Study points to growing need for sustainability in ASEAN BRI projects
A growing need for sharper focus on sustainability issues is evident in Belt and Road Initiative (BRI) projects in the Association of Southeast Asian Nations (ASEAN), according to a recent study.
Jointly conducted by the United Overseas Bank and the Hong Kong University of Science and Technology’s Institute for Emerging Market Studies, the study's researchers also found that Chinese companies see the importance of drawing on the diverse strengths of the ASEAN markets and the need for collaboration for continued success.
Researchers focused on Chinese companies with BRI investments in six key emerging ASEAN markets -- Indonesia, Malaysia, Myanmar, the Philippines, Thailand and Vietnam. The study is intended to provide insights into the political, institutional and environmental factors that affect BRI project designs and implementation, the potential for BRI investments to spur private investment and foreign direct investment (FDI) opportunities in ASEAN.
As part of the BRI, many Chinese state-owned and private companies have implemented large-scale infrastructure and FDI projects in the region to promote greater connectivity between mainland China and ASEAN.
The Chinese government has recognized the need to place greater priority on promoting green and sustainable BRI projects, calling for Chinese companies to take active steps to ensure their projects comply with regulations such as environmental standards and labor laws. The government's action addresses the criticism levelled at projects that haven't adequately considered social and environmental issues.
To help Chinese companies tackle environmental, social and governance challenges in ASEAN, the research suggests they reach out to local consultancies and civil society or community-based groups to better understand specific dynamics and establish a meaningful dialogue.
Companies can also consult potentially affected communities regarding planned projects and work out appropriate compensation with them. In one such instance, a real estate company involved in land reclamation in Malaysia stepped up its efforts to address the affected community’s environmental concerns, and is now also providing support to local villages and their education programs.