Asia Society Policy Institute

For Overseas Projects:

In 2017, China’s Ministry of Ecology and Environment (MEE):

• Set out plans to introduce standards for Financiers, Developers, and Contractors to undertake “green project screening” along the BRI.¹

Financiers should:²

• Develop funding allocation procedures based on the following risk categories from the China Banking and Insurance Regulatory Commission (CBIRC):
  • Category A Developers’ and Contractors’ activities could dramatically change the environment or have irreversible adverse environmental and social impacts.
    • Category A projects include large-scale infrastructure projects that would affect ethnic minorities’ land and/or environmentally/ecologically sensitive areas, as well as large-scale hydropower stations.
  • Category B Developers’ and Contractors’ activities could have adverse but largely reversible environmental and social impacts. Companies should undertake mitigation measures to reverse such impacts.
  • Category C Developers’ and Contractors’ activities could have minimal environmental and social impacts.
• Form environmental and social risk management (ESRM) teams to conduct a preliminary assessment of environmental and social risks for each Developer and Contractor seeking to undertake a proposed project.
  • Classify Developers and Contractors based on their individual progress on managing environmental and social risks.
• Use the results of these preliminary assessments to determine appropriate risk management measures, as well as credit ratings, access to funds, management of funds, and withdrawal of funds.
  • Adopt appropriate risk management measures before allowing proposed projects to proceed to loan granting, pricing, and allocation.
• Charge ESRM teams with the responsibility of undertaking a written assessment for each proposed project during the loan-granting phase.
  • Project-level assessments for Category A or B Developers and Contractors should cover:
    • Potential environmental and social risks for Developers and Contractors.
    • Developers’ and Contractors’ proposed measures for managing environmental and social risks.
    • A comprehensive evaluation of the environmental and social risk status of Developers and Contractors.
• Share written environmental and social risk assessments with Chinese credit-granting departments and other relevant departments to review.
• Charge Chinese credit-granting departments with the responsibility of following predetermined funding allocation procedures.
  • Suspend funding allocation for Category A or B Developers and Contractors that receive a negative assessment.
  • Require approval of funding allocation from Financiers’ headquarters for medium- and long-term projects proposed by Category A Developers and Contractors that receive a positive assessment.
  • Require approval of funding allocation from Financiers’ branch offices or higher levels for medium- and long-term projects proposed by Category B Developers and Contractors that receive a positive assessment.
  • Use regular funding allocation procedures for projects proposed by Category C Developers and Contractors.
• Examine Developers’ and Contractors’ proposed measures to manage environmental and social risks.
  • Urge Category A or B Developers and Contractors to strengthen ESRM in funding contracts.
  • Develop a supplementary contract focused on strengthening ESRM for Category A Developers and Contractors.
• Exercise a high level of due diligence for screening to ensure compliance with high environmental and social standards.³

For Domestic Projects in China Only:

Developers should:⁴

• Submit a registration form that describes each project, as well as the anticipated environmental impacts and the scope of their significance.

MEE should:⁵

• Review and approve the registration form for domestic infrastructure projects in China.
  • Determine the required level of ESAM for each project.

Financiers and the Host Country Government should:

