Last week, Business and Human Rights Resource Centre (BHRRC) attended the AIIB Annual Meeting in Jeju, South Korea. Lowell Chow, our Greater China Senior Researcher & Representative, was there to track the talks and monitor civil society reactions. He said:

 “AIIB’s pledge to become "lean, clean and green” is questionable in light of developments this week. Despite public assurances, the Bank’s new policies kept a future return to coal on the table, and there is little reassurance that focus on hydropower won’t wreak devastation on communities’ lands and livelihoods.” 

Over the three-day meeting, President Jin, along with other senior members of AIIB’s management, made proud proclamations that the Bank has no plans for coal projects and reiterated their commitment to the Paris agreement, but stopped short of removing coal from their energy strategy. Groups expressed “strong disappointment and disagreement” in a meeting with AIIB Board Governors, referencing the undeniable and well-documented impacts of coal mining and power plants on communities and the environment worldwide.

 If the right safeguards are not in place these projects can see communities forced from their land, and homes and livelihoods lost without compensation.

AIIB intends to invest heavily in hydropower as a fossil fuel alternative, but has not explained how it will protect communities. If the right safeguards are not in place these projects can see communities forced from their land, and homes and livelihoods lost without compensation. Concerns have already been raised about the Bank’s proposed projects in Georgia  and  Pakistan. Our outreach to 50 wind & hydropower firms showed many companies in the sector still do not have adequate human rights due diligence in place.

As AIIB initiates the first round of consultation on its complaints mechanism, we can only hope the dismay expressed by civil society at this week’s meeting will prompt action on pulling together a mechanism on par with or exceeding the best practice of other international financial institutions. This would at least offer avenues for affected communities to communicate their grievances, should these projects have harmful impacts.

As the youngest international financial institution in operation, AIIB has a long way to go in building accountability and transparency.  

Further reading

In its second Chinese Overseas Investment Newsletter, BHRRC highlights civil society responses to AIIB’s energy strategy and Environmental & Social Framework (ESF), alongside assessments of the Bank’s information disclosure policies & decision-making processes, and policies on gender and the protection of Indigenous Peoples, among others. As the youngest international financial institution in operation, AIIB has a long way to go in building accountability and transparency. Gaps in the Bank’s policies have raised human rights and environmental concerns on a number of its individual projects in Pakistan, Oman, Myanmar and Indonesia, all of which are underlined in BHRRC’s newsletter.