4 December 2003
Summary
The Inspection Panel Procedures stipulate that "in all cases of a request made by an affected party, the Bank shall, within two weeks of the Executive Directors' consideration of the matter, inform such party of the results of the investigation and action taken in its respect, if any." In the case of Yacyreta, the results of the investigation have still not been formally acted upon. The Board meeting in June was yet another informal discussion with no conclusions or subsequent actions stipulated by the Board. While NGOs had consistently lobbied for a follow up role for the Panel, primarily to provide an independent monitor of implementation of the Action Plans and public participation activities, as of the time of the Burki Mission, the Panel was not welcome in Paraguay.
The Board informally discussed Yacyreta three times over a year, with no Board-generated outcome. While the Board took no formal action, Bank management have communicated to NGOs that they are supporting the following:
1. EBY is planning to establish two information centers, one on each side of the river, that ostensibly will make available the Action Plans, schedules, updates on progress, information about studies that still need to be done, among other things.
2. The Bank is preparing a new loan to Paraguay to address some social impacts that aren't currently covered by previous loans. NGOs have questioned whether putting Paraguay's citizens in debt to the Bank is a reasonable way for the Bank to solve problems resulting from their own mismanagement of the project.
3. A Center for Citizen Support has also been proposed, but the proposal came from the World Bank and not out of discussions with the affected people about what specifically they need. A counter proposal from the coalition of affected people requested that an independent monitoring panel be established that could monitor and enforce the action plans; the Bank responded that such a panel was beyond the Bank’s mandate.
4. A new Independent "Blue Ribbon Panel" has been established by Vice President Burki to determine realistic options for the future final operating height of the dam. The Panel members have been brought in from outside the Bank, and have a range of technical skills. The will look at hydrology, economics, environment and social issues, and will present the Bank and the governments with an independent, technical analysis of the possible scenarios that could be followed to complete the project.
Conclusions: Accountability: What Does it Take?
The Yacyreta claims process has been an enormous challenge for those who initiated the claim, as well as for all of the actors who have tried to move it through the Bank. What are the outcomes of this process? Has the claim resulted in accountability? If institutional accountability is one of the goals of those bringing the claim, the results of Yacyreta are disappointing. However, if the goal of the claim is to trigger problem solving actions, then is the process worth it from the point of view of the claimants? From this perspective, the results are more optimistic. The following are some observations:
1. Institutional accountability remains illusory.
- There are no incentives for Bank staff to comply with policies, or consequences if they don’t:
Without an Inspection Panel, the World Bank and its staff have immunity from accountability — i.e. they are protected from any legal action that might be brought by individual citizens, corporations or governments. But even with an Inspection Panel, accountability is an illusion for several reasons.
Fundamentally, the Bank culture rewards staff for loaning money and convincing governments to borrow for projects, but does not admonish them for causing harm, even if that harm has enormous environmental, social, or economic consequences or result in project failure. The culture also fosters an environment in which Bank staff deflect the blame for failures from themselves to the borrowing governments, (which are often acting on advice and instructions from the Bank). Thus when confronted with problems, Bank staff can simply say, and often do say, "it’s the government’s fault." Given the historic problems with EBY, it has been easy for Bank staff to accuse the Entidad of failing to implement Bank policies. Indeed, Bank staff have often tried to portray themselves as champions of the people in the face of EBY’s obstreperous bureaucracy — claiming that they are putting ample pressure on EBY to move ahead, secure resources and even to consult with affected citizens.
The long time horizon of projects like Yacyreta also leads to high staff turnover, resulting in responsibility being avoided. Consequences that are felt today can often be ascribed to decisions taken by someone else years ago. The 1992 World Bank loan has had three task managers in six years. Despite acknowledgment by Bank officials — including President Wolfensohn — and the findings of the Inspection Panel that Yacyreta is a disaster, there still have been no visible consequences for staff responsible for either the fundamental problems of the project, or for lying to the press and public about the findings of the Inspection Panel Report.
Finally, the Inspection Panel Procedures and Resolution do not explicitly call for staff accountability. There are no requirements that link Panel findings to appropriate staff responses. In other words, staff continue to have impunity regardless of what the Panel concludes about violations of Bank policies in projects that they are responsible for.
- At the level of management and the Board, the claims process is driven by politics not facts.
In a recent workshop in Mexico, former Panel chair Alvaro Umana said, "the only people who have followed the Panel Procedures have been the claimants and the Panel."
