A grievance mechanism is a formal, legal or non-legal (or ‘judicial/non-judicial’) complaint process that can be used by individuals, workers, communities and/or non-governmental sectors that are negatively affected by commercial activities. This issue will focus on the background, significance and international precedents of grievance mechanism setup to make it more accessible and further promote the practice of newly-established development financial institutions in setting up grievance mechanism.
This Alert is to introduce the latest development of AIIB, present opinions and suggestions raised for AIIB Environmental and Social Framework by various stakeholders and civil organizations and provide brief analysis on differences and similarities of safeguards among the current representative development financial institutions.
While the current safeguard policies have served the development community well by protecting the environment and the world’s poor and vulnerable in World Bank investment projects, the world has changed and new and varied development and environmental demands and challenges have arisen over time. The issues the borrowing countries face have shifted dramatically. The World Bank is now in the process of reviewing, updating and strengthening its environmental and social policies to keep pace with the changing times.
Development financial institutions play a vital role in the process of sustainable development. In this issue we present the responsibility of development finance in terms of environmental and social safeguard and provide the accountability mechanism of World Bank and Asia Development Bank as example.
By this mid-April, a total of 57 countries covering five continents have applied to join Asian Infrastructure Investment Bank. The AIIB will mainly invest in infrastructure construction.The AIIB charter will be signed before the end of June, 2015. The bank will feature a three-level management structure that includes a board of governors, board of directors and senior management with effective supervision mechanism to guarantee efficiency and transparency. Also, AIIB has showed their positive attitude towards learning and adopting global experience.
The China-led development banks are developing quickly, and will soon create additional financial flows to regional and global projects. These new platforms are likely to have a significant global impact, and therefore there is pressure on them to adopt high standards and appropriate safeguards. Earlier this year, the environmental ministers from the BRICS countries met and discussed the green economy and the prospect of creating a green fund within the BRICS New Development Bank. Last week, Britain applied to join the Asian Infrastructure Investment Bank (AIIB), and is likely to be followed by more EU countries like Germany, France and Italy.The pressure is now building on the AIIB to develop strong policies to govern its future operations.
