"The World and Japan" Database (Project Leader: TANAKA Akihiko)
Database of Japanese Politics and International Relations
National Graduate Institute for Policy Studies (GRIPS); Institute for Advanced Studies on Asia (IASA), The University of Tokyo

[Title] Environmental and Social Framework

[Date] 26, Feb, 2016
[Source] Asian Infrastructure Investment Bank
[Full text]

Table of Contents


Environmental and Social Framework...1 Introduction...1

Overview of the Environmental and Social Framework...1

Objectives of the Environmental and Social Framework ...2


Annex: Environmental and Social Policy and Environmental and Social Standards...7 Environmental and Social Policy...7



Scope of Application...8

Requirements... 9

A. Screening and Categorization...9

B. Environmental and Social Due Diligence...11

C. Environmental and Social Assessment...13

D. Assessment Documentation and Instruments...16

E. Environmental and Social Management Plan...16

F. Environmental and Social Management Planning Framework...17

G. Special Circumstances...18

H. Use of Country and Corporate Systems...19

I. Information Disclosure...20

J. Consultation...21

K. Monitoring and Reporting...22


Roles and Responsibilities...24

Decision-making and Legal Provisions...25

Related Documents...26

Environmental and Social Standards...27 Environmental and Social Standard 1: Environmental and Social Assessment and Management...27

Environmental and Social Standard 2: Involuntary Resettlement...38

Environmental and Social Standard 3: Indigenous Peoples...42

Environmental and Social Exclusion List...46 Glossary...49


AIIB Asian Infrastructure Investment Bank

EHSG Environmental, Health and Safety Guidelines

ESIA Environmental and Social Impact Assessment

ESMP Environmental and Social Management Plan

ESMPF Environmental and Social Management Planning Framework ESP Environmental and Social Policy

ESS Environmental and Social Standard

FI Financial Intermediary

FPIC Free, Prior and Informed Consent

FPICon Free, Prior and Informed Consultation

IPPF Indigenous Peoples Planning Framework

RPF Resettlement Planning Framework

SDG Sustainable Development Goals

Environmental and Social Framework Introduction

1. Asian Infrastructure Investment Bank. The Asian Infrastructure Investment Bank (Bank) is an international organization that provides a multilateral regional financing and investment platform for infrastructure development and enhanced interconnectivity in Asia. The Bank's goal is to increase the pool of multilateral development support available to regional economies for infrastructure development and improvement. In doing so, the Bank cooperates closely with other multilateral development banks and bilateral development organizations; and its financing complements and supplements their efforts.

Overview of the Environmental and Social Framework

2. Structure of the Environmental and Social Framework. The Environmental and Social Framework comprises:

Introduction and Vision. These provide an overview of the Bank, the Environmental and Social Framework's structure and objectives and the aspirations of the Bank concerning: (a) environmental and social sustainability; and (b) its role in meeting the challenge of sustainable development in Asia.

Environmental and Social Policy (ESP).This comprises mandatory environmental and social requirements for each Project.

Environmental and Social Standards. Three associated mandatory environmental and social standards (ESSs) set out more detailed environmental and social requirements relating to the following:

ESS 1: Environmental and Social Assessment and Management; ESS 2: Involuntary Resettlement; and

ESS 3: Indigenous Peoples.

Environmental and Social Exclusion List. The Bank will not knowingly finance a Project that involves activities or items specified in this list (Exclusion List).

Glossary.This includes definitions of certain terms used in the ESP and ESSs.

Directive: Environmental and Social Procedures. Detailed mandatory procedures for implementation of the ESP and ESSs are under development and will be issued by the Bank's President in a Directive: Environmental and Social Procedures. The initial Directive may be supplemented over time with additional procedures as needed.

Guidance and Information Tools. Non-mandatory guidance and information tools designed to explain or facilitate implementation of the Environmental and Social Framework will also be developed in due course and provided in guidance notes.

