How will AIIB promote sustainable social outcomes in the water sector?

“Maximizing environmental and social outcomes” in the water sector is key to sustainable development, but success requires establishing the systems and guidance necessary to make that vision a reality.

Last month, AIIB released a draft of its water sector strategy, which emphasizes “maximizing environmental and social outcomes” in the sector, including “positive outcomes that directly contribute to SDG goals.” But in order for AIIB’s water projects to consistently maximize their contributions to these outcomes, the Bank must move beyond strategies and develop guidance for clients on the steps necessary to comply with the Bank’s Environmental and Social Framework.

The AIIB’s water sector analysis, which was developed to inform the strategy, highlights just how important it is for every water and sanitation project to be designed to meet the needs of marginalized groups, particularly women and girls. The paper states that “there is a growing body of literature around the impacts of poor water and sanitation services on health and educational outcomes (particularly for girls) and on intergenerational impacts that derive from stunting.” The paper also provides several examples: “rainfall shocks are linked to increases in violence against women in India;” “female-led farms are at greatest risk of not receiving irrigation water and not being represented in user organizations in Central Asia;” and “in Pakistan, poor sanitation facilities in schools deter adolescent girls, from education: up to 50% of girls do not attend school during menstruation.” The analysis also highlights that “achieving equity is a common challenge in water related services,” and that there are “complex and multiple relationships amongst water, gender, and inequality (amongst different groups, including disabled populations).” These findings are consistent with BIC’s experience with water projects funded by other IFIs. In a project in Uganda, for example, we found that the location of water points can reduce the risk of GBV and the amount of time that women spend on childcare.

“Water infrastructure investments will not deliver their expected benefits and services unless they consider these [gender] dimensions and how they interact with other factors such as class, ethnicity and geography.”  - AIIB Water Sector Analysis

According to the draft strategy, AIIB will pay particular attention to women and marginalized groups in the design and operation of water sector projects, and the Bank will also pay close attention to three other social issues: the quality and quantity of available water; equality of access to water; and affordability for users. The strategy states that the Bank’s Environmental and Social Framework (ESF) will enable projects to address these issues effectively. But the evidence shows that the Bank’s ESF alone—without accompanying guidance—is insufficient to enable clients to achieve these outcomes.

AIIB has paid limited attention to project impacts on marginalized groups, despite the ESF's commitments to address these impacts. For example, in July, PWESCR, BIC, and Gender Action released a case study that examined the ways in which gender issues were not adequately addressed in one of AIIB’s first projects. The case study focused on a rural roads project in India, and detailed the lack of inclusion of women in consultation processes, the lack of analysis of the ways that women use transportation systems differently, and the lack of efforts to prevent discrimination against women working on the construction of the project.

AIIB-funded projects also have not always adequately addressed the affordability of new infrastructure for the poor and marginalized. For example, an AIIB-funded urban development project in Sri Lanka will resettle over 20,000 people in high-rise condominium units in Colombo. AIIB's ESF states that AIIB projects will improve the standards of living for people in urban areas who are displaced by the projects that the AIIB finances. The ESF also states that projects will provide affected people with “legal and affordable access to adequate housing.” But documents for the Colombo project acknowledge that the new housing units will likely be unaffordable to the lowest-income people in the community. Documents also propose that affected people take on second jobs in order to afford the new units, a measure that is unrealistic and inadequate to address the affordability gap for the lowest-income people in the affected communities.

Lastly, the water sector strategy proposes to monitor water projects’ “incorporation of consultation and design for improved access for women and vulnerable groups.” However, consulting with women and vulnerable groups, and designing projects to eliminate barriers to equal access to project benefits, is already required under AIIB’s ESF. AIIB should be tracking these measures as part of the Bank’s efforts to ensure compliance with its ESF. Effective and meaningful consultation and project design also requires identification of the distinct marginalized groups that are likely to face barriers in accessing new infrastructure, the development of a tailored stakeholder engagement strategy for these groups, and incorporation of project-affected people's feedback in order to design projects to reduce those barriers. “Maximizing environmental and social outcomes” in the water sector is key to sustainable development, but success requires establishing the systems and guidance necessary to make that vision a reality.