Comparative analysis of the environmental, social and access to information regulatory frameworks

Comparative analysis

Environmental, social and acces to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

Comparative analysis

Environmental, social and acces to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

Comparative analysis of the environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America Author: Regional Group on Financing and Infrastructure, RGFI Constituted by: Asociación Ambiente y Sociedad (AAS) Derecho, Ambiente y Recursos Naturales (DAR) Fundar, Centro de Análisis e Investigación A.C. Fundación para el Desarrollo de Políticas Sustentables (FUNDEPS) Coordination: Beatriz Olivera Villa Collaborators: Agustina Palencia Beatriz Olivera Villa Ciro Salazar David Alejandro Cruz Prada Eduardo Alcalá Gómez Erick Mormontoy Mariana González Arnijo Valentín Estrada Saldarriaga Methodological Design: Eduardo Alcalá Gómez Mariana González Arnijo Cover, Design and Training: Marco Partida Fundar, Center of Analysis and Research Cerrada de Alberto Zamora, 21, Colonia Villa Coyoacán, Delegación Coyoacán, 04000 Mexico City, Mexico Editor: Derecho, Ambiente y Recursos Naturales (DAR) Jr. Huáscar N° 1415, Jesús María, Lima-Perú Teléfonos: 511 - 340 3780 | 51 1 - 3403720 Correo electrónico: dar@dar.org.pe Página web: www.dar.org.pe Design: Sonimagenes del Perú SCRL Av. Gral. Santa Cruz N° 653, Ofic. 102, Jesús María, Lima-Perú Teléfonos: 511 - 277 3629 | 511 - 726 9082 Correo electrónico: adm@sonimagenes.com Página web: http://sonimagenes.com First edition: July 2018, 1000 copies.

Partial or total reproduction of this book is allowed, as well as its computer processing, its transmition by any form or means, be it electronic, mechanical, through photocopies or others; with the necessary indication of the source when it is used in publications or dissemination by any means.

This book is possible by the support of Rainforest Norway Foundation, Coalición Flamenca para la Cooperación Norte-Sur 11.11.11., Charles Stewart Mott Foundation y la Coalición Regional por la Transparencia y la Participación.

This publication presents the views of the authors and not necessarily the vision of Rainforest Norway Foundation, Coalición Flamenca para la Cooperación Norte-Sur 11.11.11., Charles Stewart Mott Foundation y la Coalición Regional por la Transparencia y la Participación.

Table of Contents 1. Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3. Methodology for comparative analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.1 Objects of Study. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.2 Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.3 Reference type framework and evaluation instrument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3.4 Application of evaluation instrument and results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 4. General analysis of International Financial Institutions (IFIs) in LAC. . . . . . . . . . . . . . . . . . 17 4.1 General results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4.2 Results on Crosscutting Elements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 4.3 Results on Assessment of Environmental and Social Risks and Impacts. . . . . . . . . . . . . . . 20 4.4 Results on Access to Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4.5 Results on Participation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4.6 Results on Indigenous Peoples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 5. Results by financial institution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 5.1 International Bank for Reconstruction and Development, IBRD - World Bank. . . . . . . . . . 27 5.2 International Financial Corporation, IFC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 5.3 Inter-American Development Bank, IADB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 5.4 Inter-American Investment Corporation, IIC (Now IDB Invest) . . . . . . . . . . . . . . . . . . . . . . . . 38 5.5 Development Bank of Latin America, CAF-before Andean Development Corporation. . 42 5.6 National Bank for Social and Economic Development of Brazil, BNDES. . . . . . . . . . . . . . . . 44 5.7 China Development Bank, CDB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 5.8 Export-Import Bank of China, EIBC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 6. Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 7. Annexes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 8. References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

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Executive Summary As a result of several investigations1 carried out by the Regional Group on Financing and Infrastructure (RGFI, or GREFI in Spanish), the need to have a better understanding of the regulatory frameworks of the main International Financial Institutions (IFIs) present in Latin America, from a human rights perspective, has been detected. For this, it is necessary to pay particular attention to Chinese institutions with presence in the region and, specifically, to the issues of environmental and social impact and risk evaluation, access to information, participation and indigenous peoples.

For this purpose, the regulatory frameworks of eight IFIs were analyzed, categorized in traditional banking (4), with more than five decades operating in the region; emerging markets (2), with a significant increase in operations in the last decade; and Chinese banking (2), which currently has an important financial participation in the region.

IBRD-WB

International Bank for Reconstruction and Development – World Bank

IFC

International Financial Corporation

IADB

Inter-American Development Bank

IIC CAF BNDES

Inter-American Investment Corporation (Now known as IADB Invest) Development Bank of Latin America, before Andean Development Corporation National Bank for Social and Economic Development of Brazil

CDB

China Development Bank

EIBC

Export-Import Bank of China

The analysis of the regulatory frameworks of traditional, emerging and Chinese financial institutions is useful to have a greater understanding of their scope and differences, as well as to detect the main gaps and generate recommendations to strengthen the regulatory frameworks of the different institutions considered. The results obtained are primarily descriptive, as the analysis allowed to understand in greater detail the characteristics of each of the regulatory frameworks, as well as the most important differences between them.

For this study, five thematic areas were defined: assessment of environmental and social risks and impacts; access to information; participation; indigenous peoples and crosscutting 1 Particularly “Panorama del financiamiento para infraestructura en América Latina. ¿Cuál es el contexto regional en el que se inserta el Nuevo Banco de los BRICS?”, 2014 and “Panorama general de las inversiones chinas en América latina. Los casos de Argentina. Colombia, México y Perú.”, 2015.

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elements. An analysis instrument was constructed, with 149 variables that evaluate various categories within each of the thematic areas. The instruments provide a score of zero to one hundred in each axis, according to the degree of inclusion of the international regulatory frameworks referred to. Likewise, a general indicator is drawn up by bank, called the adequacy ratio (from which the ranking is derived), which is obtained by the simple average of the ratings obtained by the bank in each of the five thematic areas.

The main results obtained in the study report that two banks categorized as traditional, IBRDWB (86%) and IFC (64%), in addition to an emerging bank, CAF (62%) obtain the highest ratings.

Among institutions with a score that is lower than 50%, are two traditional banks, IADB (45%) and IIC (26%), one emerging bank, BNDES (17%), and two Chinese banks, EIBC (8%) and CDB (0%)2. An interesting finding is that only in the categories of traditional banking and emerging banking are institutions with a relatively high rating observed. In contrast, Chinese banks stand out with the lowest evaluations, according to the proportion of estimated adequacy. This is partly explained by the CDB bank, which does not obtain a qualification in any thematic axis, as, due to lack of access to its regulations, these are not known. (See the specific chapter on the CDB).

The scoring by thematic areas confirms that the banks have regulatory structures in which there is a certain consistency and balance. A high rating of a bank in one of these is associated, with a few exceptions, to high ratings in the rest. Among the most notable exceptions are the three banks with the highest rating in the ranking mentioned (IBRD-WB, IFC and CAF), where the thematic area of Access to Information obtains ratings that are significantly lower than those that each bank reaches in the other areas. This provides relevant information on the regulatory areas that need to be strengthened in these institutions.

In the regulatory frameworks of the eight banks analyzed, except the Chinese CDB, we identify crosscutting elements, that is, those that link in a general manner the four remaining axes3.

However, it is necessary to point out that only two traditional banks (IBRD-WB and IFC) obtain grades above 80% in this area, while others (IADB and CAF) are barely above 50%. Three (IIC, BNDES and EIBC), belonging to traditional, emerging and Chinese banking respectively, obtain even lower scores, consistent what these banks obtain in the rest of the thematic areas.

The assessment of environmental and social risks and impacts is the thematic area that is covered the most in bank regulations. Three of them (IBRD-IADB, IFC and CAF), the first two belonging to traditional banking and the third to emerging banking, have evaluations that exceed 85% compliance. However, in the remaining five institutions, the rating is less than 50%, which shows the regulatory lag with which these financial institutions operate, especially in the case of the institutions that make up Chinese banks and the Brazilian bank BNDES, which obtained the worst results, not exceeding 20% compliance with this component.

Access to information is usually included in the regulations of banks, but in the eight institutions, their level of inclusion is limited. Only two banks (IBRD-WB and IFC), both traditional banking, obtain a rating above 60%. With regards to the rest, although the subject of access to information is present, their score does not reach 50%. It is important to highlight that this is one of the most critical elements for Chinese banks. The scores obtained by the EIBC were only 2%. This is compounded by the impossibility of accessing the normative documents of the CDB, despite the formal requests that RGFI made, which in itself reflects the bank’s great difficulties with transparency and access to information.

2 3

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Despite having made several requests for information, it was not possible to access the Chinese regulatory framework of this institution, so throughout this analysis we assign it a score of zero in the corresponding evaluations.

The categories analyzed in this thematic axis were: conceptual clarity, compliance with national and international legislation, external counseling, institutional linkage and complementarity, and accountability. Further details can be found in the conceptual - methodological note of this analysis.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

In the same way, the thematic area corresponding to participation reaches a comparatively high rating only in the case of two banks (IBRD-WB and IFC). In one of them (CAF) it is slightly below 70%, and in the others it obtains values of less than 30% (IADB and IIC). It is necessary to point out that three banks, BNDES, CDB and EIBC, the first emerging and the last two Chinese, did not show evidence of compliance with international regulatory standards, resulting in a compliance score of 0%, on the grounds that they lack specific regulations that refer to the categories of the participation component.

Bank regulations regarding indigenous peoples is the most polarized category. Half of the banks have related norms and a high degree of inclusion, while the other half do not have internal norms regarding indigenous peoples. Three banks (IBRD-WB, IFC and IADB) are weighted above 85%, one (CAF) is qualified with 52%; and according to the regulations analyzed, IIC, BNDES and the Chinese banks do not pay any attention to the protection of indigenous rights.

Thus, we observe that the international financial institutions present in Latin America and the Caribbean have important gaps in crucial areas such as regulations on access to information, participation or indigenous peoples. It is not surprising then that the socio-environmental conflict related to the implementation of extractive megaprojects and / or infrastructure is increasingly constant in the region.

In the case of Chinese banking, it is lagging behind in all of the evaluation components of this analysis, with the most critical issues being aspects related to access to information, participation and indigenous peoples. The absence of regulatory frameworks on these aspects is one of the sources of conflict in investment projects in the Latin American region.

7 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

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Introduction

In this study, we develop a comparative analysis of the regulatory frameworks of the main international financial institutions (IFIs) present in Latin America and the Caribbean (LAC). Its objective is to have a better understanding of their scope and differences, including traditional banking, emerging banking and, finally, Chinese banking, which has an increasing presence in the region.

The policies of investment promotion in extractive megaprojects and infrastructure projects in the different countries of Latin America have generated important consequences and economic, social, and environmental impacts. In addition to this, foreign direct investment (FDI) flows continue to increase in the region. China’s FDI has doubled in the region since 20104, and at the same time the presence of the World Bank (WB) and the Inter-American Development Bank (IADB) continues to be a strong impetus for infrastructure development.

In addition, since 2014, the BRICS bloc (Brazil, Russia, India, China and South Africa) created the New Development Bank (NDB) with the purpose of mobilizing resources to finance infrastructure projects.

The National Development Bank of Brazil (BNDES) is a special case in the region. The growth of the Brazilian economy and the bank itself made it an instrument to boost the internationalization of Brazilian companies, which added an extensive international presence to its national operation, especially in Latin America. The bank has been questioned in the design and management of its projects and has been asked to implement better social and environmental policies, including those relating to participation and information, respect for the rights of affected communities and environmental impact, among others.

Something similar happens with the credit activity of Chinese banks. Between 2005 and 2016, the China Development Bank and the Export-Import Bank of China granted loans to countries of the region for more than 140,000 million dollars, surpassing the loans granted by multilateral banking. These loans were mainly directed to projects in the hydrocarbon, energy, infrastructure and mining sectors5. According to ECLAC (2015), the concentration of investments in these sectors has caused conflicts mainly due to weak regulatory frameworks, insufficient supervision of the same, absent or inadequate mechanisms for consulting local communities involved and lack of familiarity with the policy framework, among others.

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Panorama General de las inversiones chinas en América Latina: Los casos de Argentina, Colombia, México y Perú. Lima: GREFI, 2016. 236 pp.

China-Latin America Finance Database (2018). Available at: https://www.thedialogue.org/map_list/

Under this context of investment growth, there are serious tensions in LAC between infrastructure projects and human rights, the collective rights of indigenous peoples, respect for the environment; and commitments for sustainable development and climate change.

Regulatory frameworks and socio-environmental safeguards are necessary tools to require financial institutions to be responsible with their loans and investments in these areas.

In view of this situation, the Regional Group on Financing and Infrastructure (RGFI) developed this comparative analysis from a human rights approach, on the issues of assessment of socioenvironmental impacts and risks, access to information, participation and indigenous peoples.

The objective is to provide elements for the construction of strategies for advocacy directed at IFIs, and specifically in the national policies of the countries to which financing is granted and / or where IFI projects are carried out. Thus, this report intends to be a starting point for future analyses on the gaps between the written regulations and the implementation of the social and environmental policies of IFIs in the region.

9 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

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Methodology for comparative analysis In this section, we summarize the methodology used for the development of this study. However, for a detailed understanding of the methodological strategy used, we suggest reviewing the Conceptual-Methodological Notes “Comparative analysis of the environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America�, developed specifically to carry out this analysis.

3.1 Objects of Study As stated in the introduction, eight IFIs with an important presence in the region were defined for this analysis, taking into account the volume of loans and financed projects that they have in LAC countries. xx

International Bank for Reconstruction and Development, IBRD, commonly known as World Bank, which for the fiscal year 2016 approved $8,200 million USD to LAC, equivalent to 18% of its portfolio6. It is part of the World Bank Group.

xx

International Financial Corporation, IFC, which in 2016 destined $5,100 million USD to the region, which represents 27.4% of its portfolio7. It is part of the World Bank Group.

xx

Inter-American Development Bank, IADB, which only in 2016 approved 86 projects, for a total amount of $9.264 million USD, of which 40% was destined to infrastructure projects8.

xx

Inter-American Investment Corporation, IIC, which in 2016 approved 162 projects for a total of $2,237 million USD9. It is part of the Inter-American Development Bank.

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World Bank. (2016). 2016 Annual Report. Available at http://www.worldbank.org/en/about/annual-report, retrieved June 30, 2017.

International Financial Corporation. (2016). Annual Report 2016. Experience Matters. Available at https://www.ifc.org/wps/wcm/connect/bf1bfb0b-216b4cde-941b-dd55febe9d3a/IFC_AR16_Full_Volume_1.pdf?MOD=AJPERES, retrieved June 30, 2017.

Inter-American Development Bank. (2016). 2016 Annual Report. Summary of the year. Available at https://publications.iadb.org/bitstream/handle/11319/8218/ Informe-anual-del-Banco-Interamericano-deDesarrollo-2016-Resena-del-ano.pdf?sequence=3&isAllowed=y, retrievedJune30, 2017.

Inter-American Investment Corporation. (2016). 2016 Annual Report. Available at http://cdn.iic.org/sites/default/files/documents/pub/es/iic_ar16_sp_1.pdf, retrieved June 30, 2017.

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10

xx

Development Bank of Latin America, CAF, before the Andean Development Corporation, which approved 156 projects in 2016 for a total of $12,412 million USD, a record number since the creation of this institution10.

xx

National Bank for Social and Economic Development of Brazil, BNDES, which in 2016 decreased its disbursements by 35% compared to 2015, and even so provided financing for around $ 26.687 million dollars ($ 88.3 billion reais)11.

xx

China Development Bank, CDB.

xx

Export-Import Bank of China, EIBC.

xx

Regarding the two Chinese banks, their financing to LAC reached $ 21,000 million in 2016, the third consecutive year with record amounts from these two IFIs to the region, according to estimates12.

The IFIs have been classified into traditional, emerging and Chinese, according to the time they have been present in LAC with a significant portfolio of projects, and, in the case of the Chinese, the nationality. The traditional ones are those that for more than five decades have been actively involved in financing countries in the region. The emerging ones are those that in the last decade have increased their operations and diversified the countries where they carry them out. Finally, the Chinese banks are considered a separate category, because of the particularities mentioned above regarding their growing role as financing agents in the region in the last decade.

