Civil society organisations urge EBRD for more human rights action

CEE Bankwatch, a civil society organisation (CSO), has called on the European Bank for Reconstruction and Development (EBRD) to have more courage in addressing CSOs’ concerns about environmental and social risks and human rights violations.

Their comments came following the announcement by the EBRD of a new CSO steering committee to enhance civil society engagement. The multilateral development bank is also revising its good governance policies, including its Environmental and Social Policy (ESP), which guides its commitments when it comes to investment projects and safeguards. 

The ESP is currently being reviewed with the active participation of CSOs, which have called for greater project-related disclosures, as well as transparency and reform of the bank’s human rights and project due diligence processes. 

The EBRD invests in development projects in countries in eastern and south-eastern Europe, the southern and eastern Mediterranean, the Caucasus and central Asia, as well as sub-Saharan Africa and Iraq. CEE Bankwatch says many of these countries have high political, economic and social risks, which means there is a greater probability of human rights violations. 

Current approach failing

“Our experience shows that the EBRD’s current approach to human rights due diligence does not effectively prevent human rights violations,” says Nina Lesikhina, policy officer at CEE Bankwatch. The CSO says it had seen extensive breaches on projects run by companies financed by the EBRD in countries such as Uzbekistan and Bosnia and Herzegovina, to name just two.  

In 2021, the EBRD approved two loans worth $70m to agricultural producer Indorama Agro to support private sector investment in the cotton farming sector in Uzbekistan. However, Bankwatch claims the company’s environmental and social impact assessment, environmental and social management plan and livelihood restoration plan lacked an integrated impact assessment. Moreover, it was not compliant with the EBRD’s performance standards on impact assessment, workers’ health, biodiversity impact, land acquisition, stakeholder engagement and labour rights.

Ms Lesikhina says pressure is mounting on the EBRD to lead by example and introduce a robust system of binding instruments that ensures effective human rights due diligence. “Communities, civil society organisations, trade unions and other rights holders must have an equal say in shaping EBRD-funded projects, identifying risks, managing impacts, monitoring developments, and taking remedial action,” she said. “For this to happen, the EBRD needs to be more transparent and make engagement with rights holders mandatory.”

However, following the EBRD’s recent appointment of its first CSO steering committee, comprising international non-governmental organisations and CSOs such as CEE Bankwatch, Oxfam Great Britain, Save The Children, and Transparency International Ukraine, Ms Lesikhina says she hopes that this committee will set a good practice of effective dialogue with CSOs to protect the environment and human rights in EBRD investments.

“The EBRD lacks an effective mechanism to deal with retaliation against the human rights defenders within the EBRD investments, but this committee might be the right place to bring those issues,” she says.

More effort and courage needed

The CSO steering committee is part of the EBRD’s new strategic approach to enhance civil society engagement and provide a systematic approach for mainstreaming community and civil society engagement in EBRD-supported policies, programmes and projects, to improve development outcomes.

Carla García Zendejas, director of the people, land and resources programme at the Center for International Environmental Law, says the terms of reference for the EBRD’s CSO steering committee are quite robust. She says that collaborations to decide the agenda and panels for the EBRD’s annual meeting, CSOs providing advice on areas of development, and issues to do with retaliation, are at the crux of many of the battles the CIEL has been having with international financial institutions (IFIs) for decades. 

“The EBRD’s policy is already ahead of curve when it comes to other IFIs in having language on remedies,” she says. “It’s a step in the right direction because its institutionalising the relationship most CSOs want to have with the bank. We’re bringing the community to you before things happen in the best cases. And we try to create the best safeguards possible.”

Ms Lesikhina encouraged the EBRD to consider the CSOs as actors in defining the development, since many act on behalf of the communities and other rights holders, and to take their feedback seriously. “There is a clear benefit for the EBRD from involving the CSOs in risk and impact identification and mitigation and overall compliance with its accountability and transparency commitment. However, it requires more effort and courage from the bank to address the CSO’s concerns,” she says.

The EBRD says it aligns its policies, standards and procedures in accordance with human rights and considers human rights risks and impacts in all its operations. 

Concerning human rights due diligence, the EBRD says it engages in policy dialogue with civil society organisations and holds project-specific workshops on various topics, such as the risk of reprisals and stakeholder engagement. Until now, these discussions were conducted with prominent international human rights organisations. 

However, with the new CSO steering committee, the EBRD says it aims to reach a broader network of local civil society representatives and to enable continuous and inclusive dialogue on governance and human rights issues. 

The steering committee will also advise the EBRD’s internal working groups on human rights and retaliation, as necessary, the bank said. “Having said this, the steering committee is not a platform to resolve the retaliation cases,” says a spokesperson for the bank, adding that there were other accountability and compliance mechanisms for this purpose.

Thirteen NGOs and CSOs from central and eastern Europe, Ukraine, the UK, the Kyrgyz Republic and Romania, including organisations focused on nature, sustainability, ecological justice and female entrepreneurs, were selected to be part of the EBRD’s new steering committee. Their term will run until the end of 2025, when a new committee will be selected.

Ms Lesikhina says she welcomes another forum for facilitating meaningful engagement with CSOs, but adds the committee should not replace formal engagement forums such as required public consultations on safeguards revision, CSOs’ engagement in the sector and country strategies, stakeholders’ engagement as part of environmental and social impact assessments, and the independent project accountability mechanism.

The EBRD says the steering committee will be another mechanism for civil society members to review the bank’s institutional policies and provide feedback and recommendations directly to the relevant teams within the bank. 

This year, the EBRD’s governance policies, including its ESP, access to information policy, independent project accountability mechanism and approach to civil society engagement, will be open for public comment. The bank says input from the CSO steering committee will help it align these policies with best practice.