NGOs Pressure AsDB to Strengthen Safeguards

By Marwaan Macan-Markar
IPS News May 15, 2008

MADRID, May 6 (IPS) - Behind-the-scenes lobbying by non-governmental organisations (NGOs) paid off by the end of the annual meeting of the Asian Development Bank (AsDB) concluding here Tuesday. Leading financial officials from a host of European countries came out in favour of the strong "safeguard policies" that activists are championing.

The polices call for protection of the environment, respecting the rights of indigenous people and a stop to the involuntary resettlement of people when a development project is implemented in a country by the AsDB, Asia’s premier lender for development.

In the lead up to the AsDB’s 41st meeting of its board of governors, held in the Spanish capital from May 3 to 6, activists expressed concern over possible new language in the safeguard policies that the bank was considering. Consequently, since the opening sessions of the meeting here activists ‘turned up the heat’ on senior bank officials to commit to viable safeguards.

"Belgium is concerned by the weakening of the social and environmental standards in the review of safeguard policies initiated recently," said Franciscus Godst, head of his country’s delegation during the formal business sessions, where central bank governors of the AsDB’s 67 members made statements. "Belgium considers that one of the values that a development bank can add is strengthening such standards and enabling the executing agencies to make them current practice."

"There are a number of non-negotiable principles that need to be applied to the environment, indigenous peoples and involuntary resettlement policies," added Jorg Al. Reding, Switzerland’s central bank governor. "A broad range of views from governments, non-governmental organisations and the private sector needs to be heard and considered in the process of reviewing these safeguard policies."

Getting such language into the record of the formal sessions reflected the lobbying prowess of Asian, European and U.S. activists, who had laid the foundation for their campaign weeks before the Madrid meeting began. "Two weeks ago, we had meetings with the officials from the ministry of finance in Belgium," said Pol Vandevoort, a policy officer at 11.11.11, a coalition of development NGOs in Belgium. "We talked about safeguards and our concerns."

After the small contingents of activists arrived here, they sat down with financial officials from countries sympathetic to their cause to drive the message home. The activists from regions such as Central Asia, South Asia and South-east Asia also met with delegations from Canada, France, Germany, the Netherlands, Portugal, and the U.S., among others.

"Now that the management at the bank has heard the signals from some of the countries, it will push them to go for a better version," added Vandevoort in an interview with IPS. "It is positive the way attention is being paid to this issue."

In its defence, Haruhito Kuroda, president of the AsDB, said that the Manila- based financial institution "has no intention to dilute the safeguard policies on environment, indigenous people and resettlement."

"The intention is to combine the three safeguard policies into one to make our operations in developing countries more effective," he added during the final press conference of the annual meeting. "The second-round draft of the safeguard policies will soon be put up on our website. And we will have consultations about it in Manila."

This contentious issue between activists and the bank goes back nearly three years, at which time the AsDB’s board informed stakeholders of the bank that it was planning to "update" the prevailing safeguard policies. Soon, bank watchdogs like the NGO Forum on ADB -- an umbrella group that has its headquarters in Manila -- began to engage with officials out of concern that the update could lead to "weakening the existing safeguard policies."

The bank in the mid-1990s embraced the initial safeguard policies. They marked concern over the social and environmental consequences of development projects in the poorer regions across Asia. In 1995, the AsDB introduced its Involuntary Resettlement Policy, followed by the Indigenous Peoples Policy in 1998 and the Environmental Policy in 2002.

Discussions between the activists and bank officials over the update steadily began to turn sour over a two-year period. Yet, the AsDB pressed on -- they hosted a series of meetings to discuss the new safeguard policies at consultations across Asia. Civil society groups stuck to the theme, "NO to Weakened Standards, YES to accountability," states the NGO Forum on ADB.

Subsequently, disillusioned activists declared a boycott of the bank’s consultations, shattering its veneer of legitimacy and inclusiveness. South Asian NGOs fired the first such volley during a consultation in December 2007. Other groups soon followed.

The outcome of civil society pressure was the bank being compelled to withdraw its first draft and announce plans to work on a second draft. It is the proposed new text that gained the spotlight during the annual meeting here, which attracted over 3,000 participants, among whom were finance ministers, central bank governors, company executives, academics and activists.

"The bank cannot ignore the issue of safeguards, despite its previous efforts to sidestep it," Renato Redentor Constantino, executive director of the NGO Forum on ADB, said in an interview. "The bank’s previous approach was not just mediocre but bordering on the dangerous for local communities."

"We are glad that the bank caved into NGO pressure and is now working on a second draft," he added. "We want strong safeguards to be at the front and centre of all the bank’s development programmes."