{"id":231262,"date":"2022-07-13T19:56:12","date_gmt":"2022-07-13T17:56:12","guid":{"rendered":"https:\/\/www.myza.co.za\/how-brics-new-development-bank-can-improve-transparency-and-accountability\/"},"modified":"2022-07-13T19:56:12","modified_gmt":"2022-07-13T17:56:12","slug":"how-brics-new-development-bank-can-improve-transparency-and-accountability","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/how-brics-new-development-bank-can-improve-transparency-and-accountability\/","title":{"rendered":"How BRICS’ New Development Bank can improve transparency and accountability"},"content":{"rendered":"
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The New Development Bank, which was formed<\/a> in July 2014, marks its eighth birthday this year. It was formed by the leaders of Brazil, Russia, India, China and South Africa (BRICS) when they met in Fortaleza, Brazil for the bloc\u2019s summit. The bank was seen as a potential alternative to the World Bank and able to take a new approach to development finance.<\/p>\n

The New Development Bank has since approved 11 projects<\/a> in South Africa and Lesotho. These involve sustainable energy, transportation, water resource management, and a COVID-19 emergency loan programme. Some of these projects, for instance the Environmental Protection Project for Medupi Thermal Power Plant<\/a>, are of strategic importance to South Africa. Of the project\u2019s estimated total cost of US$2.75 billion, the bank is providing a US$480 million loan.<\/p>\n

This is in line with hopes that the bank would serve as a much-needed new source of financing for national and regional initiatives. Another hope was that it would be more transparent and accountable than other multilateral banks such as the World Bank. Its mission and values<\/a>, articles of agreement<\/a>, environmental and social framework<\/a> and information disclosure policy<\/a> make commitments about transparency and openness. <\/p>\n

The bank\u2019s mission statement<\/a> expresses its objective of not only \u201cachieving development goals with transparency\u201d but also displaying \u201cempathy\u201d towards its projects\u2019 intended beneficiaries. <\/p>\n

Billions of dollars of investment later, however, the reality suggests that improvement is needed.<\/p>\n

A study on transparency and accountability by Oxfam South Africa and the University of Pretoria\u2019s Centre for Human Rights raises concerns about how the bank handles access to information<\/a>. It also lacks an independent accountability mechanism<\/a>. The study calls into question whether the bank is showing empathy towards the communities that are affected by its projects.<\/p>\n

Too little openness<\/h2>\n

The study highlights transparency and accountability challenges with some of the projects co-financed by the bank. The researchers interviewed representatives of the communities near the South Africa Lesotho Highlands Water Project Phase II<\/a> and the Medupi project<\/a>.<\/p>\n

Some of these challenges are cross-cutting. For instance, the representatives said that the influx of migrant workers into their communities had put a strain on resources and services. There were also project-specific issues. These included concerns about the resettlement of more than 3,000 people<\/a> to make way for the Lesotho project.<\/p>\n

The study demonstrates the difficulty of getting project information. The New Development Bank\u2019s responses to information requests from the researchers lacked adequate detail. Without timely and comprehensive access to information, how can communities affected by projects adequately address their concerns? <\/p>\n

The bank\u2019s website has no project documents and its information portal is hard to use. This affects the right of communities to be heard, a right that can\u2019t be exercised without access to information. <\/p>\n

Unlike most multilateral development banks<\/a>, the New Development Bank doesn\u2019t have an independent accountability mechanism. Nor does it have other ways for these communities to seek redress or hold it accountable. <\/p>\n

Such mechanisms are created to hold development finance institutions<\/a> and their clients accountable to their own policies. They also provide access to remedies for individuals and communities that are adversely affected by the activities such institutions fund. Without such a mechanism, the bank\u2019s approach to accountability falls far short of global best practice.<\/p>\n

It\u2019s clear that much more can be done to improve transparency and accountability at the New Development Bank. <\/p>\n

Looking ahead<\/h2>\n

The bank could do this in several ways:<\/p>\n