranza, who retired from the entity a year before the end of his term amid allegations of abuse of power, forced resignations and strong internal in the multilateral credit organization.
Sergio Díaz-Granados, is a prominent lawyer who currently serves as Executive Director for Colombia in the IDB Group. He has an extensive career in public and private service, both nationally and internationally, with special emphasis on issues of development and regional integration. Throughout his career, Diaz-Granados has served as Minister of Commerce, Industry and Tourism of Colombia, Vice Minister of Business Development and President of the Boards of Directors of Bancóldex and ProColombia. He has also been a congressman and chairman of the Economic Affairs Committee of the House of Representatives.
More information:
- Sergio Díaz-Granados is elected the new Executive President of CAF – CAF
- The President of CAF retires from his position, giving way to a new administration – CAF
Author:
Juliet Boretti
Contact:
Gonzalo Roza – Coordinator of the Global Governance Area
gon.roza@fundeps.org
On April 1, the Office of Evaluation and Oversight (OVE) presented an evaluation report of the Independent Consultation and Investigation Mechanism (MICI) corresponding to the period 2015-2020. The evaluation examined the Mechanism’s policy and its application, with the aim of informing the Boards of the IDB and IDB Invest on the extent to which the MICI has been an effective and efficient mechanism in the resolution of claims associated with environmental and social impacts of projects financed by the Bank.
“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”
In its report, the Office of Evaluation and Oversight (OVE) determined that the current MICI policy corrected important issues identified in its last evaluation of 2012. Among the main advances, it highlighted the solution to the problems of accountability and associated conflicts of interest. to the previous organizational structure, as well as the duplication problems of the eligibility instance; the establishment of deadlines for the management of requests; and the creation of instances for the participation of the administration. Likewise, he highlighted a greater consistency between the policy, the guidelines developed, and the associated processes.
The evaluation also highlighted the progress made in the internal functioning of the MICI, as a result of the restructuring of the mechanism, as well as the process of consolidation and institutional learning. The mechanism has been able to define its work plan and manage its human and budgetary resources independently of the IDB Group administration.
However, judicial exclusion, a key issue, remained pending. It is one of the exceptions of the internal policy to the eligibility of applications and establishes that those matters raised in an application that are being the subject of arbitration or judicial processes in a member country of the IDB Group are not eligible.
Although judicial exclusion was identified by OVE in 2012 as a limiting factor for the effective and independent functioning of the MICI, it was maintained in the reformulated policy in 2014. Likewise, there are other limitations that have emerged in the application of the policy in recent years. 5 years but that, to a large extent, have been paid for by the MICI. This shows that there is sufficient margin for the mechanism to manage the limitations of the current policy.
Access to the MICI
Regarding access to the mechanism, OVE identified that the MICI is not yet well known among applicants. Realizing that between the different institutional levels there is a lack of consensus on the importance of publicizing the mechanism and the way to achieve it. An issue that should not be overlooked, since access to the MICI depends on the knowledge that people have about the existence of the mechanism.
For their part, those who were able to access the MICI found that their applications were not registered due to the difficulty in complying with some requirements. In this regard, the IDB Group does not have a claims management system, which makes it impossible to know the number of concerns that the administration receives.
Case management
Regarding case management, although the MICI is operating in accordance with the principles established in its policy: independence, objectivity, impartiality, transparency and efficiency; Their ability to act independently is affected by being subject to the decisions of the Board of Executive Directors.
In accordance with its policy, the Board controls the possibility of initiating an investigation in the Compliance Verification Phase (FVO) and decides whether or not to approve the recommendations of an MICI investigation. Originally, the approval of the Board of Directors to continue with an investigation was thought as a short procedure but it has come to be conformed as a contentious procedure affecting the independence of the MICI.
Finally, many ongoing investigations have presented delays related to the complexity of the projects and themes. Complaints were also filed by the applicants about the length and slowness of the processes in the Compliance Verification Phase (FVO), which reduces the possibilities of effective redress.
