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Policy Advocacy and Roles of Civil Society in Reform of JBIC’s Social/Environmental Guidelines

Policy Advocacy and Roles of Civil Society in Reform of JBIC’s Social/Environmental Guidelines. Beijing Red Wall Hotel, 3 December 2006 Satoru Matsumoto Representative Director of Mekong Watch Lecturer at Hitotsubashi University, Finance Ministry’s Council member (satoru-m@msi.biglobe.ne.jp).

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Policy Advocacy and Roles of Civil Society in Reform of JBIC’s Social/Environmental Guidelines

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  1. Policy Advocacy and Roles of Civil Society in Reform of JBIC’s Social/Environmental Guidelines Beijing Red Wall Hotel, 3 December 2006 Satoru Matsumoto Representative Director of Mekong Watch Lecturer at Hitotsubashi University, Finance Ministry’s Council member (satoru-m@msi.biglobe.ne.jp)

  2. What is JBIC (Japan Bank for International Cooperation)? • 100% government-subscribed financial institution • Objectives: (1) promotion of Japanese exports, imports and economic activities overseas (2) economic and social development in the developing economies (3) stability of international financial order • Budget: US$15.7 billion --- International Financial Operations (for Japanese companies) 1,060 billion yen (US$ 9.1 b); Overseas Economic Cooperation Operations (for developing countries) 770 billion yen (US$ 6.6 b) c.f. World Bank lending US$ 23.6 billion • Staff: 869 c.f. World Bank staff 10,000

  3. JBIC’s past projects accused of negative social / environmental impacts • Kotopanjan Dam in Indonesia (loss of livelihoods by resettlement – water, forests) • Lam Ta Khong Pump Storage Project in Thailand (health problems cased by 2.5 year blasting work) • San Roque Dam in the Philippines (loss of livelihoods of ethnic minorities) • Samut Prakarn Wastewater project in Thailand (lack of impacts studies on fisheries)

  4. ◆In order to solve or avoid the problems from views of civil society, it is important to know/understand: Necessary factors to improve policies 1. Reality of problems (social, environmental, technical aspects) 2. System / mechanism of public financing (relevant regulations/guidelines, decision making process/power…) 3. Political spaces to influence issues

  5. NGOs’ observation: Institutional defects of Japanese financing in developing countries • Unclear procedures and bench marks to review projects for decision-making • No information disclosure policy • Unclear mechanism to cancel problematic projects • weak mechanism to monitor the on-going projects Focus on environmental & social guidelines of JBIC

  6. How have Japanese NGOs worked to improve the guidelines?

  7. Chronology 1st stage: In 1999 when JBIC established by merger of OECF(ODA Loan) and JEXIM Bank (IFO Loan) • Goal…JBIC agrees to establish environmental social guidelines of international standard with participation of civil society • How…through Parliament (political will) • Results…resolution at the Upper House

  8. Chronology 2nd stage: In 2000 when JBIC considering New environmental social guidelines • Goal…JBIC drafts environmental social guidelines in accordance with international standards with participation of civil society • How…dialogue with JBIC & relevant Ministries & Parliament (alliance building inside GOs) • Results…independent study group (relevant directors of JBIC, MOF, MOFA, academics, NGOs, MPs, while open to everybody)

  9. Chronology 3rd stage: In 2000-2001 when Independent study group discussing necessary factors for guidelines • Goal…NGOs bring necessary clauses into the study group based on their problem analysis • How…thorough studies about policies of other institutions and actual problematic projects (creating credibility) • Results…Most of crucial points are incorporated in the recommendation within our capacity.

  10. Chronology 4th stage: In 2001 when JBIC drafts guidelines based on recommendations of study group • Goal…JBIC accept all the recommendations for tguidelines proposed by the study group • How…follow-up committee to monitor, dialogue with JBIC & relevant Ministries & parliament • Results…Many crucial points are incorporated but human rights, duration of EIA disclosure

  11. Chronology 5th stage: In 2002 when JBIC considers and drafts compliance (objection) mechanism of guidelines • Goal…JBIC introduce people-friendly compliance mechanism to respond to grievances • How…studies of similar mechanisms, open discussion at public consultation forum • Result…advanced mechanism to comply with the guidelines and respond to grievances New Guidelines and Objection Mechanism went into effect on 1 October 2003

  12. New environmental social guidelines of JBIC • Improved information disclosure (when, which documents, how) • Strengthened conditions of EIA (public participation, social impacts, governance) • Made procedures transparent • Clarified responsibility of JBIC (ensure adequate studies and measures) • Compliance mechanism (grievant to JBIC)

  13. Implications of policy reform Policies or guidelines are apparatus that people can utilize easily in order to protect environment and their livelihoods. They will neither automatically prevent nor solve problems. Monitoring by civil society groups is still important and better policies will facilitate it.

  14. Lessons • Clear goals (“what”) and strategies (“how”) • From one alliance to group of alliances beyond NGOs • Relation between implementing agencies and supervising ministries • Parliament: bargaining power to ministries • Parallel studies on the cases and advanced policies of international organizations

  15. Leading to further policy reform • NEXI (Japanese governmental export insurance agency) adopted similar policies. • Japan International Cooperation Agency (JICA) adopted new guidelines & compliance mechanism. • Ministry of Foreign Affairs adopted new guidelines for appraisal. • JETRO facilitating trade and investment is developing its environmental guidelines.

  16. Remaining challenges • Effectiveness and efficiency should be tested by thorough monitoring • Outreach to developing countries • Citizen’s handbook for people and NGOs in developing countries • Video program for NGOs in developing countries • Monitoring with NGOs/researchers in developing countries

  17. Handbook on JBIC’s Environmental and Social Guidelines

  18. References • Study Group on Environmental Guidelines for JBIC (http://www.sg-egl-jbic.org/) • JBIC’s environmental guidelines and objection mechanism (http://www.jbic.go.jp/english/environ/) • JICA’s environmental and social guidelines (http://www.jica.go.jp/english/global/env/inv.html) • FoE-Japan (http://www.foejapan.org/en/aid/index.html) • Mekong Watch (http://www.mekongwatch.org/english/index.html) • Japanese Committee Supporting the Victims of Koto Panjang Dam (http://www2.ttcn.ne.jp/~kotopanjang/ENG00.htm) • Study group on environmental and social consideration, Ministry of Finance, only in Japanese (http://www.mof.go.jp/jouhou/kokkin/frame_4.html)

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