December 18, 2013

On December 17, the board of the African Development Bank (AfDB) approved a new set of environmental and social safeguard policies (link forthcoming) to update and replace its decade-old policies and procedures. While civil society and indigenous groups have highlighted the glaring deficiencies in protections for Indigenous Peoples within the new safeguards framework, the new Integrated Safeguards System (ISS) is light years ahead of its old policies, and in some crucial respects surpasses those of the World Bank.

Most notably, the AfDB’s policies build on progress made at other MDBs in applying the new safeguards to the entire breadth of its portfolio. In addition to uniform application of safeguards to its public and private sector operations, the African Development Bank will for the first time subject all of its lending operations and instruments to the safeguards, including policy lending. This is in sharp contrast to the World Bank which, despite calls from CSOs, has thus far deliberately excluded Development Policy Loans (DPLs) in the course of its safeguards review.

As a rationale for expanding the breadth of its safeguards coverage, AfDB cites its changing portfolio away from single project investments toward greater policy and programmatic lending, a situation not unlike that of the World Bank. According to the AfDB’s new standards, all policy loans will be screened for environmental and social risk and categorized according to the level of potential risk. For those policy loans deemed to have moderate or significant risk, the AfDB introduces the use of the Strategic Environmental and Social Assessment (SESA) tool, which would serve as a basis for public consultation and the preparation of an Environmental and Social Management Plan to manage those risks identified in the SESA.

The new AfDB safeguards framework was unanimously endorsed by the Board of Directors, which represents member governments ranging from Africa, the United States, Japan, India, China, Brazil and Western Europe. As the debate over safeguards application to policy lending gains momentum at the World Bank, including DPLs in the World Bank’s safeguards review would be entirely consistent with the standards just approved at the African Development Bank.

Despite some notable weaknesses in its new safeguards, the African Development Bank has joined the ranks of other MDBs by adapting its safeguard regime to suit the changing nature of its portfolio, and taken the lead in introducing tools to properly assess and manage the risks of policy lending. As the World Bank undertakes a similar effort to update its safeguard policies, it would do well to adopt the AfDB’s approach.