The Central American Bank for Economic Integration (CABEI) is committed to promoting regional integration and the balanced economic and social development of its member countries. In pursuit of this objective, the Bank supports, implements, and participates in initiatives that foster the sustainable management of the region's natural resources.
In this regard, CABEI ensures compliance with both national environmental and social legislation and international agreements ratified by its founding and beneficiary countries. This commitment is reflected in the Bank’s robust environmental and social analysis and evaluation processes, which underpin the approval of its operations and promote sustainable environmental management.
CABEI's strategic guidelines, as outlined in its Environmental and Social Policy, require the integration of environmental and social considerations into all the Institution's operations and internal practices (as part of the scope of the Environmental Management System), within the broader framework of sustainable development. Also, as part of its institutional commitments, CABEI has developed and implemented the Environmental and Social Risk Identification, Evaluation and Mitigation System (SIEMAS). This system serves as a tool for identifying, evaluating, and safeguarding potential environmental, social and climate risks or negative impacts, applying the necessary mitigation measures derived from environmental and social assessments, and incorporating these measures throughout the Project Cycle.
In line with CABEI’s governance structure, the Executive Presidency is responsible for the approval of the SIEMAS, ensuring its design and periodic updates reflect the Bank’s strategic direction, institutional priorities, and evolving sustainability standards.
Since 2010, CABEI has been implementing the SIEMAS, which has been refined and updated over time, with the third and latest version implemented in 2016. A new Sustainability Policy, intended to replace the current Environmental and Social Policy, is currently under development and review, with the aim of further aligning the Bank with international best practices in environmental and social management. The SIEMAS identifies, evaluates, and mitigates potential risks and negative environmental and social effects that the financed operations could generate.
In line with international best practices, CABEI’s 2016 Environmental and Social Policy update strengthened its grievance mechanism enabling the Bank to receive, address, and resolve complaints related to environmental and social risks or impacts, ensuring accountability, promoting dialogue, and contributing to the continuous improvement of project outcomes. This allows third parties a transparent, accessible, and responsive process through which individuals or communities who believe they may be adversely affected by a Bank-financed operation can raise concerns.
In line with CABEI’s new organizational structure, this version of the SIEMAS incorporates the establishment of the Countries and Projects Office and the Office of Environmental and Social Sustainability, created in 2019. This office is responsible for overseeing the implementation of the Environmental and Social Policy and its related tools. Its role is to promote sustainable use and conservation of natural resources, safeguard environmental quality, and benefit people and the environment in a normative, effective manner, within the framework of green growth and environmental governance. This is achieved through the application of the highest international sustainability standards across all financed operations.
The implementation of the SIEMAS enables CABEI to:
- Enhance the quality of its loan portfolio
- Promote new business opportunities aligned with sustainable development models
- Support more streamlined and efficient processes for compliance with national regulations
- Facilitate access to international financing
- Mitigate potential negative environmental and social impacts
- Safeguard the natural, social, and cultural values of the environments where interventions take place
- Promote greater transparency by promoting stakeholder engagement, including free, prior and informed consultation
The Environmental and Social Safeguards adopted by CABEI and applied through the SIEMAS are based on internationally recognized frameworks, including the International Finance Corporation (IFC) Performance Standards, the Equator Principles, and the Environmental, Health and Safety (EHS) Guidelines of the World Bank Group (commonly referred to as the EHS Guidelines or GMASS). These instruments, along with relevant national legislation, serve as essential tools to ensure the application of sound environmental and social practices.
CABEI's specific Performance Standards, as defined in its Environmental and Social Safeguards Guide, apply to all Bank-financed operations. The Bank oversees and ensures that its clients adhere to these standards throughout every stage of the Project Cycle.
CABEI’s Performance Standards include the following:
Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts
Aligned with IFC Performance Standard 1, this standard aims to avoid, minimize, restore and/or compensate for adverse impacts on the environment and communities, both previously identified and evaluated, as well as those that may occur during the execution of an operation.
Performance Standard 2: Work and Working Conditions
Aligned with IFC Performance Standard 2, this standard aims to ensure compliance with standards relating to working conditions, codes of conduct, fair treatment, equal opportunities for workers, vulnerable groups and prevent forced labour, child labour.
Performance Standard 3: Resource Efficiency and Pollution Prevention
Aligned with IFC Performance Standard 3, this standard aims to avoid, minimize, restore and/or compensate for adverse impacts generated by pollutants linked to the activities of operations, and to promote efficiency in the use of natural resources.
Performance Standard 4: Community Health and Safety
Aligned with IFC Performance Standard 4, this standard aims to avoid, minimize, restore and/or compensate for impacts on the health and safety of affected communities.
