CREATION OF A SUSTAINABLE DEVELOPMENT POLICY

• In cooperation with government representatives, the scientific community and the general public, the EBRD needs to develop a sustainable development policy to guide its lending in Central and Eastern Europe. A set of sustainable development criteria should be created and integrated into the Bank's project selection procedures. The EBRD should utilize Sectoral and Regional EAs as the basis for long range planning and policy development, and consider the environmental impacts of Bank activities at the global level.

THE EBRD PROJECT PORTFOLIO

• Bank projects should reflect regional and local development priorities based on decentralized, autonomous decisionmaking. Projects that are inconsistent with the sustainable development policy should be ineligible for EBRD financing. The EBRD should undertake more projects aimed directly toward improving the region's environment. The activities of the new Energy Effeciency Department and the Environmental Infrastructure Department should be fully supported and expanded.

THE EBRD ENVIRONMENTAL PROCEDURES

• The current Environmental Procedures should not be replaced, but should be clarified and strengthened, as recommended. The Environmental Procedures should be supplemented with Project Sponsor Guidelines which in clear, unambiguous, and mandatory language, would instruct project sponsors how and when to notify the public, conduct scoping, prepare an EA, hold public meetings, conduct monitoring, and fulfil all other Bank requirements for environmental due diligence.

Procedures for Environmental Assessment

• The EBRD should require projects to adhere, at a minimum, to EU standards, and to more stringent standards in special circumstances. Local laws and regulations, where they exist, should be strictly followed, though in many cases they will need to be supplemented by the Bank's own procedures.
• To ensure that projects receive the appropriate level of environmental scrutiny, the Bank staff should strictly adhere to the screening requirements of the Environmental Procedures. All information upon which screening is based should be made public and the public should be given an opportunity to review and appeal screening decisions.
• The scope of EAs should be expanded to include:

*a statement of the purpose and need for the project;

*an assessment of all alternatives to the proposed action that satisfy the purpose and need, including an assessment of the no-action alternative; and

*an assessment of all foreseeable indirect, cumulative, regional and global impacts.

• More time should be allotted for both the preparation and review of EAs; the EBRD staff should diligently review the EA throughout its development to ensure that it fully addresses all areas of potential concern. Where data is unavailable, procedures have not been followed, or environmental concerns have been ignored, the staff should reject the EA and stop the project until all deficiencies have been remedied.
• Environmental audits should not be used as a substitute for EAs. Environmental audits, particularly of state-owned companies, should be provided to the local environmental agencies and should be released to the public. The Bank should require remediation of any contamination discovered during the audit, as a condition of financing. Both the EBRD staff and the public should participate in project monitoring to ensure that Management Action Plans are fully implemented.
• Remediation agreements and Environmental Action Plans should provide for public review, participation, and monitoring. Loan agreements should not be signed, nor money disbursed until complete agreement has been reached in writing with the project sponsor for mitigation and remediation.
  Procedures for Project Review and the Environmental Veto

Procedures for Project Review and the Environmental Veto

• The Environmental Staff should be given a mandatory veto if the projected net environmental outcome of a proposed project would result in a significant loss of environmental quality or would not promote sustainable development as required by the Bank's charter. The Environmental Advisory Council should be given authority to review Environmental Staff recommendations and provide advice to the President, the Operations Committee, and the Board of Directors on specific projects.

Procedures for Board Decisionmaking

• EAs should be released to the public and the Board of Directors a minimum of 120 days before projects are submitted to the Board for approval. The Board should reject projects when environmental and public participation procedures have not been fully followed, or environmental information is incomplete.

Procedures Related to Monitoring and Evaluation

• Every EBRD EA should contain a monitoring plan. The Bank should:
  *integrate public participation into all its monitoring activities;

  *make Environmental Evaluation Memoranda public documents; and

  *withhold a portion of the loan until all environmental mitigation and remediation requirements are met.

   

Disclosure of Information

• The EBRD should develop and publish an information disclosure policy and establish a Public Information Center modeled after the World Bank PIC, and those recently established at other multilateral development banks. The information disclosure policy should endorse a rebuttable presumption in favor of releasing all environmental information, which should be provided to the public in a timely manner. The Board of Directors should condition the approval of all loans upon full public access to all such information.

