ADB Criticized for Holding Questionable Consultations on its New Corporate Strategy
Manila, Philippines – NGO Forum on ADB expressed its disappointments and discontent on the stakeholders’ consultation for the Asian Development Bank’s corporate strategy held at the ADB Manila Headquarters last Monday due to lack of public disclosure and quality consultations with civil society organizations (CSOs).
The Forum questioned ADB’s intent to shift towards using country safeguards systems without any ‘assessment’ and ‘equivalency’ with its own safeguards systems as presented by Strategy and Policy Department of the ADB. This alarming move towards using country systems prematurely will have disastrous impacts on local communities and the environment especially in autocratic regimes where civil society voice is suppressed and persecuted, and national instruments are riddled with corruption and weak implementation.
ADB in doing so will also be in violation of its own ADB Safeguards Policy Strategy SPS 2010, where it clearly indicates ‘equivalency’ and ‘assessment’ to be conducted for Country Systems with ADB standards before they are considered for use in any ADB project. In ADB’s own study on Country Systems in 2015, it indicates that in six upper middle-income countries UMICs, the use of country systems are not feasible as they are far from ADB SPS 2010 standards. The ADB is faced to provide competitive lending rates with the rise of new banks and abruptly moving towards using Country Systems is a way by which the Bank is trying reduce loan approval times and “costs” by compromising due diligence requirements which put human rights, public safety, environmental sustainability and national economies at risk.
On being questioned on this issue of policy dilution, Safdar Parvez from the ADB HQ responded by reassuring there will be ‘no dilution of ADB safeguards’. The Forum believes, however, that reliance on country safeguards systems is tantamount to “ADB absolving from its obligations to human rights, SDGs, and climate change deals”. “Even if we have good national laws, safeguards implementation will be subject to the country’s changing technical capacities, budgetary limits and shifting political leadership.”
Rayyan Hassan, Executive Director of the Asia-wide independent watchdog of ADB expressed his deep concerns that the presence of CSOs in this consultation process could just be a way to legitimize ADB’s questionable private-led sector strategies. Participating CSOs were asked to form workshop groups and comment after the “Road to 2030” powerpoint presentation of Safdar Parvez, ADB Director, Regional Cooperation and Operations Coordination, Central and West Asia Department. “We cannot provide substantial comments based on just a few bullet point summaries, without a full disclosure of the entire ADB strategy 2030 draft paper revealing the details of plans presented to us. This strategy will guide how public money is going to be used for development purposes for the next 14 years and thus we need full disclosure of information prior(with adequate time) to have a robust, informed, meaningful consultation”, said Hassan.
The bullet point presentation by ADB failed to mention how the strategy 2030 would address the problem of sustainable development particularly in terms of its commitment to reaching the level of global warming to 1.50 Celsius, which can only be achieved by keeping fossil fuels on the ground. The Bank continues to invest in coal energy and greenhouse gas emitting large hydropower plants and has not made any clear commitments to divest and transition to renewable energy in the wake of COP 21 Climate Accord.
Forum Policy Coordinator Mayang Azurin pointed out that “the Bank makes it clear that intends to increase investments to the private sector in achieving its mission of poverty reduction and sustainable development without providing a review on the impacts of Strategy 2020 which was also private sector led on inequality, environmental sustainability, and human rights.” She cited the case of Naga Coal Plant in the Philippines and Tata Mundra Plant in India, both private sector energy projects with formal community complaints filed in ADB’s Accountability Mechanism on its damaging impacts on the environment, health and livelihoods.
She also added that the strategy has no mention of human rights and labor standards, which are crucial as some ADB-financed projects violate both international and local labor standards. Amu Bukhara Irrigation System Rehabilitation in Uzbekistan ADB project supported forced labor.
Abner Manlapaz of Life Haven Incorporated indicated that there should be stronger language in inclusion of women, persons with disabilities (PWD), indigenous peoples and conflict groups. The Forum also added that if ADB is really serious in taking into account the stakeholders condition “the language of equivalency and assessments should be included in the draft, and a keener language on accountability and human rights in the context of greater priorities in private sector development should be included”.
Forum also drew attention to the strategy’s intent to be selective on financing the Sustainable Development Goals (SDGs), which can be dangerous. Azurin said the SDGs are premised on the importance of an integrated approach to planning for people, planet, and prosperity. “We see that the goal on justice, peace and accountable institutions have barely been considered. The strategy 2030 is silent on accountability and instead falls into dangerous lines by planning to invest in Fragile and Conflict-Affected States”.
CSO voices from FCAS demands development banks to disinvest so as not to add further tensions to the ongoing ethnic and geopolitical rivalries in the region intensified by supporting dictatorial regimes and private sector control on public resources. “Public money should be used for poverty-reduction and sustainable development and that cannot be achieved with the same strategies that led us into deepening inequalities, to begin with,” Hassan said.