The other actors in the process — management and the Board — have continually undermined and subverted the process in order to avoid accountability. The initial management response to the Yacyreta claim had four basic thrusts: One was to challenge the eligibility of the claimants and of the claim itself. Second, management denied that the problems of the project resulted from policy violations. Third, they asserted that the required actions related to environment and resettlement at 76 masl had been met and that problems with the project alleged in the claim had not occurred. Finally, management issued an Action Plan that appeared to be a response to issues raised in the claim. In other words, after having denied that there were problems, management submitted an Action Plan ostensibly to deal with them because it was politically expedient to do so.
Later, once the Panel’s final report confirming the claim’s allegations was issued, management blatantly lied about its findings to the public, through the letter from Isabel Guerrero to Pedro Arzamendia and in a later field visit by Bank staff to the affected community. Their political motivation could be attributed to an urge to avoid personal accountability by first denying the facts by claiming that problems did not exist, by trying to challenge the claimants’ legitimacy, and then by appearing to be proactively dealing with the problems.
The Board’s internal politics resulted in a North/ South (or donor/ borrower) gridlock from the moment they received the Panel’s recommendation right through to the present. Northern governments took the claim and the Panel’s recommendation seriously. Southern governments rejected both. The Board’s actions in the context of Yacyreta followed three basic streams: One was to focus on semantics, rather than on the facts of the claim. The Board established the term "investigation" when it created the Panel, but the word itself had been politicized. During the first Board discussion of Yacyreta, the Southern Executive Directors asserted that an "investigation" implied wrongdoing and possible corruption, and adamantly objected to the use of the term. The Argentine Director may have had good reason for wanting to avoid an investigation, considering the history of documented and alleged corruption at Yacyreta. The term was so contentious that the Board agreed to a compromise that limited the Terms of Reference to a "review and assessment". This semantical difference as noted above ultimately had real implications for claimants’ specific concerns.
The second tactic was to divert the discussion away from the merits of the claim by complaining that the Panel did not follow the rules because their investigations raised issues around the role of governments not just of the Bank. (Ironically, it has been management that has consistently assigned blame to governments as they deflected responsibility for problems off of themselves.) Part of the Southern Directors’ reactions to the Panel process may be that the findings could result in their governments having to pay for any remedies that might arise from investigations.
Third, Southern governments have tended to act in solidarity. It may be that Southern governments agree informally to support each other in limiting or rejecting Panel recommendations to investigate claims. For example, prior to the first scheduled Board discussion of Yacyreta, the Director for Argentina met with many of the Part II governments ostensibly to garner support for his position that there should be no investigation because a) the claimants were ineligible (because they are Paraguayan and the borrower is Argentina); and b) that the Panel did not follow its own rules and was biased in favor of Paraguay over Argentina, among other things. While the arguments may not have made sense to some, the Part II Directors were inclined to support Argentina in fighting the claim, lest they be the next in line for a claim to the Panel. At the end of the day, the Board abdicated its responsibilities to uphold the policies of the institution, by considering the political consequences of the claim rather than its technical merits.
2. The Board as a whole is unable to assign remedies.
The Board’s final role in the Inspection Panel process, as outlined in the Resolution, is to consider the findings of the Panel and to determine whether any action should be taken. Granted, the language in the Resolution is weak and does not actually compel the Board to assign remedies. The expectation of the public, however, is that the Board exists to make decisions for the institution. As such, it should not simply hear the findings but address them. In the Yacyreta claim, however, the Board has all but thrown up its hands in determining what should be done about the problems identified by the claimants, confirmed by the Panel, and further affirmed by the Bank’s management after Mr. Burki’s mission.
On each occasion when the Board had the responsibility to discuss Yacyreta it met informally, came to no conclusions, and delayed any action into the future. While the Panel is the Board’s sole link to objective reality, their response to the Panel report was not to take effective action to assign responsibility for problems or mandate adequate remedies, but instead to "shoot the messenger". The Panel’s work on Yacyreta, Singrauli and Itaparica prompted the Board to order a review of the Panel, not the projects.
3. The complexity of the process requires the active involvement of an organized, international civil society.
First, the Bank seems impenetrable to most citizens: it is a large and complex institution that is often removed from the communities affected by Bank-financed projects. In the case of Yacyreta, in order for the claims process to be used, local and national citizens needed contact with international NGOs in order to learn that the Inspection Panel was in fact an option for them. In preparing their claim, they also relied on NGOs who understood Bank policies in order to determine which policies applied in the Yacyreta project, and how their experiences may have been a result of violations of those policies.