As for the way in which they are constituted, four of the institutions studied are multilateral banks, that is to say that their governing bodies are made up of representatives of the governments of the partner countries. These are public institutions, as public servants govern them. One of the institutions (CAF) is a hybrid of multilateral banking and private banking, since 59% of its partners are country governments, while the remaining 41% consists of private banks in the LAC region13. The remaining three are national development banks that respond to their countries of origin (Brazil and China), even when they have transnational operations.

In addition, the eight institutions studied here provide financing in the name of development.

However, of these, only one allocates resources to the public sector (IBRD-WB), two only to the private sector (IFC and IIC), while the remaining five finance both sectors.

These particularities have been considered in the elaboration of the methodological proposal, with the premise that regulatory frameworks must be robust and cover the same issues, regardless of whether the financing goes to the public or private sector, or if it is multilateral or state banking. Figure 1 describes the financial institutions analyzed in this study.

10 Development Bank of Latin America. (2016). 2016 Annual Report. Available at http://scioteca.caf.com/handle/123456789/1047, retrieved June 30, 2017.

11 BNDES. (2016). Performance in 2016. Available at https://www.bndes.gov.br/SiteBNDES/bndes/bndes_en/Institucional/Investor_Relations/performance_2016.html, retrieved June 30, 2017.The amount represents the total disbursement, which is not necessarily directed only to the LAC region.

12 Gallagher, K. y Myers, M. (2017) Chinese Finance to LAC IN 2016. China-Latin America Report. February 2017. The Dialogue Leadership for the Americas.

Global Economic Governance Initiative. Available at https://www.thedialogue.org/wp-content/uploads/2017/02/Chinese-Finance-to-LAC-in-2016-Weband-email-res.pdf, retrieved June 28, 2017.

13 CAF. (2017). Sobre CAF. Disponible en https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:11300:0::NO:11300:P11300_INSTRUMENT_ID:312314:NO. Recuperado el 28 de junio de 2017.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

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Figure. 1 Objects of Study

IBRD

IFC

IADB

IIC

CAF

BNDES

CDB

EIBC

1

2

3

4

5

6

7

8

International Bank for Reconstruction and Development

International Financial Corporation

Inter-American Development Bank

Inter-American Investment Corporation

Development Bank of Latin America

National Bank for Social and Economic Development of Brazil

China Development Bank

Export-Import Bank of China

(Usually know as World Bank)

• Traditional • Traditional • Multilateral development bank

• Multilateral development bank • Private sector

• Traditional

• Traditional (A part of

• Multilateral development bank

the IADB Group)

• Public and private sectors

• Public sector

• Multilateral development bank • Private sector

(before Andean Development Corporation)

• Emerging • Multilateral development bank

• Emerging

• Public and private sectors

• Public and private sectors

• Multilateral development bank

• Chinese/emerging bank • National development bank • Public sector

• Chinese/emerging bank • National development bank • Public and private sectors

Source: Prepared by the authors

3.2 Considerations The methodological proposal includes some considerations in order to limit the study and ensure its robustness. a) The study defines five thematic areas that correspond to issues that are considered critical when carrying out a project in any of the sectors. These areas are those that influence conflicts over territory, as well as violations of rights when implementing projects in the different sectors in the region: xx

Assessment of Environmental and Social Risks and Impacts (EIAS). This assessment represents one of the main tools to make decisions regarding a project. It allows identifying the possible environmental and social impacts and risks it could imply. On the other hand, it is one of the most important inputs for the consultation process and to obtain, or not, the consent of the individuals and communities that would be affected. This allows for the assessment of alternatives, as well as determining the necessary prevention, mitigation, management and monitoring measures.

xx

Access to information. Having complete, accessible, timely and free information is a human right. When considering projects, it is essential to ensure that everyone has access to information about them, in such a way that they can actively participate in the decisions over matters that impact them, as well as access justice. Likewise, access to information is an indispensable requirement to guarantee other rights, such as participation.

xx

Participation. This means both the possibility of actively intervening in the deliberative spaces of the entire project cycle, as well as influencing how the actions of public officials and the companies involved are controlled. Participation is essential for the processes of accountability, transparency and project monitoring. In order to be active participants,

12 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

people and communities must be able to organize themselves freely, communicate their opinions frankly and be well informed. xx

Indigenous peoples. Many of the extractive activities and projects carried out in the name of development in LAC are implemented in territories historically occupied by indigenous peoples and Afro-descendant communities. Oftentimes these territories coincide with areas that harbor a great quantity of natural resources14. This generates conflicts, as it is common for the collective rights of indigenous peoples to self-determination, consultation, prior, free and informed consent, and decision over their own development, among others, to not be respected.

xx

Crosscutting elements. We define this thematic area to include contents that cut across the previous four in a general manner.

International human rights standards were used to construct the evaluation instrument, in addition to the regulatory frameworks of two IFIs: IBRD and IFC. Figure 2 shows the regulatory frameworks and international reference standards by thematic area (See Annex 1). It should be noted that, when using the frameworks of these two institutions, it is not held that they are the most robust, nor that what they establish is fulfilled in practice. Their policies –with their weaknesses and strengths- have been taken, nonetheless, as references in this field. In the case of the IFC Performance Standards, these have been the basis for the Principles of Ecuador, subscribed by 90 private banks and financial institutions15. These establish that, for non-designated countries16, in addition to complying with them, financed projects must also comply with said norms.

Regarding the World Bank’s Environmental and Social Framework (ESF), reviewed and approved in August 2016, this analysis has incorporated it in the construction of the evaluation instrument, as over the years the IBRD has set the standard for the safeguard policies of other multilateral development banks17 (which means that these are the most complete). Although it has not yet entered into force, the new ESF was also taken into account as it will be the one to govern the different projects of this institution. This also seeks to ensure the validity of the comparative analysis18. It should be noted that the operating guidelines for the ESF, which contain important weaknesses, are still under discussion; more information is provided on this topic in section 5.9 of this analysis.

14 Inter-American Human Rights Commission. (2015). Pueblos indígenas, comunidades afrodescendientes y recursos naturales: protección de derechos humanos en el contexto de actividades de extracción, explotación y desarrollo. Available at http://www.oas.org/es/cidh/informes/pdfs/IndustriasExtractivas2016.pdf.

Retrieved June 28, 2017.

15 See the Ecuador Principles at: https://equator-principles.com./wp-content/uploads/2017/03/equator_principles_III.pdf; retrieved on June 27, 2017.

16 See designated countries at http://www.equator-principles.com/index.php/designated-countries, retrieved on June 27, 2017.

17 The IBRD began with its resettlement policies in 1980 and established the requirement of an Environmental Impact Assessment 120 days before the approval of a project, through what is known as the Pelosi Act. For more information see Clark, D. et al (eds) (2003) Right to Demand Answers. Claims of civil society before the Inspection Panel of the World Bank. Twenty-First Century Publishers.

18 World Bank. (2017). The Environmental and Social Framework. Available at http://pubdocs.worldbank.org/en/837721522762050108/Environmental-andSocial-Framework.pdf. Retrieved on June 29, 2017.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

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Figure 2. Regulatory frameworks and international reference standards, by thematic area

All documents

Environmental and social framework of the World Bank.

Social and environmental standard 1: Evaluation and management of environmental and social risks and impacts.

Performance standard 1 on Environmental and Social Sustainability: Evaluation and management environmental and social risks and impacts.

Also reviewed: Inter-American Human Rights Court. Saramaka vs Surinam. Excepciones preliminares, Fondo Reparaciones y Costas. Sentence dated 28 November 2007. C Series No. 172.

Model Inter-American Law on Access to Public Information.

Ibero-American Charter of Citizen Participation in Public Management.

International Financial Corporation policy on access to information.

Environmental and social framework of the World Bank. Social and environmental standard 10: Involvement of interested parties and disclosure of information.

World Bank policy on access to information.

Performance standard 1 on Environmental and Social Sustainability: Evaluation and management of environmental and social risks and impacts.

Convention 169 of the International Labor Organization on indigenous and tribal peoples.

United Nations Declaration on the Rights of Indigenous Peoples.

International Finance Corporation Performance Standard 7 on environmental and social sustainability: Indigenous Peoples.

Also reviewed: Aarhus Convention Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters.

Source: Prepared by the authors

The evaluation instrument was built using a rights approach based on practical requirements, and using the international standards as references. However, it does not evaluate the human rights narrative in the IFI regulatory frameworks, as they lack one, even though it has been demanded, without success, from civil society organizations19.

The variables that make up the evaluation instrument do not include those that from the start involve the implementation of a project. This is based on the principle that, for any type of project, in any sector, a consultation process must be guaranteed throughout its entire cycle; that is, from the beginning of the design, and prior to its approval. In addition, in the case of indigenous and Afro-descendant peoples, their prior, free and informed consent must be obtained before proceeding with the plans of any project.

14

19 See for example Coalition for Human Rights in Development http://rightsindevelopment.org/resource/3490/?Lang=en, retrieved on June 30, 2017.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

3.3 Reference type framework and evaluation instrument Associated with the thematic areas that make up the reference type framework, this study defines 24 categories of analysis. These account for the different considerations that, for each of the thematic areas, must be reflected in the regulatory frameworks of the IFIs. Following this, the study synthesizes the content of the analytic categories, as well as the proportion (in percentages) of variables that each category represents for the corresponding thematic area. The following table summarizes the thematic areas used, and the corresponding definition of each category: Table 1. Synthesis of the thematic areas and the definition of their categories.

Thematic Areas

Categories

Crosscutting elements

Assessment of Environmental and Social Risks and Impacts

Access to Information

Conceptual clarity

Scope of the evaluation

Compliance with national and international legislation

Social Requests for considerations access to of the evaluation information

Participation

Measures to Participation plan promote access to information

Indigenous Peoples Indigenous consultation

Public consultation Land and territory

External counseling Environmental Dissemination considerations of institutional of the evaluation information

Scope of participation

Institutional linkage and complementarity

Action plan

Dissemination of information at the project level

Representation

Accountability

Monitoring

Declassification Grievance mechanism at project level

Decision over their own development

Appeals Source: Prepared by the authors.

15 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

3.4 Application of evaluation instrument and results The evaluation instrument is composed of 149 variables (See Annex 2) in the form of dichotomous questions (1 = Yes, 0 = No). Figure 3 shows their distribution and their proportions (%) with respect to each thematic area. It is important to indicate that the variables are not weighted, that is; their value will be 1 in all cases in which the answer is positive, given that each of the thematic areas has the same weight.

Figure 3. Composition of the evaluation instrument

Crosscutting elements 13 % (19 variables)

Assessment of Environmental and Social Risks and Impacts 23 % (35 variables)

Access to information 30 % (45 variables)

Participation 19 % (29 variables)

Indigenous peoples 15 % (21 variables)

Source: Prepared by the authors

The methodological proposal for the application of the evaluation instrument was made through a double response scheme with cross verification. This means that, for the evaluation of the same IFI, two organizations completed the evaluation instrument, while a third organization carried out a cross-check of the answers, in order to identify inconsistencies in filling out the form, and to reach agreements on the variables to which contradictory answers had been given.

The aim was to provide greater solidity to the evaluation. As the application process of the instrument involved three parties, the personalization of the responses was reduced, and the results were contrasted to homogenize the reflections on each variable.

Finally, the results obtained are mainly descriptive, as the analysis allowed us to understand in greater detail the characteristics of the regulatory framework of each institution evaluated, as well as the most important differences between them.

16 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

4

General analysis of International Financial Institutions (IFIs) in LAC 4.1 General results

In this section, a general estimate of the average score obtained by each financial institution is made, once we have analyzed the different thematic areas together. For this, we use an indicator called adequacy ratio, through which the degree of regulatory adequacy of each financial institution is assessed with respect to the five thematic areas addressed in this study20.

The indicators show that most of the IFIs have regulatory deficiencies. In this regard, Figure 4 shows the score reached by each of them. The score is only greater than 50% in the IBRD-WB, IFC and CAF banks, the first two categorized as traditional banking and the last as emerging banking. It highlights the case of the IBRD-WB, whose score is the highest, because in general its regulatory standards reported to a large extent to be sufficiently adequate in accordance with the thematic areas analyzed. The remaining financial institutions, the IADB, the IIC and BNDES, obtained ratings below 50%. However, this contrasts with the low score obtained by the Chinese banks, in particular by the EIBC, whose rating was less than 10%, while for the CDB there was no evaluation due to lack of access to its regulatory frameworks. This situation is dealt with in detail in the section corresponding to the analysis by financial institution.

It is also necessary to point out that all of the banks analyzed take into account, to varying degrees, the Assessment of Environmental and Social Risks and Impacts21. In contrast, only half of them incorporate norms related to indigenous peoples (IBRD-WB, CFI, IADB and CAF).

Another worrying finding is that access to information is the area with the least degree of regulatory compliance by the IFIs. In general, it is observed that emerging banks, development banks and, in particular, Chinese banks present in Latin America and the Caribbean, operate with insufficient regulatory schemes to ensure the inclusion of international reference policies and standards. This is worrying given the large investment flows that the different IFIs are injecting into the region.

20 Cross-cutting elements, assessment of environmental and social risks and impacts (ESIA), access to information, participation and indigenous peoples.

21 With the exception of the CDB, whose regulatory framework was not possible to evaluate in its entirety.

17

Figure 4. Ranking of the adequacy ratio of IFIs in LAC

General Ranking of IFIs in LAC 100 90 80 70 60 50 40 30 20 10 0

IBRD-WB

IFC

IADB

Traditional banks

IIC

CAF

BNDES

Emerging banks

CDB

EIBC

Chinese banks

Source: Prepared by the authors, based on the comparative analysis of the regulatory framework of each institution

4.2 Results on Crosscutting Elements The thematic area related to the study of the cross-cutting elements of banking, includes the analysis of five categories: 1) Conceptual clarity, in which we evaluate if the regulatory documents specify the definitions related to the assessment of environmental and social risks and impacts, access to information, participation, and indigenous peoples; 2) Compliance with national and international legislation, through which we assess whether the regulatory frameworks establish the obligation to align the compliance of projects with the national regulatory framework, and with commitments acquired at the international level; 3) External counseling, in which we evaluate whether the regulatory documents establish considerations on the accompaniment of independent specialists within the framework of a project; 4) Institutional linkage and complementarity, in which we assess whether regulatory documents explicitly establish the alignment, collaboration and / or linkage with government institutions and agencies within the framework of a project; and 5) Accountability, which assesses whether the institution has an independent accountability mechanism and updated policies in this regard.

18 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

Figure 5. Categories of the Thematic Area on Cross-cutting elements

CATEGORY

Crosscutting elements

PROPORTION OF VARIABLES

Conceptual clarity

Compliance with national and international legislation

External counseling

Institutional linkage and complementarity

Accountability

26%

16%

26%

21%

11%

Source: Prepared by the authors

In this thematic area all the institutions except the EIBC establish that the client must comply with the national legislation and international standards adopted by the country where the project will be carried out. The highest scores corresponded to traditional banking, and tended to decrease towards significantly lower ratings in emerging banking and towards the lowest standards in Chinese banking. The normative disparities in this area are evident since only two banks, IBRD-WB and IFC, both belonging to traditional banking, reach scores close to 90%. For the rest of the banks, the rating is lower than 60%, and among them are the Chinese banks, with a score of less than 20%. The exception is CAF, which in this indicator reaches a score of 53%, similar to the IADB, which in both cases is far from optimal. Figure 6 schematically shows the proportions reached for this thematic area by each of the IFIs.

