21 November 2003
III. The World Bank's Inspection Panel: What Can Be Done If Policies Are Violated?
In the Foreword to The World Bank Inspection Panel: The First Four Years (1994-1998), Bank President James D. Wolfensohn wrote:
By giving private citizens-and especially the poor- a new means of access to the Bank, it has empowered and given voice to those we most need to hear. At the same time, it has served the Bank itself through ensuring that we really are fulfilling our mandate of improving conditions for the world's poorest people. The Inspection Panel tells us whether we are following our own policies and procedures, which are intended to protect the interests of those affected by our projects as well as the environment.
To address the continued adverse impacts of Bank lending, and the lack of policy compliance, the NGO community has long advocated for an independent mechanism whereby citizens harmed by Bank projects could bring grievances and seek remedies. The creation of the Independent Inspection Panel is the most concrete step taken by the World Bank in the last ten years to establish public accountability and openness in Bank operations. Established by the Bank in August 1993, the Inspection Panel has been in operation since August 1994. The Panel is not only a step forward for the World Bank, but has set a precedent for the other multilateral development banks, two of which now have their own inspection mechanisms [Note:10]. It is also an advancement in international law because it is the first time an international financial institution has made itself potentially accountable to citizens who are adversely affected by their operations.
The Panel is empowered to receive and investigate Requests for Inspection (referred to as "claims") from people directly affected by World Bank projects regarding violations of Bank policy, procedures and loan agreements as they relate to Bank policies. (For more information on how to file an Inspection Panel claim, see Section IV below.) Some of the requirements for claimants are that they:
- must be two or more affected people in a Bank borrowing country;
- must show that their rights or interests were (or are about to be) directly adversely affected by an act or omission of the Bank regarding policy or procedural violations;
- must show that they brought the violations to the attention of Bank management, and that management did not respond adequately.
Claimants can be represented by local NGOs in the country where they are located, but can only be represented by international NGOs in "exceptional cases." In special cases of "serious alleged violations" of Bank policies and procedures, an Executive Director of the Bank can also file a claim.
The Panel itself consists of three permanent members, who are nominated by the President of the Bank and appointed by the Board of Executive Directors. The members of the Panel serve staggered 5-year terms. The Chair of the Panel is chosen by the Panel members themselves, and works full time at the Panel's secretariat at Bank headquarters in Washington. The other two Panel members are called upon as needed. While the Panel is housed in and financed by the Bank, to maintain their independence, Panel members cannot have worked for the Bank for at least two years prior to their appointment, and are prohibited from working for the Bank after their term is completed.
Some important features of the Panel include:
- it can investigate claims that allege violations of any of the Bank's policies and procedures (not just the safeguard policies);
- it can receive claims filed by anonymous requesters who may be concerned about issues of confidentiality and personal safety;
- it has full access to internal Bank documents and can interview staff in the course of its investigations;
- it can travel to the project site and meet with requesters and others affected by the Bank's project;
- it can provide advice to citizens who are interested in filing claims but who are unsure of the process.
Panel Operation Creates Controversy
Ostensibly, the Inspection Panel is a tool for the Board of Directors to use to achieve accountability and transparency in Bank operations. The Board, however, has had a difficult time accepting and supporting the Panel. To date, the Panel has received a total of 17 claims. Of those claims, the Panel has recommended seven full investigations, but the Board has agreed to allow the Panel to investigate only three-the Arun Project in Nepal, the Singrauli/NTPC coal project in India, and the China Western Poverty Reduction Project-and to "review and assess" the Yacyreta Hydroelectric Project in Argentina/Paraguay. In many of the claims that the Panel has believed merited investigations, the Board and Bank management have interfered with the process, severely undermining the ability of the Panel to function, or for claimants to use the Panel process in the way that would allow their concerns to be properly considered by the Bank.
