The Asian Development Bank has reached the homestretch of a long and tedious process of reforming safeguards on bank-funded projects.

Reform, of course, indicates improvement, a change for the better. Whether the new policy satisfies such condition is something that is yet to be determined, at least by numerous civil society organizations that had railed against the policy review throughout the long consultation process.

The bank's board approved on July 20 an updated safeguard policy statement that aims to bolster current protection mechanisms to minimize the adverse impacts of ADB projects on the environment and affected population.

ADB's safeguard mechanisms are embodied in its policies on involuntary resettlement, indigenous peoples, and the environment. All these policies were revised and consolidated to enhance the intended development impact, according to Ursula Schaefer-Preuss, vice president for knowledge management and sustainable development.

"The Safeguard Policy Statement has requirements that are clearer, stronger, and more comprehensive and constitute best practices in addressing environmental and social risks and impacts of investment projects," she said in a statement.

ADB further stated that the updated policy contains new provisions on biodiversity conservation, community health and safety, physical cultural resources, and requirements for innovative financing modalities that were previously not covered.

More than 15 workshops that brought together multiple stakeholders were undertaken between November 2007 and November 2008 across Asia, the Pacific, North America and Europe.

It was not a process without considerable pain. Non-governmental organizations have blasted ADB for endeavoring to weaken its own protection mechanisms.

The Bank Information Center and Oxfam Australia, were among numerous civil society organizations that, separately and collectively, put their weight behind halting consultations pending an improved draft than what was first offered for comment.

NGOs wrote to ADB President Haruhiko Kuroda in February 2008 to say the public consultation draft released in October 2007 was "regressive and damaging."

Bank watchdog NGO Forum on the ADB had called the review a "dilution" of existing policies.

"[It] also proposes – in the midst of the international financial crisis – significant deregulation, a marked decrease in transparency and reduced due diligence even for highly risky alternative investments, including controversial off-shore private equity funds," said Renato Constantino, the forum's executive director, in a letter to the bank in December 2008.

Even as late as January 2009, NGOs continued to question the merits of the policy review.

"They have created tremendous anger by weakening in one fell swoop, environment, indigenous peoples and resettlement policies under the guise of a safeguards review," Stephanie Fried of the Environmental Defense Fund told Reuters.

In the months and years to come, we will see whether the lengthy and controversial policy review would have been worth it – and it has to be, for at stake is an average of $5 billion worth of projects throughout Asia and the Pacific that could make or break development.

About the author

  • Josefa Cagoco

    Sef Cagoco served as one of Devex's international development correspondent from mid-2008 to mid-2009. Her writing focused on social entrepreneurship and multilateral agencies such as the U.N. and Asian Development Bank. She previously worked as senior reporter for the national daily BusinessWorld and a production journalist for the Financial Times.