April 4, 2008
The Inter-American Development Bank (IDB) stands alone as the only multilateral development bank without an adequately functioning accountability mechanism. The IDB’s 2005 proposal to improve the Independent Investigation Mechanism (IIM) fell short of providing project-affected people with an effective voice at the bank and was ultimately shelved without ever securing the needed reforms. A strong mechanism is critically important for local communities, especially in the context of IDB’s involvement in the Initiative for the Integration of Regional Infrastructure in South America (IIRSA). The Executive Directors of the IDB should recommit themselves to the task of reforming the IIM and should ask Bank management to develop a revised proposal for an improved accountability mechanism.
Criticisms of the IIM are familiar to IDB’s management and Executive Directors: lack of transparency, unpredictable timelines, and inadequate human and financial resources. The complaint process is opaque without adequate opportunity for the participation of claimants. Critical documents, such as the consultant’s determination of whether an investigation is warranted and the terms of reference for the investigations, are not shared with claimants. Further, the lack of deadlines for several key decision points in the process has left claimants waiting years for resolution to their complaints. The delays are exacerbated by the Bank’s failure to provide a sufficient budget and to devote permanent, full-time staff to the IIM.
The new mechanism proposed by the IDB in 2005, the Consultation and Compliance Review Mechanism (CCRM), failed to correct many of these deficiencies. The Public Registry, designed to increase transparency, did not provide for the posting of documents at relevant stages of the process. The process would have continued to be encumbered by the involvement of the Board in reviewing the eligibility of a complaint and the consent of the host country as a condition for site visits by the panel. The proposal also failed to ensure the independence of the Office of the Executive Secretary and the Compliance Review Panel. The obstacles for claimants in submitting complaints, such as the requirement that the harm suffered by the claimant be the result of a specific violation of the Bank’s Operational Policy, were not removed.
The IDB can and should learn from the best practices of accountability mechanisms at other international financial institutions. First, other banks have made it easier for affected communities to file a complaint. For example, the Office of the Compliance Advisor Ombudsman of the International Finance Corporation (IFC) requires only that the community indicate how they have been or will likely be affected by the social or environmental impacts of the project; it does not require an analysis of how the impacts are a result of IFC’s violations of its policies. Second, other banks have made the process more participatory. The Independent Review Mechanism at the African Development Bank makes the compliance review report available to the requestors and any other interested party at the same time it is submitted to the President and/or the Boards. Lastly, other accountability mechanisms have improved their follow-up. The CAO, the Asian Development Bank’s Accountability Mechanism, and the Independent Review Mechanism all provide for monitoring until the instances of non-compliance are remedied.
It is in this context-in the absence of a mechanism to ensure that the voices of communities are heard-that the IDB is championing IIRSA, a collaboration among the governments of South America begun in 2000 to develop infrastructure projects in the name of physical and economic integration. There are over 500 projects contemplated under IIRSA, which would require a total investment of $ 68 billion. The IDB, a member of the Technical Coordination Committee, or Secretariat, of IIRSA, is committed to funding one third of the 31 priority projects identified by the governments. One of these projects financed by the IDB is the Tarapoto-Yurimaguas highway in Peru, which will impact the indigenous communities of Aguarunas and Kechwa Lamistas. It is imperative that these, and other affected communities, have a reliable mechanism to ensure that the protections afforded to them under the IDB’s environmental and social safeguard policies are enforced.
The IDB’s Executive Directors must, as a matter of urgency, request a revised proposal for improvements to the IIM, incorporating comments from civil society and the best practices of other IFI accountability mechanisms. It is far past time that the IDB establish a functioning accountability mechanism.