What the Brics bank forgot in its rush to get going
This weekend marks the sixth annual Brics Summit, being held in Goa, India.
On the sidelines of the summit of Brazil, Russia, India, China and SA, academics, economists, environmentalists, social activists and human rights practitioners will discuss the bloc’s New Development Bank (NDB).
The NDB is a development bank established by the Brics countries to fund projects related to sustainable development and infrastructural development.
It was founded a mere two years ago but has already granted funding to all Brics countries for a variety of projects, despite only publishing its operational policies on August 30 this year.
Numerous calls for consultation on the development of the policies, and for the policies themselves to comply with human rights principles, have gone unanswered.
Policies are crucial in the realisation of aims; they ensure talk becomes action. The 14 policies developed for the NDB cover issues ranging from governance and procurement to environmental and social safeguards and disclosure.
Unfortunately, these policies fall short of ensuring the NDB will not contribute to environmental degradation and the violation of human rights.
Social concerns are the most under-considered feature of sustainable development by development financiers, corporations and governments. Inadequate provisions for social considerations can have devastating impacts on a country’s people, economy and environment.
It goes without saying that inadequate or nonexistent environmental considerations also have a devastating impact on society.
The NDB’s Environmental and Social Framework outlines its "approach to promote sustainable development in the area of environment and social management". It begins by stating that detailed procedure and guidelines will be developed over time subject to certain processes. So the framework does not in fact outline the NDB’s approach to promote sustainable development but is a statement of principles for the future development of principles.
Similarly, the framework provides that the NDB "integrates the principles of environment and social sustainability into its policies and operations". However, it does not define what the NDB understands to constitute "sustainability" nor does it indicate the manner in which such sustainability will be integrated.
It appears that the framework applies to the NDB and its stakeholders who are also not defined. It is not clear whether the term "stakeholder" includes communities affected by the project, which it no doubt should.
The framework further allows for variation in compliance with country systems. This is most unsettling. It leaves those adversely affected by projects with ambiguity on the applicable standards especially in cases where the impact may be across borders.
Furthermore, not all country systems comply with industry accepted standards for human rights compliance in development finance. This principle therefore leaves affected persons vulnerable not only to abuse but to ineffective or non-existent remedy.
In addition, relying on country systems has historically proved to be unreliable as some are weaker than others. Setting standards for operations is the crux of achieving the development that is environmentally and socially sustainable. The NDB makes a mistake by delegating this to country systems, which essentially prevents the framework from achieving its objectives.
The same can be said of the NDB’s interim information disclosure policy, explicitly intended to fulfil the objective of "promoting the highest levels of transparency, accountability and probity". Its guiding principles include transparency, accountability and confidentiality. The policy recognises the importance of disclosing information to stakeholders on a regular basis but, like the framework, does not define the term "stakeholders".
The policy also does not outline routes for recourse should such information not be provided in a regular manner nor does it state the point at which such information should become available. Use of the terms "timely" and "regular" present more of an interpretative obstacle than remedial solution.
The policy distinguishes between public and confidential information and that even where the information is classified as public, access to that information may be denied in exceptional cases. It undertakes to follow modern standards and best practices regarding project disclosure but is unclear about what these standards and practices are.
A reading of the policy leaves one feeling more confused than informed. Its vague mechanisms and processes for accessing information render it ineffective in fulfilling its objectives.
There is comfort in the fact that these policies are either foundational or interim, and they do not expressly exclude human rights considerations.
However, they do not provide a very positive picture of the policies which will set out mechanisms and procedures regarding information disclosure and an environmental and social framework.
SA’s Constitutional Court defines sustainable development as a three-legged pot, the legs of which are the economy, environment and society. The pot cannot stand if one of its legs is broken.
The NDB needs to take more seriously social and environmental matters and specifically provide for them and a clear, meaningful and practically implementable way.
Civil society will happily come to its aid to assist it in thinking about, expressing and providing for social and environmental impacts of development projects and intends to do so at the Brics’s meetings in Goa this week.
In our opinion, based on these policies, NDB has a long way to go before it walks the walk of sustainable development.
• Twala is a candidate attorney and Nyembe an attorney at the Centre for Applied Legal Studies. They write in their personal capacities.