1 Multilateral Development Bank Accountability Mechanisms: Developments and Challenges University of East Anglia 11 November 2009 Suresh Nanwani

2 Topics 1.Introduction 2.Establishment and raison dêtre of MDB accountability mechanisms 3.Overview of MDB accountability mechanisms 4.Table on MDB accountability mechanisms – main features, structure and operations 5.Emerging trends and directions 6.Suggestions to meet challenges for MDBs and their accountability mechanisms

3 1. Introduction Multilateral development banks (MDBs) - owned by member-states - focused on economic growth or development in developing countries MDBs with accountability mechanisms include - African Development Bank (AfDB) - Asian Development Bank (ADB) - European Bank for Reconstruction and Development (EBRD) - Inter-American Development Bank (IADB) - International Finance Corporation (IFC) - Multilateral Investment Guarantee Agency (MIGA) - World Bank (International Bank for Reconstruction and Development and International Development Association) MDB operations: finance or assist projects and programs which impact on people Working definition of accountability mechanism: an avenue for private individuals and groups to file claims against an institution to address their grievances in the institutions operations

4 2. Establishment and raison dêtre of MDB accountability mechanisms DateMDBMechanism 1993World BankWorld Bank Inspection Panel 1994IADBIndependent Investigation Mechanism – ongoing review in ADBInspection Function (replaced by ADB Accountability Mechanism in 2003) 1999IFC and MIGACompliance Advisor/Ombudsman (CAO) Office 2003EBRDIndependent Recourse Mechanism (replaced by Project Complaint Mechanism, approved in May 2009) 2004AfDBIndependent Review Mechanism – ongoing review in 2009 Establishment of MDB accountability mechanisms

5 reasons for establishment – internal (reports of failed projects) and external pressure (civil society organizations, donors, G7) policy review process – extensive consultation with the public outcome of establishment – window of access for individuals and groups to file claims and opportunity to influence decision-making process – from a foot in the door to a seat at the table?

6 focus on at least one aspect of addressing citizen complaints – investigation or problem-solving established/oversight by the Board of Directors general provisions: implementers, cut-off point for filing claims, and reporting lines to the President or Board of Directors claimants are a group of individuals and exceptionally, individual claimants can file scope of policies and procedures covered participation of claimants in the accountability process monitoring activities 3. Overview of MDB accountability mechanisms

7 4. Table on MDB accountability mechanisms – main features, structure and operations See the Table provided.

8 Claims with MDB accountability mechanisms to 15 October 2009 (total: about 216)* MDB Accountability Mechanism Years of operation Claims filed or registered World Bank Inspection Panel1561 IADB Independent Investigation Mechanism14 5 ADB Inspection Function (1995 – 2003) 8 8 ADB Accountability Mechanism (from 2003) 523 CAO Office – Ombudsman (30 June 2009) CAO Office – Compliance audit: 19 complaints received (30 June 2009) EBRD Independent Recourse Mechanism 4 5 EBRD Project Complaint Mechanism - - AfDB Independent Review Mechanism 2 4 * Source: MDB Accountability Mechanism websites and latest annual reports. Some projects have multiple claims, e.g., BTC Pipeline (CAO Office and EBRD) and Southern Transport Development Project (ADB).

9 5. Emerging trends and directions MDBs have similar classes of shareholders – donor and borrowing countries despite different approaches taken, similar emerging trends and directions addressing concerns by both problem-solving and investigation establishing permanent panels instead of roster of experts making mechanisms more friendly and easily accessible to users

10 extending the period of time to file claims identification/anonymity of claimants handling monitoring of outcomes from problem-solving and investigation expanding claimants participation in the accountability procedures mandatory training for experts/panel members lessons learnt in (new) policy review – public consultation, e.g., European Investment Bank, EBRD, AfDB

11 6. Suggestions to meet challenges for MDBs and their accountability mechanisms establishment of accountability mechanisms and improvement of these mechanisms or other systems at MDBs movement from articulating accountability to demonstrating responsibility – various views – two reality checks: decision to implement accountability is political accountability mechanism is an internal governance tool and is not adjudicative

12 maintaining key features of an accountability mechanism – IOCAPE: independence, objectivity, credibility, accessibility, professionalism, effectiveness – What is the perfect fit? ensuring the buy-in of civil society in selection process of key personnel in an accountability mechanism facilitating citizen access by lowering threshold levels lessons learnt and the way ahead – individual claims – NGOs as claimants in compliance review – monitoring: mechanisms sailing in relatively unchartered waters – accountability mechanisms having wider mandates – civil society organizations adopting accountability measures

13 1. Richard E. Bissell, Learning Processes in International Accountability Mechanisms. The Innovation Journal: The Public Sector Innovation Journal, (2005) Volume 10 (1). 2. Eisuke Suzuki and Suresh Nanwani, Responsibility of International Organizations: The Accountability Mechanisms of Multilateral Development Banks. Michigan Journal of International Law, (Fall 2005) Volume 27, No Suresh Nanwani, Holding Multilateral Development Banks to Account: Gateways and Barriers. International Community Law Review, (2008) Volume 10, No Richard E. Bissell and Suresh Nanwani, Multilateral Development Bank Accountability Mechanisms: Developments and Challenges. Manchester Journal of International Economic Law, (2009) Volume 6, Issue 1. References

14 Thank you. The views expressed are the personal views of the presenter and do not reflect those of the Asian Development Bank. The presenter thanks Dr. Richard E. Bissell for his assistance in this powerpoint presentation. Suresh Nanwani 16 November 2009 Copyright © Suresh Nanwani 2009