As multilateral development banks gear up to fill the serious gaps in infrastructure in Asia and elsewhere, attention also focuses on safeguards used to deflect potential spillover damages to communities, habitats and livelihoods from these investments. The value of such defenses is at an all-time high because of the heightened fragility of the environment and society today – as the United Nations’ new Sustainable Development Goals stress.
Indeed, safeguards should be a top concern for established lenders such as the World Bank and ADB as well as the two new lenders: the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank of BRICS countries. While the borrower is responsible for implementing such protection, the financier must be accountable for robust checks on the projects financed. When it comes to spillover damages, the crucial question is how flexibility is balanced with compliance.