Unexpected natural disasters

Sectoral Operational Policies*

Introduction: Types of Disasters

A. Borrowing members of the Bank are always vulnerable to emergencies arising from natural and unexpected disasters. This includes natural disasters such as earthquakes, tidal waves (tsunamis), hurricanes, volcanic eruptions (lava, ashes, rock), floods, droughts, epidemics, forest fires, and erosion, or a combination thereof; and accidents and actions that impact economic production or the environment such as explosions, oil and chemical spills.

B. When these phenomena occur there is generally a sequence of events that produce a major catastrophe, causing many deaths and/or seriously affecting the national economy, damaging the infrastructure and work under construction, and bringing losses of material goods.

Definition

For purposes of this policy, the term "disaster" is considered to refer to any emergency due to the action of natural, accidental, or human-generated actions that cause death, damage to the physical and service infrastructure of any borrowing member country, or a loss of material goods so extensive that economic and social development is affected.

Borrowing members of the Bank may be vulnerable to emergencies arising from disastersat any time. The Bank's assistance in this field addresses the unforeseen effects of such disasters and their socio-economic and ecological impact on member countries.

Objectives

The main purpose of the Bank's participation in the field of natural and unexpected disasters is to assist member countries in effectively protecting and resuming their socio-economic development. The Bank also seeks to assist member countries in taking appropriate measures to reduce or avoid losses from all disasters. At their request, the Bank will participate in enhancing member countries' capacity to take into account their vulnerability to disasters in their development projects and programs and to respond to disasters. Specific objectives are to prepare for, and to prevent and/or mitigate, the hazards which cause loss of life and property and damage to the economic infrastructure and the environment. In assisting borrowing countries affected by disasters, three stages of an event are distinguished: before, during and after its occurrence.

Before a disaster, Bank assistance focuses on:

  1. Disaster Preparedness aims to lessen the impact of a disaster by structuring in advance the countries' ability to cope quickly and effectively with the emergency;
  2. Disaster Prevention and/or Mitigation including measures undertaken to prevent natural phenomenon or potential hazard from having harmful effects on persons, economic infrastructure or the environment;

During the emergency, the primary goal is to minimize the loss of life and property. Depending on the type of disaster and the state of preparedness, the Bank will collaborate with the requesting country in its efforts to achieve urgent priority objectives.

After the emergency, the rehabilitation stage is designed to:

  1. repair damage to service infrastructure as promptly as possible;
  2. provide necessary services and safety for the population; and
  3. guarantee the normalization of economic activities.

Rehabilitation may be temporary or permanent. When the damaged zone is rehabilitated for short-term use to meet only the primary vital needs of the population, it is temporary. When the damaged infrastructure is rehabilitated through action designed to achieve the full functioning of the affected zone, it is permanent. Rehabilitation may incorporate measures to prepare for and to prevent and mitigate the adverse effects of future recurrences of similar disasters, and to address their impact on the environment.

Identification of Emergency

An emergency is the situation of crisis generated when a disaster occurs. An emergency is characterized by the following features:

  1. Normal activity is disrupted in the stricken areas or throughout the country.
  2. There is destruction of public services, housing, public and private buildings, industrial and commercial facilities, roads, and so on.
  3. It becomes necessary to:
    1. Clear and clean up the area;
    2. Activate such routine emergency services as the police, firemen, and public-health personnel or military units for rescue and salvage operations;
    3. Supply the population with the vital necessities they obtain for themselves in normal times, such as food, housing, and personal welfare needs;
    4. Take special measures for medical treatment;
    5. Make temporary repairs to damaged infrastructure to restore basic services such as power, gas, potable water and sanitation, communications, and emergency health services; and
    6. Carry out rehabilitation and reconstruction programs.

Fields of Activity

The Bank encourages governments, in their development planning, to take into account the impact of disasters and their undesirable socio-economic and environmental effects by incorporating effective preparedness prevention and/or mitigation measures into their development program.

Bank participation in the field of disasters may take the form of technical cooperation and loans. The Bank's natural and unexpected disaster policy encompasses activities that take place before, during and after an emergency occurs.

  1. Before the Emergency:

    a. Disaster preparedness: Planning and programming activities to enhance the capacity of countries to cope with areas of greater vulnerability. Based on assigning higher priorities to greater risks to economic development, these activities include, for example, i) creating information, warning and alert systems that enable ready states of preparedness to be implemented quickly during an emergency, ii) equipping and training specialized human resources; and iii) promoting the funding of national trusts for the sustainable financing of disaster preparedness actions in a cooperative context that includes public, private and civil society organizations.

