265 Civil Society Groups Call on Chinese Authorities to Ensure that Covid-19 Financial Relief Does Not Bail Out Harmful Projects

265 Civil Society Groups Call on Chinese Authorities to Ensure that Covid-19 Financial Relief Does Not Bail Out Harmful Projects.

Today, Inclusive Development International joined 265 civil society groups around the world in calling upon the Chinese government to ensure that COVID-19 related financial relief for struggling Belt and Road projects flows only to high quality overseas investments that meet stringent criteria aimed at protecting people and safeguarding the environment.

The organizations urged China to avoid bailing out projects already mired in environmental, social, biodiversity, climate, or financial risks prior to the onset of COVID-19.

In February 2020, China’s Ministry of Commerce and the China Development Bank jointly issued a notice creating a mechanism for directing finance to Belt and Road projects that have been impacted by the COVID-19 pandemic. They instructed local commerce departments and centrally state-owned enterprises to collect information on overseas projects impacted by the outbreak and pass this information on to the China Development Bank, which will consider providing financial relief to get projects back on track.

Crucially, the notice states that projects that are “high quality”, “legally compliant” and have “controllable risks” can qualify to receive COVID-19 related financial relief.[1]

In the statement, civil society groups highlighted 60 Chinese sponsored projects in the mining, pulp and paper, hydropower, infrastructure, fossil fuel, and other sectors which do not meet these criteria, and set out 10 specific principles that if present could help to ensure that projects are “high quality.” This includes ensuring credible, robust environmental impact assessments, obtaining free, prior informed consent from affected people, committing not to impact on key biodiversity areas, and ensuring alignment with international norms and best practices and China’s green finance policies, among others.

As the world continues to respond to the COVID-19 crisis, economies are contracting, unemployment is rising, and major development projects are stalled. To manage the crisis and begin to address the harm caused by the pandemic, Chinese and global development actors will need to seriously consider how low-quality, high-risk investments may not only drive negative environmental, social, climate, and biodiversity impacts, but may also facilitate the spread of diseases.

“Poor and marginalized communities around the world continue to suffer the worst health and economic effects of this pandemic. It is these same communities who always suffer the most from the impacts of top-down, unsustainable development projects. This is the moment to abandon all the new extractive and destructive mega-projects in the works, which threaten the immediate health and well-being of local communities and the long-term health of the planet, and rebuild an inclusive and ecologically sound global economy from the bottom up,” said David Pred, Executive Director of Inclusive Development International.

In a post COVID-19 world, the organizations joining the statement emphasize, global actors seeking to stabilize and revitalize the economy must ensure that any COVID-19 related financial relief is allocated to projects and investments which are fully supported by and benefit local communities, align with international standards and best practice, and preserve our world’s increasingly fragile ecosystems.

The statement is available here in Chinese and English

The full project list is available here in Chinese and English

[1] Ministry of Commerce & China Development Bank (2020) #61, Work Notice On Supporting the High Quality and Cooperative Building of “One Belt One Road” By Unleashing the Role of Development Finance in Response to the COVID-19 Outbreak / 商合函【2020】61号 《关于应对新冠肺炎疫情 发挥开发性金融作用支持高质量共建“一带一路”的工作通知》


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