United States (U.S.) Comments on the

European Bank for Reconstruction and Development (EBRD) Environmental and Social 

Policy (ESP) Revision Draft for Consultation

March 7, 2014

The U.S. welcomes the proposed improvements to the EBRD’s current Environmental and 

Social Policy (ESP), such as the new references to human rights, gender, resource efficiency, 

water, and Financial Intermediary Category A sub-projects. The U.S. also has a number of 

suggestions for further improvements. 

With respect to the overall safeguards system reflected in the ESP, largely articulated in the 

“EBRD ESP” and Performance Requirement 1, the U.S. has the following comments and 

suggestions:

 Deferred appraisal. The U.S. believes that the text on deferred appraisal should: 1) 

clarify the specific circumstances in which deferred appraisal would be appropriate; 2) 

require that the Board be informed of the anticipated timeframes for the deferred 

appraisal; and 3) state that the Board has the option to request that future subprojects or 

specific uses of funds return to the Board for decision when environmental and/or social 

risks are particularly high. 

 Alternative approaches to the Performance Requirements. The U.S. recommends

that the EBRD, like other Multilateral Development Banks (MDBs), require the use of 

the Performance Requirements and not allow for alternative approaches. 

 Client responsibility for implementing the Performance Requirements. The U.S. 

recommends, consistent with the approaches at the World Bank, International Finance 

Corporation (IFC) and other MDBs, that clients also be required to comply with the 

Performance Requirements in activities that are not financed directly by the EBRD (so 

are not part of the “project”), but are associated with the project. 

 Category A and B definitions. The U.S. recommends that the Category A definition be 

consistent with that of other MDBs in that it reflect the significance of the potential 

impact, not the degree to which impacts can be mitigated or the ease of identifying 

impacts, and that the definition for the Category B projects be revised to match the IFC’s 

definition. The U.S. also recommends that Performance Requirement1 be clear that the 

client should follow the EBRD’s category decision. 

 Mitigation hierarchy. The U.S. recommends that the footnote defining the mitigation 

hierarchy should reflect more clearly the commonly accepted hierarchy of “first avoid,”

then if avoidance is not possible, “minimize and mitigate,” and then “offset/compensate”

for residual impacts, as a last resort. 

 Documentation to the Board – Environmental and Social Action Plans (ESAPs). The 

U.S. recommends that the documentation provided to the Board include the anticipated 
timeframe or schedule for a project to be in compliance with the Performance 

Requirements. 

 Specification of technical standards. The U.S. recommends that the text state, in an 

appropriate place, that the Environmental and Social Impact Assessment (ESIA) will 

identify the applicable requirements for the project, including technical standards. There 

may be cross-references of particular issues in the Environmental and Social 

Management Plan (ESMP) and ESAP.

 EBRD assessment of Financial Intermediaries. The U.S. recommends that the EBRD, 

like other MDBs, be responsible not only for assessing Financial Intermediaries’ 

environmental and social management systems but also for identifying gaps and 

overseeing implementation of necessary gap-filling measures.

With respect to specific substantive areas, the U.S. has the following comments and suggestions:

 The U.S. recommends a more robust approach to climate change. This should include 

considering climate in each alternative; requiring measures to reduce greenhouse gas 

(GHG) emissions; preventing maladaptive investments; and, for projects with high 

potential GHGs, considering an expanded assessment of policy and economic 

considerations. 

 The U.S. recommends that the ESP and Performance Requirements address issues related 

to land tenure and land use.

 The U.S. recommends that the EBRD apply a consistent definition of vulnerable 

individuals and groups that includes sexual orientation, gender identity, religion, and 

indigenous status.

 The U.S. recommends using language that is supportive of appropriate benefits and 

opportunities for affected communities while maintaining flexibility in how those 

benefits are derived.

 Performance Requirement 2 (labor) should more clearly recognize the client’s 

responsibility to identify and assess the risk of child and forced labor in its primary 

supply chain. 

 Performance Requirement 3 (resource efficiency and pollution) should be explicit 

that the client’s identification of Good International Practice (GIP) standards will be 

agreed by the EBRD (not solely the client’s choice). 

 Performance Requirement 4 (health and safety) should focus solely on client 

responsibilities, and should require that risks be managed to an acceptable level.
 Performance Requirement 5 (involuntary resettlement and related issues) should, in 

all cases, seek to improve living standards and require that clients avoid pre-resettlement 

activities that negatively impact affected communities.

 Performance Requirement 6 (biodiversity and living natural resources) should not 

allow offsets for impacts in critical habitat. If they are allowed, Performance 

Requirement 6 should require baseline data to assist in the identification of critical habitat 

and require sufficient capacity and commitment by implementing entities. It should 

adopt a more flexible approach on genetically modified organisms, as proposed 

restrictions lack a scientific basis. It should adopt a more risk-based approach to 

intentional introductions of invasive alien species. 

 Performance Requirement 7 (indigenous peoples) should recognize the collective 

ownership rights of Indigenous Peoples, in those cases where they possess the land and 

natural resources in question, and also recognize access and usage rights on a collective 

basis. It should also acknowledge that there is no internationally agreed definition of 

“free, prior and informed consent” and note that the proposed definition is for purposes of 

the Performance Requirements.

 Performance Requirement 9 (financial intermediaries) should require at least a 

minimum of information disclosure by Financial Intermediary subprojects that are 

“medium” or “high” risk in the Financial Intermediary sub-project lexicon, comparable to 

that required of directly financed Category B projects. It should also require that 

Category B subprojects comply with the relevant Performance Requirements, consistent 

with the IFC’s approach. 

 Performance Requirement 10 (disclosure and stakeholder engagement) should 

include both Environmental and Social Management Plans and, where they exist, 

Environmental and Social Action plans, in the disclosure and consultation process on 

projects requiring an ESIA. 

As with any policy, implementation is the key to an effective outcome, so the U.S. encourages

the EBRD to be open to constructive ideas on improving supervision during implementation and 

incorporating safeguards into ex-post evaluations. 

The U.S. would particularly like to emphasize the importance of robust implementation of the 

provisions to provide information on Category B projects to the Board and for clients to provide 

information to communities that are likely to be affected by these Category B projects. 

As the EBRD moves forward in implementing its new policy, the U.S. encourages the EBRD to 

increase its engagement with civil society organizations in those areas where such organizations 

have expertise. For example, the U.S. believes that some civil society organizations have 

experience that might be useful in the areas of gender, sexual orientation, gender identity and 

disability.