Civil society calls on public development banks to overhaul their approach to development, 4 September 2023

The global coalition’s message, issued at this year’s Finance in Common Summit, is loud and clear: When it comes to development financing, the principles of rights, justice, sustainability, transparency, accountability and dignity for all cannot remain mere slogans. They must be the cornerstone of all projects undertaken by public development banks.

The Finance in Common Summit has become a pivotal platform for international public development banks, including the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB). Far too often, these banks fail to assess, prevent and remedy the harmful impacts of their investment decisions on communities and the environment. This has been proven in many cases, including the Indorama Agro cotton farm in Uzbekistan, the Budapest Airport expansion, the Kvesheti–Kobi Road in Georgia, and many other projects Bankwatch has been monitoring over the years...

A new report, written by over 100 Global South activists and civil society experts, exposes how – in the name of development – public development banks are fuelling human rights violations, environmental destruction, inequality, and debt. Through a series of eye-opening case studies, data, and analysis of key trends, “Demystifying Development Finance” shows how public development banks are supporting projects and policies that harm people and the planet, and funding governments and companies that do more of the same.

Manana Kochladze, strategic area leader for democratisation and human Rights at CEE Bankwatch Network, says: ‘Unfortunately, despite many safeguards and precautions, development banks still follow the logic of commercial profit. All too often they finance projects that bring untold misery to local people. Loss of income, involuntary resettlement, degraded and polluted environments, human rights violations, and shrinking civic space are just some of the detrimental effects. These investments prevent sustainable development, democracy and pluralism, all of the values development banks are supposed to strive for.’

Nina Lesikhina, EBRD policy officer at CEE Bankwatch Network, says: ‘Public development banks continue to invest millions upon millions in development projects located in countries with weak democracies, where restrictive regulation of civil society organisations, reprisals against journalists and human rights defenders, and suppression of peaceful public protests are commonplace. Yet, despite decades of technical assistance and oversight, these banks have consistently failed to uphold human rights and the principles of democratic transition. That local people continue to push back is proof – if ever it was needed – of the negative impacts of these ‘public’ investments. It’s high time development banks stood up for human rights!’

Anna Roggenbuck, EIB policy officer at CEE Bankwatch Network, says: ‘Public development banks can still improve the project preparation process, including by integrating human rights due diligence into their appraisals and requiring promoters to do the same. When red flags are raised about a project, banks should meaningfully engage with the people likely to be affected at an early stage. This will not only improve the quality of the development of these projects, but will also build people’s trust in public institutions, a prerequisite for democracy and the growth of civil society.’