Opinion | AIIB must give local communities a voice in development projects
Despite the perception of multilateral development banks as forces of good, the evidence shows that they do actually cause harm
The AIIB was the first such bank to include an oversight mechanism in its founding documents, but it is nearly impossible for people affected to access it
In its eight years of operation, the Asian Infrastructure Investment Bank (AIIB) has grown to be the second-largest multilateral development bank in terms of membership and has invested more than US$50 billion in more than 250 projects. While some might laud the size and scale of the AIIB, it’s impossible to determine whether its investments have hit their mark.
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This is because the AIIB has made it exceptionally hard for communities negatively affected by its financing to raise environmental and social concerns. This raises the question of whether the AIIB is afraid to hear about the true impact of its investments.
After years of raising the alarm over the AIIB’s lack of accountability, there is some hope. The bank has agreed to review the effectiveness of its accountability mechanism, called the Project-affected People’s Mechanism (PPM). It’s a perfect opportunity to update the mechanism so that it is actually accessible to, and facilitates remedies for, affected communities, and begin to earn the trust of its most important stakeholders: frontline communities in Asia.
Despite the common perception of multilateral development banks as forces of good abiding by do-no-harm mandates, it is undeniable that such organisations do, in fact, cause harm. From my work at the Accountability Counsel, representing communities affected by international investments, it is clear that well-intentioned development projects can harm people and the planet.
Examples include: a hydropower-dam-associated project in Nepal that affects people’s livelihoods, health and safety; a mining expansion project in Mongolia that harms the environment and traditional herder communities in the South Gobi; and a biomass project in Liberia that led to the destruction of nearby natural forests and sexual violence against women.
Workers stand near a trench collecting seepage water at Rio Tinto’s copper mine in Oyu Tolgoi, Mongolia, on July 25, 2023. The mining project has been blamed for wells going dry in the area, harming the livelihoods of traditional nomadic herders. Photo: Accountability Counsel/Reuters
With more than 1,800 such complaints made against multilateral development banks, including the AIIB, it is all but certain that its financing is causing environmental and social harm. What matters is whether the AIIB is aware of and able to correct harm stemming from its projects. To achieve that, its accountability mechanism must be fit for purpose.
