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NGO Forum comments on ADB ESF R-paper

Updated: Oct 21

Following NGO Forum on ADB network and allies call for redrafting the ADB ESF W-paper we acknowledge the substantial changes made to the current R-paper. We have also appreciated the lengthy in-person discussion held with the Office of the Safeguards team in Manila following the release of the R-paper. We are pleased that some key revisions and additions that were advocated for by civil society that are reflected in the R-paper include –


  • 120-day disclosure period for sovereign projects

  • Common Approach: Commitment to applying the requirements among the co-financiers that are the most stringent or protective of the project-affected persons and/or the environment

  • The Financial Intermediaries annex is now included in the overall ESF framework

  • Gender-responsive grievance redress mechanism

  • Inclusion of civic space and enjoyment of rights and freedoms in the E&S risk classification

  • On hiring of experts (page 138, para 25): We welcome this language of hiring additional experts to monitor and mitigate risks being highlighted by the risk assessment. This should include the onboarding of independent experts who would be able to assess reprisal risks and put in place protocols and security measures to mitigate these. 

  • The cost of the safeguards is indicated to be included in the budget of the project

  • Removal of good faith requirement before approaching the Accountability Mechanism

 

However, we feel the R-paper can be further strengthened, and we call for these changes based on our active monitoring of MDB-financed sovereign and non-sovereign projects on the ground, and years of advocating for accountability together with affected communities.

 

ADB ESF R-paper

NGO Forum network and allies recommendations

Information disclosure

Page 12, para 26: ADB will include the basis for a project’s E&S risk classification in the relevant project document and disclose it on ADB’s website. ADB will review the E&S risk classification assigned to the project on a regular basis throughout the concept design, preparation, and implementation phases of the project cycle, and will change the E&S risk classification where necessary to ensure that it continues to be appropriate. Any change to the E&S risk classification will be disclosed on ADB’s website.

Language edits:

ADB will include the basis for a project’s E&S risk classification in the relevant project document and disclose it on ADB’s website prior to Board approval.

Page 17, para 53: ADB will disclose a draft, or final if available, E&S assessment and management documents and ESCP/ESAP for High Risk, Substantial Risk, and Moderate Risk projects as early as possible in project preparation and no later than project appraisal or final credit approval. For High Risk projects, a draft, or final if available, E&S impact assessment will be disclosed as early as possible in project preparation, and in any event at least 120 days before Board consideration of the proposed project for sovereign operations and at least 60 days before Board consideration of the proposed project for nonsovereign operations. These documents will address, in an adequate manner, the key E&S risks and impacts of the project and will provide sufficient detail to inform further stakeholder engagement and ADB decision-making. Final or updated documents will be disclosed when available. ADB will also disclose monitoring reports submitted by the borrower/client.


Language edits:

For High Risk and Substantial risk projects, a draft, or final if available, E&S impact assessment will be disclosed as early as possible in project preparation, and in any event at least 120 days before Board consideration of the proposed project for sovereign operations and at least 120 days before Board consideration of the proposed project for non-sovereign operations.

 

We strongly recommend the inclusion of substantial risk projects in the 120-day disclosure period as miscategorization and under-categorization of projects is an issue we have raised concern about over time. While substantial projects may be limited to a smaller site or project location, “some adverse risks and impacts may be significant” as per the risk categorization.

 

We further recommend stronger time-bound language for the disclosure of final and updated reports, and monitoring reports.

Page 136, para 18: The borrower/client will submit to ADB for disclosure E&S performance monitoring reports prepared under the relevant ESSs for a project, as required by ESS1.If there are changes to a project that result in additional E&S risks and impacts, particularly where these will impact project-affected persons, the borrower/client will provide information on such risks and impacts and undertake meaningful consultation with project-affected persons.

Language edits:

If there are changes to a project that result in additional E&S risks and impacts, particularly where these will impact project-affected persons, the borrower/client will provide information on such risks and impacts and undertake meaningful consultation with project-affected persons. The ADB will disclose this information on the ADB website prior to meaningful consultation with project-affected persons, and the borrower/client will make available this information to project affected persons prior to meaningful consultation.

Financial Intermediaries

Page 149, para 66: ADB will summarize and include in the relevant project document for disclosure on ADB’s website ADB DD related to the existing and planned activities and transactions of an FI’s borrower/investee to be financed by ADB, ADB’s review of the FI’s ESMS and/or corporate audit, the corresponding corrective action plan, if any, and the ESMS. ESAP, if any, as agreed between ADB and FI will also be disclosed. For capital market transactions, disclosure of E&S documentation prior to and after subscription is subject to applicable capital markets rules and regulations.

 

Page 149, para 67: For FI-1 and FI-2, ADB will disclose monitoring reports for the activities and transactions supported by ADB financing. For higher risk transactions to be supported by ADB financing, ADB will also disclose any draft, or final if available, documentation prepared by FI borrowers/investees and submitted to ADB relating to the E&S assessment of such transactions.