Figure 6. Proportion of adequacy of each financial institution in the thematic area of “Cross-cutting elements”

Proportion of IFI compliance for “Crosscutting elements” 100 90 80 70 60 50 40 30 20 10 0 IBRD-WB

IFC

IADB

Traditional banks

IIC

CAF

BNDES

Emerging banks

CDB

EIBC

Chinese banks

Source: Prepared by the authors, based on the comparative analysis of the regulatory framework of each institution

19 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

4.3 Results on Assessment of Environmental and Social Risks and Impacts The thematic area corresponding to the assessment of environmental and social risks and impacts includes the analysis of five categories: 1) Scope of the evaluation, in which we evaluate if the regulatory documents establish if the evaluation is applied in all the phases of the project cycle, if alternatives to the project are considered, if risks and impacts that cross physical borders are considered, among others; 2) Social considerations of the evaluation, in which we evaluate the social aspects included in the regulatory documents that allow a more robust evaluation of risks and impacts; 3) Environmental considerations of the evaluation, in which the environmental aspects included in the regulatory documents are evaluated; 4) Response plan, in which we measure if the regulatory frameworks require a plan to implement and comply with the evaluation of risks and impacts, and if, in addition, those frameworks characterize said plan; and 5) Monitoring, in which we evaluate whether the regulatory documents include processes and mechanisms for monitoring the activities of the response plan, its fulfillment, and the evaluations and audits of its results.

Figure 7. Categories of the Thematic Area on Evaluation of Risks and Social and Environmental Impacts

Assessment of Social and Environmental Risks and Impacts

CATEGORY

Reach of the Evaluation

Social Considerations of the Evaluation

Environmental Considerations of the Evaluation

Response plan

Monitoring

PROPORTION OF VARIABLES

34%

17%

9%

17%

23%

Source: Prepared by the authors

In this section, it is important to remember that ILO Convention 169 specifies the obligation of State parties to carry out studies in cooperation with the peoples concerned, in order to assess the social, spiritual and cultural impact, and the impact on the environment that planned development activities may have on these peoples22. The foregoing represents an obligation for the States that have ratified said Convention23 and in whose territories projects are carried out with IFI investment.

The assessment presented here shows that only three of the eight banks considered contemplate in a significant manner the incorporation of regulatory tools related to the assessment of environmental and social risks and impacts. The banks that achieve the highest ratings are IBRD-WB, IFC and CAF, the first two categorized as traditional banks and the third as emerging banking. In this case, the IBRD-WB achieved 100% compliance while at the opposite extreme the BNDES, CDB and EIBC obtained a rating equal to or less than 20%.

20

22 Article 7.3, Convention 169.

23 In Latin America, the countries that have ratified ILO Convention 169 are: Argentina, the Plurinational State of Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Guatemala, Dominica, Honduras, Mexico, Nicaragua, Paraguay, Peru and the Bolivarian Republic of Venezuela.

See http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:11300:0::NO::P11300_INSTRUMENT_ID:312314

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

The results on the asessment of environmental and social risks obtained in this section are worrisome, given the poor compliance with regulations of five of the banks (IADB, IIC, BNDES, CDB and EIBC), among which, again, Chinese banking stands out with the lowest levels in the evaluation. Figure 8 shows the results for all of the institutions analyzed.

Figure 8. Proportion of compliance per financial institution for the thematic area “Evaluation of Risks and Social and Environmental Impacts”

Proportion of IFI compliance with “Assessment of Social and Environmental Risks and Impacts” 100 90 80 70 60 50 40 30 20 10 0

IBRD-WB

IFC

IADB

Traditional banks

IIC

CAF

BNDES

Emerging banks

CDB

EIBC

Chinese banks

Source: Prepared by authors, based on the comparative analysis of the normative frameworks of each institution

4.4 Results on Access to Information The thematic area relative to access to information includes the analysis of six categories: 1) Measures to promote access to information, in which we evaluate if the regulatory documents include basic principles to guarantee access to information24; 2) Requests for access to information, in which we assess whether the regulatory documents clearly indicate the procedures to receive, confirm and respond to a request for information; the means to request it and the deadlines to respond and request extensions, among others; 3) Dissemination of institutional information, in which we analyze if the regulatory documents establish that the institution is to proactively disclose information about its internal processes; 4) Dissemination of information at the project level, in which we examine whether the regulatory documents establish that the institution is to proactively disclose information about its projects; 5) Declassification, which examines whether regulatory documents define deadlines for publishing information that was once on the list of exceptions, and whether the process for publishing historical information of the institution is indicated; and 6) Appeals, in which we analyze if the regulatory documents define procedures, terms and institutional figures, to respond to the disagreement of a soliciting person if they are denied information.

24 Principles considered: classification of information; translations into local languages; contacts within the institution; staff training; monitoring of policy compliance, and lists of exceptions, among others.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

21

Figure 9. Categories of the thematic area on Access to Information

CATEGORY

Access to Information

PROPORTION OF VARIABLES

Measures to promote Access to Information

Requests for Access to Information

Dissemination of Institutional Information

Dissemination of Information at the Project Level

Declassification

Appeals

22%

33%

7%

13%

7%

18%

Source: Prepared by the authors

Based on the analysis of the aforementioned categories, the evaluation reported that only two institutions, the IBRD-WB and the IFC, both in the traditional banking category, achieve a compliance rating of 64%; the IADB obtains almost 50%, while the remaining five banks obtain less than 30%. In this case, Chinese banks obtain very low scores (barely 2% for the EIBC and zero for the CDB), which indicate a very high degree of noncompliance with international normative standards. The thematic area related to access to information shows the same trend described in other categories, where the highest levels of compliance are found in traditional banking, the intermediate ranges in emerging banking and the lowest evaluations correspond to Chinese banking. However, it is necessary to emphasize that, within the traditional banking system, the IBRD, the IADB and the IIC are the only institutions that establish norms regarding the declassification of information; others are remiss in this section.

The only positive aspect of the EIBC regarding access to information has to do with the need to implement and maintain a project-level mechanism to receive and record external communications from the public, a measure that includes all of the institutions analyzed, except the BNDES. Figure 10 shows the results for all institutions examined.

Figure 10. Proportion of the compliance of each financial institution with the thematic area “Access to Information”

Proportion of IFI compliance with “Access to Information” 100 90 80 70 60 50 40 30 20 10 0

IBRD-WB

IFC

IADB

Traditional banks

IIC

CAF

BNDES

Emerging banks

CDB

EIBC

Chinese banks

Source: Prepared by the authors, based on the comparative analysis of the normative frameworks of each institution

22 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

4.5 Results on Participation The thematic axis regarding access to participation includes the analysis of five categories: 1) Participation plan, in which we evaluate whether the regulatory documents indicate the requirement to draw up a participation plan and to allocate resources to execute it; 2) Public consultation, which examines whether regulatory documents consider and characterize public consultation processes; 3) Scope of the participation, in which we analyze if the regulatory documents indicate the implications of the participation processes in decision-making related to a project; 4) Representativeness, which assesses whether regulatory documents include the requirement of equitable participation, accessibility and inclusion of disadvantaged groups, and respect for the institutions and actors that represent the communities; and 5) Grievance mechanism at the project level, in which we analyze whether the regulatory documents indicate the requirement and the characteristics of a mechanism to identify, attend and follow up on the needs, concerns and disagreements expressed by communities.

Figure 11. Categories of the thematic area on Participation

Participation

CATEGORY

Participation Plan

Public Consultation

Scope of the Consultation

Representation

Grievance mechanisms at a Project Level

PROPORTION OF VARIABLES

11%

29%

14%

14%

32%

Source: Prepared by the authors

For this axis, the policy of complying with international regulatory standards is consistent within banks. The regulations of IFIs regarding participation receive a relatively high evaluation: 69% or more, in the case of IBRD-WB, IFC and CAF. For the rest of the banking sector, the indicator of less than 30% shows the scant attention paid to this aspect. It is worth noting that the IADB Group has a low score on this thematic axis while that of the IIC is even lower, barely 10%. The large participation gaps shown by BNDES, the EIBC and the CDB, whose score was zero, are striking. Once again, this shows regulatory deficiencies in the case of the Chinese and Brazilian banks. Figure 12 shows the results for all of the institutions analyzed.

23 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

Figure 12. Proportion of compliance of each financial institution with the thematic area of “Participation”

Proportion of IFI compliance with “Participation” 100 90 80 70 60 50 40 30 20 10 0

IBRD-WB

IFC

IADB

IIC

Traditional banks

CAF

BNDES

Emerging banks

CDB

EIBC

Chinese banks

Source: Prepared by the authors, based on the comparative analysis of the normative frameworks of each institution

4.6 Results on Indigenous Peoples The thematic area relative to Indigenous Peoples includes the analysis of three categories: 1) Indigenous Consultation, which refers to the variables that indicate whether regulatory documents contain the elements and characteristics that must be fulfilled in an indigenous consultation; 2) Land and territory, in which we assess whether the regulatory documents specify the respect for the use of land by indigenous peoples, their uses and customs, their heritage, and the natural resources of their territory; and 3) Decision on their own development, which examines whether the regulations explicitly respect the decisions of indigenous communities regarding their own development.

24 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

Figure 13. Categories of the thematic area on Indigenous Peoples

CATEGORY

Indigenous peoples

Indigenous consultation

Land and Territory

Decision over their own Development

52%

34%

14%

PROPORTION OF VARIABLES

Source: Prepared by the authors The regulations of banks in matters of indigenous affairs are the most polarized. Half of the banks have relevant norms and a high degree of inclusion25, while the other half does not have internal regulations on indigenous issues. They include the IBRD-WB, IFC, IADB and CAF banks, all with a rating of 52% or higher. At the other extreme, the Chinese banks, the IIC and the BNDES do not address the protection of the rights of indigenous peoples. Figure 14 shows these results.

Figure 14. Proportion of the compliance of each financial institution with the axis of “Indigenous Peoples”

Proportion of IFI compliance with “Indigenous Peoples” 100 90 80 70 60 50 40 30 20 10 0

IBRD-WB

IFC

IADB

Traditional banks

IIC

CAF

BNDES

Emerging banks

CDB

EIBC

Chinese banks

Source: Prepared by the authors, based on the comparative analysis of the normative frameworks of each institution.

25 This statement refers only to the analysis of regulatory documents, not to the implementation of the projects. It is necessary to recognize that there is a gap between regulations and the application of regulatory instruments.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

25

The omissions of these banking institutions regarding the rights of indigenous peoples are worrisome, considering the high number of socio-environmental conflicts caused by development and infrastructure projects in the region. In this regard, the Inter-American Commission on Human Rights26 reported having observed a notable increase in the information received, individual petitions and precautionary measures regarding human rights violations committed against indigenous peoples in the context of development, investment and extraction projects27. Along the same lines, according to the United Nations Special Rapporteur on the rights of indigenous peoples, “the commodification of the land caused by these practices constitutes an attack on indigenous cultures and on the importance that land has for them”28.

It is essential that in projects whose investment comes from the IFIs present in the region -whether development banking, Chinese or emerging banking- the standards on the right to participation and prior consultation of indigenous peoples are respected. One of the most relevant instruments is ILO Convention 169 on Indigenous and Tribal Peoples, which contemplates the right of indigenous peoples to decide their own priorities in relation to the development process. It also includes the right to “participate in the formulation, application and evaluation of development plans and programs that may affect them directly.”29 Another relevant standard is the United Nations Declaration on the Rights of Indigenous Peoples, which constitutes a regulatory reference that should be considered in development policies and projects30. By not having its own regulatory framework that adheres to international standards, Chinese banks, the BNDES and the IIC are making very serious omissions.

In addition to adherence to international standards, it is important that the IFIs integrate in their actions the “Human rights approach to development”31. This methodology implies ensuring the participation of intended beneficiaries in the design, implementation, monitoring and the evaluation of all development projects or decisions that affect them32. This approach in turn establishes that in all development projects it is necessary to ensure a particular emphasis on the groups that are most vulnerable, to prevent those who have been traditionally marginalized from being left out of the benefits or suffering negative consequences33. In the same sense, the Guiding Principles on Business and Human Rights establish the independent obligation of companies to respect the rights of indigenous peoples recognized in international human rights law.

Thus, both internationally and regionally, there is a robust framework for the protection of indigenous peoples related to the implementation of development projects, which States must enforce.

26

26 Report: “Las mujeres indígenas y sus derechos humanos en las Américas”, available at http://www.oas.org/es/cidh/informes/pdfs/MujeresIndigenas.pdf 27 Op. Cit. Párrafo 99. http://www.oas.org/es/cidh/informes/pdfs/MujeresIndigenas.pdf 28 Op. Cit. [Citado en Naciones Unidas, Informe de la Relatora Especial sobre los derechos de los pueblos indígenas, Victoria Tauli Corpuz, 6 de agosto de 2015, A/ HRC/30/41, párr. 15].

29 Article 7.1, ILO 169 Convention. Similar regulation in articles 20 and 23 of the UN Declaration on the Rights of Indigenous Peoples.

30 See González, M. y Del Pozo, E. El derecho a la participación y a la consulta en el desarrollo. Retos para México. p. 16.

31 Metodología desarrollada por la oficina del Alto Comisionado de las Naciones Unidas para los Derechos Humanos. Available at: https://www.ohchr.org/Documents/Issues/Development/RTDBook/PartIIChapter8.pdf 32 Los Derechos de los Pueblos Indígenas en México: Una mirada desde los Organismos del Sistema de Naciones Unidas. p.9. Available at: http://www.hchr.org.mx/index.php?option=com_content&view=article&id=594&catid=17&Itemid=278 33 Op. Cit. p. 15.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

5

Results by financial institution

5.1 International Bank for Reconstruction and Development, IBRD - World Bank In this section, we analyze the new Environmental and Social Framework (ESF), developed after a review and consultation process that was carried out from 2012 to 2016. At the time of preparing this report, a transition process was taking place between the application of the old standards and those of the new ESF, in force from 2018. In order to understand this policy change context, it is necessary to include some comments and concerns that emerged from the review and construction process of the new safeguards.

After analyzing this new set of norms, some civil society organizations34 pointed out that the new World Bank ESF eases some fundamental issues, and that it would lead to the financing of projects that would put at risk the environment, and the human rights of peoples and communities of member countries. Although the ESF represents an advance in some aspects related to the inclusion of children’s rights and rights for contract workers, in other aspects the standard does not express with sufficient clarity some of its procedures and requirements.

Some considerations with regards to the new ESF of the World Bank: xx

The process of reviewing safeguards was a consultative exercise that practically did not take into account the recommendations of civil society organizations. These organizations protested the lack of dissemination of information and the lack of timely translation of documents of importance to the multiple languages that the bank dominates.

xx

The new ESF lacks a human rights approach and avoids explicit references to international standards in this area. Although it has been a constant of the norms (of this and other banks) to avoid an explicit reference to international standards in Human Rights, the review

34 The following communiquĂŠs and analyses of the EFS drafts can be consulted: Civil society declaration on World Bank safeguards (2014): http://www.fundar.org.mx/mexico/pdf/sociedadcivilsobrelassalvaguardasdelBancoMundial.pdf; Positioning of civil society organizations in Latin America and the Caribbean on the second draft of the new Environmental and Social Framework of the World Bank (2015): http://fundar.org.mx/posicionamientode-organizaciones-de-la-sociedad-civil-de-america-latina-y-el-caribe-sobre-el-segundo-borrador-del-nuevo-marco-ambiental-y-social-del-bancomundial/; Preliminary analysis of the New Draft Environmental and Social Framework of the World Bank by Bank Information Center (BIC) (2015):

27

process represents a lost opportunity to integrate these into the regulations that will govern during the coming years. xx

The new framework does not establish precise deadlines or criteria or obligations that allow the environmental and social risks of projects to be evaluated and managed. The use of ambiguous language does not allow a clear analysis of these questions, and leaves doubts about the way in which the IBRD-WB will guarantee that projects will ensure participation in the informed consultations.

xx

Loan modalities such as Development Policy Loans (DPLs) and financing through Programs for Results (PforR) are excluded: There has also been a constant failure to incorporate these modalities of loans in the application of environmental and social standards. This is important because significant amounts of the bank’s capital are allocated to this type of financial support.

xx

Due diligence by the bank is excluded since, by opening up the possibility for borrowing governments to request to use their own safeguard systems at the national level, it is easier to transfer responsibility for the application of safeguards to governments and not to the Bank. Clarity is needed on how the use of one or another social and environmental framework will be determined.

xx

There are implementation problems because, although World Bank regulations comply with many of the elements evaluated in this report, there are concerns about possible conflicts in the implementation of regulations for the different projects it develops. It is necessary to constantly monitor the implementation of environmental and social standards in projects to assess their effective degree of compliance.

