Resilience Planning and Project Finance Process:
8
Incorporate Safeguards

Urban Resilience Roadmap
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Incorporate Safeguards
Introduction Competencies/Skills Tools Tips Supporting Entities Potential Outputs
Introduction

Most if not all financiers require certain procedures to be followed to ensure that the project minimizes, to the extent practically possible, impacts to the environment, as well as impacts or costs that may fall disproportionately on the shoulders of certain groups within societies.  Moreover, many financiers recognize the need to pay specific attention to gender sensitivities in terms of both impacts and interventions.  In particular, extra care must be taken when designing projects that could potentially involve relocation of people, or which could directly or indirectly affect indigenous groups.  If the project is targeting Asian Development Bank or World Bank financing, the city must follow their established procedures.  Proposals for the Adaptation Fund or the Green Climate Fund, must also follow specific procedures adopted by the funds.  Most funds follow the World Bank guidelines with minor adjustments.  For a project to be approved, it must comply with the safeguard policies of the respective financier. Common considerations in environmental and social safeguards analyses include:

  • Proximity to populated areas;
  • Proximity to cultural sites;
  • Proximity to important ecosystems/wetlands/protected areas;
  • Environmental by-products (pollution, increased waste, greenhouse gases);
  • Human rights;
  • Gender equity;
  • Relocation/resettlement/tenure security: is there land acquisition that will require people to be moved?
  • Free, prior, and informed consent (FPI).

It may be useful to use a checklist to determine what sorts of safeguards might need to be put in place.  For example, the United Nations Environment Programme uses a diagnostic list of questions to assess most of the aforementioned considerations.  The checklist is a useful tool for describing the issues, listing the additional studies that need to be conducted during the feasibility study, as well as mitigation measures that will be required in project implementation. 

The German Development Bank (KfW), on the other hand, uses the International Finance Corporation’s Performance Standards on Environmental and Social Sustainability (see references).  World Bank projects adhere to a series of Operational Policies (OP), including policies related to environmental assessment, natural habitats, physical cultural resources, involuntary settlement, indigenous people, and forests, among other areas.  Each of these operational policies comes with documentation requirements.  These operational policies are useful references for understanding how various safeguards are operationalized in project design and implementation.  For example, most projects try to avoid resettlement if reasonably possible. 

However, in some cases, resettlement may be unavoidable.  The World Bank’s operational guidelines in this case would require the preparation of a resettlement plan that includes measures to ensure that displaced people are informed about and aware of their rights and are consulted on and offered choices about resettlement.  The plan would also include measures to ensure that relocated/displaced people are offered assistance during and after relocation.  If the city is planning to access the Green Climate Fund through direct or multilateral access channels, the project should adhere to the safeguards procedures of the accredited entity that is submitting the project.  

Tools/Resources
Tips
  • When conducted properly, safeguards procedures can provide a robust structure for managing operational and reputational risks of projects;
  • Incorporating safeguards can also improve development effectiveness and impact, leading to improved results over the short- and long-terms; 
  • Safeguard screenings should be conducted by outside experts that do not have vested interests in the outcome of the screening.  They should also be insulated from influence from government or third parties;
  • Projects should be screened early to identify potential risks so that impacts can be minimized, and so that appropriate mitigation measures can be mainstreamed into the project’s design.  It is far easier to incorporate findings from environmental and social safeguards screenings during the design process than after the project has been designed; and
  • Be sure to include the costs of mitigating environmental and social risks in the project budget.
Supporting Entities/Processes
  • Millennium Challenge Corporation;
  • UNDP;
  • CDIA; and
  • Asian Development Bank
Potential Outputs
  • Specific assessments and mitigation plans associated with safeguards triggered by the project;
  • Gender Action Plan (GAP); and
  • Stakeholder consultations