NGO Recommendations on Environmental Reviews of the JBIC
(Prepared as a meeting material for Study Group on unified JBIC Environmental Guidelines, Jan. 25, 2001)
The term “environmental review” used here refers to the process though which JBIC should review environmental aspects of projects in its funding activities. The process should start from the time of receiving a request from a prospective borrower until completion of the formal decision-making process on funding. Although comprehensive project reviews to be conducted by JBIC also include economic, financial, and technical issues, this paper focuses on the environmental and social aspects.
In the review process, JBIC should be responsible to ensure that all the projects it funds are environmentally and socially sustainable. The impacts of projects and their mitigation strategies should be examined in the context of JBIC’s own environmental and social policies and standards. The results of these reviews should be reflected in actual decision-making.
In order to adequately fulfill their necessary functions, the following are essential elements of guidelines for environmental reviews:
clear policies and standards for the conduct of responsible reviews,
clear procedures to ensure that reviews are accountable,
requirements and guidance for prospective borrowers to adequately consider the environment along the lines needed for reviews,
institutional arrangements to ensure the proper implementation of guidelines, and
periodic revisions of guidelines based on international trends and advances in scientific knowledge.
Based on those elements, this paper covers three points in detail: Policies and standards for environmental reviews; Procedures for environmental reviews, and Requirements and guidance for borrowers.
I. POLICIES AND STANDARDS OF ENVIRONMENTAL REVIEWS
1. Basic philosophy concerning environmental reviews
1-1. Comments on the objectives of environmental reviews
(1)Environmental reviews should be conducted on all projects in order to ensure that projects funded do not inflict any harm on the environment, local communities or individuals.
(2)Environmental reviews ensure that the social and environmental impacts of projects for which funding is sought have been properly anticipated; that countermeasures have been properly considered in order to limit the impacts to the smallest degree possible; that effective and proper project management are more likely, including environmental and social measures; and that the views of the stakeholders are adequately considered.
(3)If the environmental assessments and/or mitigation measures by the contractors are judged to be inadequate, JBIC should demand the submission of the necessary information and/or additional actions. JBIC should suspend the review until these steps are taken.
(4)JBIC should, based on the review, judge whether or not funding for the proposed project is appropriate from the perspective of environmental and social sustainability. JBIC should not provide any final commitment for funding?such as through premature announcements?until the review has been completed.
(5)The results of the review should be clearly reflected in the final decision-making documentation related to the provision of funding (i.e., the loan agreement (L/A), etc.).
(6) Beginning in the early stages of a project, JBIC should notify
project proponents about the environmental and social criteria and
let them know that JBIC is prepared to give advice. Furthermore, JBIC
should make efforts to build its capacity to provide advice.
1-2.
Principles of the Review
(1)Decisions should be made objectively, based on the most up to date scientific knowledge.
(2)The scope and standards of the review should be clearly stated.
(3)Sources of information for the review should not be limited to screening forms, feasibility studies (F/S) and environmental impact assessments (EIA), etc. Opinions and information should be sought from local citizens, NGOs, and experts who possess special knowledge and expertise, and utilized to the greatest extent possible in order to objectively verify information from a broad perspective.
(4)Reviews are to be conducted objectively based on an adequate understanding the legal systems, social customs, and usual practices, etc., of the country.
(5)A variety of opinions and information should be collected, with clear procedures and allocation of responsibilities, based on checks and balances.
(6)In principle, review information should be compiled, documented and made public, in order to ensure responsible decisions and the transparency and accountability of the review process.
(7)JBIC should set up the infrastructure and build its capacity to conduct reviews according to these principles.
2. Points that should be considered in reviews
2-1.
Scope of the environmental and social impact assessments
Natural environment
Human rights, health, safety, social impacts
Involuntary resettlement. Loss of means of livelihood
Society, culture and rights of indigenous peoples
Impacts on cultural property, scenery, etc.
Impacts crossing national boundaries, impacts on the global environment
Related impact assessments
Environmental information should be sought and verified in compliance with the guidelines, for cases in which a project seeking JBIC funding includes components that cannot be combined with the main project (e.g., construction of a pulp factory connected with large scale tree plantations or logging, irrigation projects associated with dam construction, etc.), or when the cumulative effects from other projects are anticipated.
