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"Safeguards"? Asian Development Bank

Release Date: 22-Jan-2008

The ADB has been mired in a scandal of depleted credibility, broken promises and slipping standards since October last year, with the unveiling of a new, inferior draft of proposed changes to the Bank’s new Safeguard policies.

Australian advocacy NGOs including Jubilee Australia have been taking action against this most recent Bank scandal in 2008, in the wake of a visit to Australia by the ADB Safeguards team at the end of January.

The problem is this: on reporting that the ADB would be redrafting its policy, the Bank made guarantees to civil society organisations around the world that the changed Safeguards would not weaken existing standards regarding the protection of environments and people living in proposed project areas.

A draft released in June 2007 made it seem as though ADB were sticking to their word, according to Oxfam Australia and representatives from British NGO, the Forest People’s Project.

The June draft had been worked upon by 5 experts in the fields of environmental protection, indigenous relations and involuntary resettlement for two years and looked likely to be a policy that could satisfy at least some of the demands of civil society with regard to Bank program activities.

Between June and October, as a result of interventions from Bank management, the policy was redrafted, greatly diluting the policy and removing many of the checks and balances that would have made it effective.

Four of the five members of the original drafting team resigned from the project in disgust: contrary to previous Bank promises, the new “safeguards” policy was merely an aspirational spiel incorporating a lot of ‘development friendly’ speak but ultimately offering next to nothing in the way of protection to communities in project affected areas.

Although the policies were not appealing to people or environment, they were much nicer to borrowers – therein providing the crux of the issue.

As middle income countries such as China and India broaden their position as creditor nations, regional development banks like the ADB that are structured along traditional OECD principles of conditionality and creditor control are losing market space.

The ADB is having a hard time finding relevance in the changing regional economy, and its panicked management are desperately looking to business mores rather than development needs to restructure its operations. Although Bank rhetoric from President and Board rejects this, the new Safeguards policy clearly demonstrates that the ADB is putting its own survival ahead of the fight against poverty, economic and environmental marginalisation in developing countries.

Civil society organisations across the Asia Pacific, and most recently here in Australia have refused the ADB’s invitation to consult on the October safeguards draft.

While the Bank has referred to the disengagement as a ‘boycott’, Oxfam Australia explains that this is not representative of their motives. In actuality, CSOs have simply decided not to consult with the Bank until there is something worthwhile to consult about. As the current draft does not meet the minimum standards that the ADB set for itself – not to weaken existing policy – civil society have decided not to meet Bank representatives until this problem is redressed.