Catfish Tales Test

JBIC STUMBLES INTO IMPLEMENTATION OF ENVIRONMENTAL GUIDELINES: LACKS RESOURCES TO RELEASE INFORMATION IN ENGLISH?

The Japan Bank for International Cooperation (JBIC) has yet to live up to its responsibility to provide important information to stakeholders in spite of its professed commitment to do so under its new Environmental Guidelines.

JBIC's new Environmental Guidelines, adopted in April 2002, went into effect in October 2003 (see Catfish Tales #1 and #14 for more information). Though the Guidelines are now in effect, JBIC is not releasing the information it should, and it is not implementing the guidelines appropriately. NGOs that participated in consultations to develop the Guidelines are unhappy that their successful efforts to include progressive provisions in the Guidelines have thus far been negated by JBIC's poor implementation.

Of the various Official Development Assistance (ODA) schemes, JBIC is responsible for Yen Loans, and also provides import and export credits to Japanese corporations (non-ODA international financing). JBIC is the world's largest international finance institution, and its new Guidelines cover both its yen loan and international financing operations. The Guidelines commit JBIC to proactive information disclosure, and a complaints mechanism called the Objection Procedures was also established under the Guidelines. For this, JBIC (as an export credit agency) is being heralded as cutting edge.

Unfortunately, JBIC is already stumbling over its commitments in the Guidelines.

INFORMATION ONLY IN JAPANESE

According to the Guidelines, JBIC welcomes information provided from stakeholders and releases information regarding projects it is considering financing so that stakeholders can contact JBIC with concerns as early as possible. Certain types of information are uploaded on JBIC's website immediately after screening projects it is considering funding and categorizing them according to the degree of anticipated environmental/social impacts.

At present, however, JBIC is providing this information only in Japanese. While English is also a barrier to accessing information for many local NGOs and project affected people, making information available only in Japanese makes it nearly impossible for them to get the information they need-unless they or people they know have Japanese language capacity.

Also according to the Guidelines, after a decision has been made to finance a project, the results of JBIC's environmental review of the project are put on JBIC's website. This information is important in order to ensure the accountability of JBIC's environmental reviews, and is essential information in the event that stakeholders would choose to use the Objection Procedures. However, this information is also being provided only in Japanese.

OTHER CONCERNS

In addition to the above, other concerns regarding JBIC's implementation of the new Guidelines are as follows:

• JBIC's website is supposed to list whether or not JBIC has received documents related to social and environmental considerations, such as relocation plans. While JBIC will provide this information regarding Environmental Impact Assessments and EIA Certificates, information on relocation plans and other documents is not being disclosed on the website. A JBIC official has explained that JBIC does not intend to put up this information after all.
• Not only are results of environmental reviews being provided only in Japanese, the only information available is a 1-2 page summary. There is no explanation of how JBIC responded to any concerns raised by stakeholders and other parties outside JBIC.
• In meetings between NGOs and JBIC regarding problems with specific projects, only the department responsible for overseeing investment attends the meetings. Officials responsible for examining environmental concerns do not attend.
• JBIC does not respond in writing to concerns raised or information provided by stakeholders in writing.

The most progressive provisions in the Guidelines are regarding information disclosure and encouraging stakeholders to provide JBIC with information. These provisions are also essential to prevent damage to environments and livelihoods from JBIC projects. The fact that these
promises are not being kept, now that the Guidelines are actually in effect, is evidence of JBIC's lagging commitment in using the Guidelines to prevent damage from occurring as a result of its projects.

At a regular meeting between JBIC and NGOs on February 26, Mekong Watch and other NGOs pointed out these problems and called for them to be resolved. At this meeting, Mr. Yoshio Wada, the director of a division in JBIC's Development Assistance Strategy Department, made inadequate excuses such as "providing information in English requires too many resources." NGOs can only conclude that JBIC is not interested in resolving the remaining problems-especially considering that much of the information put on JBIC's website in Japanese is originally provided by recipient governments in English.

NGO ACTION-PROVIDING INFORMATION IN ENGLISH

NGOs must continue to push JBIC to be more responsible by raising these issues with the Finance and Foreign Affairs Ministries (which oversee JBIC).

