‘Delivering Impact Together’ … unless things get complicated: EBRD Annual Meeting marked by shrinking civic space

Focus on human rights intensifies at EBRD Annual Meeting  

The European Bank for Reconstruction (EBRD)’s 33rd Annual Meeting in Yerevan was overshadowed by escalating human rights issues in several member countries. Civil society representatives from Georgia, protesting the newly introduced ‘foreign agent’ law aimed at repressing civic freedoms, expressed their fears about their government’s assault on democracy. Echoing these concerns, representatives from Kyrgyzstan highlighted the recent approval of similar regulations in their country, while representatives from Armenia sounded the alarm on multiple strategic lawsuits against public participation (SLAPPs) filed by mining companies aimed at silencing environmental activists. 

The EBRD claims to be committed to fostering economic progress and sustainable reconstruction in countries that uphold the principles of multi-party democracy, pluralism, and market economics. But critics argue that the bank’s actions don’t always match its words. Mariam Patsatsia, a community support coordinator at Georgian non-governmental organisation Green Alternative, highlights this discrepancy: ‘The EBRD’s commitment to its stated goals is inconsistent, resembling more of a pendulum swing than a steady progression. Georgia is a prime example of this. Having once represented a beacon of democracy in the region, it now risks collapsing into full-fledged autocracy. We hope to see the EBRD not only recognise the risks posed by these detrimental changes but also be prepared to respond effectively.’ 

During their meeting with civil society, the EBRD President and Board of Directors publicly recognised this lack of civic space as a significant risk and reaffirmed the importance of meaningful civil society engagement. Reflecting on these issues, several board members displayed a willingness to find solutions to how the EBRD can better address retaliation risks and improve its approach to public participation.  

At the Independent Project Accountability Mechanism (IPAM) sessions, one of the key presentations centred around the EBRD’s irresponsible withdrawal from the controversial Amulsar gold mine project in Armenia. In bilateral meetings with the Board of Directors, Armenian civil society representatives stressed the need for the EBRD to redress the harm caused by the project and to enhance its environmental and social safeguards. Their request for the bank to incorporate these lessons and prevent similar issues in future investments was met positively by members of the board. 

Pressure mounts on EBRD to stand up for human rights 

On the eve of the Annual Meeting, 60 civil society organisations released a joint statement offering straightforward recommendations on how the bank can effectively respond to increasing human rights risks. These action points include increasing the transparency of projects promoted by public-sector clients, proactively engaging with rights holders to inform due diligence and verify information provided by clients, assessing retaliation risks and developing an effective response mechanism, and committing to a shared responsibility to redress the harm caused by problematic investments. Their message was delivered to the EBRD President and relevant stakeholders during the public consultation session. 

While the EBRD has made concerted efforts to promote human rights by introducing different initiatives such as the Civil Society Steering Committee, the Just Transition Initiative, and the Better Work Uzbekistan programme, as well as advocating for policies that promote a safe space for civil society, much more needs to be done at the project level to safeguard human rights.  

There’s a clear mismatch between the EBRD’s aspirations and how projects are actually implemented on the ground, particularly when it comes to retaliation prevention and response (as seen in the Indorama project in Uzbekistan), seeking and considering stakeholder feedback (as in the Corridor Vc project in Bosnia and Herzegovina), and redressing the harm caused by problematic projects (as in the Amulsar project in Armenia or investments in grain and poultry producer MHP in Ukraine). To prevent these abuses from happening again, the EBRD must put its top-level commitments into action by strengthening its human rights due diligence and updating its policies. 

Sustainable infrastructure must be inclusive

The EBRD prides itself on its approach to the green economy, exemplified by its flagship Green Cities initiative, and is currently developing a new sustainable infrastructure strategy for the transport and urban sectors. At meetings with the President, Board of Directors and senior bank management, civil society participants provided constructive input on how to make EBRD investments in these sectors more inclusive and sustainable. Bankwatch has documented a critical mass of cases demonstrating the challenges facing EBRD projects on the ground, the need to adopt circular economy principles, and the urgency of decarbonising these sectors. 

A key concern raised by civil society participants was the need for the stronger integration of gender considerations into transport projects and municipal services. They stressed the importance of incorporating the EBRD’s measures and existing good practices into its investments to ensure women have access to reliable, safe and affordable public transport, which is crucial for supporting their role as carers and providing a gateway to economic, educational, and other opportunities. They also called for women and other vulnerable groups, such as people with disabilities as well as young and older people, to be included in the planning and design of projects that impact their daily lives. 

Rebuilding Ukraine: Smaller municipalities need more support 

In the aftermath of Russia’s full-scale invasion of Ukraine, the EBRD was prompt in establishing new programmes. Yet, despite being the main financial supporter of Ukraine’s reconstruction and development, the EBRD has failed to change its skewed approach to financing Ukraine. The fact is that the EBRD continues to primarily support large-scale projects overseen by corporate enterprises, agricultural holdings, and major cities. Notably, there are no projects in its Ukrainian portfolio specifically aimed at supporting smaller municipalities.  

Given its recent capital increase, it’s imperative that the EBRD overhauls its approach to financing Ukraine. Efforts should be directed at preserving environmental standards and addressing modernisation, recovery, and reconstruction needs at the local level. 

New Agribusiness Strategy: An opportunity to transform agri-food systems 

With the EBRD set to review its Agribusiness Strategy this year, Bankwatch’s recommendations were well received by the bank’s leadership. Although EBRD investments in the agribusiness sector between 2019 and 2023 helped increase agricultural production in its countries of operations, they failed to adequately address the challenges of food security and sustainable agribusiness.  

In Bankwatch’s view, the EBRD has the potential to transform agri-food systems through targeted investments and policy dialogue, implementing climate and circular-economy solutions, and enhancing environmental standards. 

Reporting neglects human rights impacts 

Last year, Bankwatch published a ‘forgotten annex’ to the EBRD’s 2022 Sustainability Report, highlighting a number of cases involving human rights violations in EBRD investments that were omitted from the official report and received no mention in the environmental and social performance documentation for these projects.  

Once again this information is notably absent from the 2023 Sustainability Report, which largely focuses on the EBRD’s efforts to ‘green’ the energy sector, industries, the financial system, and cities through direct investment, technical assistance, and policy dialogue 

Nina Lesikhina, policy officer at Bankwatch, highlights this significant transparency gap in the EBRD’s reporting: ‘None of the EBRD annual reports contain project-level information on environmental and social performance. In 2023, the Bank supported 464 individual projects, but we have no ex post evaluation information on the impacts of these projects, as implemented. Nor do we have any publicly available aggregated data, for example, on the effectiveness of stakeholder engagement, measures to reduce gender-based violence and harassment, or grievance redress mechanisms at the project level. The EBRD commits to upholding these standards and should report on them.’

The EBRD’s draft 2024 Environmental and Social Policy affirms that the bank will report annually on the environmental and social risks and impacts linked to its projects. Therefore, Bankwatch calls on the EBRD to ensure that all of its aggregated project data are carefully collected, analysed, and documented in its annual Sustainability Report. The EBRD must demonstrate that its investments not only bring green benefits but also uphold human rights as an ultimate development goal.