Is the IDB supporting Indigenous, Afrodescendants, and traditional communities’ rights in its Amazon Initiative?

The update was co-written with Roberto Espinoza, Consultant to BIC.

The Amazon Initiative (AI) is the Inter-American Development Bank’s (IDB) response to the Leticia Pact and aims to support the Amazonian countries in implementing the Pact’s commitments. Its ostensible objective is to foster socio-environmentally sustainable economic development models in the Amazon region by supporting the preparation and implementation of the IDB Group’s operations in four thematic areas or pillars: bioeconomy; sustainable agriculture, livestock, and forest management; human capital (health, education, and employment); and sustainable infrastructure and cities. 

The IDB is developing three funds under the umbrella of the Amazon Initiative: 

1. Amazon Seed Development Program (ASDP): The IDB Board approved $20 million in seed capital, and IDB’s president anticipated that there would be up to $1 billion in commitments to the fund. The ASDP aims to develop a strong project pipeline and portfolio to provide strategic technical support to clients (governments and private companies) for the ideation, preparation, and execution of IDB lending operations, during the first years of implementing the Initiative. BIC has previously raised concerns related to the ASDP and the AI regarding its potential adverse effects on the Amazon and forest peoples and has engaged with IDB management around the need for the AI to effectively prioritize and protect the rights of IP, AD, and traditional communities.   

2. Amazon Bioeconomy Fund: The IDB submitted a proposal in August to the Green Climate Fund (GCF) for the creation of a $300 million bioeconomy fund, which is subject to GCF Board approval in October 2021. The proposal claims to “unlock private capital by valuing bioeconomy and nature positive products and services with climate mitigation results in the Amazon basin.” 

BIC and partners have identified the following shortcomings and concerns: 

1. Failure to include land regularization and land tenure security as a major component of the proposal. The program focuses on addressing the critical barriers preventing medium or large bio-businesses from unlocking private investments, without “responding to other technical and governance barriers and risks that are relevant for the sustainable and inclusive development of the Amazon, [such as] deficiencies in land tenure and rights across the region.” [1] The proposal’s theory of change [2] is purely based on a market assumption that bypasses and minimizes the serious risks of land disputes. Furthermore, it underestimates the role IP, AD, and traditional communities play in mitigating climate change through their efforts to protect the forests. Their continued ability to mitigate climate change is directly connected to the issue of land tenure security and territorial governance. 
2. Unequal access and distribution of project benefits: The program proposes a $10 million Small Grants Program (SGP) to “enable local stakeholders – especially women, indigenous people, afro-descendants and campesinos – to take on initiatives and enable bio-businesses to enhance and influence development outcomes with a bioeconomy perspective.” [3] While it is good news that the proposal includes direct financial support for IP, AD, and traditional communities, the funds dedicated to the SGP represent only 3.3 percent of the total Amazon Bioeconomy Fund. In comparison to the total funds that the IDB plans to allocate as of now to the AI ($1.3 billion) [4], the funds dedicated to IP, AD, and traditional communities through the SGP is only 0.007 percent of the total AI funds. This unequal distribution of funds not only compounds existing inequalities but also has no strategic coherence as it marginalizes one of the main territorial actors in the Amazon, the IPs, who control 23 percent or more of the entire Amazon biome. 
3. Lack of prioritization of indigenous bioeconomy initiatives based on Indigenous Life Plans (Planes de Vida Indígena): A main component of the proposal is to support private bio-business solutions and their supply chains through different financial instruments. [5] The main actor receiving most of the funds will be the private sector (early-stage bio-businesses, bioeconomy enterprises, climate tech and biotech companies). It is not clear how the IDB will mitigate and address the extractive pressure of the different private actors it will support. The corporate bioeconomy has a tendency toward monoculture and homogenization of the forest, restricting traditional uses of land, exacerbating land trafficking, commercializing the “natural capital”, and absorbing all the privileges in financing, which deepens the inequality of benefits. [6] Contrast this with, Indigenous bioeconomy initiatives, which replicate and maintain the biodiversity of the forest, take a holistic approach, strengthen IP autonomous management, and promote equitable distribution of benefits. The proposal should balance its support to private sector actors and indigenous endeavors. 
4. Lack of an effective consultation process and failure to obtain the consent of Indigenous Peoples: Instead of holding meaningful and inclusive consultations with IP, AD, and traditional communities, the IDB held improvised, superficial “dialogues” [7] to sensitize selected communities and civil society to the Amazon Bioeconomy Fund. This represents a missed opportunity for the IDB to lead by example and follow its own policies and international best practice and engage with IP, AD, and traditional communities.The IDB did not consult with IP, AD, and traditional communities to design key components of the Bioeconomy Fund, and the proposal has no clear mechanism enabling communities to provide input on the design of the key program components, including the sub-projects. Moreover, the complete Bioeconomy Fund proposal is only available in English, making it inaccessible to most IP, AD, and traditional communities.

