IDB consultations on the Environmental and Social Policy Framework: Neither inclusive, nor meaningful, nor effective

Expectations for the Inter-American Development Bank (IDB) holding inclusive, meaningful, and effective consultations on the proposed Environmental and Social Policy Framework (ESPF) were low, and the Bank (sadly) met those expectations. At the beginning of the safeguards review process, civil society sent a letter to the IDB with recommendations on how to design and implement a robust, meaningful, and inclusive consultation process. Our recommendations were based on lessons learned and widely shared experiences from our previous engagement with IDB Group consultations. However, most of them were not effectively followed or considered.  

Why do we insist so much on process?

 The more the Bank engages with outside stakeholders, including civil society, indigenous peoples, afro descendants, and local communities directly impacted by development projects, the more solutions it will find to the complex challenges it faces in many of its projects. The purpose of an effective consultation should be to understand and consider issues and concerns of stakeholders. The promise or expectation behind that engagement is that the Bank will work with stakeholders to ensure that their concerns and recommendations are directly reflected in the alternatives developed and that the Bank will provide feedback on how input influenced the decision.

 None of these has been occurring with the latest consultations held by the IDB Group. The Bank’s engagement with civil society and project affected communities has been (and continues to be) worryingly weak compared to other Multilateral Development Banks (MDBs). Civil society cannot effectively engage in a consultation process if there are not genuine and multiple opportunities to dialogue and engage with the IDB Group as the IDB Invest and IDB safeguards policies are being revised.

Why is it important for civil society to participate in the IDB review process of its Environmental & Social Safeguards Policies?

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, mitigated, and compensated. They are also supposed to maximize benefits to project-affected communities.

 The expectation for this review is to contribute to the strengthening of the environmental and social policies, their effective implementation, and expanding their scope in key areas. At a minimum, existing standards should not be diluted. The draft ESPS proposes a significant shift from prescriptive rules to avoid harm and manage social and environmental risks to a private sector-based model, which shifts significant responsibility to the Borrower. Specifically, the Bank’s proposed role has transitioned toward conducting due diligence before agreeing to finance a particular project, and then supervising, monitoring, and evaluating the project’s compliance with its E&S Policies during design and implementation. However, this model is not as reliable as a rules-based approach and thereby weakens the social and environmental protections that prevent harm in Bank-financed projects. This is particularly true when Borrowers have low capacity in these areas [1].

CSOs and project-affected communities have significant expertise and experience to share with the Bank on how to strengthen E&S policies, and safeguards supervision and implementation. This is why it is important for civil society to participate in the safeguards review process.  

What was wrong with the regional consultations in Panama City, Lima, and Buenos Aires and why does the Bank need to improve engagement with civil society?

IDB hosted 4 in-person consultations in LAC (in Jamaica, Panama, Perú, and Argentina). However, IDB operates in 26 countries in the region, and geographic distances in the region represent significant barriers for civil society and project-affected communities to participate in the few opportunities that were offered. The lack of in-person opportunities to engage is something to improve if the Bank aims to be inclusive [2]. Other areas in which the IDB consultations fell short include:

 1) Logistics and organization.

  • People who registered to participate in public consultation did not get the confirmation until 2 or 3 days before the consultation happened.
  • In Buenos Aires, one week before the consultation, the Bank changed the date and many registrants did not get the email with that change of date [3]. Also, for many people who registered, IDB did not have the badges ready on the consultation day.

2) Lack of an agreed agenda or sharing of time with those attending the consultations.

  • Several CSOs sent specific recommendations for the agenda which weren’t taken into account, negatively impacting the dialogue.
  • In Lima, civil society recommended having at least one hour for general comments after the PowerPoint presentation done by the Bank [4], and to structure the agenda considering the people and organizations that were attending the meeting, to leverage their experiences or expertise. The Bank did not take those recommendations, resulting in missed opportunities. Moreover, people weren’t able to introduce themselves, making it hard to know who was in the room participating. 

3) Lack of diversity and outreach.

  • This has always been a challenge with IDB consultations because consultations are normally held in the capitals, which limits the capacity for project-affected people and local communities from outside the capitals to participate. For example, in Buenos Aires, in the consultation with indigenous groups, there were no indigenous groups from Argentina.
  • In Lima, the Bank did not invite project-affected communities to participate in the consultation. Project-affected groups that were there were invited by other CSOs. In Buenos Aires, there was only one member of an affected community invited by the Bank. IDB’s MICI has many cases at the moment in Argentina, Chile, Brazil, etc., so they could have easily asked MICI whom to invite from each country. Also, in Buenos Aires & Panama City, almost half of the participants weren’t civil society members, they were consultants that worked with the Bank. While we welcome the participation of everyone, the Bank shouldn't report their input as civil society input in the consultation reports. In the minutes the Bank shared with participants, the Bank mentions that 25 ‘attendees’ participated in the consultations. This is not transparent since they have to report which of those ‘attendees’ were CSOs and which of them were consultants.

4) It is not clear how the Bank will include and take into account the recommendations made.