Recommendations
After identifying the main difficulties in the current operation of the mechanism, OVE proposed a series of recommendations to be adopted by the MICI. Among the main ones, in the first place, the elimination of judicial exclusion and the strengthening of its internal capacities stand out. In turn, OVE highlighted the need to reinforce the independence of the mechanism and ensure the adoption of corrective measures when there are findings of non-compliance with the policies and related damages.
Remembering that one of the main objectives of the IDB Group is to improve the quality of life in the region, monitoring its policy is a key tool to guarantee compliance with socio-environmental safeguards and transparency in the development of projects. funded. If the recommendations made by OVE are applied, it would imply a declaration of commitment by MICI to the users, who, among other complaints, have systematically insisted on an improvement in the conditions for accessing the mechanism.
Based on this evaluation, one might wonder if the limitations of the current policy can be rectified by incorporating OVE’s recommendations or if these limitations, on the contrary, make a new comprehensive review of the policy necessary, a measure that has been ruled out by OVE until the moment.
At Fundeps, we consider that there are still many obstacles to overcome to guarantee an effective and independent action of the mechanism, especially regarding the need to nullify judicial exclusion. However, we highlight the importance of these types of entities that are beneficial for both the public and private sectors, and especially for the communities affected by IDB Group investments.
More information:
- Evaluation of the Independent Consultation and Investigation Mechanism (MICI) – Office of Evaluation and Oversight (OVE)
- MICI Response to the Evaluation – MICI
- We participated in a discussion with the new MICI director, Andrea Repetto – Fundeps (2021)
Authors:
Clara Labat
Julieta Boretti
Contact:
Gonzalo Roza, gon.roza@fundeps.org
On April 27, we participated in a discussion with civil society organized by the Independent Consultation and Investigation Mechanism (MICI) of the IDB, on the occasion of the recent inauguration of its new director, Andrea Repetto. Civil society organizations, individuals and people from the public and academic sectors from different countries participated. One of the main points of discussion revolved around the evaluation of the Mechanism’s operation recently carried out by the Office of Evaluation and Oversight (OVE) of the IDB Group.
“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”
The Independent Consultation and Investigation Mechanism (MICI) was established in 2010 as an instance of last resort so that people who consider themselves affected by projects financed by the IDB Group can turn to the mechanism in search of a solution. In this regard, it should be noted that the complaints submitted must relate to non-compliance with the bank’s operating policies and not to other national and / or international regulations.
At the beginning of the discussion, the new director introduced herself personally, conducted a review of the most outstanding events of 2020 and indicated what the priorities of the mechanism will be during 2021.
Case management in times of COVID-19 and management priorities during 2021
In 2020, the MICI took actions to mitigate the impacts of the pandemic on claims management. Managed a total of 21 claims from communities potentially affected by projects financed by the IDB Group in 9 countries: 17 claims refer to IDB projects with the public sector and four to IDB Invest operations with the private sector. In addition, the MICI began, for the first time, a completely remote dispute resolution process in Colombia (Ruta del Cacao).
Similarly, with the recent assumption of Repetto as director, 2 priority areas were identified during 2021: on the one hand, the opening of the mechanism, seeking to make it more accessible to the communities that need it and, on the other, institutional learning, with The objective of adding more value to the IDB Group and reinforcing its accountability and sustainability.
OVE’s evaluation of the MICI
OVE carried out a first evaluation of the MICI in 2012 and identified significant problems in terms of its policy, structure and operation, recommending ending the pilot phase of the MICI and reformulating its policy and structure. Thus, in December 2014, the Bank’s Board of Directors approved a new policy and structure for the mechanism and, since the beginning of 2016, the MICI is also responsible for managing requests related to IDB Invest operations, that is, the private sector.
In the following evaluation (2015-2020), 19 cases were analyzed (between December 2014 – June 2020) and it was concluded that the MICI, in general, is operating in accordance with the principles established in its policy: independence, objectivity, impartiality, transparency and efficiency and that the current policy corrected important issues identified by OVE in its 2012 evaluation as limiting the proper functioning of the MICI. Similarly, there was greater consistency between the policy, the guidelines developed, and the associated processes. OVE also highlighted the consolidation of capacities in conflict resolution within the MICI.
