The European Investment Bank (EIB) Group lends money to companies and governments inside and outside the European Union (EU) for large-scale projects: mining sites, highways, dams, etc. Those projects usually involve large sums of money and they can have major impacts for people living near the construction or mining sites: pollution of water, displacement, etc. Complaints about EIB Group projects or future EIB projects are sent to and dealt with by a department of the EIB, its Complaints Mechanism. This year, the Complaints Mechanism is rewriting its rules, hoping to deal better and faster with complaints relating to the environmental and social impacts of EIB Group projects.
The EIB Complaints Mechanism is doing a transparent consultation but the EIB remains an opaque institution
The rewriting process is being done in a very transparent manner. A big contrast to other policies recently renewed by the EIB without consultation of civil society: its climate policy or its environmental and social due diligence policy for instance. Indeed, despite the transparency efforts of the Complaints mechanism, transparency is not the priority of most EIB departments. For instance, when projects are about to be financed in the EU, impacted communities can have access to information about the project before the loan is being signed (example here in Italy). When projects take place outside the EU (such as this one in multiple countries), this information is only shared when the EIB itself defines the project as high risk.
Better opportunities in case things go wrong
Nonetheless, other possibilities are opening up for communities negatively impacted by EIB projects around the world. First, the Complaints Mechanism is most probably going to be more independent from the EIB Group as a whole, although not completely. More independence means the Mechanism can have a stronger voice in the Bank and put more pressure for improvements on the ground.
Also, in the new draft policy of the Complaints Mechanism, complaints will be dealt with in a more timely manner and with a clearer procedure for consultations with impacted communities. And there is a new tool to solve disputes at a very early stage between the companies building a project and the impacted communities. A step forward. However, it might be hard for the EIB staff in the Complaints Mechanism department to meet those deadlines if no new staff will be employed. A new and improved policy for the Complaint Mechanism is a mirage if the department is understaffed.
Following EIB money has gone more complex
In one third of EIB projects, the EIB Group lends money to an organisation (a bank, a venture fund, an equity fund) which does not implement the project but which itself relends the money. In 2020, for instance, the European Investment Fund (EIF) provided capital to a fund-of-funds which then directed this capital to an Israeli venture capital fund which invested in the Israeli spyware company Paragon Solutions. Paragon’s spyware Graphite has been used against activists by multiple governments, including in Italy and it is working today with the US immigration service ICE. The Complaints mechanism should be an easily accessible tool for any victims of these investments, even in cases when those companies are financed indirectly by the EIB Group (EIB and EIF). So in the case of Paragon, victims could complain to the EIB Group even if the EIF money went through two intermediaries before being used for spyware.
Unfortunately, the new policy of the Complaints Mechanism does not make it so clear and explicit. The new policy of the Complaints Mechanism should cover all the impacts on the ground, on the environment, on people but also on democracy and human rights of all EIB Group investment, even when the money passed multiple hands between the EIB and the final outcomes of the project. This link is currently missing. For instance, in December 2025, the EIB Group signed a flexible loan to BRAC Bank in Bangladesh. The latter will support the private sector towards circular and green practices. But what if it did not? What if those funds ended up financing projects with negative environmental impacts? What if no information was made available on how those funds will be used? Those questions need an answer. And communities need to know they can access the EIB Complaints Mechanism in case they get no answers or if things go wrong.
Essentials are still missing
Absent from the new policy and the discussions are sanctions. Indeed, the Group could sanction any company which does not put in place the recommendations of the complaints mechanism. If negative environmental and social impacts of EIB Group projects continue, the Bank could force the projects to be stopped or could put the promoters of the project on a blacklist, barring them from further EIB funding. In Nepal for instance, despite the impacts of a dam project being officially documented by the EIB Complaints Mechanism, the corrective actions asked by the mechanism towards the company building the dam were not effectively implemented. The EIB Group, at its top management level, should monitor the uptake of these measures and then sanction if needed. Without sanctions, there are less incentives for companies to improve the project the EIB partly or fully funded.
A new policy, transparently elaborated, is always good news. The best news, though, would be that the Complaints Mechanism is rarely used due to the precautions and attention given by the EIB management to the projects they decide to finance, with or without financial intermediaries. For this, the EIB Group would need a strong due diligence policy, with strong environmental, human rights and social standards, and apply them regardless of geopolitics or European multinationals economic interests.
A strong project selection and due diligence procedure would allow that projects are designed to prioritise meeting the needs of local population and protecting the environment, while ensuring any negative impacts do not cross vital thresholds, but remain limited and are always mitigated and compensated for. It would ensure that the complaints mechanism would hardly be needed anymore, but rather exists as a worst case safety option. As things stand in the review of the Complaints Mechanism, some progress is likely to be made which will to a certain extent improve the remediation of harm caused by EIB financed projects. However, weak due diligence combined with political pressure on the Bank to finance risky projects in mining and other sectors, will likely result in more complaints without the mechanism having the necessary staff or resources to properly deal with all of them, nor the tools required to intervene thoroughly in case a client does not comply and correct its errors.