2-2.
Impact Assessment Criteria
In general, the criteria for impact assessments should be as follows.
Laws, government ordinances, rules and regulations of the country or region in question
High level national environmental and development plans, etc.
International treaties, conventions and agreements
Internationally recognized criteria and good practices
Criteria and good practices of other international organizations
Specific criteria should be described for each topic
(1) Natural environment
International agreements such as the Ramsar Convention, Biodiversity Convention, and Basel Convention. Environmental plans of each country.
No serious impact on nature preserves, national parks, etc.
No serious impact on biodiversity or the habitats of endangered species
(2) Human health and safety, social impacts
Vienna Declaration and Action Plan, International Declaration on Human Rights, Rio Declaration, various recommendations of UN human rights organizations, Convention for the Abolition of Sexual Discrimination, Beijing Action Plan, etc.
National emissions standards of the country concerned, emissions standards of Japan and international organizations, World Bank Pollution Prevention Handbook, etc.
Have the economic activities and social dynamics of the region concerned been adequately understood? Have the economic activities, lifestyles and cultures, etc., that depend on the natural resources been taken into account?
Check into the situation concerning women’s economic activities, roles in society, and use of resources. Will the project have any adverse impacts on the human rights, economic activities, and work or health of the women?
Analyze the impacts of the project on the poor, especially on women. How will the project contribute to poverty reduction targets?
Identify other vulnerable groups and determine whether special consideration is necessary.
(3) Indigenous peoples
Other international laws and documents concerning the rights of indigenous peoples such as the ILO Convention, ADB Indigenous Peoples Guidelines, and World Bank Indigenous Peoples Policy. Consider any development or other plans for indigenous peoples in the country concerned.
Recognizing the fact that indigenous peoples often lead traditional lifestyles based on the land and other natural resources, consider whether the groups’ rights to own and use the land and other resources are ensured (not limited only to legally guaranteed rights).
(4) Involuntary resettlement and loss of means of livelihood
World Bank guidelines on involuntary resettlement OD4.30 (OD4.12 and BP4.12 are drafts)
All possible efforts should be made to avoid involuntary resettlement and loss of livelihood resulting from projects. Those projects that reduce people’s quality of life violate the principles of development assistance. Projects funded by JBIC that include involuntary resettlement should be limited to those that fulfill all of the following conditions.
Projects should not proceed without the prior free and informed consent of the people who will be directly affected by the project. Information concerning the project should be provided, explained and discussed in such a way that the people and communities who will be affected by the project can comprehend. Pressure should not be used. Explanations should be accurate. The rights of the people to be relocated should be properly guaranteed
In order to minimize the impacts and adequately compensate for any damages, resettlement and rehabilitation plans should be developed so that costs are reflected in a way that can be verified.
Adequate compensation and financial assistance should be given before the actual relocation begins, in order to ensure that the quality of life of the resettled people after resettlement is better than before the project, and at least is not worsened (this is not limited to cases in which the legal rights are guaranteed). This includes adequate compensation with land and money (for lost land or wealth), support to ensure sustainable alternative means of livelihood, compensation and care to deal with the psychological hardships associated with the relocation, financial support for the expenses associated with relocation, and support to rebuild the community at the relocation site.
The project-affected people and community should be given the opportunity to participate in the preparation, implementation, and monitoring of the resettlement and rehabilitation plan.
(5) Development of water resources
Final Report of the World Commission on Dams
(6) Effects on cultural heritage, natural scenery, etc.
Registered cultural heritage property should not be damaged
Natural and cultural scenery that hold important significance for the local people should not be damaged, even if it is not registered.
(7) Impacts crossing national boundaries, impacts on the global environment
UN Framework Convention on Climate Change, Montreal Protocol, World Bank International Rivers Policy (OP7.50), etc.
2-3. Quality of Information Submitted
Information submitted should include the following:
(1)Baseline information to serve as basis for forecasts and monitoring, etc.
(2)Are detailed alternative plans also properly considered, including the “zero option” of not proceeding with the proposed project?
(3)Were the procedures prescribed in the country concerned for F/S and environmental assessments properly adhered to?
(4)Are the terms of reference (TOR) and authors of the F/S and EIA identified clearly?
(5)List of laws and environmental plans, etc., that bear any relation to the project implementation.