However, there is still room for the MICI to deepen its efforts to maximize its contribution to the IDB Group’s system of safeguards and environmental and social standards.
A key issue that remained pending is judicial exclusion, which continues to be an important factor limiting the effective and efficient functioning of the MICI.
OVE also found that some requirements to access the mechanism are difficult for applicants to meet, such as the need to present their concerns to management before resorting to the MICI. In this regard, it should be mentioned that the difficulty of complying with the requirement of prior contact with the administration had to do, to a large extent, with the lack of a complaints management system within the IDB Group during the period under evaluation (2015 -2020) and one of the OVE evaluation recommendations points towards that goal.
Promotion of access and risk of retaliation
OVE indicated that the mechanism is not yet well known despite the important efforts of the MICI to make it known, including important work in the area of attention to the risk of retaliation that has important implications for safe access to the mechanism. Nor is it clear that at the institutional level there is consensus on the importance of publicizing the mechanism and how to achieve it. Not a minor issue, since access to the MICI depends on the knowledge that people have about the existence of the mechanism.
Finally, another point that the evaluation indicates that should be strengthened is the independence of the mechanism, a fundamental issue since the credibility of the mechanism depends on its ability to work independently. Although the MICI is an arm of the Board of Directors, its added value depends on the extent to which it can present you with frank and honest reports on complaints associated with IDB Group projects.
Based on these and other observations, OVE made 5 recommendations, directed both to the MICI and to the administration and the Boards of the IDB Group. These include: 1) implementing the management system for environmental and social claims of the IDB Group’s administration so that it is articulated with the MICI, 2) nullifying the judicial exclusion, 3) reinforcing the independence of the MICI, 4) ensuring the adoption of corrective measures when there are findings of non-compliance with the policies and related damages and, finally, 5) strengthen the internal capacities of the MICI.
One might wonder, however, if the limitations of the current policy can be remedied by incorporating OVE’s recommendations or if these limitations, on the contrary, necessitate a new comprehensive review of the policy, a measure that OVE has ruled out in its evaluation.
At Fundeps, we believe that this type of instance is essential to exchange opinions and positions in relation to how the Mechanism could be even more efficient and effective in its interventions to the problems that arise in our region. Likewise, we consider that a strengthening of the mechanism translates into an improvement in the accountability system of the IDB Group as a whole.
We hope that these instances will continue to be repeated over time and we celebrate that the MICI is willing to receive feedback from those who position themselves as users of the mechanism, being able to glimpse the shortcomings that the processes may have.
More information
- Evaluation of the Independent Consultation and Investigation Mechanism (MICI) – Office of Evaluation and Oversight (OVE)
- MICI Response to the Evaluation – MICI
- Annual Report 2020 – MICI
- MICI – IDB – MICI policy
- MICI Policy – IDB Invest – MICI
Author
- Camila Victoria Bocco
Contact
- Gonzalo Roza – gon.roza@fundeps.org
Between March 17 and 21, the Annual Meeting of Governors of the Inter-American Development Bank was held virtually. Different economic and financial leaders from member countries and the private sector discussed the pandemic and the economic recovery in Latin America and the Caribbean.
“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”
Each year, the IDB holds its Annual Meeting of the Board of Governors in one of the member countries. This year, the Assembly was held in the city of Barranquilla, Colombia, and its agenda was crossed by two central themes: the economic recovery of Latin America and the Caribbean in the face of the crisis caused by the pandemic, and the capitalization of the Bank.
First, the Bank’s president, Mauricio Claver-Carone, affirmed the IDB’s commitment to helping countries recover from the current economic crisis, reaffirming support for the financing needs of governments and assistance for access and negotiation in the purchase of vaccines. Based on this, Claver-Carone is committed to promoting the agenda that the Bank baptized as “Vision 2025”: reinvesting in the Americas, a decade of opportunities ”.
