The creation of new multilateral development banks (MDBs), such as the New Development Bank, created by members of the BRICS countries in 2014, and the Asian Infrastructure Investment Bank, created in 2015 by 57 signatory countries, has reopened the debate over the required safeguards and conditions for the international financing of public and private projects. By analyzing three sets of socio-environmental policies and safeguards recently disclosed by the two new MDBs noted above and by the World Bank, which just presented a revision of its own framework, this brief addresses two central issues concerning the socio-environmental policies of the MDBs: the responsibility sharing with their clients and the uses of country systems of social and environmental protection. The emphasis on country systems, proposed by the three banks, does not clarify how and in accordance to which parameters such systems will be strengthened. This lack creates a large area of uncertainty regarding the treatment of the negative impacts of development projects, particularly in relation to investments in infrastructure, which in turn has generated much criticism from civil society organizations and experts.

Socio-environmental safeguards and policies are generally considered responses to market failures and negative externalities resulting from the action of private agents. Since the 1990s, the debate over socio-environmental impacts has emphasized investment decisions supported by international financial institutions (IFIs). In this context, the MDBs have been regarded as decisive agents of the socio-environmental conditions in developing countries. The integration of the socio-environmental agenda into investment decisions was fundamental to the development of safeguards and prevention, mitigation, and compensation policies. In relation to the construction of socio-environmental safeguards, the World Bank has become an institution of reference.

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(Source: BRICS Policy Center)