• Develop procedures or guidelines to categorize and/or screen proposed projects before conducting desk reviews.
  • Select either a “standardized approach” of using existing categories to classify proposed projects or a “customized approach” of using guidance to individually screen these projects.
  • Financiers tend to employ a standardized approach to categorize proposed projects by their type, location, scale, sensitivity, and potential impacts and risks.
    • The World Bank classifies projects by risk, specifically by reviewing type, location, sensitivity, and scale of each project; the nature and scope of potential environmental and social risks and impacts; and Developers’ and Contractors’ capacity and commitment to manage these risks and impacts. It also screens projects for potential impacts on Indigenous peoples.
    • The Asian Development Bank (ADB) classifies projects by environmental impacts, specifically by reviewing the type, location, scale, and sensitivity of each project, as well as the magnitude of potential direct, indirect, cumulative, and induced impacts. It also screens projects for potential impacts on Indigenous peoples and/or the potential need for involuntary resettlement.
    • The Asian Infrastructure Investment Bank (AIIB) classifies projects by environmental and social impacts, specifically by reviewing the type, nature, location, sensitivity, and scale of each project, as well as the potential direct, indirect, cumulative, and induced impacts. AIIB policy requires the examination of gender impacts and impacts on potentially vulnerable groups. It also screens each project to determine the significance of ESAM, land acquisition and involuntary resettlement, and/or Indigenous peoples.
  • The Host Country Government may either use a standardized approach or charge a specific department or ministry with the responsibility of undertaking a customized approach.
• Determine ESAM requirements for proposed projects.
  • Set environmental and social impact assessment (ESIA) requirements for different categories of projects: a full ESIA, a limited ESIA, an initial environmental examination (IEE) or initial environmental and social examination, an environmental and social review, or no ESIA.
  • Require an environmental and social management plan (ESMP) for all projects, regardless of category.
  • Require a land acquisition and resettlement plan (LARP)/livelihood restoration plan (LRP) for projects with potential impacts on local people’s access and rights to land. 
  • Require an Indigenous peoples plan (IPP) for projects with potential impacts on the economic, social, cultural, and natural resource rights of Indigenous communities. 
• Disclose information about procedures or guidelines for project categorization and screening, as well as relevant ESAM requirements, in the local dialect(s) and language(s) on their own websites.
• Use publicly available procedures or guidelines to screen or categorize each project at the beginning of the pre-project planning phase.
• Immediately disclose the initial categorization decision in the local dialect(s) and language(s) of host countries for each project on their own websites, as well as in project documentation.
  • Ensure Developers and Contractors are aware of how their own companies and proposed projects are categorized.
• Follow internal procedures or guidelines for preparing, implementing, and disclosing a full ESIA and an ESMP, a limited ESIA and an ESMP, an IEE and an ESMP, an initial environmental and social examination and an ESMP, or an environmental and social review and an ESMP.
  • Ensure Financiers, the Host Country Government, Developers, and Contractors are aware of these requirements.

Financiers, Developers, and the Host Country Government should:

• Conduct preliminary site visits.
• Arrange a project screening meeting with local communities, CSOs/NGOs, Researchers/Experts, and Subnational Government Officials.
  • Disseminate broad details about the ESIA process, project scope, project timeline, anticipated issues and concerns, the stakeholder identification and consultation process, and potential impacts and risks.
  • Cover any meeting costs including, but not limited to, transportation costs for community members and CSOs/NGOs.
  • Provide meeting attendees adequate time to discuss the project and provide feedback directly or anonymously.
  • Maintain a list of attendees to include in the stakeholder engagement plan. Ask attendees for permission before taking photos.
  • Document issues discussed during the screening meeting. These issues should be covered in the preliminary assessment of environmental and social impacts and risks.⁶

• Browse the websites of Financiers and the Host Country Government for information about their own procedures or guidelines for project categorization and screening; relevant ESAM requirements; and categorization and screening decisions for proposed projects, Contractors, and Developers.
  • If any of this information is unavailable, ask Financiers and the officials from the Host Country Government to publicly disclose specific details in your native language. See Stakeholders to identify some of the available mode(s) of contact.
  • If you are unable to directly contact the Financiers and/or the Host Country Government, reach out to a Community Leader or CSO/NGO for assistance.
• Attend the project screening meeting.
  • Ask Financiers, Developers, and the Host Country Government to reimburse transportation costs and cover other costs associated with attendance.
  • Maintain a record of your attendance and participation — either on paper or your phone.
  • Discuss the proposed project with other community members and CSOs/NGOs both during and after the meeting.
  • Provide feedback directly or anonymously to Financiers, Developers, and the Host Country Government. 
• If you have not heard about the project screening meeting, ask Financiers, Developers, and the Host Country Government for details about when and where this meeting will be held.
• If the project screening meeting has already been held, request a copy of the Financiers’, Developers’, and the Host Country Government’s records of meeting attendees and issues.
  • Set aside time to discuss the proposed project with other community members and CSOs/NGOs.
  • Provide feedback directly or anonymously to Financiers, Developers, and the Host Country Government. See Stakeholders to identify some of the available mode(s) of contact.
  • If you are unable to access the forms of contact offered by the Financiers, Developers, and the Host Country Government, reach out to a Community Leader or CSO/NGO for assistance.
• Once project categorization and screening are complete, review Financiers’ and the Host Country Government’s compliance with their own project categorization and screening procedures or guidelines.
  • Submit queries/concerns/complaints about noncompliance with relevant procedures or guidelines to Financiers and the Host Country Government.
  • Review Financiers’ compliance with CBIRC’s “Key Performance Indicators (KPIs) of Green Credit Implementation.” Submit concerns or complaints about Financiers’ noncompliance with KPIs to CBIRC.

