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Guiding Principles for the Operation of the Constituency

  1. Australia, Vietnam, Singapore and New Zealand have agreed to form a constituency to be represented by a Director and Alternate Director on the Board of Directors of the Asian Infrastructure Investment Bank (AIIB) (see Attachment).
  2. This document outlines agreed principles for the management of the constituency, intended to shape the development of arrangements and procedures to ensure that all members of the constituency are properly represented in the context of a Board of Directors that functions on a non-resident basis.
  3. In all its interactions, the constituency will be guided by a shared commitment to transparency, inclusiveness and open engagement among constituency members.

Selection of Director and Alternate Director

  1. For each election, the Director and Alternate Director shall be nominated by the constituency member responsible for the position, listed at paragraph 5 of the constituency arrangement (see Attachment).
  2. Members are expected to nominate high quality candidates with relevant skills and experience in public policy, international finance and infrastructure financing. Nominees will have demonstrated integrity. Nominating members will be conscious of the need to avoid any concerns regarding potential conflicts of interest.
  3. Nominating members will endeavour to ensure that all members of the constituency are advised of their intended nominee with sufficient time to allow others to consider the suitability of the proposed candidate, and raise any potential concerns with the nominating member, in advance of the formal nomination and election process.

The Duties of the Director and Alternate Director

  1. The Director is the main representative of the constituency and will be the primary contact for AIIB management.
  2. The Director is expected to consult proactively with all other members of the constituency in seeking to understand member’s views and shape a shared constituency position on issues to be considered by the AIIB Board of Directors. He or she should make their best efforts to visit the capitals of each of the other members of the constituency on a regular basis, ideally on an annual cycle, to allow for face to face meetings with their authorities.
  3. The Alternate Director will be expected to take a leading role in assisting the Director to represent the interests of the constituency.  To facilitate this, the Director and Alternate Director should establish a close working relationship, involving regular contact and exchange of views.
  4. It is expected that the Director will reach agreement with the Alternate Director on an appropriate allocation of responsibilities within the constituency, including reasonable opportunities for the Alternate Director to take the lead on specific issues, including, but not limited to, representing the constituency’s views on such issues at meetings of the AIIB Board of Directors, and at meetings of Board committees of which the Director is either a member or attends as an observer.
  5. The Director should report annually to constituency Governors on the operation of the Constituency and key issues considered by the Board during the preceding twelve month period.   This would not preclude the Director providing additional reporting to constituency Governors as they deem necessary.

Representation of Constituency Views and Voting

  1. The Director will be ultimately responsible for representing the views of the constituency to the AIIB Board and management. They may delegate responsibility for representing the constituency’s views on specific issues to the Alternate Director.
  2. As far as possible, the constituency will seek to reach a shared position on all issues to be considered by the AIIB Board of Directors. Appropriate weight will be given to the views of individual members where they have a direct interest in a particular matter, such as a specific investment proposal.  In circumstances where individual constituency members have specific interests, the Director or Alternate will be expected to represent these clearly to the AIIB Board and Management.
  3. It is anticipated that the Board of Directors will seek to operate on the basis of consensus to the greatest extent possible, and to avoid formal votes. Should a vote be called, while the Articles of Agreement allow for the Director to split the votes of the constituency, the constituency will seek to avoid recourse to this option. 

Attendance at AIIB Board of Directors’ Meetings

  1. Subject to whatever attendance rules are established by the Board of Directors, the constituency should seek to ensure that each member of the constituency has the opportunity to send a representative to attend Board meetings. 

