Tokyo

WITH infrastructure investment likely to be stepped up in Asia in coming years, the danger is growing that environmental safeguards could be neglected as countries in the region take advantage of increased financial and other resources, an Asian Development Bank report has warned.

The report from the ADB's Independent Evaluation arm echoes concerns voiced at the time when the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (BRICS bank) were formed, although both institutions have said they will maintain high environmental standards in their projects

"More financing for infrastructure is becoming available from established and new lenders for development, and borrowing countries are pushing to have their country safeguard systems used on projects supported by multilateral development banks," the ADB report said.

It called attention to what it said is the importance of strong safeguards in order to deflect damage to the environment and communities that can be caused by infrastructure projects.

"Narrowing wide infrastructure gaps will be vital for Asia to secure strong and sustained growth," Marvin Taylor-Dormond, director general of Independent Evaluation at the ADB said on the launch of the report.

"Robust safeguards to protect the environment and affected communities are needed more than ever amid the risk of increasing environmental degradation and the rising threat of climate change." The report focuses on projects in Indonesia, Sri Lanka and Kyrgyzstan.

These were chosen "because they were around the median for the environmental and involuntary resettlement sensitivity of their roads, energy, and water projects, and their experiences shed light on the wider application and enforcement of safeguards".

The ADB and its client governments have made significant progress in assessing the environmental and social risks of development projects and in designing measures to mitigate them, said the report's chief author Tomoo Ueda.

"Implementation of safeguard measures remains a big challenge, because of regulatory, institutional, and budget constraints in borrowing countries, and this was a common theme throughout the evaluation."

The report found that few government agencies employed regular environmental specialists to enforce safeguards on ADB-financed projects, and that ADB specialists were over-stretched.

"Gaps need addressing in the involuntary resettlement of people affected by new infrastructure, such as roads, on land owned by them," the report said.

The ADB's safeguards policy requires governments to provide compensation for lost assets at replacement value, and special livelihood support for the poor to get them to national minimum living standards.

Progress has been made on the compensation side, but less evidence was found of governments providing livelihood support. The report examines benefits and costs of implementing safeguards, an area, it says that has received relatively little attention, in part because of a paucity of data.

The report acknowledged the benefits of using country safeguard systems for ADB-financed projects but stressed the importance of ensuring that country safeguard systems are able to address project risks properly.

"Many ADB borrowing countries have sound laws and regulations on environmental and social safeguards. Our main concern is that many institutions and agencies, particularly in local government, do not have the resources or the skills needed to implement them."

An assessment of Indonesia's safeguards system, for example, "identified potential gaps in the country's laws and agencies on involuntary resettlement with respect to the safeguards framework in force at the ADB, especially in protecting the poor and vulnerable".

Raising the standards of country safeguard systems will be crucial for ensuring that public and private sector infrastructure projects avoid or mitigate environmental and social risks in a region with a huge demand for infrastructure investments, the report added.