AIDA calls on financial institutions to join the fight against climate change
Photo: In Misa Rumi, Argentina, residents depend entirely on the sun for their energy needs. Credit: Alejandro Balaguer.
International Financial Institutions (IFIs) have a significant influence on large infrastructure projects and energy development in the western hemisphere. Many of them finance projects that accelerate climate change. These include large dams that emit methane gas, mines that disturb carbon sinks, and power plants that inefficiently use highly polluting coal- and oil-based technologies.
This financing, for example, is behind “La Colosa,” a huge gold mining project in Colombia. The project could affect the paramos and release the huge amounts of carbon dioxide retained by these high-altitude wetlands.
The Inter-American Development Bank (IDB), the World Bank Group (WBG) and its member institution, the International Finance Corporation (IFC), recently carried out research to redesign their energy investment strategies. AIDA took part in this process, pressing the IFIs to prioritize the development of clean and sustainable energy sources. We urged them to:
• Consider climate change and human rights in every stage of the process;
• Incorporate the highest standards of human rights, social equity, energy efficiency and natural resource planning in decisions;
• Set aggressive but achievable targets for reducing carbon dioxide emissions for the projects they support; and
• Prioritize energy efficiency and renewable energies while also discouraging a continued dependence on fossil fuels.
AIDA also participated in the public consultation at which the IDB was called on to give comments on the current policy of the Independent Consultation and Investigation Mechanism (ICIM). While not perfect, the ICIM is the only grievance system available to people affected by activities funded by the institution. AIDA, together with other organizations in the region, sent a letter with the comments, which was a great opportunity to increase the transparency, accountability and effectiveness of the mechanism.
Along with the IDB and the institutions of the World Bank Group, there is the National Development Bank of Brazil (BNDES), which, although not officially an IFI, behaves as such and wields a huge influence in the region. It has amassed such financial power to allow it expand outside its borders and participate in large investment projects in more than 11 countries in Latin America.
The concern is that BNDES doesn’t have socio-environmental safeguards or transparency and participation policies in line with its size and influence. Instead, it is governed by much lower standards than the IFIs working in the region. BNDES doesn’t have mechanisms to ensure the protection of the environment and communities affected by the projects it finances, nor does it have an effective system for addressing complaints or claims. In fact, the projects supported by BNDES have been drawing attention from environmentalists and human rights defenders in the region for years.
We have focused much of our work on influencing this organization so it will promptly implement appropriate environmental and social policies. What is interesting and encouraging is that we’re not alone in this task. In November 2012, we created a coalition called “BNDES na Mira,” which brings together over 90 people from more than 25 organizations in the region. The group is a reflection of the need to work together to achieve ambitious and needed results.
At the same time and as part of the ongoing training of our team and the group in general, we are developing a report to explain the inner workings of BNDES so that we can understand their decision-making process and pressure points. We also hope to make contacts to help us have an impact in and outside the bank.
To address BNDES’ lack of recognition as an IFI and hence its need to comply with the responsibilities that entails, AIDA is working on a third document that will develop this argument and provide a comparison between the safeguard and transparency policies of BNDES and other IFIs working in the region such as the World Bank and the IDB.
Also as part of “BNDES na Mira,” we participate in workshops and seminars to further strengthen our joint work, share information and develop common strategies for the future and a possible long-term channel of communication with representatives of the bank.
Given the huge amounts of money that IFIs and BNDES provide to projects and programs around the continent, any influence that we can have on their policymaking can lead to significant reductions in the emissions that cause climate change. These institutions have the opportunity to choose new tools to redirect their path toward truly sustainable development, and therefore to help protect our health and the environment from climate change. AIDA will continue examining and influencing the IFIs and BNDES on a constant basis and especially during their process of reshaping internal policies.
Last updated on 22. October 2014 - 14:34. Created on 09/20/2010 - 18:34.