Private Enterprise and Financial Markets > Environment > Disaster Risk Management
Strategies
With basis in its mandate to promote sustainable development in Latin America and the Caribbean the Bank will help the countries integrate the reduction of risk in their development planning and investments and create permanent technical and operational capacity to efficiently manage risk reduction.
With the goal to overcome the challenge of increasing risk and losses from natural hazards, the Bank will prioritize vulnerability reduction in its support to the region and it will provide financing for the prevention and mitigation of disasters resulting from natural hazards and strengthen capacities to manage risks. This national approach is complemented by research and a regional dialogue to identify best practices and facilitate their sharing. The Plan of Action (Facing the Challenge of Natural Disasters in Latin America and the Caribbean: An IDB Action Plan. March 2000) identifies six strategic areas for Bank assistance to help countries adopt comprehensive risk management policies:
- National Systems for Disaster Prevention and Response : Building national legal and regulatory frameworks and programs that bring together the planning agencies, local governments and civil society organizations; developing national strategies for risk reduction, and assessing inter-sectoral priorities, backed by separate budgets.
- Inserting Prevention into the Culture: Developing and disseminating risk information and empowering citizens and other stakeholders to take risk reduction measures.
- Reducing the Vulnerability of the Poor: Supporting poor households and communities in reducing their vulnerability to natural hazards and recovering from disasters through reconstruction assistance.
- Involving the Private Sector : Creating conditions for the development of insurance markets; encouraging the use of other risk-spreading financial instruments where appropriate, and designing economic and regulatory incentives for risk reduction behavior.
- Risk Information for Decision-Making : Evaluating existing risk assessment methodologies; developing indicators of vulnerability, and stimulating the production and wide dissemination of risk information.
- Fostering Leadership and Cooperation in the Region : Stimulate coordinated actions and to mobilize regional resources for investments in risk mitigation.
Proposed actions
With the goal to increase the effectiveness of the Bank's support in the identified strategic areas, the Bank is faced with the challenge to put risk management to the top of its agenda. The following list of actions provides the necessary elements to integrate risk management in the operations and activities of the Bank.
1. Creation and revision of financial mechanisms of the Bank to help the countries take and strengthen necessary measures of disaster prevention and risk management.
2. Risk reduction as a component of the Banks Country Dialogue with borrowing members: promote the dialogue concerning risk identification, strategies for risk management and the use of financial instruments made available by the IDB for investments related to Natural Disasters.
3. Risk reduction in the project cycle: include risk analysis and reduction in the programming process and in the identification, formulation, execution and evaluation of projects.
4. Bank focal points for disaster risk management: support preparation of risk reduction programs in the countries and coordinate activities of prevention and response among sector divisions and Bank representations.
5. Alliances: Create an integrated network with information and response which includes the preparation of pre-investment studies, financing of investments for prevention and reconstruction and to establish inter-institutional protocols for disaster response.
Strategic actions executed with relation to Natural Disasters since 2001
The Bank has made a new mechanism for with fast disbursement, the Disaster Prevention Sector Facility, available to its borrowing members and revised its Immediate Response Facility instrument. In its country dialogues the Bank has increasingly emphasized natural disaster prevention and mitigation and the development of capacity for effective risk management. This includes various initiatives to incorporate risk reduction in the investment planning processes. The Bank collaborates with other institutions, among other issues to promote the interchange of information concerning best practices for responding to emergencies and to develop effective emergency reconstruction plans.
Revision and creation of IDB financial instruments
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In March 2001 the IDB established the Disaster Prevention Sector Facility.
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In 2003, the Bank's Facility for Emergency Reconstruction was updated as a response to its evaluation, and its name was changed to Facility for the Immediate Response to Natural and Unexpected Disasters.
Regional Policy Dialogue for Natural Disasters
With financial support from the Integration and Regional Programs Department, the following activities has been celebrated:
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In May 2001 the Bank established the Natural Disaster Network, which members represent each of the Bank's borrowing member countries.
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The first meeting of the Network was held in November 2001 with the main topic: "National systems for risk management".
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The second meeting focused on the macroeconomic financial consequences of natural disasters. This meeting was held in March 2002.
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In 2003 the Regional Policy Dialogue published a book on "Disaster Risk Management" based on studies presented at the I and II meeting.
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The III meeting of the Natural Disasters Network of the Regional Policy Dialogue took place in March 2003, and discussed risk management at the local level.
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Based on studies developed and presented in cooperation with GTZ, Germany, at the III meeting, the regional policy dialogue published a book on "Disaster risk management by local communities and local governments".
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In February 2004 the IV meeting of the Network took place, this time discussing environmental management and the use of economic instruments for the reduction of disaster risk.
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In November 2004 the two sub-regional meetings were held: in Jamaica discussing cost-benefit analysis of mitigation investments; and in Colombia analyzing the role of the private sector in disaster risk management.
Revision of the Bank Policy
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In 2003, as a component of the policy evaluation, the policies of other multilateral banks, including the Asian Development Bank, the Caribbean Development Bank, BCIE, the Andean Development Corporation, and the World Bank were reviewed.
