European Development Bank: Backward Step on Rights – Draft Policy Would Weaken Protection

(London) – The European Bank for Reconstruction and Development’s (EBRD) new draft Environment and Social Policy would fail to weed out abusive development projects, seven human rights and bank watchdog organizations said today in a joint statement. The bank’s consultation on the draft policy closes on March 5, 2014. It then has an opportunity to revise the policy before sending it to the bank’s board for approval in the coming months.

The draft policy removes some existing safeguards that protect against rights violations and fails to include other safeguards necessary for people affected by projects for which the bank lends money, Accountability Counsel, Amnesty International, ARTICLE 19, CEE Bankwatch Network, Center for International Environmental Law, Centre for Research on Multinational Corporations (SOMO), and Human Rights Watch said.The groups urged the bank and its member countries to reconsider this backward step.

“The European Bank for Reconstruction and Development should have firm policies so that countries and businesses seeking the bank’s loans know they’re required to respect human rights if they wish to work with the bank,” said Jessica Evans, senior international financial institutions advocate at Human Rights Watch. “Instead of using this opportunity to make sure the EBRD lives up to its longstanding human rights commitment, it appears to be retreating on this commitment altogether.”

The groups urged the bank to use this opportunity to put policies and systems in place to ensure that it will take all necessary steps to prevent it from causing, contributing to, or exacerbating human rights violations.

Headquartered in London, the bank is owned by 64 countries and two European Union institutions. With a cumulative business volume of US$ 117 billion, it is designed to help build open market oriented economies and promote private and entrepreneurial initiative. The EBRD works in 34 countries in Central and Eastern Europe and the Middle East, and invests mainly in private enterprises. The bank is also revising its public information and project complaint mechanism policies.

The groups cited several concerns with the EBRD’s draft policy revisions, including that:

• The draft Environment and Social Policy (“the draft policy”)eliminates language that the “EBRD will not knowingly finance projects that would contravene country obligations under relevant international treaties and agreements related to environmental protection, human rights, and sustainable development;”
• While the draft policy recognizes the responsibility of business to respect human rights, it does not actually require its business clients to live up to this responsibility;
• The draft policy doesn’t require human rights due diligence to ensure that the bank does not support activities that will cause, contribute to, or exacerbate human rights violations. Existing environmental and social impact assessments rarely identify, assess, or address the full range of human rights impacts a project is likely to have, illustrating the importance of expressly requiring analysis of human rights impacts;
• While the draft policy provides that the bank would not knowingly finance projects that involve forced evictions contrary to international human rights standards, it does not require the bank to take all necessary steps to become aware of potential forced evictions in projects that it supports, and its requirements for resettlement are inadequate;
• The draft Public Information Policy does not commit the bank to disclose information on social and environmental appraisals of projects, as the presumption of transparency is undermined by an overly wide description of confidentiality, which would prevent disclosure in many cases; and
• The window of opportunity for people negatively affected by bank projects to make formal complaints is far too limited.

“Our research on two bank-financed projects in Romania and Serbia showed that the bank did not adequately assess the risk of human rights violations before approving projects and failed to put in place effective measures to protect communities,” said Audrey Gaughran, director of global issues at Amnesty International. “The cost of these failures was forced evictions that, in Romania, left entire families homeless in winter and, in Serbia, forced Roma to live in metal containers.”