(6)Indication of the freshness of the information in the F/S and EIA. A system should be put in place to re-conduct the studies if some time has passed or changes have occurred in various conditions (e.g., economic, social or legal factors, or the local community’s societal factors) between the time of the F/S and EIA and the time of project implementation.
2-4. Countermeasures to Address Environmental and Social Issues
(1)Are methods to avoid negative impacts adequately considered? In cases where they cannot be avoided, an explanation must be given about the nature and scale of the impacts, and the reason they cannot be avoided. In addition, adequate consideration should be given to ways to minimize impacts and provide compensation.
(2)Has a detailed environmental action plan (including information about how to cover costs, timing, etc.) been considered corresponding to the impacts predicted?
(3)Has the most feasible and best countermeasure been selected, from the perspective of covering costs, schedule, etc.? Has adequate scientific evidence been provided to substantiate the results? Is there any likelihood of new problems emerging as a result of implementation of the countermeasures?
(4)Prepare a proper monitoring plan for the countermeasures that is suitable for the predicted impacts.
2-5. Capacity of Implementing Bodies of the Project
Consideration should be given to the environmental management capacity of the borrowing country or party and contractors, including performance during implementation, past performance, etc.
2-6. Environment-related Regulatory System in Borrower Country
Consideration should be given to the quality of the environment-related regulatory system in the borrower country, including the environmental assessment system. Also, to the supervisory capability of the country’s environment ministry, etc.
2-7. Local Conditions affecting project implementation (human rights, governance, etc.)
In countries where basic human rights such as freedom of speech are not guaranteed, one can not rely on the proper collection of environmental or social information, nor on proper discussion/debate and decision-making. Funders should be fully aware of this problem, and take the situation into account. Information should be collected about the local status of human rights, and this should be considered when conducting during reviews. Regarding the guarantee of basic human rights?for groups that will be directly affected by the project, other stakeholders and socially vulnerable groups?particular effort and attention must be paid to verify their ability to express their views and to access information.
Funders should be aware of the possibility that the development process can be largely distorted if inadequate effort is made to prevent corruption. This reality should be taken into account in the review process.
2-8. Information Disclosure and Consultation
(1)Were the EIA and F/S made public in the target country? With what timing, what method, in what language?
(2)Were any opportunities for exchange of opinion provided, such as public hearings, etc., to present information directly to the local people?
(3)Were stakeholders properly selected, considering rights to resources and risks of suffering impacts?
(4)Before consultations, adequate information should be provided to stakeholders, especially to local people in the implementation area who will receive direct impacts, regarding the reasons the project is needed, details of plans, and impacts, etc.
(5)Responses should be made regarding the major opinions received. They should be recorded, and reflected in the final plans.
II. PROCEDURES FOR ENVIRONMENTAL REVIEWS
1. Basic philosophy concerning the creation of procedures
Clear review procedures should be broadly publicized internally and externally, based on the review principles and criteria described above. For Japan’s Other Official Flows (OOF), project review procedures and criteria should be treated as public documents, just as stipulated for Official Development Assistance (ODA) activities such as in “Operational Guidance for Preparation of Requests for Yen Loans.”
The timing and method of JBIC’s involvement differs depending on the type of financing, but social and environmental policies and standards should be carried out for all projects. Based on this principle, it will be important to determine efficient and effective procedures for the peculiarities of each type of financing.
In order to ensure the transparency and accountability of the review process, the type and timing of documentation for information that must be presented and compiled should be clearly stated.
2. Screening (for details see separate page outlining opinions)
Both ODA and OOF activities should use the same screening standards relating to project features, local characteristics, and scale of impacts.
Information should be regularly updated, and the categorization of the project should be revisable if major impacts are discovered later, or if changes are made in plans.
3. Procedures that depend on type of financing
The required procedures should be stipulated so that environmental information can be verified efficiently and effectively, reflecting differences in type of financing such as two-step loans, program loans, etc.
When a project is divided into multiple phases, the contents of reviews in consecutive phases should adequately reflect the monitoring and evaluation results of the previous phases.
4. Information disclosure and accepting input
JBIC should create a system to accept information from the public on an ongoing basis, in order to fulfill its responsibility for public disclosure, and in order to utilize in reviews any valuable information from concerned NGOs and specialists. In particular, it is important to ensure an adequate comment period before review missions.