  • Considering that the Bank has been weak in following up with stakeholders to make sure that feedback received is taken into account, and in the past policy reviews, there has been lack of responsiveness to CSOs' submissions. During this consultation, we asked questions on next steps but we didn't receive a clear response. For example, we asked if the implementation guidelines and the implementation plan will be consulted on. In addition, we requested the Bank to publish the matrix with comprehensive analysis and response to the comments received at least one month before the 2nd draft is sent to the Board for consideration.

 Why expectations were low from the beginning?

 IDB Group has a poor record in holding not only effective consultations, but also in establishing a serious and mature relationship with civil society. Civil society has been repeatedly raising concerns around this, and on the poor performance of the Bank for holding meaningful consultations, but we haven’t seen any measure or improvement on the side of the Bank. Here are some general trends and examples of the poor consultation repertoire.

 1)  Short and inadequate advance notice & limited venues, including cases were no regional consultations was offered

  • With 3 weeks in advance only, in August (holiday season in the US and Europe), the IDB announced ‘pre-consultation’ meetings with civil society and indigenous groups in Washington D.C. to get recommendations on what needed to be included in the new E&S Policy Framework. Unfortunately, they were only held in DC, and not in the region so civil society from the region was not able to participate. Also, it was not clear how that feedback was effectively included in the draft.
  • In the IDB Invest Access to Information Policy consultation (2018), invitations were sent with such short notice that many CSOs from other countries, and from outside the capital were not able to plan the trip to attend the consultations in Buenos Aires. Also, in the consultation, there were no indigenous groups, and other traditional groups, or people affected by IDB Invest projects, including people who filed cases with IDB’s Independent Consultation and Investigation Mechanism (MICI).

2)  Poor timing (in terms of enabling participation)

  • In a letter sent in December 2019, civil society requested the IDB to hold regional consultations on the proposed ESPF in March 2020, and not earlier (as in most countries in Latin America, official holidays and carnival-related festivities take place in January and February). Unfortunately, that recommendation was not taken into consideration either as consultations in the region started in mid-February.

3) Lack of response to written submissions, including on means for follow-up

  • In December, we sent a letter to the Board of the Bank requesting to publish the full set of comments received during the IDB Invest E&S Sustainability Policy consultation at least one month before the draft was sent to the Board for consideration, and to publish a matrix with a comprehensive analysis and response to the comments received at least one month before the draft was sent to the Board for consideration. None of those happened.
  • For the IDB Invest Access to Information consultation there was a lack of dialogue with the representatives of the IDB during the consultation, and no ongoing communication with stakeholders after the consultation to keep them informed. The Bank failed to provide effective feedback on how stakeholder input influenced decisions.

4) Consultations are not structured & designed to seek meaningful, significant, inclusive, and effective input

  • The IDB Invest consultation on the E&S Sustainability included only one consultation phase, --overlooking the recommendations made in a letter sent to Management in May 2019. This limited civil society engagement in the process.
  • The IDB Invest consultation on the Access to Information Policy had a strictly defined agenda that limited the capacity of CSOs to participate. There was no effort to seek input from stakeholders on how they wanted to participate ahead of time.

The fact that the IDB does not provide a space like the World Bank Civil Society Policy Forum (CSPF) for civil society to have a space to participate and engage in the Annual Meetings is also representative of the Bank’s lack of engagement with CSOs [5]. Civil society has been asking for that special space for years now, and nothing. The same happened for IDB’s 60th Anniversary observance: Civil society was not invited to participate.

It is critical that the IDB Group acknowledges the importance of civil society and project-affected communities as relevant stakeholders. There should be a cultural shift at the Bank to recognize the important role of civil society and project affected people to guarantee that IDB Group-sponsored development benefits, and does not harm, people and the planet.

 *Many thanks to Gonzalo Roza (FUNDEPS), Maia Seeger (ONG Sustentarse), and Vanessa Torres (Asociación Ambiente y Sociedad) for their comments and suggestions.

 Notes

[1] IDB’s main project portfolio is focused in countries with low financial and institutional capacity and weak regulatory frameworks on environmental, social, and human rights issues.

[2] In-person consultations in the region happened before many LAC countries declared official quarantine and closed their borders due to the COVID-19 global emergency. The consultation in DC was the only one that had to be online as a result of the pandemic. For the second consultation phase, the Bank decided (pre-COVID-19) to host those consultations virtually, so we shouldn’t be expecting major changes for the second consultation phase.

[3] In Lima, for instance, the invitation was to the Atton Hotel, while the real name of the hotel was Pullman Hotel

[4] What happened was that people wanted to add some follow-up comments and recommendations and people were not allowed to do so (the facilitator did not let people talk until several of us expressed that this was not appropriate).

[5] Participation in the Annual Meeting is by invitation only, and civil society is not considered to be a relevant stakeholder for the Bank, as one can conclude by reading the invitation to the 2020Annual Meeting that was supposed to take place in March in Barranquilla: "Participation in the Annual Meeting is by invitation only. The list of guests, including private-sector organizations, banks, and associations, is prepared according to internal procedures established for that purpose, and must be approved by the respective country authorities."