Over 260 Civil Society groups call on Chinese Authorities to Ensure that Covid-19 Financial Relief is Not Targeted to Harmful Projects

Sumsel 1 coal power plant in Muara Enim (owned majority by Shenhua Gou Hua. Fomerly this site was community plantation, and community plantation nearby site is inundated because the run of water blocked by this site. Picture taken 28 February 2020

On April 29, 2020, over 260 civil society groups across the world called on the Chinese government to ensure that COVID-19 related financial relief for struggling Belt and Road projects flows only to high quality overseas investments satisfying specific stringent criteria, and 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 (CDB) jointly issued a notice creating a mechanism for directing finance to Belt and Road projects that have been impacted by the COVID-19 pandemic. The announcement 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 CDB, 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 ten 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 rising, and major development projects are stalled. As we find ways 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, as a consequence of encroachment on undisturbed ecosystems.

In a post COVID-19 world, global actors will need to take stronger, decisive steps to stabilize and revitalize the global economy in an ecologically safe, people-oriented, and sustainable manner, and 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.

[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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