Sustainability on International Financial Institutions (IFIs)’ Investments

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Ricardo Rey Rivera Vásquez

Derecho, Ambiente y Recursos Naturales (DAR)

Coalición Regional por la Transparencia y la Participación

In order to conduct public consultations on IDB Invest’s social and environmental safeguards, in-person workshops are to take place this month in Colombia, Argentina, Panama and Jamaica, which have raised the expectations of those from civil society that are involved in the monitoring of this process. As IDB’s private sector arm, IDB Invest’s new social and environmental safeguards would apply to activities and operations funded by the bank, which was created to fund development in Latin America and the Caribbean.    

Whether it is about a process of “modernization” of its current policies and practices, or the “adoption” of new ones, IDB Invest has presented (published) a draft. This document incorporates 8 performance standards from the International Finance Corporation (IFC), which have been approved in 2012 and improved with the “2016 Social and Environmental Framework”, so that both instruments get along.     

Nonetheless, with respect to this process and the above-mentioned draft, one of civil society’s concerns is that of a “consultation without consulting” scenario. In that respect, it is necessary that IDB Invest not only incorporate such performance standards but also lessons learnt from their application (strengthening of operational policies and implementation).

In order to repeat funding experiences that affected human rights or displayed weak transparency, the President of the World Bank has himself pointed out such lessons’ importance. In cases of financial intermediaries, there was no application of safeguards in the operations and activities carried out by them.

Considering the great positive impact that well planned, evaluated and supervised investments’ sustainability has on closing gaps, as well as on creating opportunities for development, civil society’s demand includes the incorporation of two additional standards, particularly on gender and participation of communities and interested parts. Moving from a “compass of planning” to a “generation of benefits” is the purpose of those standards: in other words, moving from a “make no harm” declaration of good intentions to an effort for adequate implementation and an independent internal unit capable of fullfilling its tasks. In a context of weakening of national standards, international financial institutions’ (IFIs) safeguards, as well as their application, evaluation, and monitoring mechanisms, should ensure that investments are socially and environmentally friendly.

The recent and sad events in the Amazon, which threaten indigenous peoples, biodiversity and forests, have not only raised international interest in tackling climate change, including adaptation and mitigation measures, but also demands a high level of commitment from IDB group, as well as all multilateral banks, towards sustainable development.