Mr. Speaker, with regard to (a), analysis was conducted internally to assess the feasibility of joining the AIIB as part of a memorandum to cabinet, which is protected under cabinet confidence. As well, Global Affairs Canada, GAC, produced a “Review of the Asian Infrastructure Investment Bank Safeguards: Draft Environmental and Social Framework”.
Both the analysis and the study identified potential risks in joining the AIIB at its inception, given the lack of a track record, and flagged areas specific to governance, safeguards, and transparency in procurement and hiring processes. Nevertheless, monitoring over time would be required to ensure that the AIIB effectively implements high social responsibility standards and safeguard policies that would be expected by shareholders.
With regard to (b), (c), (d), (e), and (f), the contents of the memorandum to cabinet are held in confidence and cannot be released.
An assessment was conducted on the AIIB’s draft environmental and social standards. The standards cover the following areas: First, social standards and human rights, including social risks and impacts, vulnerable groups, gender, land and natural resource access, and cultural resources under social coverage; and safe working conditions and community health and safety, child labour and forced labour, labour management relationships in private sector operations under working conditions and health and safety. Second, environmental standards, including biodiversity, critical habitats, natural habitats, protected areas, sustainability of land use, climate change, pollution prevention, resource efficiency, greenhouse gases, quantification of greenhouse gas emissions.
There were no direct comparisons of human rights or the environmental record with the World Bank Group and the Asian Development Bank, or any other international financial institutions, IFIs, given that the AIIB only approved its first project in April 2016 and has not yet developed a record in these areas. Analysis had highlighted that the draft framework’s labour provisions, related to forced labour and child labour, were different from those of other IFIs, including the African Development Bank and the European Bank for Reconstruction and Development.
The following considerations were seen as factors that could facilitate the alignment of standards with IFIs with proven track records: considerable technical adviser support was given from existing IFIs, with the environmental and social framework drafted by a World Bank senior technical adviser with expertise in safeguards; diverse group of founding members, which would increase transparency and public scrutiny; co-financing with IFIs, such as the World Bank Group and the Asian Development Bank, which would likely require the AIIB to satisfy these IFIs’ rigorous standards; and a formal grievance redress mechanism covering environment and social impacts was in line with a safeguards review conducted by the World Bank.
Overall, the draft framework was seen as meeting international best practice, recognizing that some clarifications and details need to be addressed before its finalization. It was also understood that Canada would be monitoring the implementation of the framework.
With regard to (g) and (h), OECD standards are intended to apply to member and non-member countries and governments wishing to adhere to such standards; they are not intended to govern the activities of international financial institutions. As such, written assurances have not been received from the AIIB on adherence to OECD standards.