Second, as soon as a claim has been accepted by the Panel the claimants are officially left out of the process. While the Panel has always exercised their option of meeting with claimants both in Washington and in country, the claimants do not have formal access to the process. Their only recourse is to engage with international NGOs who can in effect be their advocates in front of Executive Directors and management, and to the international press. In the case of Yacyreta, NGOs in Washington had to relentlessly monitor the progress of the claim in order to keep Sobrevivencia and the local claimants informed. Concerns raised by the claimants were also frequently communicated through informal NGO channels into the Bank.
Third, the politicization of Yacyreta forced the international NGO community to generate enormous pressure on the Board of Directors to approve some form of an investigation. Pressure was also aimed at President Wolfensohn, who understood that to deny an investigation into one of the most well-documented and well-publicized of the Bank’s large-scale disasters would create further public relations problems. Without that pressure, the Board would have swept Yacyreta under the rug.
Finally, without an organized international civil society, and especially without advocates in Washington, the claimants would have been completely at the mercy of Bank management’s attempts to whitewash the Panel’s report in the Paraguayan press. The Guerrero letter lied to the Paraguayan people, yet it took a herculean effort on the part of Sobrevivencia, local citizens and international NGOs to finally get President Wolfensohn’s attention. And that occurred only because of an embarrassing article in the Financial Times.
The necessity for such an organized civil society is not surprising. The Yacyreta claimants went to great lengths to establish the legitimacy of their claim, following all of the rules and procedures, including many years’ worth of field work documenting the dam’s problems. When the Panel accepted their claims as valid and worthy of an inspection, the claimants should have been able to rely on the Bank to implement its part of the bargain. Unfortunately, Bank policies and procedures are not necessarily complied with unless there are aggressive public interest watchdogs ensuring that those in power implement them.
But even with policies and watchdogs, both externally and internally, one cannot argue that the claims process has led to accountability. Recent attempts by a coalition of local citizens’ organizations, municipal and provincial governments, and NGOs to insert themselves in a process of problem solving with the Banks and EBY have been thwarted by continued lack of access to meaningful participation. A Bank-generated proposal for the citizen’s support center was rejected by the coalition because it was felt that the center was inadequate to their needs. An alternative proposal has been rejected by Bank officials. Clearly, due process does not exist at the World Bank, and without more democratic processes to govern the institution, the Bank will continue to have impunity.
4. The Panel Process Fosters Local Citizen Empowerment.
As this paper is written, the coalition of affected peoples’ organizations, local municipal authorities and NGOs from Paraguay and Argentina are undertaking a citizen-led evaluation of the Yacyreta project. The process started with an alternative forum held parallel to an official evaluation meeting, organized by EBY, the IDB and the World Bank on September 24 and 25 in Encarnacion. The coalition decided to boycott the official meeting because it did not provide minimum conditions for effective participation, for an adequate evaluation of resettlement and environmental mitigation, and even less for including corrective proposals from the communities, civil society and local officials. The alternative forum attracted mayors and city council members from 19 municipalities; governors and councils from the Provinces of Itaipua and Missiones, Paraguay; members of parliament; as well as the local community organizations of people affected by Yacyreta. The citizens’ groups are launching a more vigorous campaign to obtain accountability and participatory problem solving from EBY and the Banks, by calling for the resignation of the Paraguayan head of EBY, Joachim Rodriguez, and by calling on the Banks to revise the Action Plans with the true participation of the population. Their efforts are also intended to illustrate the ways in which democratic processes can contribute to designing solutions, and to reject the "official" participation process as mere rhetoric.
The outcome of this process remains to be seen. But it implies that citizens have been able to use the Inspection Panel as a way to legitimately challenge the MDBs, EBY, and governments, using the policy and accountability tools that the Banks themselves have made available. The Panel Reports of both the World Bank and IDB confirm that the problems are real and that the responsibility for correcting them lies with all of the official actors. Moreover, the Reports underscore the absolute necessity for effective public participation in order to overcome years of distrust and suspicion that has become the main obstacle to problem solving at Yacyreta. Even though the Banks’ Boards have not been able to respond formally to the claim, the citizens have. They are demanding that their voices be heard and that their rights be upheld; and they are beginning a process of creating the solutions to their own problems. The Panel process has empowered citizens affected by Yacyreta and in this sense, has had great success.