have united their voices to call for immediate and impactful action from Public Development Banks (PDBs).
The global coalition’s message is clear: when it comes to financing for development, principles of rights, justice, sustainability, transparency, accountability and dignity for all cannot remain mere slogans. They must form the core of all projects undertaken by all Public Development Banks.
The Finance in Common Summit has become a pivotal platform for Public Development Banks from around the world. The fact that this year’s summit is taking place in Cartagena, Colombia, the deadliest country in the world in 2022 for human rights, envrionmental and indigenous activists, development banks must acknowledge and integrate the protection of human rights into their projects.
“Development banks are advocating to play an even bigger role in the global economy. But are they truly fit for this purpose? Unfortunately, the stories of communities around the world show us that development banks are failing to address the root causes of the very problems they claim to solve. We need to hold them accountable for this,” says Ivahanna Larrosa, Regional Coordinator for Latin America at the Coalition for Human Rights in Development.
“When PDB projects cause harm to people and the environment, PDBs must remedy these harms. All PDBs should implement an effective accountability mechanism to address concerns with projects and should commit to preventing and fully remediating any harm to communities,” adds Stephanie Amoako, Senior Policy Associate at Accountability Counsel.
The ongoing crises demand a transformation in the quality of financing and a power shift to include the voices of communities. The existing financial architecture not only impedes governments’ ability to safeguard both their citizens and the environment but also contributes to the escalating issue of chronic indebtedness. Policy-based lending and conditionalities enforced by International Financial Institutions have steered countries toward privatization of essential services, reduced social spending and preferential treatment for the private sector. This burdens the population with higher taxes, inflation, and weakened social safety nets.
“The same multinational companies that have polluted and violated human rights in Latin America are now obtaining financing from development banks for energy transition projects. Another example is the development of the green hydrogen industry in Chile, which carries a very high environmental and social risk,” says Maia Seeger, director of the Chilean civil society organization Sustentarse.
Addressing these issues requires a comprehensive and sustainable transformation of the financial architecture as well as holistic reforms and synergies with civil society and communities. Environmental and neo-colonial debts need to be a thing of the past and equitable reforms the thing of the present.
Global civil society, in response to these challenges, demands bold and decisive actions in a collective declaration signed by over 100 organisations. The demands are the result of a 4-year process in which a coalition of civil society organisations has come together to call on all PDBs at the Finance in Common Summit to embrace tangible actions that genuinely prioritize and protect people.
Just last month we have seen that change is possible when communities are involved, as the people of Ecuador voted to ban oil drilling in one of the most biodiverse places on the planet, the Yasuní National Park in the Amazon rainforest.
“The global financial system needs not just a rethink but a surgical operation, and that requires bold action. Governments and institutions such as the Public Development Banks must cancel the debt of the countries that require it and put in place concrete and immediate measures to put an end to public financing of fossil fuels, to have financing based on subsidies so as not to fall into the debt trap once again. It is time for the rich countries, the biggest polluters and creditors, to offer real solutions to the multiple crises we are currently experiencing,” says Gaïa Febvre, International Policy Coordinator at Réseau Action climat France.
“Public and Multilateral Development Banks must divest from funding false climate solutions and projects that harm forests, biodiversity and communities. Instead, they should redirect finance to support gender just, rights based and ecosystems approaches that contribute to transformative changes leading to real solutions that address climate change, loss of biodiversity and create sustainable livelihoods for Indigenous Peoples, women in all their diversities and local communities. Public funds must support community governed agroecological practices, small scale farming and traditional animal rearing practices instead of large scale agri-business which perpetuates highly polluting and emitting industrial agriculture and unsustainable livestock production, the root cause for deforestation and food insecurity,” adds Souparna Lahiri, Senior Climate and Biodiversity Policy Advisor at the Global Forest Coalition (GFC).
The call to action emphasizes that achieving the Sustainable Development Goals (SDGs), effective climate action aligned with the Paris Agreement and successful implementation of the Kunming-Montreal Global Biodiversity Framework require Public Development Banks to pivot from a top-down profit-driven approach to one that prioritizes community-led involvement and human rights-based approaches.
“It is important that civil society participation be strengthened at the Finance in Common Summit (FICS). In previous years, civil society has been sidelined. Clearly, there is still some room for improvement for civil society participation to become truly meaningful. The lack of civil society representative on the opening panel this year is just one example of that. PDBs should promote and support an enabling environment for civil society and systematically incorporate civic space, human rights and gender analysis. This year, we are working towards ensuring that civil society voices, including those from communities are heard at the FICS. In collaboration with the FICS Secretariat, Forus seeks to establish a formal mechanism between civil society and PDBs and to ensure that civil society is recognised as an official engagement group,” says Marianne Buenaventura Goldman, Project Coordinator, Finance for Development at the global civil society network Forus.
IPS UN Bureau