    It should be noted that recent technological advances are increasing the predictability of natural disasters such as floods, fires and earthquakes. Satellite information coupled with new GIS systems have been proven effective in assisting governments and authorities engaged in planning human settlements. The Bank encourages the adoption of new technologies, such as the ones mentioned, whenever their practicality can be demonstrated.

    b. Disaster prevention and/or mitigation: A wide range of diverse activities tailored to specific priority risk hazards delineated in disaster preparedness. Examples include erecting diversion walls to channel the direction of lava away from population centers, constructing dams or dikes to prevent flooding, using earthquake-resistant construction techniques, installing hurricane straps to reduce wind damage to roofs, and building break-waters in ports and low-lying coastal areas to protect against water damage, etc.
  2. During the Emergency stage: The Bank will mobilize resources to provide the requesting country with timely assistance in such urgent fields of activities as clearing and cleaning up the disaster area; activating routine emergency services; supplying the population with vital necessities they normally obtain for themselves; and providing public health measures and medical treatment. At the same time, the Bank will gather information on the disaster to prepare for further action.

    a. Role of the Bank's Country Representative.

    When a disaster occurs in a member country, the Representative will report fully and promptly to the management on the course of the emergency, following the probable socio-economic impact on the country, its financial position and foreign trade; on how the disaster has or will probably affect current development plans and ongoing programs financed wholly or partially by the Bank; and provide an evaluation of the needs arising from the emergency and a summary of the relief provided by the international community through such specialized organizations as the Red Cross, the United Nations Agencies, and by other countries directly through their government agencies.

    b. Action by the Management.

    When the Bank's Management receives an official request for emergency assistance and verifies the occurrence of a natural disaster in one of the member countries, the following measures will be taken:

    i. Carry out measures in conformity with this policy, to grant the stricken country, with maximum speed and flexibility, the resources that will enable it to ameliorate or overcome the negative effects caused by a disaster to the physical and service infrastructure of the country and to the normal execution of previously agreed development plans. Among these actions management will:

    1. Activate the process to make available immediately resources from the Emergency Reconstruction Facility (see OP-306);

    2. With maximum speed and flexibility, the President will order the appropriate technical assistance as set forth in document AT-719;

    ii. Inform the Board of Executive Directors of the occurrence of the disaster and the emergency that has been declared. Report on the planned action to assist the stricken country. Later, at reasonable intervals, Management will report to the Board on the progress made including an evaluation of the Bank and country effectiveness in ameliorating and neutralizing the negative impacts of the disaster. In this report Management should touch upon: the measures adopted by the Bank under this policy; the results obtained by missions to the country in question; and on the coordination with other international organizations.

    iii. In close cooperation with the Country Office, headquarters staff should determine the need for immediate resources for emergency financing from the Emergency Facility, and technical cooperation program. At the same time the staff should determine the convenience of redirecting resources from existing operations or the formulation of new loans to support the rehabilitation and reconstruction stages. To facilitate these tasks Management might deploy one or more special missions to the stricken country to seek information and better assess the situation. The Bank, whenever possible, will coordinate with other donors and local authorities to determine the scope of Bank participation. A special effort should be made in these missions to determine the prevention and preparedness status of the country in order to link all assistance to the future strengthening of these capabilities.
     
  3. After the Emergency:

    In regard to disasters, the term "rehabilitation" means an action or series of actions designed to rebuild or restore a physical entity to its state before the disaster. Rehabilitation may be temporary or permanent. It is temporary when the damaged zone is rehabilitated for short-term use and only to meet the primary vital needs of the population. It is permanent when the damaged infrastructure is rehabilitated through action designed to achieve full reconstruction of the affected zone.

In the rehabilitation stage, based on the conclusions and recommendations relating to damage assessments made by the country's authorities, the IDB country office staff, special missions, and qualified experts, the Bank will assign priorities to the financing of its rehabilitation activities.

Rehabilitation must ensure that all works and projects in execution that have not been severely damaged will be continued, so as to reach the goals pursued and to promote the economic and social development of the borrowing country, except in cases where it is more economical to abandon them.

Projects financed with Bank assistance that have suffered severe damage and whose repair will be a heavy burden to the country may be abandoned if their loss will not jeopardize the development and reconstruction effort, and the undisbursed balances may be re-channeled toward more urgent rehabilitation and reconstruction projects.

The rehabilitation effort is designed to assist in repairing the service infrastructure to provide essential services and safety for the population and to guarantee the normalization of economic activities. For this purpose, the Bank may participate in the following activities, among others, designed to:

  1. The reopening of roads and communications.
  2. The repair of water and sewer systems, electric power systems, etc.
  3. The granting of credit to rehabilitate sources of employment for peasants, farmers, small manufacturers, and handicraft workers, whether directly or through cooperatives or other forms of association.
  4. The granting of credit for the prompt rehabilitation of the infrastructure and the economy of the stricken zone. The granting of credit to restore mainstream production by investing in asset rehabilitation can only be granted when the total loss to the economy in terms of GDP forgone exceeds ten percent.
  5. Carry out programs targeted at helping absorb the shock of the disaster on the most seriously affected social sectors, which are often the economically weakest groups. Thus, in keeping with Bank policy to assign priority to the needs of the economically most disadvantaged population groups, these programs will help address the immediate and longer-term effects of a natural disaster on the population.