3. Multi-donor Bioeconomy & Amazon Forest Fund: Currently, the IDB is engaged in conversations to create a multi-donor trust fund that intends to drive “achievements in sustainable forest management, sustainable land use, and development of the bioeconomy in the Amazon region.” [8]

As the IDB continues discussions with donors to create this fund and works to institutionalize the Amazon Initiative, we recommend that the IDB: 

1. Increase SGP funding under the Multi-donor fund at a level proportional to the indigenous territorial control of the Amazon (23 percent of the biome). This increase has a triple benefit: it improves equity, contributes to the social sustainability of the proposal, and increases the sustainability of funded activities.
2. Use the SGP to support IP, AD, and traditional communities’ tenure security by closing the historical gap in land titling and strengthening governance, forest management, and support to communities’ productive initiatives.
3. Consult with IP, AD, and traditional communities while developing the Multi-donor fund so that the objectives and structure are aligned with the needs and demands of these peoples. This will help prevent the objectives of the modest SGP from being reversed by the impacts of the predominantly corporate approach of the Amazon Bioeconomy Fund. The IDB should also continue  to consult with IP, AD, and traditional communities as the AI is operationalized.  

For the AI to meaningfully address climate change and protect the Amazon and its peoples, it needs to support IP, AD, and traditional communities’ rights and approaches to sustainable development and place their environmental and social solutions at the heart of the initiative.  We look forward to continuing working with IDB management to strengthen the design and implementation of the Amazon Initiative.

[1] See page 17, Para. 36, footnote 44 of the Funding Proposal Package for FP173

[2] “The Programme proposes that IF tailored financial and policy mechanisms to value natural capital are deployed through the operationalization of the Amazon Bioeconomy Fund, THEN bio-businesses that contribute to climate mitigation, resilience and adaptability to climatic threats of local people in the value chains and ecosystems will become financially viable, expand, and provide a new model for low-emission resilient business development. BECAUSE entrepreneurs will be able to build capacity, start-ups will be incubated and accelerated, private support will be pooled through thematic bonds and incentivizing policies, and knowledge on climate-resilient and low-emission practices will be generated and disseminated.” While valuing natural capital is indeed useful, this linear thinking oversimplifies the challenge of reflecting these values in the broader economy and avoids evaluating the economic impacts of  widely documented social, territorial, and environmental conflicts in the Amazon biome.

[3] See page 33, Para. III.4. of the Funding Proposal Package for FP173

[4] Assuming that the ASDP will raise up to $1 billion in funding, plus the $300 million that will be approved to create the Amazon Bioeconomy Fund.

[5] See page 26 of the Funding Proposal Package for FP173.

[6] The Proposal says that “For the purposes of this proposal, in the Amazon the bioeconomy aims to be climate and nature-positive, encouraging sustainable land-use practices that lead to reduced emissions, higher carbon stocks, net gains in natural capital, and increased climate resilience of vulnerable populations and ecosystems” (Page 12, Para. 24, footnote 37). This definition lacks reference to the knowledge, wisdom, and holistic vision of the IP bioeconomy which prioritizes the extraction of products in a balanced and sustainable way.

[7] See page 29 and 30 of the Spanish version of the Environmental and Social Management System (ESMS). The IDB mentions that as part of an initial phase of the Stakeholder Engagement Plan (SEP), the IDB had seven dialogues with IPs, AD, traditional communities, etc. The author participated in one of these dialogues “Let’s talk about the Amazon” organized by a Canadian company hired by the IDB, and in that dialogue there was no opportunity to raise questions about the AI, nor the funds. Also, partners that participated in the “round table discussions” reported that the dialogues had a strict agenda and allowed no space for participants to identify problems, possible solutions, and ways to implement those solutions and discuss these with IDB staff. Many civil society organizations decided not to join these dialogues because it was not clear what was the IDB’s goal. They did not want to participate in a space that could be used in the future to legitimize specific actions or decisions. The ESMS also mentions that Artificial Intelligence is being used to “analyze perceptions and concerns,” however, it’s not clear how the IDB is compiling and obtaining this information.

[8] Paragraph 1.5, page 24 of the ASDP proposal.