11 October 2004
IIM Panel letter contests IDB Board misrepresentation of their report in an August 5 press release
When internal compliance mechanisms fail, the IDB’s Independent Investigation Mechanism (IIM) is the only institutional means for affected parties who have been harmed by Bank projects to hold the Bank and its borrowers accountable for compliance with the Bank’s established operational policies. Unfortunately, the IIM has no permanent budget or staff and lacks independence from the Board. This can undermine the panel's effectiveness as a mechanism to insure compliance.
In the case of Yacyretá not only were the findings of the IIM de-legitimized by bank management, the Board publicly re-interpreted its findings in a press release on the IDB website, claiming that, "Based on the investigative panel's findings, the Board of Executive Directors concurred that the IDB did comply with the normative framework applicable to the design, analyses and implementation of the project and did follow applicable procedures." The Board then recommended the final disbursement for the project.
In a letter to IDB President Iglesias, the Panel replied that "The Board could not have concurred with our report to reach those conclusions because our report said nothing of the kind. On the contrary... the design and implementation of the project violated many of the stipulations of the Bank's policies on environment and involuntary settlement." Among the most serious problems which the panel attributed directly to the Yacyretá project were flooding of houses along the river, polluted creeks and water wells, elevated incidence of health problems, including diarrheas, parasites, and skin problems, inadequate resettlement housing, and child prostitution.
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