This agenda establishes five areas in which the IDB will focus in our region. These areas are: regional integration, strengthening value chains, supporting small and medium-sized enterprises, promoting the digital economy and prioritizing responses to gender and climate change issues.
On the other hand, Claver-Carone emphasized the work of the IDB Group during 2020, which in response to the COVID-19 emergency, approved loans for almost US $ 24,000 million, both to companies and governments, reaching record levels in the granting of loans. Faced with this, the president referred to the Bank’s capitalization: “I ask you to reinvest in us so that we can decisively reinvest in the region (…) The region will have a committed partner to help countries face these historical challenges and be well equipped with the financial resources necessary to make a big difference ”.
The Assembly then approved a resolution authorizing the work necessary to consider a potential capital increase of around US $ 80 billion. This amount was authorized by the United States Senate and was described by the Bank’s president as “the largest capitalization in its history.” Capitalization is a process that will increase the IDB’s creditworthiness and lending capacity. Through this, the Bank’s capital will be revalued and will allow it to face its need to address the financing problems of the region.
Finally, Claver-Carone referred to the need for the participation of women in the labor market to promote economic growth in Latin America and the Caribbean and made known new contributions for the Amazon region between Colombia and Brazil to promote development sustainable through an environmental approach.
Undoubtedly, this year’s Assembly leaves us with a clear forecast of what the IDB Group will do in our region, crossed by the needs generated by the pandemic, by a new Bank presidency and by new agendas to be implemented, supported by the new capitalization. In this sense, it is worth noting that this capitalization process should be accompanied by a series of necessary internal reforms at the institutional level, which effectively ensure greater transparency and protection of social and environmental rights in projects financed by the Bank or its clients. .
At the same time, the process of citizen participation and relationship with civil society should be strengthened. The way in which spaces such as the Board of Governors are structured and planned, for example, reflect the Bank’s little predisposition to create effective spaces for exchange and dialogue with civil society and affected communities. We hope that these are some of the points to be reviewed by the Bank in view of a possible capitalization.
More information
- IDB Annual Meeting will address economic recovery and sustainable growth – IDB
- Annual meeting of the Boards of Governors of the IDB and IDB Invest – IDB
- IDB and IDB Invest get support from the Assembly for Vision 2025 and route to capitalization – IDB
- Roadmap for IDB recapitalization approved – The New Century
Author
- Sofia Armando
Contact
- Gonzalo Roza, gon.roza@fundeps.org
Through a virtual session, on February 25, IDB Invest presented the latest revised version of the Implementation Manual for its Environmental and Social Sustainability Policy. The document is key to achieving a correct and effective implementation of the policy approved in April 2020 and which came into effect last December.
“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”
After being approved by the Board of Executive Directors on April 10, 2020, the new IDB Invest Environmental and Social Sustainability Policy came into effect on December 15. The latest revised version of the Implementation Manual for said policy was presented on February 25 through a virtual session in which more than 20 representatives of civil society organizations participated.
The new Implementation Manual is based on the Bank’s Sustainability Framework composed of the Sustainability Policy and the policies and standards that accompany it, such as the Access to Information Policy, the IFC Performance Standards, the MICI Policy, among others. The purpose of this Manual is to guide clients in their actions according to the different factors and environments that may arise, taking into account the principles and requirements of the IDB Invest Sustainability Framework. Also, the Manual addresses, in a general way, the activities that the project cycle contemplates and the accountability mechanisms that people and communities can access in case the project affects them.
On the other hand, it considers the risk factors that may occur or that already occur in the environment where the project is carried out. Among the topics and risk factors mentioned in the Manual are vulnerable groups, human rights, the inclusion and participation of stakeholders in the project, working conditions, among others.
An important advance is the incorporation of the Exclusion List that lists the activities that IDB Invest will not finance due to adverse environmental and social effects.
However, the application of the Manual is not mandatory for clients or the Bank since it constitutes rather a roadmap that contemplates the requirements of the Environmental and Social Sustainability Framework, and international good practices and lessons learned that clients may or may not apply. In addition, although it addresses the options available to the Bank in the event of non-compliance with the Sustainability Policy by its clients, there is little precision regarding the manner and requirements in which these options would be applied.
