At ADB meeting, the bank and civil society grapple over reform

During the first major session held on the first day of the Asian Development Bank’s 50th annual meeting in Yokohama, an activist handed President Takehiko Nakao a pair of gifts. The first was a photo book, entitled “A Visual Testimony of Asian Development Bank’s 50 Years of Destruction,” the second a financing trend analysis: “Missing the Mark ADB@50.”

“I hope it adds insight to the Strategy 2030 process, overall,” Rayyan Hassan, executive director at the NGO Forum on ADB, told the president about the bank’s strategic review plotting out its future strategy.

The official meeting between civil society organizations and ADB’s highest levels of management came at the very start of the four-day conference. It was a means of “clearing the air,” as one delegate put it. That CSO engagement is so tightly intertwined with the bank’s biggest meeting highlights the complexity of the issue, with activists asking whether there is enough commitment to reform.

Nakao stressed the key role of NGOs, calling them “very important partners.”

“For many aspects of ADB work, your engagement is so important,” he told a room crowded with everyone from large INGO executives to community members who say they have been adversely affected by ADB projects.

Yet many CSOs argue that the ADB could still be doing more to improve its accountability. Here’s a look at some of the key recommendations being put forth by civil society organisations during the annual meeting.

Take accountability further

Adeline Angeles, a member of the Marinduque Council for Environmental Concerns and a former legislator, has been charting the impacts of the Marcopper mine for decades.

The mine first came to international attention as the Philippines’ worst mining accident ever, after a pipe leaked, sending more than a million tons of toxic waste into the Boac river with disastrous effects. Even before that, however, residents contended with leakages causing serious health and environmental impacts.  

“After 30 years of mining, they left Marinduque as still one of the poorest provinces. It contaminated two major rivers. There were studies done by different agencies including the Department of Health, and in one study 100 percent of those tested were found to be positive  for heavy metals,” Angeles said at a civil society panel held Thursday.  

She and others have argued for the ADB to figure out a means of redressing the fallout from historic projects — those which predated the bank’s safeguards but continue to have lasting impact today.

In the case of the mine in Marinduque, the ADB has doubly absolved responsibility, saying the bank left the project in 1994, before the major disaster — though after a smaller one, campaigners counter. But many feel that the bank, given its size and wealth of institutional knowledge, could be doing more.

“I was a bit surprised to hear this morning the response from the president that it is hard for the ADB to address this issue [of the Marcopper mine.] It is understandable that the policies don’t apply anymore, but I would think that the ADB has the power and flexibility to find a solution,” said Jessica Rosien, an NGO consultant.

Stop loaning to authoritarian regimes

Bruce Shoemaker is an independent researcher and one of the foremost experts on international aid in Laos. But a major reason why he presented on the problems related to the ADB-funded Nam Theun 2 dam in Laos, and not a member of the affected community, is because people dare not speak out under the deeply authoritarian government.

“We just can’t find anybody from Laos who can come here to talk about it. That’s what the scenario is,” said Hassan, of NGO Forum on ADB. “Which leads us to the question, the point Bruce is trying to make: Why does ADB lend to oppressive regimes that have bad governance?”

The Nam Theun 2 dam has long been touted as a “model project” by the ADB and other funders. In reality, the dam —  whose power is exported to Thailand — has had major impacts including large-scale displacement, environmental degradation and biodiversity loss, and loss of livelihoods. One of the dam’s most prominent adviser’s publicly backtracked, telling the New York Times it had been handed over to an ill-equipped government too soon, and that he changed his mind about the entire premise of hydropower as a poverty alleviator.

Though the ADB has tried to mitigate the impacts in recent years, Shoemaker said they fall short because there are limits to what safeguards can accomplish in “a country with severe government and transparency issues.”

“We have to look more carefully at ‘do you finance high-risk projects in countries with severe governance issues?’ The risks are being borne by the local communities and the local environment and the risks are just too high,” he said.

Firm up a commitment to anti-corruption efforts

When Nakao opened the floor up to comment during his meeting with NGOs, Vinay Bhargava, a former World Bank adviser and chief technical adviser of the Partnership for Transparency Fund, offered a simple piece of advice: Make anti-corruption an explicit part of its key Strategy 2030.

Nakao stressed that the bank had “no tolerance for corruption,” saying corruption was anathema to the growth and development exposed by ADB. The bank, Nakao explained, remained committed to “good governance.”

But that talk of good governance is precisely what is holding back banks from tackling the issue head on, Bhargava told Devex.

“We are seeing the multilateral development banks including World Bank and ADB kind of distancing themselves from the fight against corruption. They’re burying it by saying ‘we’re for good governance, as you heard him say.’ Well, we’re all for good governance. But the issue is not good governance alone, but directly attacking the problem of corruption,” he said.

“The extreme accusation, I’m saying extreme, from civil society is that lending by multilateral banks is part of the problem. When they put so much money-honey in the hands of government officials, the flies are likely to come. Since they pass so much money, fighting corruption should be explicit,” Bhargava added.

Defend workers’ rights

With ADB reaffirming its commitment to large scale infrastructure projects, while pushing for increased public-private partnerships, campaigners say it’s time to guarantee the protection of labor rights.

Currently, ADB has “committed” to core labor standards, but they are not enforceable and there is no operational mechanism. This means that tens of thousands of people employed on ADB-funded projects face no safeguards ensuring the International Labour Organization’s conventions mandating free assembly, collective bargaining rights, no child labor and the like are enforced.

Karen Batt, secretary of the Community and Public Sector Union’s Victoria branch, and a member of Public Services International, said the lack of safeguards have seen thousands of workers across the region laid off without recompense, and face “thuggery” and blackmail from anti-union bosses.

“When you look at Strategy 2030, 50 percent of the strategy is going to be about public-private partnerships. Without a core labor standard governing the operation of these projects, more and more people are going to be put out of work, are going to work in substandard conditions, will not have their health and safety rights, will not have their pension rights protected, will not have the right to simply move along and find another job,” Batt said at a panel held by civil society.

Strategy 2030 does not mention core labor standards, which President Nakao said Thursday morning was an oversight. Batt told the audience she hoped that was the case and urged ADB to go further to make sure “standards are built into the strategy.”

“We’re going to need enforcement, a way of monitoring, and we need a way of making sanctions against those who deliberately breach the labor standards that the ILO says are applicable, that all of the countries in the ADB say they adhere to, and yet when you look at them in reality they are ignored,” Batt said.

End immunity

While the ADB has made efforts to reform its safeguards and complaint mechanisms, it retains its immunity from being brought to court in the countries in which it operates. While this is de rigeur for multilateral development banks, United Nations and aid agencies, ADB’s immunity shelters it from true accountability, argue campaigners.

Last month, the NGO Forum on ADB launched a campaign to challenge the ADB’s immunity. Hassan told Devex that he hoped the campaign would encourage more openness and self-reflection.

“For an institution to be an effective development partner, it needs to be challenged.”

The group has helped coordinate a series of protests across India this week, highlighting detrimental ADB projects and pushing for an end to immunity.

ADB officials, however, have said the issue is not up for discussion.

“We need immunity,” President Nakao said in his opening press conference, stressing that the banks “rigorous system” of safeguards protected against environmental and social impacts, as well as corruption.

Devex is on the ground at the ADB 50th Annual Meeting. Stay tuned to Devex for coverage.