GREENING THE BRI

The linear infrastructure projects under the BRI (see Annex 1) pose significant threats to the ecosystems of ASEAN member states.30 Critics of the BRI often point to debt burdens and environmental and social impacts as reasons to oppose the BRI.31 In response to some of this criticism, the PRC government has released proposals to “green” the BRI and create a more sustainable model for BRI investments and project implementation. Since 2017, there have been attempts to more closely align BRI projects with the vision of “ecological civilization”32 that has been advanced by President Xi Jinping. Baird and Thomas have suggested that PRC BRI investors and proponents’ full compliance with national EIA law and policies, and the application of transboundary EIAs and strategic environmental assessments (SEAs), are important initial steps to reduce the ecological and social footprint of BRI projects. They further recommended that the PRC government engage with ASEAN on a multilateral basis to develop a common ASEAN-wide approach to EIA, SEA, and transboundary EIA dispute resolution mechanisms and environmental and social standards.33

In December 2020, the BRI Green Development Coalition issued the Green Development Guidance for BRI Projects Baseline Study (BRI guidance) with nine recommendations (see Box 2). While all the BRI documents are considered voluntary, they provide a broad framework for recommendations and regulations to promote a greener BRI in ASEAN and ASEAN member states. In addition, specific guidance for highways and railways was issued in 2021. This guidance highlighted the clear risks for biodiversity, wildlife, and habitat fragmentation caused by these linear infrastructure projects. It included recommendations that projects should avoid ecologically sensitive areas and consider the impacts of construction and design on wildlife. There is a need for further clarity and specific mechanisms to ensure effective implementation of these guidelines and recommendations.

In July 2021, the PRC’s Ministry of Commerce and Ministry for Ecology and Environment jointly issued the Green Development Guidelines for Overseas Investment and Cooperation.34 In January 2022, the Ministry of Commerce issued the Guidelines for Ecological and Environmental Protection of Foreign Investment Cooperation and Construction Projects (2022 guidelines).35

Notably, the 2022 guidelines address both private and state-owned enterprises engaging in overseas new projects, reconstruction projects, and expansion projects, as well as mergers, “to implement the concept of ecological civilization” and to “promote the green and high-quality development of projects”. The 2022 guidelines describe how companies should integrate environmental considerations along the whole project lifecycle—from project planning to construction, management and de-construction, and information disclosure.

30  Hoong Chen TEO et al, ‘Environmental Impacts of Infrastructure Development under the Belt and Road Initiative (2019) 6 Environments 72

31  Shahar HAMEIRI, ‘Debunking the myth of China’s “debt-trap diplomacy”’, Lowy Institute, September 9, 2020 https://www.lowyinstitute.org/the-interpreter/ debunking-myth-china-s-debt-trap-diplomacy (last viewed 19 September 2022)

32  These are described in Baird and Thomas, Greening the BRI in ASEAN, CJEL 4 (2020) p. 217-234.

33  Baird and Thomas, p. 231-233.

34  For an English translation see https://www.clientearth.org/latest/documents/green-development-guidelines- for-overseas-investment-and-cooperationenglish-translation/

35  https://greenfdc.org/interpretation-2022-guidelines-ecological-environmental-protection-of-foreign-investment-cooperation-and-construction-projects/

Box 2: Nine recommendations of the BRI Guidance

1 Address all project phases with green overseas investment practices, from project initiation through project evaluation, financing, construction, operation, reporting, and transfer or closure.

2 Provide a list of projects not available for funding (e.g., similar to many developing financial institutions).

3 Obtain an environmental and social impact assessment (ESIA) depending on the project’s perceived risks, where “red,” “red-yellow,” “red-green,” and high-risk “yellow” projects obtain an independent EIA assessment based on international best practices.

4 Differentiate conditions to reduce financing costs and approval times for “red-green” and “green” projects.

5 Require an environmental and social management system for the project company to ensure mitigation measures are implemented and reported.

6 Require financial institutions to provide grievance redress mechanisms for people and NGOs. These should be easy to access and promote the sharing of violations of environmental agreements or laws with the financial sponsors throughout all project phases.

7 Integrate covenants related to breach of environmental and social agreements between the financial institution and the project company to exercise remedies to rectify environmental management.

8 Provide public reporting of the environmental performance of the project.

9 Encourage international cooperation on environmental performance reporting.