BRICS Bank

Meeting of civil society discusses challenges for the environmental and social agenda of the New Development Bank

On March 21 and 22, 2016, the Civil Society Strategy Meeting on the BRICS (group of countries comprising Brazil, Russia, India, China and South Africa) and the New Development Bank was held in São Paulo. The event was organized by Conectas Human Rights, Rebrip (Brazil Network for the Integration of Peoples) and Oxfam Brasil. The meeting was attended by some 30 representatives of organizations from India (Oxfam India and Accountability Counsel), Russia (Institute of Globalization Studies) and South Africa (CALS), in addition to members of the Secretariat of the global network Coalition for Human Rights in Development and the China-Latin America Sustainable Investment Initiative. Among the participating Brazilian organizations were Ibase, Heinrich-Boll Foundation, Action Aid, Articulação Sul, IR, Abia, International Accountability Project, BRICS Policy Center and GIP.

Since the announcement of the creation of the NDB (New Development Bank) in 2013, a number of civil society organizations have shifted their efforts to influencing the process of creating the new multilateral bank, with the intention of including in the processes of structuring the new institution a public and participatory discussion on the concept of development to be adopted by the bank, on the types of projects to be financed and on its transparency, socio-environmental and human rights policies, as well as its mechanisms for receiving complaints. At the BRICS summit in the Russian city of Ufa, dozens of organizations sent a letter to the BRICS countries with four principles for the NDB to promote a genuinely new, i.e. non-abusive, development model. To date, however, ahead of the approval of the first projects by the bank (scheduled for April), the mobilization of civil society has not found resonance in the actions of national governments or the bank itself.

The lack of information on the process of getting the NDB operational has prompted civil society to create strategic dialogue forums in order to demand transparency and guarantee that rights will not be violated by the bank and its borrowers. In addition to civil society organizations, this month’s event was also attended by representatives of the Ministry of Foreign Relations and the Ministry of Finance, who addressed issues such as the process of creating environmental and social policies and the possibilities of opening dialogue channels with civil society.

At the opening of the event, Otávio Cançado Trindade, head of the IBSA Forum and the BRICS Group division at the Ministry of Foreign Relations, gave an overview of the bank’s operations under the Russian presidency and some of the initiatives that will be taken during the Indian presidency. Cançado Trindade stressed that the NDB will be a “bank of projects” that will receive co-financing from private banks. He also explained that the bank will use the concept of sustainable development contained in international regulatory frameworks such as the 2030 Agenda for Sustainable Development.

The organizations from the five countries then shared their experiences engaging in advocacy with national and multilateral development banks. Adhemar Mineiro, of Rebrip, emphasized the importance of looking at the experiences of national development banks, such as Brazil’s BNDES. But he drew attention to the resistance of these institutions to more transparent and participatory processes. The attending organizations from the BRICS countries noted that the approval of the NDB by lawmakers was extremely quick and did not include any public consultations or debates. According to Boris Kagarlitskiy, from Russia, the debate on the BRICS and more specifically the NDB does not yet involve many players in the country. Paulina Garzón (China-Latin America Sustainable Investment Initiative) presented an overview of Chinese investments in Latin America and the safeguards policies of the Asian Infrastructure Investment Bank (AIIB).

As part of the goal of disseminating the debate on the New Development Bank with Brazilian society, the round table discussion “The New Development Bank poised for its first loan: challenges on the environmental and social agenda” was staged on the morning of March 22. The round table was held in the auditorium of the Getúlio Vargas Foundation’s Law School in São Paulo (FGV Direito SP). Moderated by Caio Borges, a lawyer from the Business and Human Rights project of Conectas, the speakers were: Komala Ramachandra (Accountability Counsel), Gretchen Gordon (Coalition for Human Rights in Development), Oliver Stuenkel (FGV-SP) and Paulo Esteves (BRICS Policy Centre).

In his presentation, Marcelo Lima, of the International Affairs Department of the Ministry of Finance, said that several NDB policies are currently being drafted and reviewed by the executive board. Lima shared the Brazilian government’s position with the other countries of the block on the importance for the bank to have a transparency policy. Gretchen Gordon expressed concern over the lack of information on the priorities of the NDB, which has not released its policies or the projects that are under review, and over the absence of a structure for the effective oversight of the financed projects. She also pointed out that a number of international financial institutions have already adopted a human rights approach to development and that the goals of the 2030 Agenda should be taken into consideration by the bank. Komala Ramachandra drew on her experience taking cases of communities affected by projects financed by the World Bank to complaint mechanisms (such as the Inspection Panel) to emphasize the insufficiency of establishing strong regulatory environmental and social safeguards. What is needed, she said, is to guarantee their effective implementation – a recurring flaw in projects financed by other multilateral banks. She also expressed the importance of the NDB having an independent redress mechanism that is aligned with the UN Guiding Principles on Business and Human Rights, which could make it a global example of accountability.

The final part of the two-day event was dedicated to the preparation of a short-term agenda of actions by civil society, aimed at ensuring that the governments of the five countries and the NDB itself employ a transparent and participatory process for the development of the bank’s strategic and operational policies, in particular its socio-environmental and transparency policies. The attention of the group is also turned to the 8th BRICS Summit, which will take place in Goa, India, on October 15 and 16, 2016.