Consultation & Participation Export Credit Agencies and Sustainable Development: Challenges and Opportunities Consultation & Participation June 2006

General Issues of Consultation and Participation CONCEPTS Consultation: two-way communication process of seeking, discussing and considering the views of others, and where feasible, seeking agreement Participation: process through which stakeholders influence or share control over setting priorities, making policy, allocating resources, ensuring access to public goods and services (partnership) Consultation and Participation both try to influence the decision-making process of public entities. Participation implies stronger involvement of stakeholders

General Issues of Consultation and Participation COMMON CHARACTERISTICS Depend on country’s culture and experiences in public debates Often bring conflicts which existed in latent form Have costs for both sides Facilitate information exchange but they do not guarantee that consensus will result in the end or that all inputs will be reflected in the final project

General Issues of Consultation and Participation KNOWN BENEFITS Consultation: Improved communication with affected communities Knowledge of affected communities and NGOs can contribute to the quality of environmental assessment provide a better understanding of the social/environmental impacts of projects Participation: More involvement of stakeholders in decision-making processes regarding project design, management and distribution of project benefits >Superior quality of projects with support of affected communities <

Examples of processes in the WB Group Making Sustainable Commitments: An environment strategy for the World Bank Support Strategic Environmental Assessments and other in-depth, cross-sectoral environmental analyses early in country-policy dialogues Support increased transparency and accountability on the part of both borrowers and the World Bank by instituting regular reporting to external stakeholders, using clear benchmarks or performance indicators Promote dialog for maintaining communication with partners including governments and civil society

Examples of processes in the WB Group The World Bank Social Assessment Guidelines: Overall objectives and prerequisites Identify Stakeholders whose Participation is of Strategic Importance - the stakeholders will include various social groups, public and private sectors, including NGOs (Part I, Paragraph 2) Information Strategy - this strategy will identify the key social actors and their interactions and the social provisions needed to achieve the project's specific economic, technical, and social goals (Part I, Paragraph 4) Formulate Participation Strategy (Part III, Paragraph 1) the participation of the poor and vulnerable groups the participation of the broader group of stakeholders - government and NGOs, donors, and other partners

Examples of processes in the WB Group The Effects of Consultation and Participation: The WB experience Projects are more inclusive, involving key stakeholders including traditionally marginalized Projects are more socially sound – more benefits and fewer adverse impact Projects are more effective and sustainable, having better institutional arrangements at the country level Improving mutual communication between beneficiaries, government implementing agencies, and the Bank and increasing influence of stakeholders in planning and implementation Initiation and facilitation of participation The breadth (number of stakeholder included) and the depth (degree of control stakeholders gain over outcomes) of participation vary between initiatives and regions

Examples of processes in the WB Group IFC Performance Standards on Social and Environmental Sustainability (April 30, 2006) PERFORMANCE STANDARD I Taking into account relevant finding of the S&E Assessment and the result of consultation with affected communities (Paragraph 13) Community engagement process including consultation (Paragraph 19) Consultation required for projects with significant adverse impact on affected communities, process ensures free, prior, and informed consultation and facilitate participation of affected communities (Paragraphs 20, 21, 22) > These standards have yet to be tested<

The OECD Revision of the Common Approaches The Recommendation on Common Approach on Environment and Officially Supported Export Credits Indicating required environmental information to the appropriate parties involved in the project, including EIA, where appropriate (Paragraph 7). Information also include: potential environmental impacts including the impact on involuntary resettlement, indigenous peoples, and cultural property the result of public consultation with relevant stakeholders Exchanging views with appropriate stakeholders on a regular basis (Paragraph 17)

The OECD Revision of the Common Approaches Reference to the World Bank Safeguards Policies in the existing Common Approaches Members should benchmark project against one or more relevant environmental standards and guidelines published by the World Bank Group and against safeguard policies of the World Bank Group (Paragraph 12.2)

The OECD Revision of the Common Approaches The World Bank’s Safeguard Policies Environmental Assessment - to identify, avoid, and mitigate the potential negative environmental impacts Natural Habitants - the conservation of biodiversity Pest Management - to avoid using harmful pesticides Cultural Property - protect cultural resources Involuntary Resettlement - to avoid it or minimize impacts Indigenous Peoples - identify them, consult with them, ensure that they participate and benefit Forestry - reduce deforestation Safety Dams - design and supervise construction and implement safety measures Projects on International Waterways - prospective borrower notifies the other riparians of the project Projects in Disputed Areas – to ensure that there is no objection from the other claimant to the disputed area

The OECD Revision of the Common Approaches Risks and constraints in the project context Risks: Exclusion of potential group Creating unrealistic expectations Conflict context Bypassing or undermining existing institutional structures and processes Prolonging the environmental review process and delaying projects Tackling competition between OECD member’s ECAs and OECD non-member’s ECAs Constraints: Clients tend to view the Environmental Assessment as a purely technical without benefit from public involvement Existing tendency in many countries to implement projects in a non-participatory manner