The IBRD-WB obtained relatively high scores in this evaluation, since its regulatory frameworks explicitly establish the obligation to align and comply with the national regulatory framework of the countries where the projects are carried out, as well as with the commitments acquired from the standards35. However, as already explained, they do not make explicit reference to international human rights standards.

In terms of the assessment of socio-environmental risks and impacts, the bank’s regulatory framework establishes the obligation for its clients to carry out an environmental and social evaluation of the project throughout its life cycle. It also establishes that said instrument will evaluate in an integrated manner all of the relevant direct, indirect36 and cumulative environmental and social risks and impacts throughout the project37.

The regulation establishes that the environmental and social assessment will be based on updated information, which must include the precise description and delimitation of the project and all related aspects, as well as environmental and social reference data with a sufficient level of detail to characterize and identify, with information, the risks, impacts and mitigation measures38. The evaluation will estimate the potential environmental and social risks and impacts of the project, examine alternatives to it, and identify ways to improve the selection, location, planning, design and implementation of the projects, in order to apply a mitigation hierarchy for adverse environmental and social impacts, and to look for opportunities to improve the positive impacts of the project39. Likewise, the regulations require a response plan for environmental and social risks and impacts, which will be part of a legal agreement40.

A worrisome aspect in this matter is that the regulation establishes that, in high risk or contentious projects, or that involve risks or serious impacts in multiple dimensions, the

28

35 Environmental and Social Framework. p. 1, parr. 4; p. 31, parr. 26.

36 An indirect impact is an impact that is caused by the project and occurs after more time or greater distance than a direct impact, but which is reasonably foreseeable anyway, and does not include induced impacts.

37 Environmental and Social Framework. p. 24, párr. 23.

38 Environmental and Social Framework. p. 30, párr. 2.

39 Environmental and Social Framework. p. 30, párr. 24.

40 Environmental and Social Framework. p. 34, párr. 36.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

client or borrower will hire independent specialists to carry out the environmental and social evaluation41. The mere fact that the borrower hires them already raises serious questions about the valuations and independence of the specialists. In the same sense, it is striking that the regulations specify that those who execute the projects (the borrowers) will also be those who supervise their environmental and social performance42.

Regarding access to information, the regulatory framework includes among its considerations basic principles to guarantee it43. Regarding access requests, the regulatory documents indicate the procedures to receive, confirm and respond to a request for information, as well as the means to request it and the deadlines to respond, but do not establish the deadlines for requesting extensions44. Another aspect that should be highlighted is that the regulations do not consider that requests can be made anonymously or without justifying the reasons why the information is requested. Nor is it explicit what the internal procedure to follow up on an application is, nor is it indicated which is the instance in charge. The documents do not consider that the answer must be delivered in the language in which it was requested or that public versions of the documents that are in the exceptions regime may be prepared. The regulation also does not consider monitoring the compliance with the institutional policy on access to information. On the other hand, the documents analyzed affirm that the financial information will not be publicly accessible, and do not define the importance of divulging information45.

With regard to the projects, the regulatory documents establish that the institution must proactively disclose the results of the consultation, the environmental and social impact evaluation, updated information on each project and that the client must implement a projectlevel mechanism to receive and record the external communications of the public46. However, the IBRD does not include the importance of disclosing a summary with information on the investment before the approval of a project. Although in its regulatory documents it does define procedures, deadlines and institutional figures to respond to the dissatisfaction of the applicant if denied information, it does not mention that the entity in charge of receiving the appeals must make reasonable efforts to help the applicant.

With reference to participation, the IBRD considers and describes public consultation processes. However, its regulatory documents do not specify the availability of resources that the borrower must have to encourage participation and specifically guarantee the necessary conditions for its effective exercise. In the same area, regulatory documents include equitable participation, accessibility and the inclusion of disadvantaged groups. However, in regards to respect for the actors, the bank suggests “making reasonable efforts to verify that this person, in fact, represents the points of view of the individuals or communities and is facilitating the communication process in an appropriate manner”47. This may be a legitimate interest of the bank, but in no other section is it affirmed that the people chosen by the affected communities or groups to represent them must be respected.

The regulations state that information will be disseminated in the relevant local languages and ​​ in a manner that is accessible and culturally appropriate. The specific needs of groups that may be affected differently or disproportionately by the project or the sectors of the population that have specific information needs (such as those related to disabilities, literacy, gender, mobility, language differences or accessibility)48 will be taken into account. The regulation is explicit in pointing out that the consultation process must ensure that women’s perspectives are gathered and that their interests are considered in all aspects of the planning and implementation of resettlement. In cases where there are differentiated impacts on the means of subsistence of 41 Environmental and Social Framework. p. 30, para. 25.

42 Environmental and Social Framework. p. 35, para. 5.

43 Access to Information Policy. p. 3, para. 6.

44 Access to Information Policy. p. 12-13.

45 Ibid.

46 Environmental and Social Impact Assessment, p. 134-136.

47 Environmental and Social Impact Assessment, p. 133, para. 17.

48 Environmental and Social Impact Assessment, p. 134, para. 20

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29

women and men, it points out the possibility of requiring an analysis within households to face these impacts. The regulatory documents also define that the preferences of women and men for compensation mechanisms should be explored, such as land substitution or alternative access to natural resources instead of cash compensation49.

A relevant aspect in terms of participation is that the regulations indicate that the client will maintain and disclose a documented record of the participation of the interested parties, including the description of the parties consulted, a summary of the opinions received and a brief explanation of how those opinions were taken into account, or the reasons why this did not happen50. It is also pointed out that the client will try to obtain feedback from the interested parties regarding the environmental and social performance of the project, as well as the implementation of the mitigation measures, but it is not established as an obligation51.

Similarly, the regulations are very limited with regards to the participation of interested local people and communities that depend to a large extent on community representatives, as they indicate that the client or borrower will make reasonable efforts to verify that these really represent the opinions of the local people and communities, and that they facilitate the communication process in an adequate manner. This is extremely flexible in terms of the obligations for those who execute projects with IBRD loans.

On the other hand, in terms of indigenous peoples the regulations have important gaps, since, for example, it is explicitly stated that the bank will carry out a study to determine if there are indigenous peoples52 (or as they are named in the national context) present in the proposed project area. In carrying out this study, the bank can request technical advice from specialists with expert knowledge about the social and cultural groups in the project area53.

The regulations clarify that the bank can follow the national processes of the client or borrower for the identification of indigenous people. This aspect is worrisome, given that the regulations give the bank the power to define who is or is not indigenous, and therefore leaves in their hands the possibility of defining whether or not they will be subject to collective rights such as the right to land and territory. In this sense it is necessary to point out that Convention 169 states that “the awareness of their indigenous identity should be the fundamental criterion to determine to whom the provisions on indigenous peoples apply”54. The above clearly is not considered in the bank’s regulatory framework.

The bank’s regulations establish the elements and characteristics that must be met in an indigenous consultation55. It explicitly states that the process must include prior, free and informed consent, as well as the documentation of the same. It also establishes that the result of the consultation process will be documented and that the bank will perform the necessary due diligence and ensure the results of the full and effective consultations56. However, the regulations also specify that the goal of the process of indigenous peoples’ participation is to generate support or acceptance of the project at the local level and reduce the risk of delays or controversies related to the same57. It turns out that this process is directed, as in most of the analyzed IFIs, to obtain the consent to implement the project, not to have elements to define whether or not to continue with it.

49 50 51 52

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Environmental and Social Impact Assessment, p. 81, para. 6.

Environmental and Social Impact Assessment, p. 132, para. 2.

Environmental and Social Impact Assessment, p. 20, para. 4.

In the bank’s regulations, the term “Indigenous peoples / Traditional historically marginalized communities in sub-Saharan Africa” (or as they are called in the national context according to alternative terminologies) is used in a generic sense to refer exclusively to a social and cultural group which to varying degrees has the following characteristics: (a) self-identification as members of a distinct indigenous social and cultural group and the recognition of this identity by others; (b) the collective connection with geographically distinct habitats, ancestral territories or zones of seasonal use or occupation, as well as the natural resources of those areas; (c) cultural, economic, social or customary political institutions that are distinct or separate from those of the dominant society or culture; and (d) a different language or dialect, often different from the official language or languages o​​ f the country or region in which they reside.

53 Environmental and Social Impact Assessment, p. 20, para. 4.

54 Article 2. ILO Convention 169.

55 Environmental and Social Impact Assessment, p. 112, para. 23.

56 Ibidem 57 Environmental and Social Impact Assessment, p.112, para. 23.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

It is also important to point out that the documents establish that indigenous peoples must carry out, together with the client, the evaluation of the direct and indirect economic, social, environmental, and cultural risks and impacts on their communities58. However, when this refers to the distribution of benefits and compensation to the affected peoples, one of the two criteria establishes that this will be done according to the “level of interaction with the dominant society�59. In other words, the bank assesses the fulfillment of rights in function of the affectation and historical influence that the general culture has exerted on the indigenous people. This leaves out other important factors that must be taken into account to determine compensation, such as the condition of vulnerability of the indigenous people and their level of economic, social, religious and cultural dependence on the resources affected by the project, among others.

Finally, the normative documents make explicit the respect for the use of land by indigenous peoples, their uses and customs, their heritage, and the natural resources of their territory60. They also point out that the evaluation of land use and natural resources will be made with a gender perspective and will specifically take into account the role of women in the management and use of these resources61. They establish that feasible project design alternatives should be considered, in order to avoid relocating indigenous peoples outside of lands that are communally owned or with which they have collective ties62. In the event that relocation cannot be avoided, the client will not proceed with the project unless they have obtained the free, prior and informed consent of the communities63. The law explicitly states that forced eviction will not be resorted to64. However, it is not specified that any unauthorized intrusion into the lands of indigenous peoples or any use of the same by persons not belonging to them shall be prevented and sanctioned.

Figure 15 shows the scores reached by this institution for each of the thematic areas analyzed.

58 Ibidem 59 Environmental and Social Impact Assessment, p. 112, para. 2.

60 Environmental and Social Impact Assessment, p. 111, para. 4; p. 115, para. 1.

61 Environmental and Social Impact Assessment, p. 116, para. 1.

62 Environmental and Social Impact Assessment, p. 113, para. 24.

63 Ibidem 64 Environmental and Social Impact Assessment, p. 85, para. 31.

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Figure 15. Score obtained by the IBRD-WB

International Bank for Reconstruction and Development, IBRD - World Bank Crosscutting, 89%

Evaluation of risks and social and environmental impacts, 100%

Indigenous Peoples, 86%

Access to information, 64% Participation, 90%

Source: Prepared by the authors, based on the comparative analysis of the normative frameworks of each institution

5.2 International Financial Corporation, IFC Regarding the analysis of the International Finance Corporation (IFC), its regulatory documents characterize and delineate the definitions related to the evaluation of environmental and social risks and impacts, access to information, participation, and indigenous peoples. The regulatory framework of the financial institution considers and characterizes public consultation processes, and includes equitable participation, accessibility and inclusion of groups at a disadvantage, and respect for the institutions and actors that represent the communities.

The institution also has an independent accountability mechanism and updated policies.

In specific matters of assessment of risks and socio-environmental impacts, the performance standards on the environmental and social sustainability of the institution refer to the need to consider all potential, direct, indirect and cumulative risks and impacts throughout the cycle and the life of a project65. They establish that in cases where the project includes physical elements and facilities identified as possible or potential generators of environmental and social impacts or risks, that these will be analyzed in the context of the area influenced by the project66. They explain that, in the process of identifying risks and impacts, greenhouse gas emissions, the relevant risks associated with climate change and adaptation opportunities,

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65 Performance standard on Environmental and Social Sustainability. Performance standard 1: Evaluation and management environmental and social risks and impacts. p.4, para. 8.

66 This zone of influence includes, as appropriate: A) The area that may be affected by: (i) the project and the activities and facilities directly owned by the client or that it operates or manages (including through contractors) and that are project components; (ii) the impacts of unscheduled but foreseeable events caused by the project, which may occur later or elsewhere; or (iii) the indirect impacts of the project on biodiversity or on the ecosystem services with which the Affected Communities depend to obtain their means of subsistence; B) The associated facilities, which are facilities not financed as part of the project, that would not have been built or expanded if the project had not existed, and without which the project would not be viable; and C) The cumulative impacts (resulting from the incremental impact) on areas or resources used or directly affected by the project, produced by other existing, planned or reasonably defined constructions in the process of identifying risks and impacts.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

as well as the potential transboundary effects such as atmospheric pollution, or the use or contamination of international water courses, will be taken into account.67 However, the IFC regulation does not establish that the evaluation must consider the risks and impacts of the subprojects derived or that the client must notify the institution about any proposed change in the design, implementation or operation of the project.

The performance standards establish that the risks of a project exacerbating an already sensitive local situation and creating tensions over local resources should not be overlooked, as this may lead to new conflicts. In cases of large operations or unstable environments, the identification of risks may consider political, economic, legal, military and social aspects, as well as any pattern and cause of violence or the possibility of future conflicts68. In case of social disturbances or conflicts in the area of influence of the project, the client must understand not only the risks that this could mean for his operations and personnel, but also that their operations could be fomenting or aggravating the conflict69.

A positive aspect of this regulation is that the IFC requires a plan to implement and comply with the assessment of socio-environmental risks and impacts70, as well as processes and mechanisms for monitoring the activities of the response plan, its fulfillment, and the evaluations and audits of its results71. The regulatory documents also establish that the genderdifferentiated impacts must be evaluated and that the process of identifying risks and impacts must propose measures to guarantee that no gender is at a disadvantage72. With this, the IFC takes into account that a project can have differentiated impacts on men and women, given their different socioeconomic roles and unequal degrees of control and access to assets, productive resources and employment opportunities.

Although in general, the institution obtained a high score in terms of environmental and social impact assessments, it is necessary to highlight that IFC regulations has omissions in that it does not establish that the evaluation must consider the risks and impacts of the subprojects, or that the client must notify the institution of any change, accident or incident related to the project.

Regarding access to information, the IFC’s regulations include some basic principles to guarantee it73. However, it does not establish a principle of active and / or proactive disclosure to regularly disseminate documents through its website, nor does it specify that the information of the institution must be translated into the languages of the countries where it operates.

In the same sense, the IFC’s regulatory framework indicates the procedures for receiving and responding to a request for information, as well as the ways to request it and the deadlines to respond and request extensions. However, it does not determine the number of business days to note a request as received, nor the importance of registering requests and making them available to the public. The regulation also does not specify the possibility of making requests for access to information anonymously or without the need to justify the reasons for which information is requested, nor does it specifically refer to the language in which the answers must be given (it refers to the possibility of doing so, but does not establish it as a need), nor does it specify the free nature of the information, or the contact to request for clarifications.

It is pertinent to highlight that, although the regulatory framework establishes that the institution must proactively disclose information about its internal processes and about the projects (for example, a summary, the documents related to it, and its main results), it does 67 Performance standard on Environmental and Social Sustainability. Performance standard 1: Evaluation and management environmental and social risks and impacts. p.3, para. 7.

68 Performance standard on Environmental and Social Sustainability. Performance standard 4. P. 1, para. 1 y 2.

69 Ibidem 70 Performance standard on Environmental and Social Sustainability. Performance standard 1: Evaluation and management environmental and social risks and impacts. p.6, para. 16.

71 Ibid, p7, para. 23.

72 Ibid, p. 18, para. 05.

73 The principle of maximum publicity, the classification of information, the contacts within the institution, the training of personnel, the monitoring of policy compliance, the list of exceptions, among others.

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not indicate that the institution must disclose the result of the public consultation of a project before the bank’s board considers the investment or the loan. The regulatory documents do not define deadlines for publishing information that has been found on the list of exceptions, or any process for publishing historical information about the institution.

Finally, in terms of access to information, the regulatory documents define procedures, deadlines and institutional figures to respond to the dissatisfaction of the applicant in the face of a refusal of information, but do not force the body in charge of receiving appeals to make reasonable efforts to help them obtain the information.

In terms of participation, the IFC’s regulatory documents include the requirement to draw up a participation plan74, but make no mention of the allocation of resources to carry it out.

