With comments such as “very vague” and stressing the need for “greater detail” in how the EIB will exercise its “discretion to apply EU standards or social standards, or not” (emphasis added), the International Finance Corporation (the World Bank’s private lending arm) has provided its input to the EIB’s public consultation on its currently draft Environmental and Social Statement.

The IFC’s comments are not long, they are brutally concise. They succeed in unravelling some reasonably aspirational proposals on social protection that the EIB is attempting to finesse, unfortunately, with its trademark discretionary language. As IFC notes:

“The effect of these things might mean that you simply would not apply social standards in a majority of your projects outside EU, potentially because you do not ordinarily require the discipline of due diligence on social issues within EU, and hence your internal capacity simply dictates what is possible or not in the emerging markets (but mostly not possible).”

Ouch. A revised draft of the statement, featuring hopefully some fundamentally revised thinking and language, is due soon. A range of inputs to the first draft is available on the EIB website, but oddly lacking are contributions from business. Are we to believe that the EIB’s principal beneficiaries had nowt to say on the new statement, a statement which:

“informs not only the staff of the EIB but also the large number of other parties with whom the Bank works in order to fulfil shared environmental objectives, including other EU institutions, in particular, the European Commission, other Multilateral Financial Institutions (MFI), financial and business interests, and representatives of civil society, including non-governmental organisations (NGO).”

Commercial confidentiality surely has no application in the shaping of shared environmental objectives.

The European parliament last week demonstrated its growing vigilance over the activities of the EIB with a vote related to the bank’s expansion into Central Asia that insists on any EIB loans to the region’s states being conditional upon their progress in establishing the rule of law and in respecting human rights and fundamental freedoms.

A Green amendment to disallow Uzbekistan from receiving EIB financing until such time as EU sanctions against the repressive Karimov regime are lifted received overwhelming parliamentary support. In a European Voice opinion piece in July, our Counter Balance colleague Desi cited the European parliament’s point to the European Council and the European Commission from earlier this year: “human-rights issues should carry equal weight with the EU’s robust approach to energy, security and trade”

A landmark day, then, for the EIB – human rights conditions look set to play a part in its operations for the first time, and on top of this the resolution explicitly stipulates that individual projects receiving EIB support in Central Asia are subject to a Sustainability Impact Assessment carried out independently of the project sponsors and the EIB.

But what was behind the Commission’s original, condition-free proposal that now goes to a Council decision in this beefed-up form? It originally had no qualms about lumping Uzbekistan in with the other four states. And despite a tabled Green amendment (defeated) to restrict EIB loans to non-state sponsored projects only in Turkmenistan, President Berdymukhammedov may just have some inkling about why his tough guy approach to democracy is being tolerated in a “development funding” context by Brussels. Commissioner Piebalgs and the EIB are singing from the same hymn sheet at any rate.

Welcome, incidentally, to Counter Balance’s new blog.