As a result of JBIC's failures in the above-mentioned areas, Japanese NGOs are establishing our own website to provide the information that JBIC should be. Information available in Japanese regarding JBIC projects that are expected to have significant environmental and social impacts will be put up in English on our website at www.jbic-watch.net. This website will be operational at the end of April 2004.

JICA's NEW ENVIRONMENTAL AND SOCIAL GUIDELINES TO GO INTO EFFECT SOON

The Japan International Cooperation Agency (JICA) began a process to establish its Environmental and Social Guidelines in December 2002, and this process is now drawing to a close. After JICA's draft guidelines were released, public consultations were held in 4 cities in Japan, followed by a 2-month public comment period, which ended in early February2004. During this time, comments were also requested from aid-recipient countries, and opinions were received from 27 countries. Participation in public consultations totaled 69, and 27 comments were received during the public comment period. JICA will revise the Guidelines based on the comments received, and on April 1st, the new Environmental and Social Guidelines will go into effect.

JICA is the agency responsible for the implementation of Development Studies, Technical Assistance and some parts of Grant Aid-three forms of Official Development Assistance (ODA). In 2002, JICA operations totaled 158.2 billion yen, or approximately 1.26 billion US dollars. While studies such as Master Plans and Feasibility Studies make up 14% of JICA's budget, many of these surveys are for projects which would have extensive destructive impacts if actually implemented. In spite of this, JICA has only applied its old environmental and social guidelines to the surveys' methodology and procedures.

JICA is preparing the new Guidelines in response to strong criticism from civil society and the Japanese Parliament to reform ODA and increase transparency and accountability. The new Guidelines are expected to be comprehensive in scope so that environmental and social damage from survey results and project implementation can be prevented. For example, for surveys expected to have large impacts, JICA will require broad information disclosure at the request stage and consideration of alternative plans from early stages, including a no project option. Requirements for consultation with local people and other stakeholders are also emphasized

The drafting process for the Guidelines achieved a high degree of transparency. A committee was established to make recommendations for the Guidelines, and it was comprised of heads of relevant ministerial divisions, scholars, development consultants, NGOs, and JICA officials. Mekong Watch's representative director, Satoru Matsumoto, was a member of this committee, and his input was crucial in achieving the inclusion of certain important provisions in the Guidelines. The committee met 16 times, and all submitted documents and minutes of the meetings are public documents. The minutes document not only what was said during the meetings but also record who said what. All discussions were open to the public, and observers who were not committee members were also given the same right to speak. A subcommittee drafted detailed recommendations for the Guidelines based on the discussions, and after approval by the Committee as a whole, the recommendations were submitted to JICA's President, Sadako Ogata in October 2003. Based on these recommendations, JICA drafted its proposed Guidelines and released the draft for public comment from December 2003 to early February 2004. In addition, public consultations were held in Tokyo, Osaka, Nagoya, Kita Kyushu and Okinawa.

According to a JICA announcement on 18 February, 69 people participated in the public consultations and 27 comments were received on 217 points in regard to the draft Guidelines. Some of the main comments are introduced below:

• The JICA draft states that stakeholders participating in consultations are expected to take responsibility for their statements. This implies that people could be held responsible for any mistakes in comments they make during consultations, and could discourage affected residents from voicing their opinions.
• In JICA's proposal, emergencies can be exempt from the full application of the Guidelines. Several critical comments were submitted regarding this exemption. For example, post-conflict restoration/rehabilitation is listed as an example of emergency, but in post conflict times, there often remain issues of ethnic strife and other social tensions which could grow into conflict. Times like these require even more stringent attention to human rights and consideration of social factors rather than less, and projects expected to have large environmental or social impacts should not be exempt from the Guidelines even in cases of post-conflict.
• JICA's draft Guidelines include provisions for information disclosure. Some comments suggested that information disclosure is in principle the responsibility of the project proponent and that JICA's role in this should not be expanded.
• Global warming should be included in the scope of environmental impacts to be examined.
• In regard to JICA's proposal to respect international human rights principles, there were questions asking for clarification on concretely how JICA intends to respect these standards.
• In JICA's draft, there was no mention of how the Guidelines would be institutionalized. Questions were raised about how JICA will institutionalize the Guidelines so that they are actually respected to prevent environmental and social problems.
• The need for a complaints mechanism was emphasized.
• In JICA's draft proposal, a provision on information disclosure for Detailed Design Studies says information will be disclosed, "to the extent that it does not impact the bidding process." Several opinions expressed that this clause could be too easily abused and should be deleted.
• The English translation did not accurately reflect the content of the Japanese original.