Moreover, after several highly controversial claims were brought to the Panel, the Board decided in 1998 to undertake a "second review" of the Panel [Note:11]. That review, which was carried out by a Board committee during 1998, resulted in a proposal that would have significantly weakened the Panel. The draft proposal prompted NGOs to launch an international campaign to convince the Board that the Panel-and Bank accountability-needed to be strengthened not weakened. This campaign resulted in an unprecedented Board consultation with NGOs and claimants in March 1999, to hear their concerns. While the Panel procedures were ultimately altered and in some ways weakened, the consultation process improved the final outcome.
How the Inspection Panel Process Works
The Inspection Panel is a three member independent Panel which is empowered to investigate "Requests for Inspection" (referred to as "claims") from directly affected people regarding Bank violations of its policies and procedures. The process first starts when the Panel receives a written claim. The claimants must show the following:
- The claimants have been or are likely to be adversely affected or harmed by activities related to the design, appraisal or implementation of a Bank financed project or program;
- The harm caused or likely to occur is a result of a failure of the Bank to follow its policies or procedures; and
- The problem was previously presented to Bank management, and management did not adequately respond or failed to take remedial action within a reasonable period.
Step 1:
When the Panel receives a claim, it sends a copy of the claim to Bank management and asks management to respond within 21 days. The Panel also notifies the Board that a claim has been received.
Step 2:
When management sends its response, the Panel weighs evidence both from the claim and management in order to determine whether it wants to recommend an investigation of the alleged policy violations. The Panel may also make a site visit as part of its preliminary review. Usually the panel has 21 days for the preliminary review. If necessary, the Panel can extend the review period up to 8 weeks (56 days) by simply notifying the Board that it needs more time. If the Panel needs more time beyond the eight weeks, it must seek Board approval.
Step 3:
Once the Panel decides whether or not it wants to investigate a claim, it sends a recommendation to the Board. The Board may meet to decide whether to authorize or reject the recommendation. After the Board decides, the claim, management's' response and the Panel recommendation are made public.
Step 4:
If the Board authorizes an investigation, the Panel proceeds with the investigation. There is no time limit for an investigation.
Step 5:
Once the investigation is concluded, the Panel sends its final report and findings to the Board and Bank management. Bank management then has 6 weeks (42 days) to send its recommendations, if any, to the Board, on what action the Bank should take in response to the Panel report and findings. The Board then makes a final decision on what action should be taken, based on the Panel's final report and management's recommendations.
Step 6:
The Panel's final report and management's recommendations are made public within two weeks of the Board's decision.
Documents Governing the Inspection Panel's Operations
- Bank Resolutions 93-10 (IBRD) and 93-06 (IDA): Adopted September 22, 1993. The Resolution established the Inspection Panel.
- The Inspection Panel Operating Procedures: Adopted August 19, 1994. The Procedures were created by the first Panel to guide their methodology and to provide guidance to potential claimants
- BP 17.55: Adopted February 1997. This Bank Procedure document was prepared for use by Bank staff
- BP 17.55 Annex B: Review of the Resolution Establishing the Inspection Panel: Clarification of Certain Aspects of the Resolution. Board directive issued in 1996 after the first Board review of the Panel's operations.
- Conclusions of the Board's Second Review of the Inspection Panel: Adopted by the Board April 20, 1999. This is the second "clarification" issued by the Board after a controversial review of the Panel.
How to Contact the Inspection Panel
CURRENT PANEL MEMBERS
- Jim MacNeill: Chair
Tel. +1-202-458-2742
- Edward Ayensu
Tel+1-202-458-5123
- Maartje Van Putten
PANEL SECRETARIAT
- Eduardo Abbott, Executive Secretary
Tel. +1-202-458-2617
- Antonia M. Macedo, Assistant Executive Secretary
Tel. +1-202-458-2597
Main Panel
Tel. +1-202-458-5200, Fax +1-202-522-0916
The Panel's Operating Procedures and a suggested format for a "Request for Inspection" can be found on the World Bank's Website at: www.worldbank.org/html/insp-panel/
NOTES:
10. Both the Asian Development Bank (ADB) and the Inter-American Development Bank (IDB) have inspection functions.
11. The first Panel Review was undertaken in 1996 to comply with the original mandate to review the Panel process after its first two years of operation.