In this way, it remains to be seen if this manual ends up being really effective in filling the gaps left by the Sustainability Policy in force. Key to this will not only be a strong commitment on the part of the Bank and its clients, but also a work of monitoring and follow-up to the effective implementation of the policy by civil society.
More information
Contact
Gonzalo Roza, gon.roza@fundeps.org
The Dutch development bank FMO is not sufficiently transparent about the projects it finances, and is therefore acting contrary to its mandate. This is evident from a new report published by the International Accountability Project (IAP) and the Foundation for the Development of Sustainable Policies (FUNDEPS), endorsed by 28 organizations including Both ENDS, SOMO and Oxfam Novib. The research assesses FMO’s disclosure and access to information practices for investments proposed between January 1, 2019 and May 31, 2020. Only in 25% of the cases was it disclosed what potential negative consequences an investment by FMO would have for people and the environment.
“If the forest next to your village is cut down to build an oil palm plantation, or there is a big dam in the river that you depend on for water and fish, you need to have access to information to defend your interests and have a voice in decision-making,” says Anne de Jonghe of Both ENDS. “You are entitled to know the costs and benefits for your community, before you can consider what is best for you. As an investor, FMO shares responsibility for this information provision, but unfortunately falls seriously short in this.”
Operating with public money
FMO’s response to the report shows that the bank itself believes that the responsibility for making information public and the potential negative effects of investments on people and the environment lie with the project developers and its clients. However, as a development bank that is largely funded with public money, FMO has the mission and responsibility to invest in sustainable, fair projects that improve people’s lives and respect human rights. One way to ensure this is to strive for as much transparency as possible about intended investments and to enable affected communities to meaningfully participate in the decision-making surrounding a project. This research shows that FMO still has a lot of ground to cover in fulfilling communities’ right to information.
No reports on social and environmental impacts
The analysis of 241 projects disclosed on FMO’s website between January 1, 2019 and May 31, 2020, reveals that potential negative impacts for these investments was disclosed in only 59 cases (25%). For the remaining 182 investments (75%) there was no information available on the website.
Appendices with more detailed technical information, such as reports on social and environmental impacts, were under no circumstances available on the website. “What’s more, the little information that is disclosed is only available in English, while FMO has investments all over the world, often in countries where English is not the first or even second language,” said Ishita Petkar of the International Accountability Project (IAP). “As a development bank, it is FMO’s responsibility to ensure they are fulfilling the right to information for the communities they impact. True development requires respecting human rights – FMO should ensure vital information, including technical documents, are disclosed and accessible in national and local languages.”
FMO must improve policy and practice
The 28 organizations have written a letter to FMO calling on the bank to thoroughly review and strengthen its access to information policy and practice. This includes improving information disclosed on the FMO website, adopting internationally endorsed principles on access to information, and obligating clients to fully disclose project documentation. FMO must also ensure that information is disclosed in understandable formats and reaches the communities concerned, so that they can participate meaningfully in project decision-making processes as the intended beneficiaries of development.
More information
- Explore FMO’s portfolio of investments, including risk category and industry, in this interactive visualization
- Link to the analysis and the civil society letter
- Link to FMO’s statement
- Link to IAP’s blog responding to FMO’s statement
Press contacts
- Ishita Petkar (International Accountability Project) – ishita@accountabilityproject.org
- Gonzalo Roza (Fundeps) – gon.roza@fundeps.org
- Anne de Jonghe (BothENDS) – a.dejonghe@bothends.org
This document proposes a descriptive and evaluative analysis of the implementation of the Gender Policy in the Inter-American Development Bank (IDB) and its main objective is to investigate such implementation based on the weaknesses and strengths identified in the Bank’s gender policy. , in order to continue making progress in incorporating elements and tools that guarantee women’s rights and diversity.
On December 15, the new IDB Invest Environmental and Social Sustainability Policy will take effect. Civil Society Organizations in the region issued a Public Declaration warning about the weaknesses that the new Policy presents.