3. Board Approval. The Bank's Board of Directors has approved the ESP and accompanying three ESSs (including the Environmental and Social Exclusion List and Glossary), as set forth in the Annex attached hereto.

4. Review of the ESF and Development of an Energy Strategy. Based on the experience gained from the application of the ESP and ESSs to individual Projects during the first three years of the Bank's operation, the Bank will, at the end of this period, conduct a review of the overall Environmental and Social Framework. As warranted, updates would be introduced to the framework, and further improvements to the ESP and ESSs would be recommended to the Board of Directors for approval. Emphasis will be placed on dynamic learning from both design and implementation of Projects in the diverse countries served by the Bank. To further underpin the Environmental and Social Framework, an energy strategy for the Bank will be developed for consideration and endorsement by the Board of Directors.

Objectives of the Environmental and Social Framework

5. The objectives of this Environmental and Social Framework are to:

Reflect institutional aims to address environmental and social risks and impacts in Projects (defined below in paragraph 5 of the ESP).

Provide a robust structure for managing operational and reputational risks of the Bank and its shareholders in relation to Projects' environmental and social risks and impacts.

Ensure the environmental and social soundness and sustainability of Projects.

Support integration of environmental and social aspects of Projects into the decision- making process by all parties.

Provide a mechanism for addressing environmental and social risks and impacts in Project identification, preparation and implementation.

Enable Clients (defined below in paragraph 5 of the ESP) to identify and manage environmental and social risks and impacts of Projects, including those of climate change.

Provide a framework for public consultation and disclosure of environmental and social information in relation to Projects.

Improve development effectiveness and impact to increase results on the ground, both short- and long-term.

Support Clients, through Bank financing of Projects, to implement their obligations under national environmental and social legislation (including under international agreements adopted by the member) governing these Projects.

Facilitate cooperation on environmental and social matters with development partners.


6. Meeting the Challenges. In order to meet the challenges of sustainable development in Asia, the Bank seeks to provide:

Insight. Share insight and cutting-edge knowledge on the emerging issues and key trends that drive sustainable infrastructure and interconnectivity in Asia.

Innovation. Develop new and sustainable approaches to meet Asia's infrastructure challenges, in partnership with government, other multilateral development banks, bilateral development organizations, the private sector and civil society.

Investment. Provide financial resources to support the development and operation of new and existing infrastructure in a cost-effective, sustainable and timely manner.

Integration. Assure integration of environmental and social sustainability as a core element in the Bank's policies and the Projects it finances.

Integrity. Operate in a transparent manner to promote institutional and individual integrity as key values in development.

7.Integration of Environmental and Social Sustainability. The Bank supports

infrastructure and interconnectivity to promote economic growth and improve the lives of people in Asia. Consistent with the Sustainable Development Goals (SDGs), the Bank recognizes the need to address the three dimensions of sustainable development -- economic, social and environmental--in a balance and integrated manner.

In addressing the development challenges of Asia, the Bank subscribes to the principles of sustainable development in the identification, preparation and implementation of Projects, as described below in the ESP.

8. Social Development and Inclusion. The Bank believes that social development and inclusion are critical for sound development. For the Bank, inclusion means empowering people to participate in, and benefit from, the development process in a manner consistent with local conditions. Inclusion encompasses policies to promote equity of opportunity and non- discrimination, by improving the access of poor, disadvantaged and disabled people to education, health, social protection, housing, environmental quality, infrastructure, affordable energy, water and sanitation, employment, financial services and productive assets. It also embraces action to remove barriers against vulnerable groups,*1* who are often excluded from the development process, and to ensure that their voices can be heard. In this regard, the Bank seeks, through the Projects it finances, to be supportive of these human rights and to encourage respect for them, in a manner consistent with its Articles of Agreement.

9. Role in Decision-making. For the principles of environmental and social sustainability to be effectively integrated into policies and Projects, the Bank believes that they should become part of routine decision-making processes and that environmental and social risks and impacts should receive full consideration in the identification, preparation, implementation and evaluation of all Projects.