Conducting preliminary project categorization assessments based on predetermined procedures or guidelines and holding public screening meetings during the pre-project planning phase would:

• Provide a more accurate and complete understanding of the magnitude of potential environmental and social risks. Prevent Financiers, Developers, Contractors, and the Host Country Government from moving forward with — and funding — projects with irreversible adverse environmental and social impacts. 
• Determine the appropriate information to disclose and follow-up environmental and social assessments to undertake.
• Align Financiers’ and Developers’ practices with Chinese guidelines and regulations on project categorization and international best practices.
• Establish initial contact between Financiers, Developers, and the Host Country Government on the one hand and local communities, CSOs/NGOs, and other third-party stakeholders on the other.
• Increase transparency and accountability of project-related operations.
• Build trust, understanding, and capacity among local communities, host country stakeholders, and other third-party stakeholders.
• Improve the overall quality of each project. Ensure local and Indigenous knowledge and expertise inform project planning and decision-making, particularly for projects that require a preliminary assessment but not a full follow-up ESIA.
• Drive people-oriented progress and further green development.
• Reduce the risk of protests, damage, or other forms of conflict during the project implementation and operations phases.
• Curb significant commercial costs from delays caused by social upheaval, especially during the project implementation and operations phases.

• Asian Development Bank (ADB), “Environmental Categorization and Screening for Involuntary Resettlement and Indigenous Peoples,” Safeguard Policy Statement, p. 19, June 2009, View the PDF. 
• Asian Infrastructure Investment Bank (AIIB), “Environmental and Social Screening, Categorization, and Due Diligence,” Environmental and Social Framework, p. 15-18, 2021, View the PDF.
• International Union for Conservation of Nature (IUCN), "Template - ESMS Screening & Clearance Report," Environmental & Social Management System (ESMS), November 2020, View the PDF.
• World Bank, “World Bank Environmental and Social Policy for Investment Project Financing,” Environmental and Social Framework, p. 6, 10, 2017, View the PDF.
• United Nations Development Programme (UNDP), “Guidance Note: Social and Environmental Screening Procedure,” UNDP Social and Environmental Standards (SES), July 2022, View the PDF.
• United Nations Development Programme (UNDP), “Social and Environmental Screening Template,” Version 2, 2022, View the PDF. 

• International Institute for Sustainable Development (IISD), “Step 1: Screening,” The 7 Steps to an EIA, View the Website.
• The Regional Environmental Center for Central and Eastern Europe, “Screening,” EIA Training Resource Manual for South Eastern Europe, View the PDF. 
• United Nations Environment Programme (UNEP), “Topic 3: Public Involvement” and “Topic 4: Screening,” Environmental Impact Assessment Training Resource Manual, Second Edition, 2002, View the PDF. 

• Environmental Law Alliance Worldwide (ELAW), “Who Conducts Screening, Criteria for Screening Detail, Criteria for Screening,” in EIA Complete Factors, View the Website. 

¹ Ministry of Environmental Protection (MEP) (now Ministry of Ecology and Environment (MEE)), “The Belt and Road Ecological and Environmental Cooperation Plan,” May 2017.

² China Banking Regulatory Commission (CBRC) (now China Banking and Insurance Regulatory Commission (CBIRC)), “Key Performance Indicators of Green Credit Implementation,” 2014.

³ State Development & Investment Corporation (SDIC), “Green Finance Framework,” April 2019.

⁴ State Council, “Decision of the State Council on Amending the Regulations on Environmental Protection Management of Construction Projects,” 2017.

⁵ Ibid.

⁶ International Best Practice is based on Asian Development Bank (ADB), "Safeguard Policy Statement," 2009; Asian Infrastructure Investment Bank (AIIB), "Environmental and Social Framework," 2021; World Bank, "Environmental and Social Framework," 2018; Mekong Partnership for the Environment, "Guidelines on Public Participation in Environmental Impact Assessment in the Mekong Region," First Edition, 2017.