18 November 2008
EBRD's Environmental and Social Policy came into effect on November 12, 2008. Projects approved past this date will have to meet higher diligence standards.
On November 12, 2008, EBRD’s new Environmental and Social Policy came into effect as planned, six months after it had been approved on May 12. Any new projects approved by the EBRD after this date will need to comply with the new policy which comes with important social safeguards and transparency provisions.
The Environmental and Social Policy 2008 will require EBRD clients to meet key social provisions such as specific labor standards, and also include social and cultural impacts in their due diligence procedures. The new policy extends performance requirements to financial intermediaries, and it strengthens consultation procedures as well as project disclosure procedures.
Unfortunately, the new policy coming into effect this month still carries vague categorization language, especially related to projects potentially falling under categories A and B. Categorization of recent EBRD projects – such as Pechora LLP project or investments in exploration activities that defer adequate due diligence to future phases – has been questioned by International Financial Institution watchers as well as environmental groups.
The policy will also be tested on ensuring free, prior and informed consent (FPIC) of Indigenous Peoples any time an EBRD project affects their interests. The policy recognizes the 2007 UN Declaration on the Rights of Indigenous Peoples and includes special measures to safeguard the rights of these communities. A closer look at the footnotes, however, reveals that the policy defines consent on page 55, as the agreement of an affected community “as to whether to become involved in the proposed project.” This definition seems to contradict the concept of safeguarding the rights of Indigenous peoples because if "consent" is defined in such limited terms, the implication is that the relevant Indigenous communities have little or no say in whether or not the project ought to be implemented, but rather only whether or not they will participate in the project. Current EBRD policy represents a significant improvement to the investment practices, but the policy's overall success would require vigilant civil society participation.
The Environmental and Social Policy 2008 is available in English and Russian and is expected to be translated into other languages of the region as well.
Resources
Environmental and Social Policy 2008 (EBRD website)
BIC’s EBRD Policies Page
BIC’s comments on draft EBRD Environmental and Social Policy, Bank Information Center (Acrobat pdf, 43 KB)