Performance Standard 5: Land Acquisition and Involuntary Resettlement
Aligned with IFC Performance Standard 5, this standard aims to avoid, minimize, restore and/or compensate for adverse social and economic impacts arising from land acquisition or restrictions on land use, including those related to the relocation of people, and where necessary, ensure housing and incomes are restored to pre-displacement levels or better.
Performance Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
Aligned with IFC Performance Standard 6, this standard aims to protect and/or conserve biological diversity, natural habitats, and associated ecosystem services.
Performance Standard 7: Indigenous Peoples
Aligned with IFC Performance Standard 7, this standard aims to ensure compliance with international commitments regarding Indigenous Peoples and, where possible, to avoid, minimize or appropriately compensate adverse for impacts on these communities.
Performance Standard 8: Cultural Heritage
Aligned with IFC Performance Standard 8, this standard aims to protect cultural heritage from adverse impacts of operational activities and to support its preservation within a comprehensive sustainable development approach.
Performance Standard 9: Gender Equity
This CABEI-specific standard seeks to identify, prevent, and address gender-based risks and ensure that development operations promote gender equality and the empowerment of women and girls. It requires that projects integrate gender analysis, engage women meaningfully in decision-making processes, and implement actions that ensure equitable access to benefits and opportunities.
Cross-cutting Integration
Through the application of these Standards, CABEI promotes the integration of climate risk considerations at the project level, across operations and encourages inclusive stakeholder engagement including free, prior, and informed consultation processes.
SIEMAS PLAN
The SIEMAS Plan is a document that defines the environmental and social commitments associated with a given operation. It captures the measures and decisions adopted during the environmental and social due diligence process, as well as the resulting conclusions and recommendations. The Plan serves as a tool for systematic monitoring these commitments throughout the project cycle.
It is developed based on the applicable Performance Standards and the environmental and social management requirements to ensure proper implementation.
In alignment with the principle of transparency, consultation and stakeholder engagement outlined in CABEI’s Environmental and Social Policy and the Access to Information Policy, the relevant environmental and social documentation is disclosed after the SIEMAS Plan is finalized and before the operations is approved. The extent and timing of disclosure are determined according to the environmental and social risk category of the operation.
For operations financed fully or in part with external funds, disclosure is carried out in accordance with the terms and guidelines of the respective external financing source, also based on the operation’s environmental and social risk category.
Environmental and social risk categorization, monitoring and supervision
As per CABEI’s Credit Guidelines, the Credit Office (known by its Spanish acronym, GERCRED) is responsible for conducting screening and due diligence to ensure that no operation violates CABEI’s Exclusion List.
The Exclusion List states: “CABEI will not finance operations, programs, or projects related to activities that, by their nature, are deemed contrary to CABEI’s Environmental and Social Policy or to the host country´s laws. The SIEMAS requires that operations financed by the Bank, and their environmental and social risk categorization, be aligned with the International Finance Corporation (IFC) Performance Standards, the Equator Principles, and the World Bank Group’s Environmental, Health, and Safety (EHS) Guidelines, as well as with relevant national legislation.
For more information on CABEI´s Exclusionary Criteria List, refer to the Sustainable Bond Framework – 5. ANNEX A. Exclusionary Criteria List.
Accordingly, the Credit Office and the Country and Project Office ensure that any operation falling under the exclusion list is identified and excluded during the due diligence stage.
Additionally, in accordance with CABEI’s Credit Guidelines, the application of credit procedures – including compliance with the Exclusion List—is subject to regular external audits to ensure effective implementation and alignment with institutional safeguards.
The Country and Project Office is responsible for preparing the Project Document, which outlines the scope and progress of the potential operation to be financed. During the analysis stage, the Office of Environmental and Social Sustainability, reporting directly to the Executive Presidency and/or Vice Presidency, is responsible for conducting the environmental and social review and evaluation. This office is also in charge of preparing the corresponding SIEMAS Plan.
Subsequently, the Credit Office and the Legal Counsel ensure that the SIEMAS Plan and all relevant environmental and social considerations are incorporated into the Transaction Report. This report is first submitted to the Credit Committee, composed of representatives from the Executive Presidency and/or Vice Presidency, Risk Office, Country and Project Office, Credit Office, Finance Office, the Office of Environmental and Social Sustainability, Others and later to the Board of Directors.
The General and Special Conditions associated with the operation may accompany the draft resolution of the operation and be reflected in the loan agreement. Following approval, the Sustainability Office monitors and updates the SIEMAS Plan, while the Credit Office is tasked with the environmental and social supervision of the operation throughout its execution.
