In 2019, the Inter-American Development Bank Group started reviewing its environmental and social safeguards policies for both private sector (IDB Invest) and public sector (IDB) finance.
The environmental and social safeguards play a key role in the development process driven by Multilateral Development Banks (MDBs). Safeguards are mandatory requirements for most MDB-financed activities. They set rules or standards that borrowers must apply in investment projects that receive MDB funding. The environmental and social safeguards ensure that negative impacts and risks associated with an MDB-funded project are properly identified, and avoided, minimized, or mitigated. Also, they are supposed to maximize the benefits of a project so that they generate genuine benefits to project-affected communities. In practice, the application of the environmental and social standards should strengthen and promote positive sustainable impacts for communities.
This is why the IDB Invest and IDB safeguards reviews are so important, and explains why civil society, local communities, and indigenous groups, are primed to engage and participate. A weak safeguards policy that is not able to effectively prevent harm is more likely to result in projects that stir social conflict and degrade the environment, thus failing to achieve sustainable and inclusive development.
In May 2019, civil society sent a letter to IDB Group Management with specific recommendations to design and implement a robust consultation process. Many of these were overlooked in the design of the IDB Invest consultation, thus inhibiting civil society engagement in the process [i]. We cannot effectively engage in a consultation process if there are not genuine and multiple opportunities to dialogue and engage with IDB Group as the safeguards policies are revised.
Based on widely shared experiences from our previous engagement with IDB Group, the Bank’s engagement with civil society and affected communities has been and continues to be worryingly weak compared to other MDBs. The lack of civil society participation in IDB Group Annual Meetings represents just one example.
IDB Group can still improve and strengthen the ongoing IDB Invest policy review process and make sure that upcoming IDB safeguard consultation process is aligned with international best practices. To this end, multiple organizations have co-signed two letters to the IDB Board of Directors urging the Board members to take into consideration the recommendations below to ensure the consultation process is meaningful and participatory, with the ultimate goal of improving the safeguards to reflect best international standards.
Recommendations on the IDB Invest process:
- Ensure that the full set of comments received during the consultation process is published.
- Ensure that the matrix with comprehensive analysis and response to the comments received is published.
- Only approve a Policy that reflects IDB Invest having meaningfully considered and incorporated (where appropriate) inputs made by civil society, local communities, and indigenous peoples.
Recommendations on the IDB process:
- In-person consultation meetings should start in March 2019, not before.
- In-person consultation meetings should be held no more frequently than every two weeks in the different countries.
[i] The way the IDB Invest consultation plan was structured--with one consultation phase and no follow-up exchanges or consultations—represents one clear example.