BERLIN, Germany — Just over a year since the Asian Infrastructure Investment Bank launched, civil society groups across Europe and Asia say their initial wariness toward the bank has deepened. CSOs are concerned about both the way the China-backed bank has rolled out key initial policies and what is actually included in those documents.
Advocacy groups are now shaping their responses, hoping to lobby and influence AIIB strategies and projects. CSO officials who met last week in Berlin told Devex they are eager to engage with the institution. That includes members of The NGO Forum on ADB, a coalition of more than 100 CSOs across Asia that provides oversight of the Asian Development Bank and will now also focus on the AIIB, according to Luz Julieta Rio Ligthart, the forum's AIIB coordinator.
Among advocates’ strategies will be to undertake monitoring that bank officials say they do not have the capacity to do, to engage national representatives to the bank in their home countries, and to lobby other members governments — for example, in Europe — to push for stronger standards.
NGO leaders involved told Devex they see now as a key moment to build a constructive relationship with the AIIB. The $100 billion bank has yet to announce many of its own substantial financing projects, choosing instead to partner with other multilateral development banks. The bank is also still staffing up and building its internal systems — exactly the time when CSOs hope their voices can be heard.
"A year is not very much," said Dr. Korinna Horta of Urgewald, a Germany-based advocacy group that monitors the work of MDBs as part of its portfolio. "The rubber will hit the road when the AIIB, itself, will have to implement its own frameworks."
Lean, clean and green
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The AIIB was founded with a promise to be lean, clean and green, but some advocates say they fumbled an early opportunity to emphasize those latter two principles. AIIB released its Environmental and Social Framework in early 2016 and offered less than a month for public review and consultation.
Activists said this short window limited their ability to push AIIB to broaden the document's scope. After the framework was released, for example, the U.N. Office of the High Commissioner for Human Rights wrote to the bank lauding the imposition of standards but suggesting stronger language "to anchor human rights into the institutional policies of the future bank."
Consultations on the ESF also excluded key local actors because they were done in English in one-on-one calls over a video link, according to Dr. Stephanie Fried, the executive director of the Ulu Foundation, which works with marginalized communities on environmental protection.
AIIB has blamed personnel and time shortages for some of the problems. Asked about the short consultation timeframe on a number of projects and policies, Hamid Sharif, AIIB director general on compliance, effectiveness and integrity, told Devex in a recent interview he wasn’t aware of significant complaints.
“Certainly, some of the NGOs felt that there should have been more time given and so on,” he said. “But I think there’s broad agreement that the consultations we had were meaningful. It allowed NGOs to give their views in writing as well as on video con, even on a face-to-face meeting,” including on ESF.
Still, CSOs and development organizations speaking to Devex said the final ESF had potential loopholes. The ESF allows for a "flexible approach," Horta argues, rather than clearly defining environmental and social protections the development community can monitor and evaluate.
Though it is unclear when or if AIIB will revisit its ESF, the complaints about the rushed nature of the process appear to have had an impact. The bank released its Energy Sector Strategy late last year and included two feedback rounds.
"There's an announcement over the website, there are submission deadlines," Ligthart said. "They have released all the comments and put them on the website. I think there is an improvement there."
A trend toward voluntary standards?
The CSO and development communities have remained focused on the AIIB’s policies and frameworks because, with so many still outstanding, they perceive an opportunity to influence their content. Among the critical outstanding documents are the finalized ESS and a definitive policy on public information, which dictates when details about projects will be released.
"One might hope that if the AIIB has stronger and better standards, it could potentially trickle downward on other financial institutions," Horta said.
The timing is also critical because Horta and others worry that the trend among MDBs is to weaken safeguards. The World Bank recently announced a new version of its own environmental and social protection policy that drew widespread criticism from the CSOs. World Bank President Jim Kim has described the policy as "the best possible compromise" between rigorous environmental and social protections and standards that can actually be met.
AIIB’s framework is “quite well accepted broadly,” the bank’s Sharif told Devex. “I think it’s pretty much in line with what other MDBs do. I don’t think it in any way dilutes the high standards for sustainability, environmental and social safeguards, which we want to have in our projects.”
With the World Bank's policy not set to come online until next year and with AIIB co-financing six of its nine announced projects so far, the impact of the new standards is still unclear. That’s one reason local CSOs are beginning to ramp up their oversight networks in preparation for AIIB's solo ventures.
Leading the advocacy charge, the NGO Forum on ADB plans to pivot its four regional centers toward the AIIB. These centers grow out of an effort to have CSOs in four countries on the continent catalog the specific environmental and social laws and orders their governments have in place, which they can then use to evaluate MDB projects. Once these standards are established, probably by June, then the teams will turn to monitoring. The forum will also push other countries to adopt stricter legal standards.
The forum’s focus "will now be mobilized around AIIB. Monitoring projects critically, looking at the policies and developing their own database," Ligthart said. "What is key here, what we see, is more and more countries will have to be the ones talking to their own country representatives in the AIIB."
She does not expect it to be an adversarial relationship. AIIB officials have welcomed feedback on a project in Myanmar, where it has committed to invest $20 million toward the construction of a power plant. Groups in her forum conducted a preliminary analysis of the Myanmar project and found existing concerns within the community about who owns the land where the plant is being built (an issue that predates AIIB involvement) as well as widespread confusion about how long the construction would take and who would ultimately benefit from the power that is generated.
Ligthart said she was happy to share their findings with AIIB, where officials were receptive, although she has yet to receive a response.
"We want them to be conscious that whenever they do something, CSOs will have to be a part of it," she said.
CSOs are skeptical about how persuasive these findings could be for the Beijing-based bank management. So they are also pushing to disseminate their monitoring work to bank representatives from member European countries.
Some of those representatives met with officials from Asian CSOs on the sideline of AIIB's first general meeting in Beijing in June 2016 after they were largely shut out of the main event.
European CSOs are also planning to continue lobbying of their governments through events like last week's conference and other interactions. Advocates will encourage member countries to meet promises made when they joined the AIIB: to demand the bank uphold the highest international standards for MDBs.
German politician Manfred Zöllmer, a member of Germany's parliament from the Social Democratic Party, said that his country remained attuned to that responsibility as the largest non-Asian shareholder.
"I think it was courageous of Germany to say we will participate in this bank," he said during a roundtable discussion among politicians during the Berlin meeting last week. Zöllmer, who sits on the financial committee, said developments within the institution "are positive because we have been part of the process."
Like much to do with the AIIB at the moment, CSO officials said they will have to wait and see.
Jenny Lei Ravelo contributed reporting to this story.
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