“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”.
On April 10, IDB Invest approved the new Environmental and Social Sustainability Policy that takes effect tomorrow, December 15. After the process of face-to-face and virtual public consultations that the Bank carried out last year in which civil society organizations, peasant communities, indigenous peoples, and Afro-descendant peoples participated, at the end of May the new policy of the private arm of the IDB Group was presented.
Despite the participation, through the sending of comments, of interested parties in the period of face-to-face and virtual public consultations, in the new Policy there is little or even no incorporation of issues considered relevant. For this reason, and in the face of the weaknesses and limitations that the new Environmental and Social Sustainability Policy presents, the CSOs of the region issued a Public Declaration warning about the precariousness of the policy, the consequences that it would bring to the countries of the region and the setback it means compared to the previous Policy.
Among the main points that we highlight in the Declaration on the limitations of the new Policy are, firstly, the direct adoption of the Environmental and Social Performance Standards of the International Finance Corporation -CFI- dating from 2012, not including changes or adaptations to new realities, making them obsolete in the current context of environmental and social challenges faced by Latin America and the Caribbean.
Another important limitation is the absence of subsidiary and joint liability on the part of IDB Invest regarding the actions of the actors over whom it has influence, that is, it is detached from institutional responsibility in the face of the possible negative impacts that the activities it finances may cause where the responsibility will fall solely on the client. This means the weakening of environmental and social protections created in order to avoid the adverse impacts caused by the projects. Along these lines, IDB Invest omits its duty to “enforce”, which means that it reserves the right to decide in which cases it will apply corrective measures and in which not.
In addition, the Public Declaration highlights the vagueness and ambiguity of the language used in the new Policy since it favors the Bank to act according to what it deems pertinent as well as increases the risk of non-compliance by customers.
Finally, one of the most alarming points are the gaps in the commitments regarding the environment and the social. Regarding the environment, the commitment to mitigation is fragile since there are no express restrictions on greenhouse gas emissions -GEI-, just to mention one case. With regard to social matters, although the policy makes clear its commitment to promote good international practices, in matters such as Human Rights, Retaliation, Gender Risk Management and Equality, as well as Participation of Interested Parties and Disclosure of Information , a superficial and weak commitment is evident when addressing them. For example, in relation to human rights, essential rights such as economic, social and cultural rights or the right to a pollution-free environment are not mentioned.
Then, regarding stakeholder participation, no commitment is made to ensure timely, meaningful and culturally appropriate participation. The Policy undertakes to establish a system for receiving and monitoring complaints of retaliation, it does not detail a procedure to resolve them, nor does it follow the recommendations of the specialized guide prepared by the MICI for the management of retaliation and protection of environmental defenders and activists.
Finally, in gender risk management and equality, the Policy does incorporate the promotion of good practices but excludes the IDB Group’s Operational Policy on Gender Equality in Development, a significant setback that will increase inequality and risks for women. women and LGBTQ + people.
Among many other issues that are addressed in the Public Statement, it is extremely necessary for IDB Invest to be relentless in demanding compliance with environmental, social and transparency standards from its clients if it is truly to promote sustainable growth, reduce poverty. and the inequality of the region. With the current pandemic context and looking at the post-pandemic situation, IDB Invest cannot be flexible in the procedures of social and environmental evaluation and due diligence in the approvals of financing operations since this is the only way to achieve sustainable development and reduce the environmental and social crisis in which Latin America and the Caribbean finds itself.
More information
- Public Statement: Civil Society Organizations warn of weaknesses in the new Environmental and Social Sustainability Policy of IDB Invest
- We participate in the review of the socio-environmental sustainability policy of the IDB Invest – Fundeps
- Recommendations and Comments on the draft of the IDB Invest’s Environmental and Social Sustainability Policy – Fundeps
- Observations on IDB Invest’s Environmental and Social Sustainability Policy draft from a gender-sensitive perspective – Fundeps
Author
Sofia Brocanelli
Contact
Gonzalo Roza, gon.roza@fundeps.org