They point out that a draft of the plan must be disseminated before the approval of the project, and that the client has the obligation to incorporate the views of the communities in matters that affect them directly75. Regarding the development of public consultations, the regulatory framework considers and characterizes these processes76, and includes equitable participation, accessibility and inclusion of disadvantaged groups, and respect for institutions and actors representing communities77. However, it does not raise the need to involve independent specialists in the design of an inclusive participation process, or to take advantage of the informal participation spaces that exist in the community.

Likewise, IFC regulations indicate the requirement and the characteristics of a mechanism to identify, attend to and follow up on the needs, concerns and disagreements expressed by the communities78. However, it is not obliged to publish the procedures with specific times to acknowledge receipt, respond and resolve complaints; nor to respond to all complaints, even when they are anonymous. The rules also do not refer to an appeal process nor do they specify that the existence of a grievance mechanism at the project level does not prevent access to other administrative and judicial resources.

Regarding indigenous peoples, the IFC’s regulatory framework contains the elements and characteristics that must be met in an indigenous consultation79. For example, the free, prior and informed consent process, its documentation, and the sustainability of agreements80.

They also specify the respect for the decisions of indigenous peoples’ communities with respect to their own development81. However, it does not mention in any way that they must guarantee that these conditions are fulfilled before granting the project license. In terms of guaranteeing, during the indigenous consultation process, the perspective and interests of women throughout the project cycle, the norm only indicates that some segments of the community, such as women, youth, and the elderly, may be more vulnerable than others to the impacts of the project, so the consultation should consider their interests in the community, as well as contemplate traditional cultural approaches that could exclude certain segments of the community from the decision-making process82.

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74 Performance standard on Environmental and Social Sustainability. Performance standard 1: Evaluation and management environmental and social risks and impacts: Requirements, Participation of social actors, Analysis of social actors and planning their participation. p. 8, para. 27.

75 Ibid. p. 48, para. 6.

76 Ibid. p.9, para. 30.

77 The regulatory framework specifically states that “In cases in which the Affected Communities are subject to the identified adverse risks and impacts of a project, the client will undertake a consultation process so that the Affected Communities are offered opportunities to express their opinions about the risks, impacts and mitigation measures of the project, and the client can consider them and respond to them (...). The client will adapt the consultation process to the linguistic preferences of the Affected Communities, to the decision-making process of those communities and to the needs of vulnerable or disadvantaged groups. If clients have already undertaken this process, they will provide adequately documented evidence of such participation. “ 78 Ibid. p. 10, para. 35.

79 Performance Standards on Environmental and Social Sustainability. Performance Standard 7: Indigenous Peoples (ND7). p. 13, para. N036; p. 12, Para. N030.

80 Performance Standards on Environmental and Social Sustainability. Performance Standard 7: Indigenous Peoples (ND7). p. 3. para.12.

81 Performance Standards on Environmental and Social Sustainability. Performance Standard 7: Indigenous Peoples, p.5, para. NO11.

82 Ibid, p. 8, para. NO18.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

A positive aspect of the IFC’s regulatory framework is that it explicitly states respect for the use of land by indigenous peoples; their uses and customs83, their heritage, and the natural resources of their territory. Although it also establishes the need to consider feasible alternative project designs, in order to avoid the relocation of indigenous peoples away from their lands and communal natural resources subject to traditional ownership or under customary use84, it is preoccupying that in no part is it mentioned that any unauthorized intrusion into the lands of indigenous peoples or any use by persons alien to them should be prevented, or if it does occur, sanctioned. Nor is it established that the client will not be able to resort to the forced eviction of communities of indigenous peoples; this is only restricted, but not prohibited85.

The following graph shows the scores obtained by this institution for each of the thematic areas analyzed.

Figure 16. Score obtained by the IFC.

International Financial Corporation, IFC Crosscutting, 89% Evaluation of risks and social and environmental impacts, 89%

Indigenous Peoples, 86%

Participation, 93%

Access to information, 64%

Source: Prepared by the authors, based on the comparative analysis of the normative frameworks of each institution.

83 The same performance note regarding indigenous peoples states: “the breadth, depth and type of evaluation must be proportional to the nature and size of the potential impacts on the Affected Communities of the proposed project and to the vulnerability of the Affected Indigenous Peoples Communities. The vulnerability analysis will include a consideration of the following aspects regarding indigenous peoples: (i) their economic, social and legal situation; (ii) their institutions, customs, culture and / or language; (iii) their dependence on natural resources; and (iv) their past and present relationship with the dominant groups and the preponderant economy “.

84 Ibid, p.17. para.15.

85 Performance Standards on Environmental and Social Sustainability. Performance Standard 5: Physical Displacement. p7, para.24.

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5.3 Inter-American Development Bank, IADB The IADB obtained a regular score in the evaluation, as it presents some general successes in terms of the assessment of risks and and environmental impacts, and participation, but important gaps in access to information. In conceptual terms, although its regulatory framework defines access to information and indigenous peoples, it does not specify the objective of risk assessment, it does not establish a difference between environmental and social impacts, nor does it define the importance of participation in the processes of development.

The IADB regulations analyzed indicate the explicit obligation to be aligned with the national regulatory framework, as well as the commitments acquired from international standards on indigenous peoples. However, the documents do not establish that the client must comply with national legislation and international standards regarding participation. In terms of its conceptual clarity, the IADB’s regulatory documents lack explicit considerations on the need for advice and / or support from independent specialists within the framework of a project. In highrisk operations it suggests generally including a panel of experts, but this is not established as a need. One positive aspect is that the institution has an independent accountability mechanism.

Regarding the assessment of environmental and social risks and impacts, the regulatory documents explicitly state that the evaluation must be carried out in all phases of the project cycle86: that it must consider alternatives to the project, and take into account risks and impacts that cross physical borders87. However, the documents do not specify that the evaluation should examine studies, diagnoses and / or previous evaluations, nor be carried out for external facilities, subprojects or primary suppliers of the project. The regulations also do not include the need to notify the institution of any proposed change in the design, implementation or operation of the project.

A concerning aspect of the IADB regulations is that they do not take into account the social aspects of a project, as they do not consider potential risks of discrimination; economic and social risks and impacts related to the use or restrictions to land; risks to the health, safety and well-being of the project’s workers; nor the safety and well-being of the communities that could be affected by the project. Regarding the environmental aspects included in the regulatory documents analyzed, reference is made to an evaluation of risks and impacts88, but it does not specify if it should take into account climate change or its related impacts.

The regulatory documents of the IADB require a plan to implement and comply with the evaluation of risks and impacts and delineate their characteristics89. However, they do not establish that the client must not carry out any project activity, before having taken, within a set timeframe, the measures or actions necessary to avoid, minimize or reduce the risks and impacts identified in the evaluation. In addition to this, the IADB norms do not indicate the need to establish a system for preparing and responding to accidental and emergency situations, nor does it establish that the response plan must allow adaptations and changes in accordance with unforeseen circumstances.

Another important gap in this regulation is that, although processes and mechanisms to monitor the activities of the response plan are included, there is no mention of the need to document the response given in emergencies or to have internal audits to monitor the compliance and the progress of the plan for response in the face of environmental and social risks and impacts.

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86 87 88 89

Environment and Safeguards Compliance Policy. p. 10. Section IV, B.5. para. 4.19.

Environment and Safeguards Compliance Policy. p. 12. para. 4.22, Section IV, B.8.

Environment and Safeguards Compliance Policy. p. 10. Section IV, B.5. para. 4.19.

Environment and Safeguards Compliance Policy. p.9. para. 4.19, Section IV, B.5.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

In terms of access to information, the IADB includes the basic principles to guarantee access to information90, but does not indicate the procedures to receive, confirm and respond to a request for information; nor the means to request it or the deadlines to respond and request extensions; among others. Its regulatory documents do not obligate it to proactively disclose information about its internal processes, although it must disclose information regarding its projects. They also do not indicate that the client must implement and maintain a mechanism, at the project level, to receive and record external communications from the public.

An important aspect of the IADB’s regulatory framework is that it defines deadlines for publishing information that was once on the list of exceptions, and indicates the process that must be followed to publish the institution’s historical information91. Another positive aspect is that the IADB has procedures and institutional figures to respond to the applicant’s dissatisfaction with a refusal of information92. However, the framework does not establish deadlines for responding to an appeal or a disagreement with the answer to an appeal. Nor does it create an independent institutional figure that reviews and analyzes appeals.

Regarding Participation, the gaps in the regulatory framework of the IADB are important.

Although the requirement to draw up a participation plan93 and allocate resources to execute it is indicated, it is not indicated that the client must disseminate a draft of the participation plan before the approval of a project. In the same sense, although the regulatory framework considers and describes public consultation processes94, it does not clearly establish that these must adapt to the decision-making processes of the affected communities; nor that the consultation must be free of manipulation, interference or coercion; nor that the client should take advantage of the informal participation spaces that exist in the community; nor that it is necessary to document the consultation process.

On the other hand, although the regulatory documents include respect for the institutions and actors that represent the communities, they do not mention equitable participation or the accessibility and inclusion of disadvantaged groups. Finally, in terms of participation, the IADB does not require or outline the characteristics of a mechanism to identify, attend to and follow up on the needs, concerns and disagreements expressed by communities.

Regarding indigenous peoples, the regulatory frameworks of the institution contain the requirement to carry out an indigenous consultation, but they do not define it. Nor do they mention with precision the need to obtain prior, free and informed consent, or determine measures for the sustainability of the agreements made. Although the regulatory documents recognize the importance of the participation of indigenous peoples in various stages of the project, and establish that measures will be included to respect their cultural heritage95, they do not mention respect for the decisions of indigenous communities regarding their own development.

Finally, the IADB regulatory frameworks make explicit the respect for the use of land by indigenous peoples; for their uses and customs96 and their heritage, but they do so with respect to the natural resources of their territory. They do not state that any unauthorized intrusion on the lands of indigenous peoples or any use of them by anyone who is alien to them must be prevented and sanctioned, nor that the forced eviction of indigenous peoples’ communities should be avoided. The following graph shows the scores reached by this institution for each of the thematic areas analyzed.

90 The principles, classification of information, translations into local languages, contacts within the institution, staff training, monitoring of compliance with the policy, list of exceptions, among others.

91 Access to information policy. p.1. para. 2.1.

92 Access to information policy. p.7. para. 9.3.

93 Environment and Safeguards Compliance Policy. p.11, para. 4.19.

94 Environment and Safeguards Compliance Policy. p.11, para. 4.20.

95 Operational policy on gender equality in development. p.7, para. 4.16.

96 Access to information policy. p.2. para. 1.3.

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Figure 17. Score obtained by the IADB.

Inter-American Development Bank, IADB Crosscutting, 53%

Indigenous Peoples, 52%

Evaluation of risks and social and environmental impacts, 46% Participation, 28% Access to information, 49%

Source: Prepared by the authors, based on the comparative analysis of the normative frameworks of each institution.

5.4 Inter-American Investment Corporation, IIC (Now IDB Invest) The IIC’s Environmental and Social Sustainability Policy recognizes that it integrates norms and guidelines that have been published by other multilateral entities, such as the Environment and Safeguards Compliance Policy of the IADB, the social and environmental sustainability performance standards of the Inter-American Investment Corporation, the World Bank / IFC Group’s environmental, health and safety guidelines -including the general guidelines and the sectoral guides on environment, health and safety; as well as technical guidelines for environmental management, such as the Standard on Environmental Management Systems (ISO 14001) of the International Organization for Standardization (ISO), among others. By referring to these guidelines, the IIC’s Environmental and Social Sustainability Policy gives the impression of being backed by 29 technical documents as well as environmental and social safeguard policies. However, in the final part of paragraph 2 of the chapter on Commitments of the IIC, the application of these policies and documents is subject to the approval of the Board of Executive Directors: “Any revision of said rules, policies and guidelines will become part of the present Sustainability Policy, unless otherwise indicated by the Executive Board of the IIC. “

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In that sense, referring to a set of rules and then conditioning the application of the aforementioned documents, leave a regulatory gap and generate legal uncertainty. That is, conditioning the application of the documents to which the policy refers to creates a situation of uncertainty, in which neither the clients of the IIC nor the persons or communities that are threatened by a project financed by this entity, know which rules will be applied to the specific case. Furthermore, in the process of evaluating a project, the application of relevant norms could be omitted, to the detriment of environmental and social protection. For these reasons, the analysis presented here is limited to the IIC’s regulatory documents.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

The regulatory framework analyzed defines the objective of the assessment of social and environmental risks and impacts97. However, it lacks precision to establish the relationship between the importance of access to information, participation and indigenous peoples in development processes; besides not making explicit the obligation to comply with international standards.

The regulatory documents do not consider having consultancies or accompaniment from independent specialists to design, evaluate or supervise a project. Nor do they indicate these for the cases in which it is necessary to elaborate an inclusive participation process or to determine if a group should be considered an indigenous people. It is important to point out that the IIC’s regulatory framework does not explicitly establish the alignment, collaboration or linkage with institutions and government agencies, to agree on a common evaluation approach or for the management of environmental and social risks and impacts. The documents do not require the client to link up with the official body responsible for the indigenous peoples. Instead, they do require that financial intermediaries also comply with the requirements of their policy98.

Among the positive elements of the IIC’s regulatory framework, it should be noted that it describes the existence of an independent accountability mechanism, that has an updated policy and clear guidelines for its operation.

Regarding the assessment of environmental and social risks and impacts, the regulatory framework establishes a commitment to address and consider environmental and social risks and impacts throughout the life cycle of the project, as well as their synergistic effects99. It determines that for direct investments, information, records and existing documentation on social and environmental risks and impacts must be evaluated. It also includes the requirement for financial intermediaries to consider the risks and impacts of the project100. However, the scope of the evaluation is insufficient, as it does not require using the evaluation as an input for the design of the project, nor to apply it to activities not financed (but which are part of the project). The document also does not raise the need to consider alternatives to the project, nor to provide attention in the face of risks and impacts caused by contractors or suppliers, or risks or impacts that cross physical borders.

Although the regulatory framework includes a series of social aspects that must be taken into account, it does not include as important aspects of the evaluation those related to human security, such as the increase of personal, communal or interstate conflicts, crime or violence.

The IIC’s regulatory framework contains positions on climate change101 and the protection of natural habitats, but does not require that its clients take them into account in the evaluation.

Neither does it consider the environmental security of communities, nor does it specify that it should be part of the evaluation variables. At the same time, it establishes the need to have an environmental and social action plan, subject to a periodic review and monitored according to the category of operation. However, it is not suggested that said plan should allow for adaptations or changes that respond to unforeseen circumstances, or that it is necessary to have an emergency response system.

The regulatory framework establishes the creation of a periodic monitoring program to verify compliance with the agreements, as well as annual monitoring reports. Monitoring is also carried out by the IIC through the evaluation of the Development Impact and Additionality Scoring (DIAS) and the Expanded Annual Supervision Reports (XSR) that include environmental and social indicators102. However, the document does not explicitly mention the use of internal inspections and audits, and the responsibility to notify and document their activities in an emergency situation.

97 98 99 100 101 102

Environmental and Social Sustainability Policy. p. 1 y 2. para. 2/1 y 2.

Environmental and Social Sustainability Policy. p.7. para.15.

Environmental and Social Sustainability Policy. p.8. para. 24.

Environmental and Social Sustainability Policy. p.5. para. iii y iv.

Environmental and Social Sustainability Policy. p.2. Section II.5.

Environmental and Social Sustainability Policy. p. 8 y 9. para. 24.

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The IIC states that its policy on the disclosure of information is based on the principle of maximum publicity and active and proactive disclosure of information103, and clearly states which information is public and which is restricted. Although this policy contemplates the possibility of communicating via email with the unit responsible for providing information to the public, it does not specify what procedure must be followed to submit an application, who should follow up or how it is resolved. In terms of access to information, the IIC score is very low given that it lacks considerations regarding the language in which the information is to be communicated or disseminated. It does not address the need to train its staff in the subject or to monitor to assess compliance with these provisions, nor does it establish the possibility of publishing a document on the list of exceptions if it is shown that the benefits of disclosing it outweigh the potential damages.

