13.08.2020

Safeguards for IKI projects

IKI funding areas. Photo: IKI

IKI funding areas. Photo: IKI

The International Climate Initiative (IKI) has been financing climate and biodiversity projects in developing and emerging countries and in transition economies since 2008 – from Brazil to South Africa and Vietnam. Many IKI projects have to cope with difficult contexts and conditions in the partner countries. Poverty, lack of participation, limited rule of law, low protection standards for workers or the rights of minorities must always be taken into account. Against this backdrop, the IKI wants to ensure that the measures carried out by the projects do not have any negative effects on the people, their living conditions and nature.

For example, if a project supports the set up of a protected area to conserve biodiversity, questions like these could arise: Will the local population suffer a loss of income because hunting or gathering rights are restricted? Is there a risk of people being displaced or resettled? How can possible negative effects for the people concerned be avoided? Regardless of the project, be it on waste or electromobility, questions on the far-reaching consequences of the project activities could always arise.

The do-no-harm principle: Identifying and avoiding risks

To identify such risks at an early stage, the IKI applies a systematic safeguards approach to its projects. Safeguards are environmental and social standards that are intended to ensure, for example, the protection of human rights, compliance with occupational health and safety standards, the conservation of biodiversity, the prevention of environmental pollution or the protection of cultural assets in project work.

The aim is to avoid or mitigate possible negative consequences of project activities. In addition, the application of the IKI safeguards is intended to enhance the quality of the projects and contribute to an overarching sustainability agenda.

IKI safeguards at a glance

IKI safeguards are based on the Performance Standards on Environment and Social Responsibility of the International Finance Corporation (IFC) as the Green Climate Fund (GCF).

The IFC Performance Standards cover the following aspects:

  • Working conditions;
  • Resource efficiency and prevention of pollution;
  • Health, safety and protection of people;
  • Biodiversity and management of living natural resources;
  • Indigenous communities and marginalised groups;
  • Cultural heritage.

For each Performance Standard, the risk of a negative impact of project activities is assessed and assigned to one of four risk categories (high - moderate - low - no risk).

The criteria for this risk assessment are:

  • The extent and intensity of the potential negative effects;
  • The frequency or repetition of the potential negative effects;
  • The sensitivity and vulnerability of affected groups or habitats;
  • The irreversibility of the potential harm.

The resulting risk of a project is based on the Performance Standard with the highest risk assessment.

Safeguards as an established part of  IKI projects

Organisations that wish to carry out a project within the IKI framework are required to take environmental and social standards into account right from the planning stage. Activities that present a high environmental or social risk with irreversible consequences must be completely avoided.

Organisations willing to carry out projects for IKI must carry out a safeguards analysis based on the IFC Performance Standards and submit the results in their project application. Projects are classified into risk categories A (high risk), B (medium risk) or C (low risk). The risk assessment will be checked by IKI and regularly updated during the project period.

If a risk is identified, safeguards measures to reduce, monitor and manage the risk must be included in the project concept. Implementing organisations that do not have their own safeguards system or any related expertise can contact IKI Secretariat. The secretariat offers risk assessment support for project planning.

The Safeguard Annex: A Risk Assessment Guide

IKI has revised the Safeguard Annex, which is part of the project application, to facilitate risk assessment for implementing organisations. The new Safeguards Annex puts the focus on specific measures. It is designed to help organisations to develop targeted safeguards for identified risks and define measurable targets for the implementation of the safeguards.

In addition, for projects with a high or medium overall risk (risk category A or B), the safeguards must be anchored in the work packages and impact monitoring. This contributes to better integration of the safeguards into daily project management.

Outlook: Standards of the Global Climate Fund

IKI plans to apply the Global Climate Fund’s Safeguard Standards for IKI projects in the future. These standards are currently being revised. A first version is to be published for comments in the course of 2020. As soon as the GCF safeguards are approved, they will be checked by the IKI for their applicability and the safeguards system will be adapted accordingly.