BIC Comments on the 2000 EBRD Public Information Policy

5 December 2003

March 9, 2000

By Lisa Jordan, Executive Director, Bank Information Center

Paul Martin
Public Information Draft Policy
Office of the Secretary General
European Bank for Reconstruction and Development
Fax: +44 171 338 6488
Email:

Re: BIC Comments on EBRD Information Policy

Dear Mr. Martin:

The Bank Information Center (BIC) would like to thank the European Bank for Reconstruction and Development (EBRD) for the opportunity to comment on the draft "Public Information Policy". We hope our input will assist the EBRD's efforts to achieve greater transparency and accountability in its operations. While we acknowledge that the draft Information Policy represents progress, we feel that the Bank should use this review as an opportunity to take much bolder steps.

A strong Information Policy can improve bidding practices and reduce the likelihood that resources will be misallocated during project implementation. It can also generate ownership on the part of the public, avoiding controversy and costly delays.

We note with concern that the EBRD Information Policy is the least transparent of the five multilateral development banks and that this disparity may grow if the proposed Policy is adopted without further amendments. In December 1998, the World Bank's donor governments, the bulk of which are also active in the EBRD, instructed the World Bank to review and improve its disclosure of public information. This means that while the World Bank is preparing to expand the range of documents made available to the public, the EBRD is proposing a level of disclosure that falls short of existing World Bank standards. These disparities are unnecessary. At the very least, the EBRD should bring its Information Policy in line with the current thinking within the Asian Development Bank and the World Bank. Ultimately, the EBRD needs to align itself with the values expressed in the Aarhus Convention on Access to Information, Public Participation in Environmental Decision-Making, and Access to Justice in Matters Relating to the Environment.

There is a growing acknowledgement across the range of public international financial institutions that affected communities and local organizations have a positive role to play in Bank operations. They can help identify pitfalls, inform problem solving efforts and support project implementation. Harnessing this potential contribution improves project design, implementation and development impact in both private and public sector projects. However, meaningful stakeholder participation depends on policies and processes that create space for input throughout the project cycle. Access to information is a vital element in promoting an environment that is conducive to constructive dialogue and participation. In this sense, we hope that these comments will contribute to the EBRD's attempts to maximize its development impact.

I. As a public institution, the Bank should first and foremost be accountable to the public. The draft Policy caters to the interests of the private sector and does not sufficiently take into account the views of public sector actors.

The Policy states that the Bank must reassure "stakeholders" that the "protection of valuable business information will co-exist with the presumption of disclosure and will not lessen accountability". It also states that the "failure to continue to observe" the proposed standards of confidentiality will "affect the credibility of the Bank with its existing clients" and could be a "deterrent" to future business partners. The EBRD does not seem to acknowledge that the proposed Policy already undermines the credibility of the Bank with sectors of the public who feel that certain private sector interests are being promoted to the detriment of transparency. We refer not only to a range of organizations, labor groups, project-affected populations and citizen coalitions, but also to legislatures that can be equally critical of the lack of transparency in many multilateral institutions.

BIC recognizes that certain information should remain confidential. However, if a given private sector project cannot be carried out in a way that provides for a minimum amount of transparency, then public financing is inappropriate and the project should be left to private financial institutions. While some legal advice and sensitive financial information warrant confidentiality, the draft Information Policy goes too far in denying project information to the public. We would like to draw the EBRD's attention to the example set by the Asian Development Bank, which does not distinguish between private and public sector projects in its information disclosure.

Public support to private actors must be carried out in a way that is consistent with the need for transparency, participation and accountability. We recommend that the Bank:

1. Clarify its definition of business confidentiality.
2. When necessary, extract business confidential information prior to disclosing certain documents, but do so in a way that allows the public to understand the nature of the information that was removed. For example, this would require leaving a footnote in the place of the extracted section explaining the nature of the undisclosed information. Such an approach would allow the Bank to keep certain parts of a document confidential while simultaneously disclosing the document itself. It would also provide the public with a means of monitoring the Bank's practical interpretation of business confidentiality.
3. Expand the range of documents made available to the public, along the lines outlined below.

