More than 25 years have passed since the World Bank Group’s board of directors created the first independent accountability mechanism, the Inspection Panel, to allow communities harmed by bank-funded public sector projects to be heard and seek redress. Now a committee of the bank’s board is moving to make significant changes to the panel’s mandate and structure and without any public input.
Without input from the very people the panel was designed to serve — communities impacted by the bank — the board risks making decisions in the dark that could lead to a weakened mechanism because it lacks the knowledge and insight gained by people who stand to both gain and lose the most from the reforms.
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The panel was certainly an important innovation to refocus development finance on the global communities that the World Bank ostensibly serves, and since its creation, many other international financial institutions have followed suit by establishing independent accountability mechanisms. However, IAMs at other institutions have evolved since the panel was created and the panel needs to modernize to improve its effectiveness in addressing the concerns of communities.
Action so far and 3 key reforms needed
To the board’s credit, it has taken steps to improve accountability by undertaking an “Inspection Panel Toolkit Review,” and has already approved some additional tools for the panel. However, the board is still deciding on three more crucial tools.
First, the panel is the only major IAM unable to facilitate dispute resolution, which gives aggrieved communities, IFI clients, and other parties the opportunity to reach mutually agreeable solutions to grievances through dialogue facilitated by neutral dispute resolution professionals.
The Inter-American Development Bank’s dispute resolution function allowed Eva Jean-Baptiste, a farmer in northeast Haiti, to successfully help her community engage with the Haitian government and IDB to reach an agreement after a land grab. Showing what’s possible through dispute resolution, Jean-Baptiste remarked: “When they took the land, we didn’t see any hope for the future … With this agreement, we are sure that we will restore our livelihoods.”
Second, the panel has restrictive time eligibility requirements for submitting complaints. As some impacts of a project may not surface until after a project or loan is closed, permitting communities to file after project closure is simply fair.
Third, unlike other IAMs, the panel is not permitted to monitor whether management actions to address findings of noncompliance and resolve community grievances are actually diligently implemented. As communities impacted by a World Bank-funded transmission line in Nepal can attest, relying on bank staff and management to represent the progress made toward addressing noncompliance can provide a one-sided perspective that is incentivized away from showing the reality of implementation failures. In that case, management effectively covered up the use of force and coercion by local authorities against the community.
Delays in the dark
In October 2018, the board envisioned that no more than six months were necessary to decide whether and how to add these features. It has taken more than twice as long. One thing is certain — the lack of robust stakeholder engagement and transparency in the process has undermined this review. Outside of two perfunctory opportunities for input without the benefit of any draft proposals, the public has been left in the dark about the state of deliberations. Sources now indicate that the board is very close to a decision on these three tools, but there is no transparency to evaluate whether the details will enhance or dilute community access to accountability.
Public disclosure and comment should happen immediately
The board must publicly disclose the actual proposal on the changes and provide a well-noticed comment period. The public should additionally be consulted on any revisions to the panel’s operating procedures. Without transparency and public input, the board risks adding “tools” in name only that do not result in any meaningful change, or even worse, could actually weaken the panel and World Bank accountability.
The board could approve these tools while adding undue barriers to access, or it could approve structural changes that complicate the complaint process and compromise its effectiveness. The changes are too important to be decided without the input of the public — and particularly the communities who will use this accountability system.
Implications for World Bank Group private sector accountability
International Finance Corporation CEO Philippe Le Houérou ushers in a new era of accountability at IFC — one that "will require more dedicated IFC resources" and "a change in our behavior and culture."
Importantly, this year the board also initiated a review of the accountability framework of the World Bank Group’s private sector arms, the International Finance Corporation and the Multilateral Investment Guarantee Agency. That review includes an examination of IFC/MIGA’s IAM, the Compliance Advisor Ombudsman. Unfortunately, it is heading down the same troublesome path as the panel process, with limited transparency and public consultation, and no commitment as of yet for consultation on proposed changes before a board decision in spring or summer of 2020.
The experiences of tea plantation workers in Assam, India, highlight challenges to accessing remedy for harm caused by IFC/MIGA projects even where CAO confirms allegations of harm. Three years after CAO released a scathing investigation report, workers are still waiting for meaningful remediation of labor violations, poor living conditions, and other abuses. As is true with the panel process, the board must ensure that this review is transparent and open to the public to provide critical information on systemic changes needed to ensure that communities, like those in Assam, may access real remedy.
Accountability at the World Bank Group is at a crucial juncture. As the panel review process moves towards a key decision, and the IFC/MIGA/CAO review continues, the board must commit to full transparency and public consultation. With robust feedback, the board has the opportunity to bolster the effectiveness of the World Bank Group accountability for the benefit of communities and the institution itself.