Environmental and Social Risk Categorization
To identify, evaluate and mitigate environmental and social risks, the Environmental and Social Sustainability Office is responsible during the eligibility, preparation and analysis stages to:
- Accompany the unit responsible for the operation’s meetings and field visits.
- Determine the appropriate SIEMAS questionnaire based on the operation’s profile.
- Evaluate the operational information provided by the client.
- Review compliance with relevant laws, regulations, standards and permits of the country where the operation will be carried out.
- Analyze environmental and social risks by determining the appropriate risk categorization of the operation and assessing the client's capacity to manage these risks using defined operational risk management instruments.
- Prepare the operation’s SIEMAS Plan, incorporating actions from the operation manager, borrower, and Country and Project Office, to establish measures to safeguard environmental and social conditions and ensuring future submission of periodic follow-up and supervision reports by the client to the Bank.
When defining the environmental and social risk category for operations, the Environmental and Social Sustainability Office considers the nature of the risks, their probability of occurrence, and impact, with the sole purpose of preventing their materialization. In line with the IFC and World Bank Group definition, the environmental and social safeguards adopted by CABEI, as well as the pertinent national legislation, the categories are classified as follows:
- Category A: it applies to complex and important operations, of scale, with potential risks and/or adverse environmental or social impacts, of a significant nature, which are diverse, irreversible, or unprecedented. Such impacts may affect an area outside the site where the project takes place or by their nature are difficult to manage.
- Category B: it applies to operations with potential risks and/or adverse environmental or social impacts, of a limited nature that are few, with short-term impacts, generally located in specific sites, mostly reversible and it is possible to manage them through mitigation measures. Technical procedures for the design and implementation of mitigation measures are more standardized and common practice in the management of environmental and social risks. This categorization may include projects or programs with manageable environmental and social impacts, operations that benefit the indigenous population and that require free and informed prior consent as a result of the potential impacts that may be mitigated and under the consent of indigenous peoples.
- Category C: it applies to operations that pose little or no environmental or social risks. They will always require environmental and social monitoring and in cases where the Environmental and Social Sustainability Office identifies any social and environmental risk it will include the corresponding environmental and social measures. In this category, operations that do not involve construction works or that causes the physical modification of the environment prevail and are normally designed to generate positive environmental results, benefit the indigenous population and vulnerable groups and gender.
In line with CABEI’s risk-based approach, the depth and scope of environmental and social due diligence are proportionate to the potential impacts of each operation. Projects are classified according to their level of environmental and social risk. Category A projects—those with potentially significant and widespread impacts—require comprehensive Environmental and Social Impact Assessments (ESIAs), detailed management plans, robust stakeholder engagement, and early public disclosure.
In contrast, category B projects, which are expected to have more limited, site-specific, and manageable impacts, typically require a more targeted Environmental and Social Assessment (ESA) along with appropriate mitigation measures. This tiered approach reflects international best practices adopted by Multilateral Development Banks (MDBs).
Category C operations are expected to have negligible environmental and social impacts. These generally do not require an Environmental and Social Impact Assessment (ESIA) or an Environmental and Social Assessment (ESA). Instead, they undergo a screening process to confirm the absence of significant risks or impacts. While formal mitigation measures are not usually necessary, basic good practice standards will be applied to ensure consistency with environmental and social sustainability principles. Examples of such operations often include technical assistance, capacity-building efforts, or administrative reforms.
- Environmental and Social Monitoring and supervision
To ensure environmental and social compliance during credit monitoring and supervision:
The Environmental and Social Sustainability Office establishes at least two monitoring processes in the SIEMAS Plan, tailored to the operation’s characteristics.
During execution, this Office evaluates the need to update the SIEMAS Plan, monitors implementation, ensures compliance, may manage hiring of an independent supervisor, and addresses actions outside the SIEMAS Plan that affect compliance.
The Credit Office (through the Credit Operations Supervision Unit) ensures compliance with the SIEMAS Plan and safeguards. It may contract external personnel and will:
- Prepare an Annual Environmental and Social Supervision Plan at the end of each year for the following year, subject to review and adjustment.
- Supervise operations per the established frequency.
- Coordinate site visits with the operation’s responsible division and the Sustainability Office.
- Prepare Internal Supervision Reports using SIEMAS formats.
The Credit Operations Supervision Unit issues actions or alerts in response to supervision findings. If issues cannot be resolved operationally, they are escalated for further resolution.
Additionally, the Office of Independent Evaluation (ODEI) is responsible for periodically assessing compliance with the principles established in this Environmental and Social Policy. As part of its mandate, ODEI conducts an annual sample-based review to verify the effective implementation of the SIEMAS Plans, disaggregated by environmental and social risk category. The findings of this verification exercise are documented in an independent annual report, which serves to inform continuous improvement and institutional accountability.