Regarding requests for information, the regulatory framework indicates that the information delivery policy will be free, or, where appropriate, with costs that only cover the reproduction of the documents. It also includes the possibility of delivering public versions of documents that it considers confidential, sensitive or harmful104. With respect to all the other variables analyzed in this section, the Corporation’s policy lacks explicit mentions on the following topics: reception, confirmation and response to requests for access to information; deadlines to respond, extensions, mechanisms for contact with the applicant, registry of previous requests, commitment to obtain the information to deliver a response and to not require justifications to those who make requests.

Regarding the disclosure of information at the project level, the regulatory framework establishes that there must be a Summary of investments, which must be made public thirty days before the approval of the project. In the case of the environmental and social impact assessment, it must be made public at least one hundred and twenty days before the approval of the project.

On the other hand, the deadlines for the dissemination of the results of the consultation and the results of the project are not so precise. Nor is explicitly required to update the information available on a project in order to ensure the accuracy of the information disclosed.

A worrying aspect in terms of access to information is that the IIC framework has a declassification policy for historical documents105, but this is at the discretion of the Corporation. Thus, it does not mention the deadlines to declassify the documents of the list of exceptions, nor does it define what information will not be declassified. It should also be noted that the IIC’s regulations are devoid of information on appeals. It does not establish cases, procedures, deadlines or institutional figures to respond to the nonconformity of the applicant. On the other hand, the ICIM Independent Consultation and Investigation Mechanism can be used to file complaints for non-compliance with the Information Availability Policy.

Regarding participation, the IIC regulations do not mention the need to have any participation plan, and therefore it does not require drafting a plan or asking the client to have the necessary resources to carry it out.

The IIC’s regulatory documents do not describe public consultation processes. They do not integrate the importance of having relevant, objective and significant information; they do not tell the client what mechanisms to implement regarding the disclosure of the place and time of the consultation, the consideration of the language or linguistic preferences, or decision making. It does not prohibit acts of manipulation, interference or coercion; nor does it raise the need to use informal spaces for participation or to document the process.

The regulatory framework does not mention the scope of the participation nor the implications that this may have in the decision-making related to a project. For this reason, it does not consider the importance of planning and documenting compliance with the agreements, nor does it characterize participation processes.

40

103 Disclosure of Information Policy. p.1. para. 2.

104 Disclosure of Information Policy. p.9, para. 2.

105 Disclosure of Information Policy. p.10, para. 2.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

Although the IIC’s regulatory framework requires broad social inclusion and considers the accessibility of groups at a disadvantage106, it does not refer to the treatment that those chosen by the groups or communities as their representatives should receive. Nor does it indicate that the client must establish a grievance mechanism at the project level.

One of the most worrisome aspects is that the IIC does not refer to the use of land by indigenous peoples, to their uses and customs, to their heritage and to the natural assets of their territory. The regulatory framework does not explicitly respect the decisions of the indigenous communities regarding their own development.

In fact, although it is mentioned that the consultations must be rigorous, indigenous consultation processes are not specifically mentioned. The importance of consigning a free, prior and informed consent process is not considered, nor are there observations about the need to document these processes, or to comply with the agreements reached. The following graph shows the scores reached by this institution for each of the thematic areas analyzed.

Figure 18. Score obtained by the Inter-American Investment Corporation IIC.

Inter-American Investment Corporation, IIC Crosscutting, 42%

Indigenous Peoples, 0%

Evaluation of risks and social and environmental impacts, 49%

Participation, 10%

Access to information, 29%

Source: Prepared by the authors, based on the comparative analysis of the normative frameworks of each institution.

106 Environmental and Social Sustainability Policy. p.2. para. And footnote on page 6.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

41

5.5 Development Bank of Latin America, CAF-before Andean Development Corporation The regulatory framework of the CAF has some strengths, such as defining the objective of the evaluation of environmental and social risks and impacts107, and the importance of the relationship between access to information and indigenous peoples in development processes108. It also establishes the need to comply with national legislation, in accordance with international standards, in the management of environmental, social and climate change risks109. It also clarifies the alignment, collaboration and / or linkage with government institutions and agencies within the framework of a project110.

However, among its main weaknesses, it should be noted that the framework is remiss in terms of defining the relationship between the importance of participation and development processes, and in terms of advising and/or accompanying independent specialists within the framework of a project. In addition, the institution does not have an independent accountability mechanism.

Regarding the assessment of environmental and social risks and impacts, the regulatory document explicitly states that the evaluation must be carried out in all phases of the project cycle, that it must consider alternatives to it, and that it must also be done for external facilities, subprojects and primary suppliers of the project111. It also considers the creation of a plan to implement and comply with the evaluation of risks and impacts. However, it does not mention that studies, diagnoses and/or previous assessments, put together by governmental authorities or other parties directly related to the project, must be taken into account. Neither does it consider the risks and impacts that cross physical, geographical or territorial borders. In particular, regarding the social considerations of the assessment, the client is not required to consider aspects such as the increase of personal, communal or interstate conflicts, crime or violence, in risk and impact evaluations.

The regulatory framework includes processes and mechanisms for monitoring the activities of the response plan, compliance with it, and evaluations of it. But it does not specifically refer to the need to use internal inspections and audits in order to monitor the compliance and progress of the response plan in the face of environmental and social risks and impacts.

In terms of access to information, the score obtained by the CAF is quite low because it does not include among its considerations guaranteeing access to information; it does not establish the principles, the classification of information, the contacts within the institution that comply, nor does it allude to the need for staff training, or monitoring compliance with the policy or the list of exceptions, among others. It also does not indicate the procedures to receive, confirm or respond to a request for information, nor the means to request it or the deadlines to respond and request extensions, among others.

The regulation requires the client to provide institutional information on the activities that will be carried out, the studies and the schedule112. However, it does not specify that it must disclose the financial information of the institution (annual financial statements, annual reports, quarterly financial statements, among others) or information about the loans or the investment cycle.

The CAF does obligate itself to proactively disclose information about the results of the public consultation, updated information on the projects, the results obtained and the existence and

42

107 108 109 110 111 112

CAF. Social and Environmental Safeguards, p. 16, section III. Ă?bid, pp. 22-23. Ă?bid, p. 7, para. 2; p. 26; y p. 32, para. 4. Ă?bid, p. 27, section VI.2.

Ibid, p. 20.

Ibid, p. 23, section V.2.2.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

implementation of a communication mechanism at the project level113. However, it does not mention anything about of the disclosure of the project summary with information about the investment or the evaluation of environmental risks and impacts before its approval. It also does not define deadlines for publishing information that has been found in the list of exceptions or indicate the process for publishing historical information concerning the institution. In addition, it does not define procedures, deadlines or institutional figures to respond to the dissatisfaction of the applicant if information is refused.

In terms of participation, the score obtained by the CAF is intermediate, because, among its positive elements, it does require the preparation of a participation plan, but does not specify the allocation of resources to execute it114. Regarding public consultation, the regulation considers and characterizes public consultation processes, and includes equitable participation; accessibility and the inclusion of disadvantaged groups, and respect for the institutions and actors that represent the communities115, but does not mention the need to take advantage of the informal participation spaces that exist in the community.

In general, although the regulatory frameworks refer to the implications of the participation processes in decision-making related to a project, they do not include the need to plan and document compliance with the commitments agreed upon during a public consultation.

Regarding access to information, the CAF’s regulatory documents include the requirement and characteristics of a mechanism to identify the needs, concerns and non-conformities expressed by the communities116. However, they do not establish that the conditions that ensure the communities’ access to this mechanism. Nor do they allude to different ways to receive complaints (in person, by phone, text message, email or through a website, among others). They also do not refer to any appeals process nor do they state that access to the mechanism does not prevent access to other administrative or judicial resources.

In relation to indigenous peoples, the regulatory documentation contains the elements and characteristics that must be fulfilled in an indigenous consultation, for example: free, prior and informed consent process and its documentation117. However, they do not refer to the measures agreed upon with the indigenous communities following the consultation, or to the way in which they must be fulfilled according to the terms agreed upon between the parties.

Although CAF regulations mention the importance of respecting the decisions of indigenous peoples’ communities regarding their own development, as well as respect for the use of land by indigenous peoples, their uses and customs, their heritage, and the natural resources of their territory118; it is not explicit that the communities should be the ones defining the benefits, nor that any unauthorized intrusion on the lands of the indigenous peoples or any use thereof by people alien to them, and without their consent, should be prevented or sanctioned. The following graph shows the scores reached by this institution for each of the thematic areas analyzed.

113 114 115 116 117 118

Ibid, p. 25, section V.2.4.

Ibid, p. 23, section V.2.

Ibid, p. 24, section V.2.4; p. 83, section V.4; y p. 84.

Ibid, p. 23, section V.2.3.

Ibid, p. 84.

Ibid, p. 81, section III.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

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Figure 19. Score obtained by the Development Bank of Latin America (CAF).

Development Bank of Latin America, CAF Crosscutting, 53% Evaluation of risks and social and environmental impacts, 89%

Indigenous Peoples, 81%

Access to information, 20%

Participation, 69%

Source: Prepared by the authors, based on the comparative analysis of the normative frameworks of each institution.

5.6 National Bank for Social and Economic Development of Brazil, BNDES In this analysis, the BNDES obtained low scores in general. The regulations that govern the BNDES declare that its actions must be aligned with the applicable legislation in each country; however, it does not mention explicitly respect for international standards. The BNDES regulations have important gaps: they do not make explicit reference to participation or the rights of indigenous peoples, they do not define the objective of the assessment of risks and impacts, nor do they describe a difference between those of social and environmental nature. It does not establish a link between the importance of participation and development processes, nor does it list elements to identify indigenous peoples, nor does it have an independent accountability mechanism or updated policies.

In the same sense, within the regulations that govern the BNDES, the figure of external consultancies is reduced. It is only a requirement when the environmental or social impact warrants it, and according to the percentage of participation of the bank in the project. The regulations do not clearly state whether experts should be hired to supervise the project or its operation, in such a way that hiring is not stipulated for the design of the project, to carry out an inclusive participation process or to define whether a community is indigenous.

The bank’s policies establish that when the project has another financial agency, a common approach will be agreed upon, with criteria that are the same or more rigorous than its own119.

However, it does not include the same requirement when dealing with financial intermediaries.

The regulation does not indicate that clients should collaborate with the relevant authorities

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119 Socio-environmental policy. p.1, para. 9.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

of the host country for the management of risks and impacts, nor does it specify that a collaboration with the agency in charge of indigenous peoples is required if necessary.

Regarding the assessment of environmental and social risks and impacts, the possibility of recommending the reformulation of a project is mentioned120. However, it is not suggested that the evaluation must include alternatives to the project; it only vaguely alludes to the importance of considering impacts on the environment, but does not specify any criteria to define them. The regulation does not refer to the importance that the scope of the evaluation include external facilities, subprojects, and primary suppliers of the project, nor does it contemplate risks and impacts that cross physical boundaries.

Although compliance with measures that take into account possible risks of discrimination is required (with emphasis on work environments)121, this criterion does not appear as a variable that should be considered in the evaluation. On the other hand, there is no reference to the use and restrictions of the land, nor to the risks and impacts on the health, safety and welfare of the communities that could be affected by the project.

The regulation considers categorizing risk according to various criteria, one of which is the location of socio-environmentally sensitive areas. However, it does not state that the variables of protection, maintenance, restoration and biodiversity of natural habitats should be considered in the evaluation; nor does it explicitly state the importance of taking into account the security of the community.

A preoccupying aspect in environmental matters is that the document does not establish the need to create a risks and impacts response plan. Therefore, it does not consider that deadlines should be established to implement these measures, or monitoring or a preparation and response system, and, therefore, it does not require the client to have the necessary resources to carry it out, provide reports or notify incidents. Nor does it refer to the need to carry out internal inspections or audits for the enforcement of compliance.

Regarding access to information, since BNDES is a national bank, the regulations refer to the Transparency Policy of the Brazilian Transparency Law. However, this analysis does not refer to said Law, as the fact that the bank does not have a clear policy can generate confusion, especially when its investments are made outside of Brazilian territories, where the national norms of Brazil and the criteria of interpretation and application of these are not known.

The BNDES access to information policy is based on the principle of maximum publicity.

The institution has an active transparency policy and sets out a list of limitations that allow knowing what type of information is confidential122. It also has staff training for the proper application of this policy. The bank maintains a portal where information can be requested, but its documents do not establish the figure responsible for monitoring and compliance with the access to information policy. Nor does it consider that the information must be translated into the languages of ​​ the regions or countries where the bank operates. There is no mention of the obligation to monitor this policy or the principle of disclosing information that is on the list of exceptions, if it is shown that the benefits of disclosing it outweigh the potential harm of not doing so.

On the website of the Citizen Service Bank for access to information, some guidelines for requests for information are given123. However, these are not included in the Transparency Policy. The bank’s documents do not clearly indicate the procedures to receive, confirm, respond to a request for information, or the deadlines to respond to it, or possible extensions.

The BNDES does not establish the need to proactively disclose information on the projects in which it invests, through summaries, related documents or results. On the other hand, it does 120 121 122 123

Socio-environmental policy. Section: Operational Procedures for the Form of Non-Automatic Direct or Indirect Support.

Socio-environmental policy. p.1, para. 6.

Socio-environmental policy. p.3. section: Limitations.

See Website of the BNDES bank, section: access to information.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

45

not specify the deadlines for publishing information that is on the list of exceptions or within historical archives. Nor does it define procedures, deadlines or institutional figures to respond to the dissatisfaction of an applicant who has been refused information.

Regarding Participation, the BNDES has serious deficiencies, given that its regulations do not require the preparation of a participation plan or the allocation of resources to execute it. It also does not consider or characterize public consultation processes, nor does it record the implications of participation processes in the decision-making related to a project. Its regulations do not include equitable participation, accessibility and inclusion of disadvantaged groups or respect for the institutions and authorities that represent the communities. Nor does it require or characterize a mechanism to identify, attend to and follow up on the needs, concerns and disagreements expressed by the communities.

The participation and interaction of BNDES with indigenous peoples has serious gaps.

Its regulations do not refer to the elements and characteristics that must be fulfilled when conducting an indigenous consultation, such as free, prior and informed consent; its documentation or the sustainability of the agreements reached. It does not explicitly respect the decisions of the indigenous communities regarding their own development, the use of land by indigenous peoples, their uses and customs, their heritage or the natural resources of their territory.

Figure 20. Score obtained by the National Bank for Social and Economic Development of Brazil, BNDES

National Bank for Social and Economic Development of Brazil, BNDES Crosscutting, 21%

Indigenous Peoples, 0%

Evaluation of risks and social and environmental impacts, 14%

Participation, 0%

Access to information, 29%

Source: Prepared by the authors, based on the comparative analysis of the normative frameworks of each institution.

46 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

5.7 China Development Bank, CDB In the case of the Development Bank of China (CDB), at the time of writing this report it had not been possible to obtain the documents that are part of the environmental, social and access to bank information policy framework, necessary for the comparative study. To access the documents, we tried to directly communicate with the bank and, at the same time, conduct a search for information in different sources, as detailed below.

Several communications were sent to the CDB requesting information and official documents that include the safeguard policies and current environmental and social regulations that guide the loans and financing of the bank. Said communications were sent via email and fax.

Despite the insistence, no response was obtained from the bank.

In addition to seeking a direct response from the banking institution, a search for this information was carried out in other relevant sources, such as the Bank’s official website. There, it was also not possible to find any relevant documents, since there is only access to the Bank’s Sustainability Reports and a Corporate Culture Manual124, which do not provide substantive information in terms of regulatory frameworks.

After consulting secondary sources, such as documents and reports prepared by social organizations and institutions that have carried out similar investigations125, it was possible to identify the existence of some social and environmental policies and guidelines of the CDB, such as the “Manual for the Evaluation of Loans 2004”, the “Environmental Impact Assessment Framework for loans to small and medium enterprises” and other environmental guidelines.

However, one can only know of the existence of these documents, but they cannot be consulted, as they are not available to the public and there is no information on how to access them.

