https://bankwatch.org/story/the-ebrd-has-set-new-human-rights-standards-...
As of this year, the EBRD will start implementing its updated Environmental and Social Policy and Access to Information Policy. These policies set the EBRD’s environmental, social, and human rights standards, as well as obligations for its public and private sector clients. Feedback from civil society organisations like Bankwatch, project-affected communities, and institutions such as the United Nations Office of the High Commissioner for Human Rights (OHCHR) has led to significant improvements in transparency, stakeholder engagement, and human rights due diligence. However, accountability gaps remain.
This story explores the changes that the EBRD has made to its revised safeguards, with a particular focus on human rights due diligence. Strengthening this aspect, particularly the EBRD’s weak enforcement of client requirements, has long been a key priority for Bankwatch and has informed the collective advocacy efforts of many other civil society organisations.
Both updated policies introduce a broader range of enhanced environmental and social obligations for clients. If effectively enforced, these measures could lead to positive development impacts while preventing harm to people and nature.
One of the most significant improvements is the EBRD’s commitment to greater transparency. The EBRD will now proactively disclose environmental and social information, reducing barriers for stakeholders seeking access. Additionally, it has introduced a public interest override to prioritise transparency over non-disclosure commitments when necessary.
The requirement for high-risk (category A) projects to disclose impact mitigation plans and implementation reports marks a step forward. Some lower-risk (category B) projects must now also publish environmental and social documents, including stakeholder engagement and mitigation plans. This will enable communities to access critical information on environmental and social risks, proposed mitigation measures, and project implementation, fostering more meaningful consultations.
In the past, public transport projects in Sarajevo and Tbilisi lacked transparency, excluding citizens from decision-making. The EBRD classified these as category B projects, meaning disclosure and engagement were limited. As a result, concerns raised by women and other vulnerable groups regarding routes, security, and accessibility were overlooked. The new transparency commitments should help prevent such oversights.
However, disclosure gaps persist, particularly in financial intermediary investments. These often support green economies or entrepreneurship among women, but the lack of public data on final loan recipients prevents scrutiny, limits impact tracking, and restricts access to accountability mechanisms.
For example, in 2020, the EBRD approved a loan to Uzbekistan’s Davr Bank to promote women’s entrepreneurship. However, without public information on the funding recipients, there was no way to verify whether the initiative effectively reached its intended beneficiaries. Given ongoing concerns about women’s rights in Uzbekistan, ensuring increased transparency would be a crucial safeguard.
The new policies require financial intermediary banks to establish grievance mechanisms, disclose their environmental and social management systems, and report on implementation. This is a step forward, but it remains unclear how affected individuals will be informed of their rights and access to the EBRD accountability mechanisms when needed.
Another improvement is a new EBRD commitment to disclose the amounts and sources of technical assistance funding and grant financing. It also lowers the threshold for publishing project summaries for grant-funded activities not tied to specific projects. However, without a requirement to disclose outcomes, accountability remains weak, especially for public-sector initiatives.
For example, in the Karaganda WWTP Modernisation project in Kazakhstan, the EBRD allocated over EUR 1 million in technical assistance for a feasibility study and environmental and social impact assessment. Civil society groups raised concerns that the proposed plant might not meet the growing population’s needs or address water losses from outdated infrastructure. However, a lack of public access to the feasibility study undermined consultation efforts and limited the project’s potential benefits for essential infrastructure development.
Unfortunately, the EBRD has chosen not to incorporate a recommendation to disclose annual environmental and social monitoring reports, an approach adopted by some other multilateral development banks. Instead, the EBRD has committed to publishing an ex post summary assessment after project completion. However, this prevents timely feedback from rights holders, limiting their ability to verify compliance and advocate for necessary adjustments to impact mitigation.
Under the revised Environmental and Social Policy, the EBRD commits to annually report on the environmental and social impacts of its operations, a significant step forward for which Bankwatch has long advocated. Regular monitoring and reporting on both compliance and non-compliance with safeguards should strengthen the development impact measurement framework and reinforce alignment with the UN Sustainable Development Goals. It will also require the development and incorporation of human rights compliance metrics into client guidance notes.
But while transparency improvements are essential, effective safeguards also require stronger human rights due diligence.
For the first time, the EBRD has formally recognised human rights as a core element of project assessment and management. The updated Environmental and Social Policy requires projects to factor in governance risks, civic space restrictions, and stakeholder concerns, ensuring a more context-specific approach to risk management.
