BE2C2 Report — The China-led Asian Infrastructure Investment Bank (AIIB) has barred nearly 1,000 companies and entities that have been sanctioned by existing multilateral development banks from participating in its projects – a move that further aligns it with its peers.
This means that those sanctioned by the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank and World Bank will not be permitted to work on AIIB-financed or co-financed projects — — this would include some projects the bank is financing in the $56 billion China Pakistan Economic Corridor package, according to some experts.
The AIIB has voluntarily adopted the list of sanctioned firms and individuals under the Agreement for Mutual Enforcement of Debarment Decisions (AMEDD), effective on March 1, 2017, according to the China-initiated multilateral development bank.
Like the World Bank Group and other regional development banks, AIIB defines four practices it will not tolerate. These are ‘fraudulent’, ‘corrupt’, ‘collusive’ and ‘coercive’ practices. In addition to these practices, AIIB defines three further prohibited practices. These are ‘obstruction’, ‘theft’ and ‘misuse of resources’. Firms and individuals who engage in any of these practices can be sanctioned by AIIB. Sanctions include barring a firm or an individual, either permanently or for several years, from participating in AIIB projects. The lists can be viewed on the cross debarment website .
The AIIB Director General Hamid Sharif explains: “Creating a culture that lives up to our core value to be clean is crucial for AIIB because we are ultimately the stewards of taxpayers’ money from all of our members. This is a responsibility we take very seriously and believe adopting the same list will help to ensure we only work with partners who will deliver corruption-free infrastructure projects that bring value for local communities in Asia.”
A statement on the AIIB’s website says the adoption is in lines with its “lean, clean and green organizational principles”. However, as GTR reported recently, the development bank has yet to make a conclusive statement about whether it will finance coal-fired plants overseas.
The AIIB has been lobbied extensively by coal-producing member states such as Australia and Indonesia. Despite early signs that coal would be off the agenda, its draft energy policy states: “Carbon-efficient oil and coal-fired power plants would be considered if they replace existing less efficient capacity or are essential to the reliability and integrity of the system, or if no viable or affordable alternative exists in specific cases, particularly in low-income countries.”
This has led some to speculate that it will finance coal under some circumstances, despite pressure from environmental groups to live up to its own guiding principle.
The AIIB, headquartered in Beijing, is considered to be part of China’s “go global” strategy. It aims to support infrastructure developments in Asia, estimated to cost US$40 trillion from 2015 to 2030.
During its first year of operation, the bank approved loans of US$1.73 billion to support nine infrastructure projects in seven countries.
In 2017, the AIIB will focus on three major areas — sustainable infrastructure, cross-country connectivity and the mobilization of private capital — according to an earlier statement from the bank.
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