This situation highlights one of the main problems in relation to Chinese investments: the unknown nature of Chinese regulations for operations and investments abroad and the difficult access to such information. Cumbersome communications with the bank and access to regulatory frameworks is a major obstacle for communities and social organizations when making complaints about bank financing. It also hinders the processes of territorial defense, to the extent that there is no clarity about the rules that apply, if they are mandatory or not, or what the requirements are to carry out such investments.

In the same sense, the lack of transparency regarding existing foreign investments, the lack of systematization of information and the non-publication of regulatory frameworks, represent important challenges for research and for stakeholders interested in obtaining accurate, timely and trustworthy information.

124 Manual de Cultura Corporativa (En inglés): http://www.cdb.com.cn/English/qywh/khwhsc/download/ 125 Some of the documents and websites consulted were: Initiative for Sustainable Investments China-Latin America (IISCAL), Section on Chinese guidelines.

Emerging Sustainability Frameworks: China Development Bank and China Export and Import Bank. Viewed at: https://foe.org/resources/emerging-sustainability-frameworks-china-development-bank-and-china-export-import-bank/; Garzón, Paulina (2015).

Legal manual on Chinese environmental and social regulations for loans and investments abroad: A guide for communities. Center for Economic and Social Rights. Viewed at: https://namati.org/resources/legal-manual-on-chinese-environmental-and-social-guidelines-for-foreign-loans-andinvestments-a-guide-for-local-communities/

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

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5.8 Export-Import Bank of China, EIBC The documents available about this banking institution are rarely linked to obligations that the client must comply with. Its regulations, in effect, do not define the importance of access to information or participation in development processes. Nor do they establish elements to identify indigenous peoples. Although it states that the client must comply with the laws and regulations of the country where the project will be carried out126, it does not make explicit reference to respect for international standards in terms of participation or indigenous peoples.

Another serious deficiency is that the institution does not have an independent accountability mechanism or updated policies in this regard.

Regarding the assessment of environmental and social risks and impacts, the regulations consider that an evaluation must be carried out and that monitoring must be maintained throughout the project cycle127, but it does not clearly mention that the client must address the risks and impacts; nor does it explicitly mention the link between the evaluation and the design of the project. However, it does determine that the evaluation is a requirement for its review and approval128. The EIBC regulations are ambiguous in terms of the scope of impacts, so it is not clear if they refer to air, water, soil or others, in the project area or from the area of​​ influence of the project.

The regulatory framework records the importance of workers’ health, safety and welfare, as well as the need to care for and support the community129, however, it does not specify that these variables should be considered within the evaluation. The bank does not take into account the disproportionate risks and impacts that the project may have on individuals or groups that may be at a disadvantage or in potential risk of discrimination. Neither does it consider the impacts related to land use, climate change, the biodiversity of natural habitats or the safety of the community. The EIBC does not require a plan to implement and comply with the assessment of risks and impacts, which is why it does not describe it either.

Although the EIBC regulations mention the existence of monitoring, it does not establish procedures for continuous monitoring or indicators for the project. Neither does it allude to the need to notify the institution about any accidents related to the operation, nor to have audits that verify the compliance and progress of the project.

Regarding access to information, the bank’s regulations include nothing in its considerations to guarantee access to it: its principles, the classification of information, translation into local languages, contacts within the institution, staff training, monitoring of compliance with the policy and the list of exceptions, among others. Neither do the regulations clearly indicate the procedures for receiving, confirming and responding to a request for information, nor the ways to request it or the deadlines to respond and request extensions.

At the institutional level, the bank’s regulations do not oblige it to proactively disclose information about its internal processes, such as plans, strategies, financial information, investment cycles or the loans it has. They also do not require the proactive disclosure of information about projects, through summaries, related documents or results. The regulations also do not define procedures, deadlines or institutional figures to respond to the dissatisfaction of the applicant against a refusal of information.

Participation represents a great gap in the EIBC regulations. It affirms the importance of creating a positive public opinion but does not define the mechanisms or requirements to achieve it. The regulatory documents do not include the requirement to elaborate a participation plan or the allocation of resources to execute it, do not consider or characterize the public consultation processes, do not include the implications of the participation processes in the

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126 127 128 129

EIBC. Guidelines for the Environmental and Social Impact Assessments of the China Export and Import Bank’s Loan Projects. p. 2, para. 3.

Ibid, p. 2, chapter 2.

Environmental Protection Policy of China Exim Bank, p. 2.

EIBC. Guidelines for the Environmental and Social Impact Assessments of the China Export and Import Bank’s Loan Projects. p. 5, para. 5.

Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

decision-making related to a project, and do not include equitable participation, accessibility and inclusion of disadvantaged groups, nor respect for the institutions and authorities that represent communities.

The regulations of the EIBC do not require or define a mechanism to identify, attend to and follow up on the needs, concerns and disagreements expressed by the communities.

In terms of Indigenous Peoples, the EIBC has serious deficiencies because its regulations do not contemplate the elements and characteristics that must be fulfilled when an indigenous consultation is carried out, such as free, prior and informed consent; its documentation or the sustainability of the agreements reached.

The EIBC regulations do not refer to indigenous peoples, but speak of local people. Regarding land, the policies mention rights to resources, but not respect for the right to land and territory of indigenous peoples.

Figure 21. Score obtained by the Export-Import Bank of China (EIBC)

Export-Import Bank of China, EIBC Crosscutting, 16%

Indigenous Peoples, 0% Participation, 0%

Evaluation of risks and social and environmental impacts, 20% Access to information, 2%

Source: Prepared by the authors, based on the comparative analysis of the normative frameworks of each institution.

49 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

6

Conclusions

The results obtained in the study show that traditional banking in general has better scores with respect to emerging banking and Chinese banks, in particular the IBRD-WB (86%), the IFC (64%) and the CAF (62%). This is probably due to the fact that these institutions have had a greater presence in the region and, therefore, greater experience in the design of their respective regulatory frameworks. However, it is important to point out that there are important gaps between the standard and the implementation of projects, and that having adequate regulatory frameworks does not guarantee that they will be implemented and will operate successfully. In addition, as noted in the IBRD-WB results section, there are still important challenges in the participation and consultation of civil society in the construction of the regulatory frameworks.

Other institutions, both traditional and emerging, obtained medium and low scores, such as the case of the IADB (45%), the IIC (26%) and the BNDES (17%). All of them presented important gaps in their regulatory frameworks regarding some of the categories analyzed. However, the almost generalized gaps in terms of indigenous peoples and in terms of assessments of environmental and social risks and impacts, whose weakness or absence can further aggravate conflicts over territory throughout the region, are worrisome.

With regard to Chinese banks present in Latin America, there is a clear difficulty in accessing the corresponding regulatory frameworks. Ignorance of CDB bank guidelines complicates the monitoring of compliance with social and environmental minimum standards in their investments. The CDB is one of the banks with the greatest presence in the region; therefore, the main challenge is to access its official documents in order to expand knowledge about the use and application of the environmental and social guidelines of Chinese banks.

On the other hand, the Chinese banks have compliance lags in all of the categories that were included in this analysis, but above all the areas of access to information, participation and indigenous peoples are concerning, as the absence of regulations is such that their percentages of compliance were 0% in most cases. The fact that this type of bank, whose presence is more recent in the region, has obtained the worst scores in this evaluation, does not exempt it from improving its regulatory frameworks. On the contrary, it strengthens the urgency to work in the promotion of more and better standards, with particular attention to areas lacking in regulations today. Another challenge is to press for safeguard policies to be articulated with national and international laws and with the most relevant global agreements, to create more coherent policies and to buttress their enforceability. In this sense, Chinese banks have much

50

to learn from other traditional international financial institutions whose regulations are more advanced than the Chinese environmental guidelines, and entail greater obligations.

It should be noted that another important difference between traditional banks and the others is that, for the supervision of these norms, the traditional multilateral institutions have independent accountability mechanisms, which are key spaces in which the citizens and affected communities can present complaints or claims in the face of negative impacts due to a project financed by these institutions. In the case of the Chinese banks and the BNDES and CAF banks, this accountability mechanism does not exist.

The majority of the Chinese banks with financing in the countries of the region, are institutions of a governmental nature that respond to a great extent to the directives and social and environmental guidelines of the State and the regulatory institutions of China. Although these have not reached the degree of development of the standards of traditional financial institutions, it is important to note that efforts have been made for Chinese banks and companies to adopt them and incorporate them into their regulations. However, many of these guidelines today are voluntary.

Finally, global civil society has played an important role in pressuring financial institutions to adopt robust environmental and social standards, and to request more active participation in traditional banking spaces. A great challenge for civil society is to find channels of direct dialogue with Chinese banks, with which there are important differences in geographical distance, language and culture. Undoubtedly, the States of the region should demand that these financial institutions make their regulatory frameworks and policies public, in the interests of greater transparency and respect for rights.

51 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

Annexes

7

Annex 1. Normative frameworks, international and national development banks present in the region of Latin America and the Caribbean 7.1 International Bank for Reconstruction and Development, IBRD - World Bank a) Environmental and Social Framework (ESF) xx xx xx xx xx xx xx xx xx xx

Evaluation and management of environmental and social risks and impacts Working and work conditions Efficiency of resources and prevention and management of pollution Health and safety of the community Acquisition of land, land use restrictions and involuntary resettlement Conservation of biodiversity and sustainable management of living natural resources Indigenous peoples / Traditionally neglected local communities in sub-Saharan Africa Cultural heritage Financial intermediaries Commitment to stakeholders and access to information

b) Access to Information Policy xx

Not available

c) Inspection Panel xx

52

Not available

7.2 International Financial Corporation, IFC a) Environmental and Social Sustainability Policy xx xx xx xx xx xx xx xx

Evaluation and management of risks and environmental and social impacts Work and working conditions Efficiency of resource use and prevention of pollution Health and safety of the community Land acquisition and involuntary resettlement Conservation of biodiversity and sustainable management of living natural resources Indigenous Peoples Cultural heritage

b) Access to Information Policy xx

Not available

c) IFC guidance notes: Performance standards on environmental and social sustainability xx xx xx xx xx xx xx xx xx xx

Guidance notes 1: Evacuation and management of environmental and social risks and impacts Guidance notes 2: Work and working conditions Guidance notes 3: Efficiency of resource use and prevention of pollution Guidance notes 4: Health and safety of the community Guidance notes 5: Land acquisition and involuntary resettlement Guidance notes 6: Conservation of biodiversity and sustainable management of natural resources Guidance notes 7: Indigenous peoples Guidance notes 8: Cultural heritage Policy on environmental and social sustainability CAO Operational guidelines

7.3 Inter-American Development Bank, IADB xx xx xx xx xx xx

Environmental policy and compliance with safeguards Policy on disaster risk management Operational policy on involuntary resettlement Operational policy on indigenous peoples Operational policy on gender equality in development Policy on access to information

7.4 Inter-American Investment Corporation, IIC xx xx xx

Environmental and social sustainability policy Policy on information availability Independent Consultation and Investigation Mechanism (see ICIM Policy for the IIC)

53 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

7.5 Development Bank of Latin America, CAF (before Andean Development Corporation) xx

Environmental and social safeguards

7.6 National Bank for Social and Economic Development of Brazil, BNDES xx xx xx xx xx

Social and environmental responsibility policy Socio-environmental policy Gender equity policy and valorization of diversity of the BNDES system Transparency policy (see file in this folder “BNDES Transparency”) BNDES system transparency practices guide (within the same file “BNDES Transparency”)

7.7 China Development Bank, CDB xx

Not available

7.8 Export-Import Bank of China, EIBC xx xx

Guidelines for Environmental and Social Impact Assessments of the China Export and Import Bank’s Loan Projects Environmental Protection Policy of China Exim Bank

54 Comparative analysis. Environmental, social and access to information regulatory frameworks of traditional, emerging and Chinese financial institutions with presence in Latin America

Annex 2. Evaluation Instrument Nยบ

Question

Category

I. Crosscutting 1. Does the document define the objective of the assessment of environmental and social risks and impacts?

Conceptual clarity

2. Does the document differentiate the environmental risks and impacts from the social risks and impacts?

Conceptual clarity

3. Does the document define the importance of access to information in the development processes?

Conceptual clarity

4. Does the document define the importance of participation in development processes?

Conceptual clarity

5. Does the document define, characterize and / or establish elements to identify indigenous peoples?

Conceptual clarity

6. Does the document establish that the client must comply with the national legislation and international standards adopted by the country where the project will be carried out and that are related to the assessment of environmental and social risks and impacts?

Compliance with national and international legislation

7. Does the document state that the client must comply with national legislation and international standards on participation adopted by the country where the project will be carried out?

Compliance with national and international legislation

8. Does the document establish that the client must comply with national legislation and international standards regarding the rights of indigenous peoples adopted by the country where the project will be carried out?

Compliance with national and international legislation

9. Does the document state that when the project involves significant environmental and social impacts, clients will resort to qualified external experts for its design?

External counseling

10. Does the document state that, for projects with high risks, the client must hire independent specialists to perform the environmental and social assessment?

External counseling

11. Does the document state that for projects with high risks the client must involve independent experts to supervise the project?

External counseling

12. Does the document state that, if necessary, independent specialists should be involved in the design of an inclusive participation process?

External counseling

13. Does the document state that the client must involve independent experts to determine if a particular group should be considered an indigenous community?

External counseling

14. Does the document state that clients should collaborate with the responsible authorities in the host country to manage the environmental and social risks and impacts?

Institutional linkage and complementarity

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Question

Category

I. Crosscutting 15. Does the document state that the client will collaborate with the official entity responsible for the obligations associated with indigenous peoples in the host country?

Institutional linkage and complementarity

16. Does the document state that when the client is receiving funding from different institutions, he or she must agree on a common approach for the evaluation and management of environmental and social risks and impacts?

Institutional linkage and complementarity

17. Does the document state that when a project includes financial intermediaries, the client must comply with the institution’s requirements for the assessment of environmental and social risks and impacts?

Institutional linkage and complementarity

18. Does the institution have an independent accountability mechanism?

Accountability

19. Does the independent accountability mechanism have an updated policy and guidelines for its operation?

Accountability

II. Assessment of environmental and social risks and impacts 1. Does the document state that the client must address the environmental and social risks and impacts throughout the entire cycle and stages of the project?

Scope of the evaluation

2. Does the document state that the evaluation should consider all potential, direct, indirect and cumulative risks and impacts throughout the life cycle of the project?

Scope of the evaluation

3. Does the document state that the evaluation has to take into account the studies, diagnoses and / or assessments previously prepared by government authorities or other parties directly related to the project?

Scope of the evaluation

4. Does the document state that the evaluation should include project alternatives to reduce or avoid potential risks and impacts?

Scope of the evaluation

5. Does the document state that the evaluation should be used as an input in the design of the project?

Scope of the evaluation

6. Does the document establish that the client must notify the institution of any proposed change in the design, implementation or operation of the project?

Scope of the evaluation

7. Does the document state that the evaluation should consider the risks and potential impacts in the entire area of ​​influence of the project?

Scope of the evaluation

8. Does the document state that the evaluation should be applied to the facilities or activities that are not financed but that are a part of the project?

Scope of the evaluation

9. Does the document state that the client must address the risks and impacts caused by third parties (contractors), throughout the area of ​​influence?

Scope of the evaluation

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Question

Category

II. Assessment of environmental and social risks and impacts 10.

Does the document state that the evaluation should consider the risks and impacts of the subprojects within the framework of a project?

Scope of the evaluation

11.

Does the document state that the evaluation should consider the risks and impacts generated by the primary suppliers of the project?

Scope of the evaluation

12.

Does the document state that the evaluation should consider the risks and impacts that cross physical, geographic or extraterritorial borders?

Scope of the evaluation

13.

Does the document state that the evaluation should consider threats to human security such as the increase of personal, communal or interstate conflicts, crime or violence?

Social considerations of the evaluation

14.

Does the document state that the evaluation must take into account the risks and impacts that the project could disproportionately have on individuals or groups that may be disadvantaged or in a situation of vulnerability?

Social considerations of the evaluation

15.

Does the document state that the evaluation should consider potential risks of discrimination?

Social considerations of the evaluation

16.

Does the document state that the evaluation should consider the economic and social risks and impacts related to the use or restrictions on land?

Social considerations of the evaluation

17.