For instance, the EBRD will now have to consider risks posed by laws restricting civil society in Kyrgyzstan and Georgia, the criminalisation of LGBTIQ+ people in Uzbekistan and Turkmenistan, media censorship in Azerbaijan and Tajikistan, and the absence of civil liberties in Egypt and Turkey. These risks should inform project categorisation, impact assessments, mitigation measures, and monitoring and accountability frameworks.
Another notable step forward is the EBRD’s commitment to assessing retaliation risks and working with clients to prevent reprisals against project-affected people, a provision that the Environmental and Social Policy had previously overlooked. It now introduces requirements for clients to develop relevant policies and ensure stakeholder engagement is free from harassment and reprisals. However, given that the clients themselves are often responsible for these acts of retaliation, the EBRD must first and foremost strengthen its own due diligence processes to hold clients accountable whenever these risks arise.
Previously, EBRD clients have targeted environmental activists in Armenia and Bosnia and Herzegovina with strategic lawsuits against public participation, with workers and human rights monitors in Uzbekistan subject to similar threats. To prevent such abuses, the EBRD must establish a structured framework with clear consequences for acts of retaliation.
Additionally, the Environmental and Social Policy mandates assessments of digitalisation risks and supply-chain impacts, which are particularly relevant given the EBRD’s focus on green investment. The policy’s commitment to using sex-disaggregated data to capture gender-specific impacts is another welcome development.
The revised Environmental and Social Policy, which emphasises meaningful stakeholder engagement, especially for marginalised and vulnerable groups, requires ongoing engagement throughout the project lifecycle.
Civil society has long criticised the EBRD’s reliance on client-provided information and its consistent lack of independent verification. The new policy requires the EBRD to integrate stakeholder perspectives into risk assessments and enhance external validation of reported data.
For projects with significant community impacts, the EBRD may now conduct its own stakeholder consultations before approval, adding a layer of accountability. However, simply considering the views of stakeholders is not enough. The EBRD must also proactively seek out their opinions, particularly in countries with democratic deficits. For instance, the problematic Amulsar gold mine and Indorama Agro cotton projects, both backed by the EBRD, show how things can go badly wrong when the views of stakeholders are ignored and the early warnings of civil society organisations are not heeded.
In response to civil society concerns about the lack of meaningful stakeholder engagement at the early stages of projects – when this input can still influence outcomes – the updated Environmental and Social Policy mandates that clients consult on project alternatives, including location, design, and mitigation strategies. On previous projects, such as the Corridor Vc and Kvesheti–Kobi Road developments, affected communities were excluded from discussions on route alternatives, leading to displacement, social tensions, and multiple complaints to the EBRD’s accountability mechanism.
While the policy now requires grievance redress mechanisms for all affected workers, financial intermediaries and communities, oversight remains a concern. If effectively enforced, these provisions could help prevent grievances from being ignored, which demonstrably occurred in the MHP poultry project in Ukraine and the Oyu Tolgoi copper-gold mine development in Mongolia. While promising, specific measures for reporting gender-based violence, unsafe working conditions, and retaliation also require strict enforcement.
Additionally, the new requirement for trade union consultations means the EBRD must foster an environment where independent workers’ organisations can thrive without undue influence from the client. As a case in point, the replacement of a democratically elected union with a less representative coalition on the Indorama Agro project in Uzbekistan illustrates the risks of failing to ensure these enabling conditions are met.
A major shortcoming of the revised Environmental and Social Policy is its failure to establish EBRD responsibility for remedying harm. While the policy acknowledges the need for remedial actions, it places the obligation solely on clients. The OHCHR along with civil society organisations have consistently called for clearer provisions on shared responsibility for remedy, but thus far to no avail.
When the EBRD loses leverage over a client – whether as a result of exiting a project or repaying early – communities harmed by projects are often left without recourse. Amulsar and Indorama Agro demonstrate how the EBRD’s weak accountability framework can lead to long-lasting negative impacts on communities, even after the bank has withdrawn.
Lastly, the introduction of the EBRD’s new direct complaints process, about which little detailed information is available, raises concerns. However, it remains unclear whether the new process, while intended to improve grievance handling, will have any tangible effect on existing accountability mechanisms. A similar initiative undertaken by the World Bank has been widely criticised for its lack of transparency. The EBRD should take heed and make sure that public consultations inform its approach.
