Behind closed doors
BRICS Bank could approve first loans this week
05/07/2015- A presidente Dilma Rousseff embarcará nesta semana para Ufá, na Rússia, onde participará na próxima quinta-feira (9) da VII Cúpula do Brics, grupo formado pelos países emergentes Brasil, Rússia, Índia, China e Africa do Sul.Esta será a segunda viagem internacional da presidente nos últimos 15 dias. Na foto Da esquerda para a direita: Vladimir Putin (Rússia), Narendra Modi (Índia), Dilma (Brasil), Xi Jinping (China) e Jacob Zuma (África do Sul).
The New Development Bank of the BRICS (group formed by Brazil, Russia, India and South Africa) could make its first loans without holding a participatory process to create policies that ensure transparency and respect for the environmental and social standards of the financed projects, in conflict with the best practices adopted by multilateral financial institutions.
The decision on the loans is expected to be made at a closed-door meeting of the Board of Directors scheduled for April 13 and 14, in Washington DC. According to statements by the vice president of the New Development Bank (NDB), the Brazilian Paulo Nogueira Batista Junior, the first projects to be supported by the institution will focus on renewable energy, water supply, irrigation and sanitation, and they will be executed via national development banks, such as the BNDES (Brazilian Development Bank), or sovereign funds.
In general, multilateral development banks publish information on the projects under analysis months ahead of their approval. According to experts, the start of the NDB’s operations without any participation from civil society in the development of rules on environmental and social standards and on transparency would be unprecedented in the context of development agencies.
“Even the Asian Infrastructure Investment Bank, led by China with Brazil as a partner, approved an environmental and social policy with public consultations before operations began,” said Caio Borges, a lawyer for the Business and Human Rights program at Conectas. He explained that the NDB’s criteria are still “obscure”, which increases the chances of violations and material losses for the States and companies involved in the projects. “This is why we have insisted on the need for civil society and the communities affected by the investments to take part in the creation of these standards,” he added.
In a letter addressed to the Ministries of Finance and Foreign Relations, Brazilian movements and organizations expressed their “deep concern” with the news and asked Brazil to oppose the start of the operations until a human rights and an environmental and social safeguard policy has been developed, preceded by broad public consultation in the five countries that form the block.
In the document, the organizations claim that approving the loans now would conflict with two national statutes: Central Bank Resolution 4,327/2014 and the Budget Law of 2015. The first requires any financial institution operating in the country to create an environmental and social responsibility policy that involves consultation with stakeholders; the second obliges development agencies to “publish an annual report on the implementation of their environmental and social responsibility policies”.
In a letter sent to the president of the new BRICS Bank, K.V. Kamath, organizations from five countries stressed their concern that the bank is operating without meaningful engagement with civil society and that it appears to be selecting projects without the necessary policy framework to identify environmental and social risks and to prevent harm.
Click here to read the letter sent to the Brazilian ministries.
Click here to read the letter sent to the president of the NDB.
