21 October 2021: Accountability matters – not only to provide justice to communities that have suffered harm as a result of projects, but also so that multilateral development banks (MDBs) can learn from mistakes and avoid repeating them. The world’s newest MDB, the Asian Infrastructure Investment Bank, recognises this, and this is why the bank established an accountability mechanism – the Project-affected People’s Mechanism (PPM) in 2019.*
Yet in AIIB’s six years of operation, after 142 projects approved and over $28 billion invested, the PPM has yet to receive a single complaint. A new report released today by Recourse and Urgewald – to coincide with the AIIB’s annual meetings which start next week – examines the possible reasons for this.
The report looked both at the AIIB’s current portfolio and also at policies guiding the scope and implementation of the PPM. It found that of projects funded by the AIIB to end of September 2021:
Report author Kate Geary of Recourse said, “The AIIB clearly has an accountability deficit, when its accountability mechanism does not apply to half of its portfolio. This leaves communities affected by AIIB’s investments no way to ensure AIIB is living up to its environmental and social commitments. We call on the AIIB to close accountability loopholes when it reviews the PPM.”
To ensure the AIIB significantly reduces its accountability deficit by making the PPM more accessible, the report recommends:
– Pre-conditions for affected people to file a complaint should be removed as a matter of urgency (for example, that an individual cannot file). Language on access must be clarified, for example regarding steps for affected people to approach local Grievance Redress Mechanisms and AIIB management before filing a complaint to the PPM. At present, this could be misunderstood and prevent people from filing.
– Moreover, communities should have the right to choose their representatives. Complainants benefit from the support of expert NGOs and representation is key to level the playing field between affected people and financial institutions. The more complicated policies are, the more expert knowledge is needed to file a complaint. At present, AIIB’s PPM says that complainants may only call on support from an expert group outside their country “in exceptional circumstances”.
– The PPM Policy has the provision to suspend a case if affected people seek remedy through legal means in parallel to a PPM complaint. There is no reason why negatively affected people should not seek legal avenues to claim their rights in addition to using the PPM. In this respect, the PPM has a depoliticising effect by forcing affected people to choose one avenue over the other to make their voices heard.
The AIIB has committed to review the PPM “within five years”. The report stresses that the promised review should not be limited to the PPM but also address the wider institutional conditions and related policies that affect AIIB accountability, to make sure that the AIIB can be held accountable effectively.
Report author Dustin Schafer of Urgewald said, “The PPM review must be open and transparent, involving not just other accountability mechanisms and MDBs, but NGOs and communities affected by AIIB projects. The AIIB should consult not only on the PPM policy but on the scope of the review, its timeline and the plan for consultation.”
FOR FURTHER INFORMATION PLEASE CONTACT:
Kate Geary, Recourse: email@example.com, +44 7393 189175
Dustin Schäfer, urgewald: firstname.lastname@example.org, +49 176 80511310
* Note to editors: The AIIB PPM is a mechanism to receive submissions from Project-affected people who believe they have been or are likely to be adversely affected by AIIB’s failure to implement its environmental and social standards (known as the ESP.) See: https://www.aiib.org/en/policies-strategies/_download/project-affected/PPM-policy.pdf