10. Leading Role of the Client. The Bank's Clients, whether public or private, are responsible for successful preparation and implementation of their Projects, includingmanagement of the environmental and social risks and impacts of these activities. The Bank aims to work in a cooperative manner – by providing expert advice and oversight from its staff, supplemented by specialized consultants – to support its Clients in integrating consideration of environmental and social risks and impacts into their Projects.

11. An Emphasis on Implementation. The Bank considers that the management of environmental and social risks and impacts is central to the success of a Project. The collective experience of the multilateral development banks and bilateral development organizations in assisting their clients to manage environmental and social risks and impacts shows the importance of effective implementation of environmental and social management plans. The Bank supports Clients in the effective implementation of such plans for their Projects, through active field-based supervision, monitoring and verification, implementation support and institutional strengthening.

12.Strengthening of Country and Corporate Systems. The Bank considers that strong country and corporate systems are crucial to the management of environmental and social risks and impacts and assists in strengthening them through a variety of mechanisms in both the public and the private sectors. The Bank believes that, in many cases, the best way to strengthen these systems is to use them at the operational level, with adequate support to achieve their objectives, which itself may be an important development outcome of the Bank's financings. As provided in the ESP, the Bank may selectively provide the Client the option of using all or part of such systems for a Project in place of all or part of this ESP and ESSs, provided the Bank has determined that the Client has the ability and capacity to achieve environmental and social objectives materially consistent with the ESSs. This may be on a Project, sectoral or broader basis. In this regard, the Bank coordinates closely with other multilateral development banks, bilateral development organizations and relevant centers of expertise.

13. Stakeholder Engagement. The Bank believes that transparency and meaningful consultation is essential for the design and implementation of a Project and works closely with its Clients to achieve this objective. Meaningful consultation is a process that begins early and is ongoing throughout the Project. It is inclusive, accessible, timely and undertaken in an open manner. It conveys adequate information that is understandable and readily accessible to stakeholders in a culturally appropriate manner and in turn, enables the consideration of stakeholders' views as part of decision-making. Stakeholder engagement is conducted in a manner commensurate with the risks to, and impacts on, those affected by the Project.

14. Importance of Gender Equality. The Bank recognizes the importance of gender equality for successful and sustainable economic development and the need for inclusiveness and gender responsiveness in the Projects it supports. The Bank supports its Clients to identify potential gender-specific opportunities as well as gender-specific adverse risks and impacts under their Projects and to develop mitigation measures to avoid or reduce such impacts and risks. The Bank encourages Clients to enhance the design of their Projects in an inclusive and gender-responsive manner to promote equality of opportunity and women's socioeconomic empowerment, particularly with respect to access to finance, services and employment, and otherwise to promote positive impacts on women's economic status, with particular regard to financial resources and property ownership and control.

15. Treatment of Labor. The Bank recognizes the important role played by workers and their representatives in the development process and their contribution to sustainable economic growth. It believes that the following measures contribute to the quality of the Project: providing workers with living wages, safe and healthy working conditions and putting measures in place to prevent accidents, injuries and disease; avoiding activities involving forced labor and harmful or exploitative forms of child labor; having good human resources management; and having a sound labor management relationship based on equal opportunity, fair treatment, non-discrimination, freedom of association, right to collective bargaining and access to grievance mechanisms, consistent with the national law (including international agreements adopted by the member) governing the Project.

