In 2020, the IDB approved a robust new Environment and Social Policy Framework (ESPF) that includes a list of excluded activities along with many protections for project-affected communities and the environment. One way in which the new ESPF represents a significant step forward is that it includes the “do good principle,” going beyond do no harm, where IDB commits to maximizing sustainable development benefits. This requires the Borrower to consider and report on how project design will enhance social and environmental good in the environmental and social assessment.
Beyond the do good principle, the framework also enhances the IDB’s monitoring and supervision role and the environmental and social due diligence process. For example, the IDB is now required to consider the Borrower’s commitment, track record, and capacity to implement the provisions of the ESPF. In addition, the IDB and clients are required to inform project-affected communities about the existence of project level grievance mechanisms as well as the MICI, where communities can file complaints when something goes wrong with the project. The framework includes a provision guaranteeing zero tolerance for retaliation against those who voice their opinion or oppose a project. The new ESPF also emphasizes the need to effectively protect the rights of marginalized groups such as afro-descendants, migrant workers, children, persons with disabilities, women, and LGBTQI population throughout the project cycle.
Although the ESPF is robust on paper, the IDB's main challenge remains implementation. A recent engagement with IDB’s junior management regarding a project in El Salvador evidenced a lack of capacity, knowledge, and foresight that needs to be addressed across the institution to be able to implement the commitments under the ESPF effectively. After many requests to meet with the team leading the project, our local El Salvador-based partners finally got a meeting just to learn that the IDB had shared information about their identities and concerns with the Borrower without their knowledge or permission. This happened in a sensitive context where risks of reprisals and retaliation are high and thus the IDB staff’s actions put the safety of local civil society groups at risk.
This case illustrates some of the main concerns raised by civil society around ESPF implementation during the safeguards review process: the need for adequate resources, capacity building, and training. We provide the following recommendations that the IDB and the incoming administration should prioritize to strengthen its ability to implement the ESPF effectively:
1. Align the Environmental and Social Solutions Unit's (ESG) roles and responsibilities with its institutional hierarchy within the IDB. ESG’s role at the IDB is crucial to support borrowers and staff at the IDB in implementing the ESPF. As of today, as a Unit, ESG has little influence but an enormous commitment which is not reflected in a robust institutional structure that gives ESG the leverage they need to be on top of the role and responsibilities they currently have. More leverage will allow ESG access to more resources and grow its position within the institution.
2. Increase ESG’s staff and resources.
3. Increase and improve capacity building and training across the institution.
If the IDB strengthens its presence in countries, the Bank will be better equipped to provide operational support and offer solutions to implementing agencies. More E&S specialists on the ground will support project teams in different countries to be prepared to address a range of environmental and social issues.
With a new robust ESPF, the IDB has a significant challenge, but also a unique opportunity to promote a culture shift at the institution; one that recognizes the critical role the ESPF plays in guaranteeing that IDB-sponsored development benefits people and the planet. Having a strong ESPF on paper is not enough, and this is why culture change, sufficient funding, capacity building, and training need to be addressed and prioritized by the next IDB administration.