Soon, JICA is supposed to put the 214 comments received regarding the draft Guidelines and JICA's responses on their website, though only in Japanese. JICA set up a follow-up committee after the advisory drafting committee, which incorporated the comments into a final draft. Last discussions regarding this draft were held on 18 February, and the 1st and 4th of March. The final Social and Environmental Guidelines will be released and go into effect on 1 April 2004.

ENGLISH VERSION OF NEW JBIC ENVIRONMENTAL GUIDELINES AVAILABLE

New guidelines covering environmental and social factors for all operations of the Japan Bank for International Cooperation went into effect on 1 October 2003. An objections procedure also came into effect the same day.

The new guidelines, officially called the "Japan Bank for International Cooperation Guidelines for Confirmation of Environmental and Social Considerations," were adopted on 1 April 2002. Eighteen months later, they have come into effect with the Objections Procedure. The English version of both are now available on JBIC's website.

JBIC: New Environmental and Social Guidelines
http://www.jbic.go.jp/english/environ/guide/finance/eguide/index.php

JBIC: New Objections Procedure
http://www.jbic.go.jp/english/environ/pdf/objection.pdf

GOOD NEWS

The new guidelines are a marked improvement over the previous guidelines, especially in regard to information disclosure, responsiveness, and the adoption of the Objections Procedure. The Objections Procedure is a formal mechanism to raise complaints in cases where JBIC fails to comply with its new Guidelines. See JBIC's website for more details.

THINGS WE MUST STILL "CONSIDER"

a) Though the new Guidelines were put into effect on October 1st, we will not see the actual effectiveness of these Guidelines for ODA loans until late 2004.

Requests for loans from recipient governments must meet an August deadline each year. Because the Guidelines came into effect in October this year, requests submitted in August are not strictly subject to the new Guidelines. The first ODA loan projects which will be subject to the new Guidelines will be those requested at the end of August in 2004. ODA loans requested prior to October 2003 are subject to older guidelines, namely, the "JBIC Environmental Guidelines for ODA Loans."

b) Application of the new Guidelines for international financing operations will be more immediate.

Unlike ODA loans, requests for international financing can be made at any time. So while we are waiting to see the impacts of the new guidelines on ODA loan projects next year, we must monitor the more immediate effects on import/export credits and other such international financing operations. For international financing operations prior to 1 October 2003, the old guidelines ("Environmental Guidelines for International Financial Operations") are applied.

c) A list of projects now under consideration at JBIC for financing is available on JBIC's website, but only in Japanese. This is a list of projects already screened for environmental categorization.

Mekong Watch is pushing JBIC to maintain an updated list of projects under consideration in English. To strengthen this call, please contact JBIC and express your interest in seeing this list in English (contact details, etc will be provided soon in the next Catfish Tales). Until the information is available in English, we recommend that those who are concerned about specific projects ask someone who can read Japanese to look at the website below and check whether or not JBIC has finished screening or not List of projects screened by JBIC:

JBIC: Project Categorization List
http://www.jbic.go.jp/japanese/environ/joho/project.php

d) Lastly, Mekong Watch is dissatisfied with the process by which the Examiners for the Objection Procedure were chosen.

Forty applicants responded to a public announcement for 2 positions as Examiner for the Objections Procedure. On October 1st, JBIC announced on its website the 2 people selected for these positions. JBIC had formed a selection committee comprised of a JBIC board member, the Philippine Ambassador to Japan, an academic, and representatives from the private sector and an NGO to make the selection. It is very regrettable that both the academic and NGO representative chosen to participate on the selection committee were not knowledgeable about negative environmental and social impacts resulting from development projects. We can only conclude that either little thought was given to who the selection committee should include, or that one criteria was having a friendly bias towards the government. As for criteria for selection of the Examiners, JBIC listed the criteria on its website, but there is no explanation of why the two candidates were chosen above the others. It is disturbing that the 2 were selected based solely upon a review of their written applications. No interviews were conducted. It is unfortunately impossible to say that the process of choosing the Examiners ensured even the minimum transparency or fairness.