Environment

Background

Safeguarding climate finance: GCF, MDBs, rights, and social/environmental risk

5 October 2016

7 October 2016 | Minutes

gcf-safeguards-event

Sponsors: Bretton Woods Project & Friends of the Earth

Panellists:

Yator Kiptum, Sengwer Indigenous Peoples Programme, Kenya – power point presentation
James Close, World Bank Group
Stephanie Fried, Ulu Foundation
Karen Orenstein, Friends of the Earth U.S.
Leonardo Paat, Green Climate Fund – power point presentation
Siti Aminah Tardi, Indonesia Legal Resource Center

Notes
Karen Orenstein, Friends of the Earth US:

Next week the green climate fund is having its 14th meeting. Expected to approved and discuss its first high-risk project, upcoming discussion on management system and its own safeguards. There is a new Social and Environmental Framework (ESF) for the World Bank. Concerns with green climate funds safeguards, lack of indigenous peoples protection, etc.

Leonardo Paat, Green Climate Fund (GCF) (see also power point presentation):

I will give an overview of the GCFs managing environmental and social risk. 190 countries agreed within framework of UNFCCC. Works through diverse credit entities. Works with country focal points and governments to ensure consistency with national plans. Commitment to safeguards is enshrined in charter. Uses IFC Performance Standards.

2012 – mandated to develop own system. Operational Framework – 1 – avoid ES impact, maximise benefits, improve systems and management over time. Includes gender policy. GCF has a commitment to adopt best practice on ESFs. The GCF has its own environmental and social management system (ESMS).

Mentions key consideration and elements of ESMS. The secretariat has two assessments, institutional assessment and a programmes and projects assessment. ESS approved projects, 17 projects, so far all in lower risk categories. The secretariat would like to look at and strengthen stakeholder engagement; stakeholder analysis and planning, country ownership, information disclosure, and internal grievance and redress mechanism are being developed. The ESMS is still being developed; it (correct stage/version) is now with the accreditation committee. We intent to improve it over time, with what would be the relevant best practice.

Yator Kiptum, Sengwer Indigenous Peoples Programme, Kenya (see also power point presentation):

I will give some highlights on the need of an indigenous peoples policy for the GCF. In 70% of projects happen on land in Kenya that is classed under indigenous peoples areas where IP safeguards should apply. The need to have a policy for indigenous policy to protect them during the implementation of projects on their lands. To address the indigenous peoples landless issues. Most of these projects are carried out on indigenous peoples lands. To be able to mitigate this in advance, it is important that an indigenous peoples policy is put in place with strong environmental and social protections.

I will share some examples of use of indigenous peoples protections: The case of the Sengwer implementation of NRMP in 2007-2013 by WB policy on indigenous peoples. This project was carried out indigenous peoples land. The community filed a complaint with the Inspection Panel which held the World Bank to account of the violations that happened during the project. Without this policy the position of the indigenous people affected by this project would have been worse.

European Investment Bank complaint mechanism – the case of Maasai during the implementation Olkaria I and IV geothermal project. This project had a lack of consultation with indigenous communities. So a complaint was filed, which let to an investigation into the project and recommendation on how to mitigate the effects of the problems.

IUCN adhere to a rights-based approach, NRM project in Kenya, there were evictions and people arrested. The community disagreed to the project and demanded the IUCN redesigned the project to address the rights of indigenous people. In the end the project was suspended as the communities rights were not protected.
Recommendations: GCF should (i) develop and adopt (with participation and consultation of Indigenous People), and indigenous peoples policy, strong environmental and social safeguards, disclosure policy, complaint mechanisms, free prior and informed consent (FPIC), indicators (precautionary measures).

KO:

There are two civil society observers in the North and South, it is weird they are speaking on behalf of indigenous peoples.

James Close, World Bank Group:

How to guarantee there are actually environmental outcomes and not just on paper. We are at a point in time where the urgency to get climate finance to flow is now, in the context of an ambitious Paris agreement. Our commitment is to 28% of World Bank portfolio dedicated to investments in the climate sector. 80 Billion currently funded through MDBs – not nearly sufficient. Peak emissions must be reached by 2020.

Climate change action plan has been approved by the board. Climate Change Action Plan – approved by the Board. One element – direct concessional finance effectively to leverage additional resources. For two years screening IDA investments for climate impact. Tools available for general use. Trained hundreds of Bank staff – looking at climate benefits. Expanding process to IBRD.

Trained 700 staff members to make projects ‘climate smart’, to make sure the projects have impact on the ground. We have been developing greenhouse gas emissions accounting tools, and guidance on carbon pricing. Some platforms: Small island state resilient initiative, to deal with extreme weather.

GCF forest investment programme, which is the main work where we engage with indigenous people. Delighter to have to projects approved, Mali around weather and hazards, and an adaptation programme at sea involved several countries. World Bank is working with the GCF. Leveraging our experiences and have public available screening tools. WB is committed too greenhouse gas accounting and improve carbon pricing. Carbon funds and carbon finance. So we can integrate results based finance. Tools available, think hazard, which shows all hazards in all countries in the world. Climate system early warning system.

