The Asian Development Bank’s 57th Annual Governor’s Meeting was held against the backdrop of protests in this year’s host country, Georgia, against the proposed “Russian Law” that will compel foreign-funded organizations to register as “foreign agents” and to disclose their funding; failure to do so may result to high fines. 

It was a critical crossroad for developing member countries, civil society organizations (CSOs), multilateral institutions, the private sector, and the bank itself to convene in the middle of a pivotal event for Georgia as its people are facing a rather unfamiliar future. The shrinking of civic space in the country puts pressure on the attendees of the annual meeting to speak up and join the protests. CSOs poured their support and solidarity with the Georgian people, but ADB remained silent during the entire four-day annual meeting. Despite the lack of clear response and support from the bank, the protests persisted every night after the sessions. 

This year’s governor’s meeting put centerstage ADB’s claims as the “climate bank” of Asia Pacific. Discourses around debt-driven “climate financing” put the bank under scrutiny, as did its concluding Safeguards policy review in the context of worsening reprisals and retaliation toward affected communities of ADB-funded projects. Furthermore, the Accountability Mechanism (AM) revision process was tabled, and civil society engaged the mechanism diligently. CSOs are now waiting for the draft for review. Lastly, the bank shared its plans to revise its policies in line with its Strategy 2030 toward the region’s just, sustainable, and inclusive development, but the annual meeting only strengthened its appeals to work more closely with the private sector to accomplish its strategy. 

Civil Society Sit-in on Climate Finance

Led by IBON International, Reality of Aid – Asia Pacific, Oxfam in Asia, Recourse, GAIA Asia Pacific, and Bank Climate Advocates organized an informal sit-in on climate finance last May 4th at the CSO lounge of the annual meeting to discuss the state of climate financing in Asia Pacific, highlighting the claims and operations of the ADB.

Sunil Acharya presented a recent study from Oxfam in Asia  exposing ADB’s overstated claims on funding climate adaptation and mitigation. Of the 15 ADB-funded projects analyzed, the bank has overreported 44% of the amounts. Petra Wright of Recourse, meanwhile raised an alarming trend of climate financing from multilateral development banks (MDBs) toward fossil fuels.This is mainly due to the lack of transparency from these banks and their convoluted interpretation of climate finance itself, on top of their failure to integrate a rights-based approach into their financing and development policies. Further supporting the key trends in climate, Ivan Enrile, Climate Justice Program Manager of IBON International, revealed that these MDBs are tapping the private sector to bridge the gap in climate finance through blended finance. Yet, this strategy only burdens the global South with extractive projects from the global North and contradicts the fair and just climate finance that civil society has long been calling for. 

ADB has already committed to providing USD 100 billion of climate finance by 2030, boasting a USD 9.8 billion contribution in 2023 (USD 5.5 billion for mitigation and USD 4.3 billion for adaptation). Much of these are in the form of loans rather than grants, and although the bank is gaining momentum toward its climate financing goals, it adversely drowns its developing member countries into further debt. The ADB needs to provide more of their climate financing in the form of grants instead of loans.

Safeguards Policy for whom?

As the Safeguards policy review comes close to its conclusion, CSOs are assessing whether the newly revised Safeguards will adhere to the resounding calls of people’s movements and uphold a rights-based approach in order to truly protect marginalized communities in project areas. In several sessions during the annual meeting, the bank reiterated that the new Safeguards policy will adopt a risk-based approach that intends to create plans for risk mitigation in affected communities. CSOs, however, call not only for this approach to be incorporated in the bank’s policies but also to focus on a rights-based and people-centered framework, living up to the actual “do no harm” principle. It is imperative that these are implemented at every stage of the project, especially improvements on monitoring the effects or adverse impacts on people’s culture, livelihood, and overall social and economic development. Moreover, an inclusive, participatory, and meaningful process should be upheld to legitimize the role of the project-affected people in their communities and to act upon the decisions established during consultations. 

The bank admitted that despite efforts and improvements in the revised Safeguards, there are still challenges that need to be addressed surrounding the policy. Embedding gender equality, improving the monitoring process of project impacts, aligning with human rights and environment agreements and conventions such as the UN Declaration on Human Rights and Paris Agreement, and protecting disclosures for high-risk projects—these are only examples found in the long list of civil society recommendations that the ADB has to attend to in developing an effective Safeguards policy that prioritizes the interests of the people.

The future of the Accountability Mechanism

Critical to the implementation of the Safeguards policy is the upcoming review of the AM. In a panel discussion with ADB AM staff and Accountability Counsel, it was revealed that only 12% of complaints submitted to the AM’s compliance review panel are deemed eligible and included in the next process of investigation and review. First and foremost, the inaccessibility of the mechanism creates an unfair environment for communities to recognize and submit their complaints. Even the bank per se acknowledged that the lack of awareness of the policy hinders the mechanism itself from properly addressing the issues being raised by project-affected peoples. However, the problem can be rooted in how the bank and project people on the ground sideline the voices of communities during the consultation process. CSOs argue that ADB-funded projects are being greenlit despite objections from consultations, categorized inaccurately due to improper assessment and perspective of the direct and material harm they will cause, and implemented in favor of the private and corporate partners’ interests, dismantling people’s rights to their self-determination, livelihoods, and lands. 

A report on the external review will be released this May for public comment. The bank has already pledged commitment to a more inclusive public consultation with stronger CSO inputs in the current AM review. For CSOs, the revised AM should be accessible, community-centered, and remedy-focused. ADB should ensure that its project people will honor the AM policies and prioritize the rights and needs of affected peoples. As mentioned, the eligibility requirements and processes of the complaints should be revisited and revised in favor of complainants’ rights. In the presence of reprisals and retaliation, the bank should fully commit to removing admissibility requirements in reviewing the complaints, strengthening their dispute resolution process, suspending noncompliant private partners and financing of the project, and providing reparations and remedies to the harmed communities. 

Perpetually privatized, corporate-captured development

Based on their claims during the annual meeting, there is a commitment from the bank to contribute to overall regional development. However, such policies should go hand in hand with an effective strategy to ultimately achieve development for all, and this is where the imbalance comes from.

Mobilizing private sector investments seems to be the priority, and is being adopted across the bank’s plans and strategies, as seen from their responses to the issues of climate financing, the implementation of Safeguards policy, and the enhancement of the Accountability Mechanism. The MDB Evolution Agenda, which serves as the blueprint for MDBs to streamline their agendas, policies, and priorities toward sustainable development, reflects the strong reliance on privatization as a key solution in addressing the development financing gaps. It often leads to dispensing more loans instead of grants, which aggravate debt distress in fragile contexts. In the case of ADB, its Strategy 2030 adopts this roadmap to attract private investors in providing more capital to fund development projects across the region. 

Several studies show how the private sector is one of the main culprits in the intensifying reprisals toward communities’ resistance to harmful and destructive development projects. Jiten Yumnam of the Centre for Research and Advocacy Manipur, who has been long fighting against the ADB-funded Imphal Town Ring Road project, stressed that the private corporation the bank has been actively engaging with is primarily and historically involved in the “plundering and expropriating of indigenous people’s lands.” The corporate capture of development has long-lasting impacts on marginalized sectors, stripping them further of their rights and bestowing the upper hand to private and corporate interests in steering social, economic, and environmental development.

To genuinely build the bridge for the future, communities should navigate and lead their own path towards development, and the ADB has to adhere to the specific needs and demands of the people. Civil society recognizes the role of every stakeholder in a people-centered, rights-based, and climate-resilient approach to development, but it is necessary that people lead the frontlines toward achieving their development and climate justice.

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