The disclosure of the name, sector and location of higher risk subprojects on the ADB’s website before approval will enable scrutiny by stakeholders and help prevent potential E&S harms before they occur.

Moreover, the ESF should require ADB’s FI clients to include ADB ESS standards in legal contracts with subproject developers, as is the practice at the EIB.

Stakeholder engagement and GRM

Page 151, para 79: FIs will develop and maintain stakeholder engagement procedures and a grievance mechanism, consistent with the relevant requirements of ESS10 and following indicative requirements in Annex-2.

 

Page 139, para 31. The borrower/client will include information about the ADB’sAccountability Mechanism as part of its information disclosure and meaningful consultation with project-affected persons and other relevant stakeholders.

The requirement should be that FIs will implement effective GRMs and meaningful stakeholder engagement at sub-project level, disclosing information about it in a manner and format accessible to local communities. 

 

As well as disclosing information about the GRM, there must also be information at the subproject level, in a manner and format accessible to local people, disclosing a) the ADB’s involvement and b) the existence of the ADB’s Accountability Mechanism and how to reach it.

Paris Alignment

Page 14, para 34: ADB’s review of the E&S assessment process undertaken by a borrower/client will include, as relevant (ii) considering and integrating into the E&S assessment process, as relevant, additional information obtained by ADB through its other tools and instruments such as poverty and social analysis, gender analysis and gender assessment, digital risk assessment, fragility and resilience assessments, disaster risk

assessment, climate risk assessment and/or Paris Agreement alignment assessment.

The ADB should make its Paris Alignment guidance public and make clear and direct references to this and other significant climate commitments in ESS9 and other relevant parts of the ESF.

On reportable emissions

The borrower/client will monitor absolute GHG emissions annually and report publicly the emissions and the actions taken to avoid or minimize them. The GHG quantification assessment will be conducted in accordance with methodologies and practices advised by ADB, and in line with UNFCCC and other internationally recognized climate reporting standards.

 

20,000 tons CO2e annually per project shall be the minimum threshold for reporting emissions. Clients or borrowers which breach 8 million tons CO2e annually, qualifying them as carbon majors per global standards, shall be subject to sanctions, and penalties, which shall accrue to the host community/ies.

On the exclusion list 

On item XI: new coal-fired power generation and coal-fired heating plants


The policy should remove the footnote citing the CCUS and Liquefy Natural Gas (LNG) terminal on footnote 14. The Bank did not clearly state its relevance in supporting such technologies vis-à-vis the coal ban. Moreover, these technologies are clearly not on par with the Paris Alignment, as they extend the life cycle of fossil fuels. 

On reprisals 

Page 3, para 5: ADB does not tolerate any form of reprisals in ADB-financed projects and will seek to take all steps within the limits of its ability to work with appropriate parties to address them, including requiring its borrowers/clients to provide protection to project-affected persons who raise concerns or grievances in or about such projects.

 

Page 5, para 11, (ix): Strengthen stakeholder engagement through meaningful consultation and clear, timely and appropriate disclosure of relevant project information, and prevent threats of reprisal against project-affected persons through effective grievance mechanisms.

The policy should refer to clear protocols and directives for staff of the ADB in tackling cases of reprisals. The bank should clearly state its response protocol and how it will use its leverage over borrowers and clients to respond effectively.

 

The proposed approach of addressing reprisals through grievance mechanisms is inadequate and risks conflict of interest. Grievance mechanisms remain to be created and owned by clients, who are largely responsible for reprisals. Instead, the ADB should establish direct secure channels of engagement with the communities, independently from the client, as an avenue to raise cases of reprisals.

On Civic Space

Page 10, para 24, (j): The E&S risk classification will also consider risks that are relevant in the context in which a project is being developed or to be implemented, which may include: Civic space and freedoms of expression, association and assembly.

There should be an annex or footnote declaring clear criteria on how civic space will be analyzed – it should be done independently, not relying solely on information provided by clients. This assessment of civic space should also inform how the bank should be assessing and responding to reprisal risks throughout the project process.

 

Signatories:

 

NGO Forum on ADB

 

Aksi! for Gender, Social and Ecological Justice, Indonesia

Bank Information Center, USA

Centre for Environmental Justice, Sri Lanka

Center for Research and Advocacy Manipur (CRAM), India

Community Empowerment and Social Justice Foundation (CEmSoJ), Nepal

Defenders in Development Campaign, Global

Eco-Coalition Armenia, Armenia

Freedom from Debt Coalition, Philippines

GAIA-Asia Pacific, Regional

Legal Rights and Natural Resources Center - Friends of the Earth Philippines, Philippines

Philippine Movement for Climate Justice, Philippines

Recourse, Global

The Indonesian Forum for Environment (WALHI), Indonesia

Nash Vek PF, Kyrgyztan

Japan Center for a Sustainable Environment and Society (JACSES), Japan

Urgewald, Germany



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