Does the document state that the evaluation should consider risks and impacts on the health, safety and welfare of the project’s workers?

Social considerations of the evaluation

18.

Does the document state that the evaluation should consider risks and impacts on the health, safety and welfare of the communities that may be affected by the project?

Social considerations of the evaluation

19.

Does the document state that the assessment must take climate change into account?

Environmental considerations of the evaluation

20.

Does the document state that the assessment must take into account the protection, maintenance, restoration and biodiversity of natural habitats?

Environmental considerations of the evaluation

21.

Does the document state that the evaluation must take into account the safety of the community (dams, pesticides, among others)?

Environmental considerations of the evaluation

22.

Does the document state that the client must prepare a response plan for environmental and social risks and impacts?

Response plan

23.

Does the document state that the client will not carry out any activity of the project until it has taken measures or actions, in a pre-determined timeframe, to avoid, minimize or reduce risks and impacts identified in the evaluation?

Response plan

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Question

Category

II. Assessment of environmental and social risks and impacts 24.

Does the document state that the client must establish specific times to implement the measures and actions established in the environmental and social risk and impact assistance plan?

Response plan

25.

Does the document state that the client must document the monitoring of the environmental and social risk and impact response plan?

Response plan

26.

Does the document state that the environmental and social risk and impact response plan must establish a system for preparing and responding to accidental and emergency situations associated with the project?

Response plan

27.

Does the document state that the environmental and social risk and impact assistance plan must allow adaptations and changes according to unforeseen circumstances?

Response plan

28.

Does the document indicate that the client must establish procedures to monitor the environmental and social risk and impact assistance plan and measure its effectiveness?

Monitoring

29.

Does the document state that the client must monitor and report the performance of the project according to the assessment of environmental and social risks and impacts?

Monitoring

30.

Does the document establish that monitoring should include indicators that measure its performance and results of the environmental and social risk and impact response plan ?

Monitoring

31.

Does the document establish that the client must ensure that the necessary resources exist to monitor the performance of the environmental and social risk and impact plan ?

Monitoring

32.

Does the document state that the client must regularly provide reports with the results of the monitoring of the environmental and social risk and impact response plan, to the lender institution?

Monitoring

33.

Does the document state that the client must notify the institution about any incident or accident related to the project?

Monitoring

34.

Does the document state that the client must document their activities and responsibilities regarding emergency preparedness and response related to the implementation of the project?

Monitoring

35.

Does the document state that the client must use internal inspections and audits in order to monitor the compliance and progress of the environmental and social risk and impact response plan ?

Monitoring

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Question

Category

III. Access to Information 1.

Does the document indicate that the institutional policy of access to information is based on the principle of maximum publicity and/or disclosure?

Measures to promote access to information

2.

Does the document establish a principle of active and/or proactive disclosure to regularly disseminate documents through its website?

Measures to promote access to information

3.

Does the document establish a classification for information that facilitates knowing if it is public, confidential, for official use, exceptions, among others?

Measures to promote access to information

4.

Does the document establish an institutional figure responsible for supervising and monitoring compliance with the policy on access to information?

Measures to promote access to information

5.

Does the document indicate the contact of the entity that is responsible for access to information within the institution, for assistance and clarifications?

Measures to promote access to information

6.

Does the document state that the information of the institution must be translated into the languages of the countries where it operates?

Measures to promote access to information

7.

Does the document establish that personnel should be trained for the adequate application of the institutional policy of access to information?

Measures to promote access to information

8.

Does the document establish that compliance with the institutional policy on access to information should be monitored?

Measures to promote access to information

9.

Does the document clearly establish a list of exceptions?

Measures to promote access to information

10.

Does the document state that the institution must disclose information that is on the list of exceptions by demonstrating that the full benefits of disclosing it outweigh the potential harm of not doing so?

Measures to promote access to information

11.

Does the document establish the procedure to submit a request for information?

Requests for Access to Information

12.

Does the document establish various ways to present a request for information (eg. through the website, by phone, in person, by fax, by mail, etc.)?

Requests for Access to Information

13.

Does the document state that requests for access to information can be made anonymously?

Requests for Access to Information

14.

Does the document state that information can be requested without needing to justify the reasons for which it is requested?

Requests for Access to Information

15.

Does the document specify the internal procedure to respond to a request for information?

Requests for Access to Information

16.

Does the document determine the number of business days to acknowledge the receipt of a request for information?

Requests for Access to Information

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Question

Category

17.

Does the document state that every application must be registered and assigned a number for its respective tracking?

Requests for Access to Information

18.

Does the document determine the number of business days to respond to a request for information?

Requests for Access to Information

19.

Does the document establish the criteria and the deadlines for requesting extension to respond to a request received?

Requests for Access to Information

20.

Does the document state that the request for information will be answered in the language in which it was requested?

Requests for Access to Information

21.

Does the document state that the delivery of information must be free or with a charge that does not exceed the cost of reproducing the documents?

Requests for Access to Information

22.

Does the document state that in case the requesting entity that receives an application has doubts about the scope or nature of the requested information, it should contact the applicant for clarification?

Requests for Access to Information

23.

Does the document state that when the requested information is not located and it should exist in the files of the institution, the missing information must be obtained in order to deliver a response to the applicant?

Requests for Access to Information

24.

Does the document establish the existence of a record of the applications and information delivered, and that this must be accessible to all public?

Requests for Access to Information

25.

Does the document indicate that if part of the requested information is not delivered because it is within the exceptions regime, a public version will be provided that crosses out or covers only the parts of the document subject to it?

Requests for Access to Information

26.

Does the document provide for the disclosure of information about the institution’s plan of activities, strategies, policies and budget?

Dissemination of Institutional Information

27.

Does the document provide for disclosure of financial information of the institution (eg. annual financial statements, annual reports, financial statements, quarterly statements, among others)?

Dissemination of Institutional Information

28.

Does the document provide for the disclosure of information about the investment cycle or a loan?

Dissemination of Institutional Information

29.

Does the document state that a summary should be disclosed with information on the investment or the loan for a project (eg. destination, total cost, location, description, schedule and dates, etc.) prior to its approval?

Dissemination of information at the project level

30.

Does the document state that the institution must disclose the result of the public consultation of a project prior to the board considering the investment or the loan?

Dissemination of information at the project level

III. Access to Information

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Question

Category

III. Access to Information 31.

Does the document state that the client must disclose the environmental and social impact assessment or the preliminary version prior to the approval of the project?

Dissemination of information at the project level

32.

Does the document state that the client must update the information of a current project to guarantee the accuracy of the information disclosed?

Dissemination of information at the project level

33.

Does the document state that for each investment or loan for a project, the results obtained must be disclosed?

Dissemination of information at the project level

34.

Does the document indicate that the client must implement and maintain a mechanism, at the project level, to receive and record external communications from the public?

Dissemination of information at the project level

35.

Does the document establish specific deadlines to declassify documents that are on the list of exceptions and make them available to the public?

Declassification

36.

Does the document establish confidential information that will not be declassified?

Declassification

37.

Does the document establish a process to declassify historical documents that were prepared prior to the entry into force of the most recent policy?

Declassification

38.

Does the document clearly state in which cases, in case of a refusal of access to information, it can be appealed?

Appeals

39.

Does the document clearly establish the procedure to appeal in the event that the applicant considers that the information has been denied or delivered incompletely and without grounds?

Appeals

40.

Does the document state how an appeal is processed internally and the entity responsible for responding to it?

Appeals

41.

Does the document set the number of days to respond to an appeal?

Appeals

42.

Does the document state that the entity responsible for receiving the appeals must make reasonable efforts to assist the applicant?

Appeals

43.

Does the document establish a procedure to be express inconformity in response to an appeal?

Appeals

44.

Does the document establish the number of days that the institution has to respond to nonconformity with the response to an appeal?

Apelaciones

45.

Does the document establish the existence of an independent institutional figure that reviews and analyzes the appeals?

Appeals

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Question

Category

IV. Participation 1.

Does the document state that the client must design and execute a participation plan during the different stages of the project?

Participation Plan

2.

Does the document indicate that the client must disseminate a draft of the participation plan prior to the approval of the project?

Participation Plan

3.

Does the document indicate that the client must allocate sufficient resources to encourage participation and guarantee the necessary conditions for its effective exercise?

Participation Plan

4.

Does the document indicate that the public consultation should take place throughout the project cycle (including an early phase for the identification of environmental and social risks and impacts, such as its performance)?

Public consultation

5.

Does the document state that public consultation must be carried out with relevant, transparent, objective and meaningful information?

Public consultation

6.

Does the document indicate that the client should disclose information to interested parties about the time and place of possible public consultation meetings?

Public consultation

7.

Does the document indicate that the client must adapt the public consultation to the linguistic preferences of the affected communities?

Public consultation

8.

Does the document indicate that the client must adapt the public consultation to the decision-making processes of the affected communities?

Public consultation

9.

Does the document state that effective public consultation should be free from manipulation, interference, coercion or external intimidation?

Public consultation

10.

Does the document indicate that the client should take advantage of the informal participation spaces existing in the community?

Public consultation

11.

Does the document state that the client must document the public consultation process?

Public consultation

12.

Does the document state that the client must consider the perspectives and information resulting from the participation processes in their decision making?

Scope of participation

13.

Does the document state that compliance with the commitments agreed upon during the public consultation must be planned and documented?

Scope of participation

14.

Does the document state that the client must inform the manner in which the concerns arising from the public consultation have been answered?

Scope of participation

15.

Does the document indicate that participation must be comprehensively understood, including the monitoring, evaluation and record of people in relation to a specific project?

Scope of participation

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Question

Category

IV. Participation 16.

Does the document state that the participation of all interested social actors (men, women, elderly, young people, displaced people, vulnerable or disadvantaged groups) must be identified and considered?

Representativity

17.

Does the document state that differentiated measures should be considered for the participation of those groups or persons identified to be in a situation of disadvantage?

Representativity

18.

Does the document indicate that the people chosen by the affected communities or groups in order to represent them should be respected?

Representativity

19.

Does the document indicate that the people chosen by the affected communities or groups in order to represent them should be respected?

Representativity

20.

Does the document state that the client must form a grievance mechanism at the project level?

Grievance mechanism at project level

21.

Does the document state that the client must report on the operation of the grievance mechanism at the project level?

Grievance mechanism at project level

22.

Does the document state that the client should consider in its grievance mechanism at the project level, the necessary conditions to ensure access to the communities that could be affected by the project, including indigenous communities?

Grievance mechanism at project level

23.

Does the document state that the mechanism should consider different ways to receive complaints (in person, by phone, text message, email or through a website, etc.)?

Grievance mechanism at project level

24.

Does the document indicate that the grievance mechanism at the project level must respond promptly, effectively, transparently, culturally appropriately and with ease of access to all parties affected by the project, at no cost and without retribution?

Grievance mechanism at project level

25.

Does the document state that the mechanism should publish the procedures that establish the times to acknowledge receipt, to respond and to resolve the complaints?

Grievance mechanism at project level

26.

Does the document indicate that the client must maintain, update and make available to the public a registry or database that documents the complaints received, as well as the answers?

Grievance mechanism at project level

27.

Does the document indicate that the mechanism must respond even when complaints are made anonymously?

Grievance mechanism at project level

28.

Does the document say that the grievance mechanism should consider an appeals process?

Grievance mechanism at project level

29.

Does the document state that the grievance mechanism at the project level does not prevent access to other administrative and judicial resources?

Grievance mechanism at project level

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Question

Category

V. Indigenous Peoples 1.

Does the document indicate that the communities of indigenous peoples that could be affected by a project should be consulted prior to its approval?

Indigenous consultation

2.

Does the document establish the minimum elements that an indigenous consultation process should include?

Indigenous consultation

3.

Does the document state that the client must schedule a specific budget to develop strategies and activities that will ensure the effective participation of the communities of indigenous peoples in relation to the project?

Indigenous consultation

4.

Does the document indicate that within the framework of an indigenous consultation process, the participation of the organs and organizations that represent indigenous communities must be guaranteed and respected?

Indigenous consultation

5.

Does the document indicate that during the indigenous consultation process the perspective and interests of women must be guaranteed throughout the project cycle?

Indigenous consultation

6.

Does the document indicate that the indigenous consultation process and the agreements reached must be documented?

Indigenous consultation

7.

Does the document indicate that prior, free and informed consent must be obtained from the indigenous communities that could be affected by the project (throughout the cycle)?

Indigenous consultation

8.

Does the document indicate that the prior, free and informed consent of indigenous peoples must be documented and proven prior to the granting of permits, licenses, authorizations and concessions?

Indigenous consultation

9.

Does the document establish that when the relocation of indigenous peoples is necessary to carry out the project, the client will not proceed with it unless the prior, free and informed consent of the indigenous communities has been obtained?

Indigenous consultation

10.

Does the document indicate that the agreed measures to minimize, restore or compensate the impacts generated must be framed in a development plan resulting from the indigenous consultation?

Indigenous consultation

11.

Does the document state that the measures agreed upon with the indigenous peoples’ communities after the consultation must be carried out according to the deadlines established between the parties?

Indigenous consultation

12.

Does the document indicate that the client must carry out, together with the indigenous people, an evaluation of the direct and indirect economic, social, environmental, and cultural risks and impacts on their communities?

Decision over their own development

13.

Does the document indicate that the benefits and opportunities for development should be defined by the communities of indigenous peoples?

Decision over their own development

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Question

Category

V. Indigenous Peoples 14.

Does the document state that the intellectual property of the cultural heritage of the indigenous communities, their traditional knowledge and their cultural expressions must be respected?

Decision over their own development

15.

Does the document establish that the rights of indigenous communities over the lands that have been traditionally used by them must be respected?

Land and territory

16.

Does the document state that the use of lands for subsistence, cultural, ceremonial or spiritual purposes that are part of the identity of indigenous communities should be respected, even though they may lack legal ownership over them?

Land and territory

17.

Does the document indicate that the rights of indigenous communities to use, administer and conserve the natural resources existing on their lands must be respected?

Land and territory

18.

Does the document indicate that the culture and spiritual values regarding lands or territories of the indigenous communities must be respected?

Land and territory

19.

Does the document stipulate that any unauthorized intrusion into the lands of indigenous peoples or any use of them by persons alien to them must be prevented and sanctioned?

Land and territory

20.

Does the document indicate that the client must develop alternative project designs in order to avoid the relocation of indigenous peoples’ communities?

Land and territory

21.

Does the document state that the client will not resort to the forced eviction of indigenous peoples’ communities?

Land and territory

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References

CIDH. (2017), Indigenous women and their human rights in the Americas, Available at: http://www.oas.org/es/cidh/informes/pdfs/MujeresIndigenas.pdf Friends of the Earth (January 2016). Emerging Frameworks of Sustainability: Chinese Development Bank and Export-Import Bank of China. Available at: http://chinaenamericalatina.info/wp-content/uploads/2017/06/FOE_CHINA_REPORT_033016.pdf Garzรณn, Paulina (2015). Legal handbook on Chinese environmental and social regulations for loans and foreign investments: A guide for communities. Center of Economic and Social Rights. Available at: https://namati.org/resources/legal-manual-on-chinese-environmental-and-social-guidelines-forforeign-loans-and-investments-a-guide-for-local-communities/ Gonzรกlez, Mariana and Del Pozo, Edmundo. (2016). Right to participation and consultation in Development. Challenges for Mexico. Mexico, Mexico City, Available at: http://appweb.cndh.org.mx/biblioteca/archivos/pdfs/fas-CTDH-Derecho-Participacion-Consulta.pdf Lรณpez, Francisco and Espinoza, Guadalupe. (2017). The right of indigenous peoples to development.

Mexico, Mexico City.

Chinese Development Bank. Corporate Culture Handbook: http://www.cdb.com.cn/English/qywh/khwhsc/download/ Initiative for China-Latin America Sustainable Investments (IISCAL), Section on Chinese guidelines, UN-HR. (2018). The rights of indigenous peoples in Mexico: A view from the organisms of the United Nations system. Mexico, Mexico City, Available at: http://www.hchr.org.mx/images/doc_pub/PueblosIndgenas_UnaMirada_2017.pdf Silva, Itzel. (2018), Social Impact Studies in the international human rights framework. Internal document.

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