I think we are doing a lot, which is leading to important changes on the ground. Climate change action plan is a good place to highlight we can do more work.

Climate investment funds – eg, climate resilience – Zambia very well advanced. Experiences are being used to inform other programmes. Working closely with GCF. One project hydromap in Mali. Adaptation project at Aral Sea – complex and multi-country.

Sharing and leveraging learning and tools. Committed to further harminisation with other MDBs. Use of carbon funds. Heavily involved in convening work around results of Paris COP. Recognise the need to raise ambitions – as reflected in the Climate Action Plan.

Liane Schalatek, Heinrich Boell Foundation:

GCF was set up to move away of business as usual, but we don’t see this yet. I also want to point out we as CSO are optimistic, the FSMS has an important stipulation, that the funders have to show a significant shift in their portfolio to greener investments (so IMF and WB) over the next years. It is great the WB is investing in some green energy project, but also in investments into the opposite, such as dam projects (by WB and IFC). Two high risk project, which are not transformational, and are high-risk projects. National entities to build greener energy projects. It has to be clear that this means information disclosure by the GCF secretariat. Need for 30 day prior to board discussion, 120 for category A –however, there has been fudging of the process as this is not being done through GCF. This prevents those working on GCF from becoming aware of GCF investment .

Stephanie Fried, Ulu Foundation:

Some safeguards thought of use for the GCF. We need safeguards to shield communities and the environment of harms and damages of projects. Decrease of democratic space of civil society, of criminalisation of environmental rights defenders, human rights defenders, attorneys etc. The GCF is starting to consider very high-risk projects. Resettlement becomes often very violent with communities refusing.
Difficulty of applying FI performance standards, 99 projects the IFC is unaware of the problems in their subprojects. There are many fake consultations and this is getting more and more used. Increased violence of forced evictions. Using the term communities are ‘voluntarily donating their land’ , there is a big change of forced evictions. Ask project implementers: Will there be use of military forces against local communities? Change of laws to make it easier to evict people from their land.

There need to be strong safeguards, implemented before the project.

KO:

In medium risk projects, there can still be sub-project that are high-risk. Which is problematic. There is at least two hydro projects coming up, in Nepal.

Siti Aminah Tardi, Indonesia Legal Resource Center:

Talking about fake consultations. In Indonesia the public consultation are carried out to tick the box of the project. We have identified 6 main issues with fake consultations, which are associated with WB. The documents are often in English, which is a third language (Indonesian being the second), so hard to understand. (2), Public meetings is 3 hour meetings, the signature sheet used as a consent form. The meetings are Jakarta centric, which in an island nation is hard to attend for most.

In this example a Canadian consultation form send out an invitation, send out on a Thursday, for a Monday morning consultation on the 21st of December (tough time to meet). Noone understood what the project was about and no documentation was provided. Only two NGOs where present, and one requested that the more protective safeguards be used, the head of the meeting aid no, we are using national laws (providing lower protection). One month later another letter was received for another few days later meeting, a 200 page document was provided a day before in English, so noone could read it. A photo of the event was used by the WB and on the government website. It was an information session, but was used as a public consultation in the documentation about the project. This way of faking consultation is a pattern in Indonesia and we hope you can discern these fake consultations form the real ones.

KO:

On a global level we also don’t have access to the GCF documents showing the consulations.

Q&A

Alison Doig, Christian Aid UK: Proper consultation should be funded by the project, local CSOs don’t have funds. Is the Bank involved in the G20 initiative on disclosure policy?

Elaine Zuckerman, Gender Action: The current 17 projects, how did they do on ESF and preventing harm also related to gender?

JC: Understanding where stranded assets are, early next year, which is an important part of the work. Carbon pricing, the answer is in article 6 of the Paris Agreement. We are tracking this very closely, that would lead to a carbon market around those. Some of the mechanisms that exist through CDNs could be adopted there.

LP: The projects are still needing to be implemented, so we don’t have any results or information on impacts.

LS: We don’t have full project information, such as the gender action plan is not publically released. We don’t see the annexes on the consultation, who have been consulted and who haven’t. Urge to take this message back to the secretariat to disclose this information.

Garam, India: How did the indigenous peoples work with the CAO (ombudsman) to address the issues.

Q: It doesn’t matter if you call a right or safeguard. Underlying right, is the land rights, so any project that doesn’t address the land rights issues at the heart of the project, it will likely be an insincere consultation. Very often a sequencing issue with assessing risks that tend to happen after the project has been approved.

YK: Inspection Panel visited communities, but the final report which came after the project had already finished. Board recommended dialogue process, which is ongoing

LP: We have a separate division, the operational division to look after the implementation. Thank you for your recommendations and concerns raised.

JC: These tools are evolving, the counterfactual is often hard to evaluate. We will continue to sharpen those. I will take away some valuable feedback, I am disappointed to hear about the consultation processes. The GCF was set up learning by doing and we are trying to have the most impact on the ground.