Communication within the Constituency

  1. The Director will be responsible for ensuring that there are systems in place, complementing whatever arrangements are developed by the Bank, to ensure all constituency members have timely access to Board papers, information provided directly to the Director in restricted sessions, and any other relevant information to allow them to form an informed view on matters to be considered by the AIIB Board. 
  2. All constituency members should have the opportunity to share views and provide written comments within the constituency on forthcoming Board matters. It is expected that regular teleconferences could be used to facilitate such exchange of views. Drafts of constituency position papers and written statements should be developed in a collaborative process. Such drafts should ideally be circulated to constituency members sufficiently in advance of the relevant Board meeting to allow time for members to provide input.  
  3. The Director shall be accountable for finalising all constituency statements.  However, responsibility for preparing the initial drafts could be shared between the Director, Alternate Director and other members, in line with the agreed allocation of responsibilities and the specific interests of individual constituency members.  For example, it would be expected that a constituency member with a direct interest in a specific investment proposal may take the lead in drafting material for the Board’s consideration of that proposal.

Communication with the AIIB

  1. To the extent possible, the Director should act as a liaison between the constituency and the Board of Directors, and between the constituency and AIIB management. The Director will be accountable for keeping constituency members informed of his or her communications with other Directors and AIIB management.  
  2. When issues relevant to individual constituency members arise, such as investment proposals, these members may seek to communicate directly with AIIB management. However, consistent with paragraph 3, they should ensure the Director and other members of the constituency are appropriately informed of such communications.

Communication with External Stakeholders

  1. The Director may put in place arrangements to facilitate engagement with external stakeholders, such as potential private sector project proponents, NGOs, etc.  Any such arrangements will be developed in consultation with the other members of the constituency, and should complement any engagement with domestic stakeholders undertaken by individual constituency members.   To the extent possible, the Director should endeavour to consult relevant members of the constituency ahead of meeting with external stakeholders to ensure the Director accurately represents constituency views in such engagements. 

Staff support for Director and Alternate Director

  1. It is the responsibility of the individual constituency members providing the Director and Alternate Director under each rotation to provide appropriate staffing support for their respective functions.
  2. Where appropriate, constituency members may consider options to supplement such resources by say, temporary secondments between constituency member countries, for example to assist the transition between rotations.

Review

  1. These principles, and the constituency’s experience with operationalising them, will be subject to regular review.

Attachment

Asian Infrastructure Investment Bank Constituency Arrangement

  1. As signatories to the Articles of Agreement of the Asian Infrastructure Investment Bank, Australia, Vietnam, Singapore and New Zealand agree to form a constituency that will collectively represent our interests at the Asian Infrastructure Investment Bank. 
  2. The constituency agrees to work together on a constructive, open and transparent basis.  Given the non-resident nature of the Board of Directors, the constituency will take a proactive and open approach to sharing information.  Constituency positions should be reached through consensus as far as possible.   Members will negotiate a constituency agreement to establish formal working arrangements.   
  3. While recognising the Articles of Agreement provide for a member to join the constituency without consultation, we agree to provide a joint response, including considering the impact on constituency rotation arrangements, if another member (or potential new member) expresses an interest in joining the constituency.  We undertake to keep each other informed approaches we receive.
  4. As regards the rotation arrangements, we agree:
    • The Director role should be for a two-year term;
    • The Alternate role could be a one-year appointment;
    • Australia would take the Director role 6 terms out of 10, Vietnam twice, and New Zealand and Singapore one term each;
    • Australia would hold the Alternate Director role whenever another country fills the Director role;
    • The other Alternate Director role would be held in equal proportions by the three remaining countries;
    • Ideally each country occupying the Director role would hold the Alternate role on the immediately preceding year;
    • Arrangements will be reviewed at the end of the full 20-year rotation period; and
    • Members may agree to swap the sequence of rotations following wider constituency consultation.  
  5. The constituency arrangement is as follows:
    Year DIRECTOR ALTERNATE Year DIRECTOR ALTERNATE
    1 Australia Singapore 11 Australia New Zealand
    2 Vietnam 12 Singapore
    3 Australia New Zealand 13 Singapore Australia
    4 Vietnam 14 Australia
    5 Vietnam Australia 15 Australia New Zealand
    6 Australia 16 Vietnam
    7 Australia Singapore 17 Vietnam Australia
    8 New Zealand 18 Australia
    9 New Zealand Australia 19 Australia Singapore
    10 Australia 20 Vietnam