16. Measures for Climate Change. The Bank supports the three aims of the Paris Agreement of December 2015 to strengthen the global response to the threat of climate change, which are related to mitigation, adaptation and the redirection of financial flows. It supports the global adaptation goal of enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change. In the context of sustainable development, the Bank stands ready, through its financings, to assist its Clients in achieving their nationally determined contributions*2*, including through mitigation, adaptation, finance, technology transfer and capacity-building. It may, through its financings, support Clients' formulation of long-term low greenhouse gas emission development strategies. The Bank recognizes the challenges presented by climate change and the need to support both mitigation and adaptation measures in a Project facing such challenges. The Bank supports its Clients in their evaluation of both the potential impacts of the Project on climate change and the implications of climate change on the Project. To this end, the Bank plans to prioritize investments promoting greenhouse gas emission neutral and climate resilient infrastructure, including actions for reducing emissions, climate-proofing and promotion of renewable energy.

17. Conserving Biodiversity. The Bank recognizes that protecting and conserving biodiversity, sustainably managing terrestrial and aquatic natural resources and maintaining core ecological functions and services are fundamental to sustainable development. The objective of biodiversity conservation and sustainable management of natural resources should be balanced with a commitment to sustainable use of the multiple economic, social and cultural values of biodiversity and natural resources in an optimized manner. Through the Projects it finances, the Bank assists its Clients in protecting and conserving biodiversity and promoting the sustainable management of living natural resources through the adoption of practices that integrate conservation needs and development priorities. The Bank recognizes the value of natural infrastructure, such as wetlands, and the importance of enhancing or restoring ecosystem services where appropriate. Through its financings, the Bank assists its Clients in maintaining the livelihoods of Indigenous Peoples and other affected communities whose access to, or use of, biodiversity or natural resources may be affected by a Project.

18. Support for Green Economic Growth. The Bank recognizes the importance of green economic growth and the long-term benefits that it will provide in Asia. The Bank aims to build upon existing green economic growth initiatives in Asia, and to provide support for new ones at the regional, national and subnational level and within the private sector. Planning, investment and capacity building measures that the Bank supports help to "green" both infrastructure and interconnectivity. The Bank: promotes the conservation of energy, water and other resources; supports sustainable land use management; and encourages making best use of green growth and low-carbon technologies, renewable energy, cleaner production, sustainable transport systems and sustainable urban development.

Nationally determined contributions means those contributions, including as and when referred to as

"intended nationally determined contributions," and as found on the UNFCCC website.

19. Use of Incentives for Supporting Good Performance. As part of its policy development process and in coordination with other multilateral development banks and bilateral development organizations, the Bank intends to explore the use of incentives for its Clients to support good environmental and social performance, including ways and means to assess such performance. Measures to support the use of incentives will be examined during the initial three years of operations of the Bank. In addition, the Bank will foster a management culture that mainstreams environmental and social considerations in Project preparation and supervision.

20. Development and Dissemination of Knowledge. The Bank will develop, disseminate and apply knowledge gained from its application of the ESP and ESSs at the operational level with member governments, the private sector, the public and other development partners. This process will benefit from evaluations of Projects, on a collective and individual basis, prepared by the Bank, Clients and other development partners. The Bank aims to use this knowledge to improve the ESP and ESSs so as to increase the development effectiveness of Projects.

21. Cooperation with Development Partners. The Bank aims to promote harmonization of policies with multilateral development banks and bilateral development organizations with which it co-finances Projects to reduce the burden of multiple requirements on Clients. When co-financing a Project with these other financial institutions, the Bank seeks to cooperate with them with a view to adopting a common approach to appraisal, environmental and social management requirements, monitoring and reporting regarding the Project. Cooperation may include Projects at the regional and national level, including those for the management of trans- boundary environmental and natural resource management issues.

22. A New Development Partner. The Bank recognizes that it is a new development partner and plans to work closely with other multilateral development banks and bilateral development organizations in supporting the strengthening of environmental and social sustainability at the policy and operational level with public- and private-sector Clients. It also intends to work together with other development partners through co-financing Projects, undertaking studies and conducting training for staff and Clients.

{*1*For a definition of vulnerable groups, see ESP, footnote 2.}

{*2*Nationally determined contributions means those contributions, including as and when referred to as "intended nationally determined contributions," and as found on the UNFCCC website.}