17 August 2007
The Asian Development Bank has completed the consultation process on its draft Energy Strategy. Civil society organizations from throughout the region have called on the ADB to incorporate current international best practices in sector, and at minimum to adopt the principles of the Extractive Industries Transparency Initiative.
The Asian Development Bank is in the process of reviewing its energy policy. The consultation draft of the proposed strategy was released in English, Russian and Chinese, and was given a 60 day consultation period, which ended on July 27th. During this time, six consultations were held throughout the Asia region, in which BIC engaged with partners in the region as well as ADB experts. BIC submitted a set of comments in hopes that the new Energy Strategy will provide greater clarity on ADB project financing requirements, and better reflect current international best practices across the sector.
BIC’s comments focus on several main issues concerning the consultation process itself, the promotion of fossil fuel use, and governance and transparency.
Consultation Process -- With regard to the consultation process, BIC recommended that the ADB:
- disclose all the received comments;
- adopt a panel of independent experts to propose changes to the ADB draft;
- release the second draft or the strategy and provide a short comment period; and
- clarify the relationship of the Energy Strategy with ADB's existing Energy Policy.
In discussions with key ADB staff, BIC received a commitment that a summary of written submitted comments wold be posted along with explanations of whether they were incorporated into the draft or not, and if not, why. For the participants of the regional workshops, the ADB agreed to disclose meeting summaries. ADB also notified BIC that while a final draft will be released, there will most likely not be an opportunity to comment on it.
Fossil fuels -- BIC strongly urged ADB to stop supporting and accelerating the funding of fossil fuels in order to uphold the strategy’s goal of "meeting the energy demand in a sustainable way" towards a cleaner future.
We also advocated for a clear, quantitative, and qualitative action plan to reduce carbon emissions. This entails:
- greater investments in renewable energy;
- increase of internal capacity for carbon reduction;
- greater engagement with the private sector to promote low carbon activities; and
- a systematic approach to identifying low carbon alternatives in project financing.
Good governance and transparency -- The extractive industries sector must have specific governance requirements to ensure the protection of social rights and the environment. BIC urged the ADB to:
- adopt the recommendations of the World Bank’s Extractive Industries Review and the Canadian Government’s National Roundtable Discussions on Corporate Social Responsibility and the Canadian Extractive Sector in Developing Countries.
- adopt international best practices in transparency, such as the Extractive Industries Transparency Initiative (EITI) principles, and ensure their requirements within the Energy Strategy, should ADB continue to invest in fossil fuels.
While BIC was informed that it is unlikely EITI will be incorporated into the new Energy Strategy, a member of the Governance Division at the ADB notified us that an assessment of the applicability of the EITI to ADB operations is underway. The Governance Division hopes to complete the assessment by the end of the year and then make recommendations to the management regarding financing of extractive industries, especially EITI.
Finally, the following tentative schedule is likely to be used for finalizing the Energy Strategy:
15 August: Briefing by Drafting Team to VP Knowledge Management
29 August: Informal Board Seminar
15 September: Management Review Meeting
30 September: Management Approval
BIC’s comments on ADB’s Energy Strategy 24 Jul 2007 (Bank Information Center, Acrobat pdf, 62 KB)
Access ADB's draft energy strategy (ADB website)