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In June 2003 the Bank organized a seminar on man-made disasters, such as conflicts, terrorism, and technological disasters, to analyze the utility of including this aspect in the new policy. Following the seminar the Bank published a book with the title: "Human-Driven Disasters: Violent Conflict, Terrorism and Technology".
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The Bank approve a new environment strategy in 2003. The strategy includes considerations on natural disaster management.
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In 2004, the evaluation of the Bank?s Policy on natural and unexpected disasters from 1999 was completed. One of the objectives of this exercise is to analyze the ways through which the Bank can better contribute to reduce the impact of natural disasters in countries of the region, through financial as well as non-financial services.
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The profile for the new Disaster Risk Management Policy was prepared and presented for the consideration of the Bank's board of Directors, in February 2005.
Internal Strengthening of the Bank
The Bank is in a continuous process of strengthening its internal capacity to deal with disaster risk management. With this goal in mind, it has taken the following steps:
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It consolidated the focal point network of 36 specialists, which includes a representative in each of the 26 IDB representations and 14 specialists working from the headquarters, on the environment, infrastructure, and financing.
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Nineteen additional specialists experienced in sectors that could be affected by natural disaster were incorporated to the network. These specialists are elaborating checklists to assist project teams in taking risk management into account when preparing and carrying out loans dealing with transportation, energy, water, sanitation, education, micro and medium-sized enterprises, modernization of the State, agriculture, health, and housing.
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In November 2001 a seminar was held in Colombia to improve the disaster risk management capacities of the IDB staff. 51 people participated in the seminar.
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In February 2002 the Bank held its second training seminar on disaster risk management, this time at the Bank's headquarters in Washington DC. 70 people participated in this event.
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In 2003 within the framework of the annual meeting of FEMICA, the Bank held a training seminar with the following issues: i) Risk Management at the Local Level; ii) Checklist for Disaster Risk Management in the IDB project cycle for the water and sanitations sector.
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In 2004 in Quito, Ecuador, in cooperation with GTZ and UNDP and the participation of borrowing member countries, the Bank organized a seminar. The objective of the seminar was to review and develop a checklist for disaster risk management in the Bank project cycle.
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In 2003 the international NGO Tearfund evaluated the Bank and eight other international organizations for their activities in disaster risk management. The Bank was applauded for its efforts to internally strengthen the capacity for disaster risk management, particularly the development of the Checklist. The Bank participated in a meeting in London in 2003, where it provided information on its internal disaster risk management mechanisms.
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In 2002 the Bank prepared a manual and organized a workshop on disaster risk management for microfinance organizations. The workshop had participation of executing agencies of microfinance programs, external experts and Bank specialists.
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The document concerning risk management in the project cycle is in its final stage of preparation and will be published and disseminated in 2005. Nine regional consultants and more than 40 Bank specialists, 15 GTZ experts, and officials from borrowing member countries have contributed to the effort. OAS and PAHO have peer reviewed the document.
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In 2004 the Bank developed a Checklist and a descriptive companion document for the use of the Checklist to help project teams integrate risk management in the project design.
Bank Action Plan for Improving Disaster Risk Management 2005-2008
- In August 2005, a new Action Plan was approved by the Bank. A technical cooperation with Japanese resources and a special budget initiative of 2006 will support its initial implementationDraft Disaster Risk Management Policy
Examples of activities with other entities in the region
The IDB participated in and was co-organizer of the Hemispheric Conference on Disaster Reduction celebrated in San Jose, Costa Rica, in December 2001.
The Bank and the Federation of Insurance Industries (FIDES) has signed a memorandum of understanding which includes collaboration to develop insurance instruments for Catastrophe management.
In May 2003, the IDB assisted in the preparation of the OAS' Strategic Plan for Disaster Risk Reduction.
In October 2003, IDB co-organized the X meeting of the Central American Network for Decentralization and Municipal Strengthening (FEMICA) in Antigua, Guatemala. The main topic of the meeting was Local level Disaster Risk Management. There were more than 170 participants among local authorities, local and international experts, international partners and IDB specialists.
Also in 2003, the program for promotion of good practices for the prevention of disasters and for municipal risk management in Central America, executed by FEMICA, has produced a toolkit and a documentary video of practices, four national workshops and other products for the mass medias.
The IDB led an effort in collaboration with other international organizations including the CAF, the European Union and the World Bank to coordinate activities of disaster prevention in Ecuador. The activities included a seminar and a memorandum of understanding was signed in 2003.
Among other, seminars have been organized in cooperation with JICA (Japan), concerning risk reduction of infrastructure in 2002 and with GTZ (Germany) with respect to risk management in the project cycle in 2004.
With financing from the Japanese Trust Fund the Bank is developing strategic studies under the umbrella of the Risk Information Program in seven countries, in collaboration with UN/ECLAC. The program was initiated with a meeting in Washington in January 2004.
The Indicators Program (in 12 countries) is under development by the National University of Colombia, with financing from the Japanese Trust Fund. Under the program two expert meetings were held in Barcelona, Spain in 2003 concerning the methodology. The program has been developed in parallel to and in coordination with two other indicators programs by the World Bank and the UNDP. A working group meeting among the three organizations was held in Washington DC, in March 2004.
