Calgary, Canada – Civil society representatives from Latin America recently attended the Inter-American Development Bank (IDB) Annual Meeting along with Amazon Watch to monitor progress of a new reform agenda adopted by the Bank last year and on which the Bank’s recapitalization is conditioned. The groups expressed concern that, although the Bank has moved forward on some commitments from the Cancun Declaration, much uncertainty remains in their implementation.
“We came to Canada to follow up on the Bank’s commitment to make internal reforms that would position it as a Bank of knowledge and a leader in critical challenges in the region like sustainability, inequity and a greater focus on climatic change,” said Manolo Moral of ECOLEX in Ecuador. “Unfortunately we still don’t see much improvement in the capacity of the Bank to internally coordinate a sustainable development platform in Latin America.”
During the IDB annual meeting in Cancun last year, the institution’s 48 member countries agreed to a capital gain increase of $70 million – the largest since the IDB was founded in 1959 – conditioned by the successful implementation of 13 reforms designed to improve the Bank’s lending effectiveness, transparency, environmental safeguards and implementation of a sustainable development agenda in the region.
The U.S. government, the majority shareholder with a 30 percent stake in the IDB’s capital, agreed this year to a capital increase, but declared that the Bank needs to improve its operations and safeguards.
“We are closely monitoring progress on the revision of the IDB’s response to the report by the Independent Advisory Group on Sustainability,” said Marisa Lago, Assistant Secretary for International Market and Development at the U.S. Treasury during her address at the closing session of the meeting. “This report contains a number of recommendations on how to strengthen implementation of the IDB’s environmental and social safeguards, and more broadly on how to promote sustainable development.”
“There’s still much work ahead to ensure a better bank,” concluded the human rights and environmental groups at the closing of the annual meeting.
Conclusions from the 2011 IDB Annual Meeting
Climate Change
The BID approved a Climatic Change and Renewable Energy Strategy for the Latin American region. Groups were concerned about how the Bank is defining ‘renewable energy’ and questioned how the Bank will mainstream its climate change focus, particularly in its private sector dealings.
“If the BID really wants to become a ‘green bank’ like President Moreno has expressed on numerous occasions, then it needs to invest in renewable energy industries in the region, including real investments in green technologies and efficiency and avoid large scale hydroelectric dams and other mega infrastructure projects that generate profound environmental impacts,” said Rosemarie Ávila of Derecho, Ambiente y Recursos Naturales in Peru.
Safeguards
The IDB’s new reform agenda includes the adoption and revision of the social and environmental safeguards of Bank-financed projects. The groups categorically agreed on the need to strengthen the Bank’s safeguarding functions, particularly in high-risk projects.
“The Bank seems serious about strengthening its safeguards and we’re seeing this in the increase of its staff in the unit. But just how the bank will mainstream these, especially in its private sector financing – where we see the bulk of social and environmental risks – still remains to be seen,” said Gonzalo Roza with the Centro de Derechos Humanos y Ambiente in Argentina.
Evaluation and Effectiveness of IDB Investments
An initial report was anticipated from the IDB’s Office of Evaluation and Oversight (OVE) at the Calgary meeting on the progress of the Bank’s recapitalization process, but leadership transition and other delays have delayed results.
Recent reports by OVE have pointed to a generally flawed project design process and deterioration in the evaluability of projects, despite positive comments from IDB Vice President Julie Katzman about the institution’s improvements in lending effectiveness during the Calgary meeting. Civil society groups question the way the Bank will be able to guarantee quality and results from future investments.
Participation
Civil society groups pointed to the lack of a standard public participation process across the Bank, claiming current processes are based more on personal style and circumstance than a common methodology.
“Unlike other multilateral banks, the IDB does not have a base line for carrying out consultations and this is a problem,” said María Lya Ramos of Amazon Watch. “The World Bank has a 13 step process with a clear feedback loop. The tendency inside the IDB is to not explain its decisions nor directly respond to serious feedback.”
The groups also pointed to a lack of clear participation at the Calgary meeting by Civil Society Consulting Groups (ConSOCs) created by the IDB to promote participation and interaction in countries where the Bank operates.
“Public participation is fundamental for a country’s development, and the voices of civil society about the Bank’s investments in the region need to be heard,” stated Mayra Tenjo, of the Instituto Latinoamericano para una Sociedad y un Derecho Alternativos, a member organization of the ConSOC in Colombia. “Yet a large number of the ConSOCs don’t know or aren’t interested in this, which points to the level of participation the Bank is supporting: light on analysis and reasoning.”