One of the main objectives of rehabilitation, and later of reconstruction, is to restore the economic capacity of the most seriously affected sectors, including the groups that are economically weak. One of the goals of the policy in this respect is to restore sources of jobs in small and medium industrial, commercial, services, etc., enterprises, and to create new jobs to provide work for the population, so that the people may obtain the funds necessary to rebuild their damaged property.

It should be acknowledged that under this policy statement no clear dividing line can be drawn between the rehabilitation and the reconstruction phase, since the latter often overlaps the former. Bank staff in consultation with the country's government and the Country Office should determine this boundary on a case-by-case basis.

Technical cooperation for immediate needs arising from an emergency includes supplying experts and workers to assess damage and help restore as soon as possible essential services and to help strengthen institutions at the local and national level responsible for those services. Technical cooperation for medium-term needs include sectoral studies, the identification of projects and preparation of rehabilitation programs, and training to meet new demands for human resources. Technical cooperation for long-term needs includes assistance in disaster preparedness, prevention and/or mitigation.

Basic Guidelines

  1. Eligibility Criteria
    1. For disaster preparedness assistance to prevent and/or mitigate the loss of life and the damage to the physical and socio-economic infrastructures of the areas vulnerable to natural and unexpected disasters, the following steps are required: i) a technical assistance to perform a hazard assessment to determine the areas of greater vulnerability in the country, and ii) based on this assessment, priorities must be established for disaster preparedness loan projects designed to provide the country with the most effective hazard risk management and reduction capacity.
    2. For immediate disaster assistance, the borrowing country must declare a state of emergency and request Bank assistance on the basis of the aftermath of a disaster. Thereupon, Management, verifies its occurrence and reports it to the Board of Executive Directors at the earliest feasible moment, as well as on the status of Bank coordination with other organizations whose participation in providing disaster relief would also be expected; and
    3. Rehabilitation assistance is contingent upon the establishment of rehabilitation priorities, the Bank will take into consideration the following: i) the extent of damage to on-going Bank loan projects; ii) the overall assessment of the medium and long-term damage to the socio-economic infrastructure and environment; and iii) an analysis of the impact of the proposed rehabilitation project on the economically most disadvantaged groups affected by the disaster;
  2. Financing Criteria

    When economically feasible, and not in conflict with the revised development priorities resulting from the impact of a disaster, the financing of rehabilitation operations may be covered by: a) a loan from the Emergency Reconstruction Facility; b) the redirection of undisbursed balances within the same sector or across sectors; or c) new emergency operations when the redirection of funds is not possible.

    The damage assessment must be accompanied by recommendations to make previously authorized financial resources available to meet emergency needs expeditiously, and to facilitate the execution of rehabilitation projects and/or programs.

    The Bank may consider, when applicable, the following special measures: a) extension of disbursement dates; b) broadening and reorientation of current operations; c) longer repayment periods and lower interest rates on new loans in accordance with replenishment guidelines; d) a more flexible procurement process for certain operations, (see GS-601); e) an increase in the amount of the revolving fund for disbursements; f) a relaxation of the pari-passu requirements; and g) acceleration of current processes for the urgent handling of new loans.

    The Bank will give preference, where appropriate, to multi-sectoral and global loans to national coordinating bodies that can re-lend these loan funds without delay to the public organizations most directly identified with the rehabilitation effort, and also to the appropriate private organizations and firms, especially in the productive sector.
  3. Natural Hazard Risk Assessment Management will include in the analysis of all projects financed by the Bank the risk of natural disaster and its environmental impact in order to:
    1. Minimize damage and physical loss to current Bank projects in potential zones of natural disaster, and
    2. Adopt measures appropriate to safeguard each project and its respective area.

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Prevailing Reference Documents:
GP-92-15, December 1998
GP-92-15 Annex A, December 1998

 

* The operational policies of the Inter-American Development Bank are intended to provide operational guidance to staff in assisting the Bank's borrowing member countries. Over the course of the Bank's more than 40 years of operations, the approach to developing operational policies has taken various forms, ranging from the preparation of detailed guidelines to broad statements of principle and intent. Many policies have not been updated since they were originally issued, and a few reflect emphases and approaches of earlier years which have been superseded by specific mandates of the Bank's Governors, the most recent being the Eighth Replenishment mandates of 1994.

In accordance with the Bank's information disclosure policy, the Bank is making all of its operational policies available to the public through the Public Information Center. Users please note that the Bank's operational policies are under a process of continuous review. This review process includes preparation of best practice papers summarizing experience at the Bank and other similar institutions, and sector strategy papers.

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