Clear procedures and methodologies for information disclosure should be urgently formulated, in consultation with NGOs and other concerned parties.
At the minimum, the following items should be stipulated (and if there additional or updated information arises it should be promptly disclosed):
(1) Disclosure of information on projects being considered for funding
At the time JBIC receives a request for funding, or when JBIC initiates a review, the following information should be disclosed as a minimum: project name, location, implementers, scale and source of funding, general outline of the project.
(2) Categorization and its rationale (disclose immediately after being categorized)
(3) Environmental assessment report and F/S report
If a submission has been made by the party requesting funding, these should be made public immediately, or at least 120 days before the final decision on funding.
(4) Documents containing comments on the review (documents for board of directors) (XXXX days before the board of directors’ meeting)
(5) Exchange of Notes (E/N)
(6) Loan Agreement (L/A) and any agreements relating to environment and social issues (after signing of agreements)
(7) Monitoring reports (immediately after they come in)
(8) Other
5. Review Mission
A review mission including the Environment and Social Development Office personnel should be dispatched?this should be mandatory for Category A projects, and be done if necessary for Category B projects. This mission should be conducted in addition to a review of EIA and other documents. The mission should include meetings with local people who will feel direct impacts, as well as other groups that show interest, and should verify social and environmental impacts, from a broad perspective.
6. Utilizing the Review Results
Views expressed in the review should be duly reflected in agreement documentation including the Loan Agreement, etc., after being verified by the Environment Office.
Environmental and social information should be reported to the JBIC board of directors as it considers funding, and reflected in decision-making.
In the case of ODA, procedures should be strictly defined through discussion with the government so that no government pledges for funding are made before completion of the environmental review.
7. Roles of the Environment & Social Development Office and the Management Division
The Environment and Social Development Office is to ensure that proper consideration is given to the environmental and social aspects of every project. Procedures should be established so that the project may not proceed without clearance from this office.
The Management Division is to cooperate with the Environment and Social Development Office in considering environmental and social issues as it proceeds with projects.
8. Ensuring Independence of the Reviews
A system should be established to create an independent review team, in order to improve the quality of the review process, especially for projects having large impacts or projects for which opposition has been expressed. In this case, it is essential that the transparency of the review process is preserved.
III. REQUIREMENTS AND GUIDANCE FOR BORROWERS
1. Stating Clearly the Items Needed for Environmental Reviews
In order to facilitate adequate environmental consideration and information provision reflecting the details needed for environmental reviews, JBIC should clearly state the minimum items required. At least the following items should be required information.
Items included in the EIA (with reference to World Bank OP)
Public disclosure of the EIA and F/S at the local level
Consultation regarding the process for preparation of the EIA (in particular, for Category A projects, the stages of scoping and draft EIA should be included)
2. Good Practices for Environmental Assessment
Environmental assessments are useful procedures for conducting information exchange between concerned parties in order to achieve desirable outcomes. They are procedures to achieve social consensus (Harashina 1994, Terada 1999). Many development assistance organizations indicate “good practices” in order to ensure proper assessment processes. When contractors/implementing bodies are required to conduct proper environmental assessments, they have been recognized to produce mutual benefits for implementing agencies and the funding institutions, by avoiding delays in development as well as additional costs. JBIC should demonstrate environmental assessment good practices in its guidelines, practices which match internationally recognized standards, taking into consideration guidelines of the World Bank and the OECD.
It is desirable to have the contents of the EIA reflected properly in the F/S.
3. Completion of Guidelines, Manuals, etc.
JBIC should compile complete guidelines and manuals for contractors/implementing bodies, in order to share and build-up cumulative experience between ODA and OOF projects.
JBIC should improve the “Social Consideration Handbook” and others currently being used, through dialogue NGOs and specialists, etc., and utilized for both ODA and OOF.
To deal with projects that involve special characteristics such as dam construction, forest projects, relocation of local people, and indigenous peoples, JBIC should utilize the good practices and guidelines that have already been created by various international institutions. These should be used to provide guidance as well as reference information to parties requesting funds.
Provisions should be made allowing for periodic additions and updates to this information, to reflect progress in international experience as well as advances in scientific knowledge.