• The EBRD's procedures for public participation should be greatly expanded, as recommended. The Bank should provide more guidance to project sponsors on how to conduct public participation, via a handbook and direct assistance from the Bank staff. Project sponsors that fail to adhere strictly to public participation procedures should not receive loans.
• Project sponsors should be required to notify the public about all projects, as early as possible in the project cycle, preferably before scoping. With assistance from the EBRD staff, project sponsors should develop a notification strategy, identifying all interested parties and effective means of notifying them. Notification should include enough information about the project for citizens to determine whether it might affect them.
• The EBRD should require project sponsors to conduct public scoping on all projects requiring an environmental assessment. All potentially interested parties should:

*have an opportunity to participate in the scoping process;

*be provided with complete information and have the opportunity to comment on all relevant topics, especially alternatives, impacts, and mitigation;

*be provided a minimum period of sixty days for public input into scoping;

*be invited to public scoping meetings, and meetings with individual interest groups; and

*receive timely responses from the project sponsor, to all issues and proposals raised.

• The project sponsor should also provide an opportunity for public comment upon release of both the draft and final EA, at which point, at least one public meeting should be held. The project sponsor, or where appropriate the Bank, should be required to respond in writing to all comments.
• Public participation in monitoring should be mandatory for all projects requiring environmental assessment, and should be included as a covenant in loan agreements. To facilitate public involvement in project monitoring, environmental information documents, loan conditions, and remediation agreements should be made available at an EBRD public information center and in the Bank's field offices.

THE ENVIRONMENTAL ADVISORY COUNCIL

• The ENVAC should be given greater responsibility in developing policies and procedures. The EBRD should respect the recommendations of the ENVAC; its views on environmental matters should routinely be adopted by the Bank. EBRD representatives and project sponsors should cooperate with ENVAC members requesting information or offering advice on EBRD-financed projects in their country or region. The environmental staff should respond in writing to each ENVAC comment or recommendation, stating how the recommendation will be implemented.

• To allow time for full discussion of all important environmental issues, ENVAC meetings should be longer and occur more frequently than semi-annually.
  

CREATION OF AN INDEPENDENT INSPECTION PANEL

 

• The EBRD should create an Inspection Panel modelled after the World Bank's Inspection Panel, which would entertain claims based on the Bank's failure to comply with international legal norms, the goals of its charter, or its own policies and procedures.
• The EBRD Panel should:

*permit public disclosure and discussion of the Panel's pending claims and recommendations;

*be given the authority to slow the project cycle when claims are pending; and

*make specific recommendations for remediation.


THE EBRD OPERATION POLICIES

• The Energy Operations Policy espouses a long-term commitment to integrated resource planning, that should be fully implemented. Specific investments in conservation and energy efficiency, particularly in the residential and transport sectors, deserve greater attention, as do benign renewable technologies, such as solar and wind. Least-cost analyses should be undertaken for all projects, and global environmental impacts associated with the energy sector, should be addressed.

• The EBRD must develop a detailed long-range nuclear policy. Until an integrated resource plan is developed for the region, the Bank should place a moratorium on funding the completion of nuclear power plants, and identify and promote non-nuclear alternatives. In comparing the costs of nuclear and non-nuclear options, the EBRD should consider the environmental and economic costs of long-term waste storage, decommissioning, and possible accidents.

• The Transport Operations Policy should better account for environmental and efficiency issues. Bank lending should: favor public modes of transportation that are less destructive of the environment; encourage, where appropriate, governmental subsidies for public transportation; and promote intermodalism, bicycle transport and pedestrian zones.
• The Agriculture Operations Policy should be re-written to include environment and health issues. Bank lending should support the removal of subsidies for agricultural chemicals, provide preferences for organic agricultural practices and those that reduce dependence on fertilizers and pesticides. Technical assistance should be targeted to eliminate those agricultural practices that cause long-term environmental degradation, and to develop a market for organic and other healthy agricultural products. The Bank should assist in building a demand for these products through education and research on the impacts of agricultural chemicals on human health.