II. The Information Policy should empower stakeholders to participate throughout the project cycle. In order to achieve a level of transparency and accountability that facilitates meaningful participation, the EBRD should expand the range of documents it makes available.

If the objective is to include multiple stakeholders and benefit from their potential contributions to development, then people need access to decision-making documents. The Information Policy should help usher in this shift towards more participatory processes within the Bank. It should clearly explain that the objective of public disclosure is to enable people to meaningfully participate and contribute to the deliberative process and project implementation. In this light, we would recommend the following:

1. Draft Country Strategies (CSs) should be made available prior to Board approval:
   Open ended discussions about stakeholder priorities may be necessary during the initial stages of CS preparation. However, a draft CS should eventually be made available prior to Board approval. Failure to do so will prevent the Bank from fully capitalising on stakeholder insights, since input will be much more constructive when people are able to focus their minds on the implications of the specific course of action outlined in a draft CS. Non-disclosure of draft CSs will also risk discrediting the process itself. Consulting the public on a strategy that they are not able to see until after its finalisation will inevitably raise questions about the EBRD's commitment to participation in Country Strategy design.
2. Without exception, CSs should be made available at the Resident Offices in local languages following approval:
   There are no conditions under which the EBRD should be allowed to deny local populations the right to access the Bank's strategy for their country. The CS should be released through Resident Offices in local languages and clauses within the Policy that provide exceptions to the release of the CS should be removed.
3. A list of projects in the Bank's pipeline should be disclosed monthly:
   The ability of stakeholders to participate in EBRD projects is constrained by not only the lack of documentation, but also the late stage at which information is first made available. We are unclear why the EBRD has not developed something akin to the World Bank's Monthly Operational Summary. While such a document is obviously necessary for the EBRD's public sector operations, the need for more information on private sector projects in the pipeline is equally great.
4. Project Summary Documents should be released earlier and without exception:
   Project Summary Documents (PSDs) for both public and private sector operations should be released a minimum of 60 days prior to Board review. The proposed 30 days advanced notice for private sector projects unduly restricts the capacity of stakeholders to communicate their sentiments to relevant authorities. Furthermore, the Policy allows for non-disclosure of PSDs in certain cases. These exceptions would deny even a minimum of transparency in some EBRD operations and should, therefore, be removed.
5. Environmental Impact Assessments (EIAs) and Environmental Analyses for both public and private sector projects should be released 120 days prior to Board review:
   The rights of local stakeholders to reflect on the environmental and social consequences of a publicly financed project should not vary depending on whether the implementing agency is a public or private institution. Maintaining two standards for disclosure suggests that due diligence is being sacrificed in the interest of private sector expediency. This is a dangerous and unnecessary trade-off. Furthermore, documents such as Oil Spill Response Plans and other emergency response plans should be included in EIAs and environmental analyses and should remain available throughout the life of the project. This information is crucial to determining the impact of a project on affected communities and the environment.
6. Technical documents for public sector projects should be released in order to facilitate meaningful discussion with local stakeholders:
   Technical documents could include: prefeasibility studies; feasibility studies, including cost/benefit analyses; site and soil investigations; detailed design studies; financial statements of the agencies responsible for implementing the project; a description of institutional frameworks; technical studies which support the environmental impact analysis; and project related poverty analysis. The World Bank provides for the release of these documents for public sector projects. We see no reason why the EBRD's public sector operations should maintain a lower standard of transparency than that of the World Bank.
7. Board reports for both private and public sector projects should be released without exception:
   The World Bank equivalent - "Project Appraisal Documents" - have long been disclosed in their entirety for public sector projects. We see no reason why the EBRD should be held to a lower standard of transparency. Furthermore, following the formula for removing business confidential information proposed above (section I, point ii), we feel that Board reports for private sector projects should also be open to public scrutiny. As a public institution the EBRD has the responsibility to operate in the public domain.
8. Summaries of Board Proceedings should be disclosed:
   Transparency within the Board is an important element in the EBRD's attempts to achieve greater accountability. In this regard, the minutes of Board meetings should be made available to the public in order to allow interested parties to determine how they are being represented within the institution. At the very least a summary of Board proceedings should be made available.
9. The legal agreements between the EBRD and a borrowing country should be made available on the EBRD's website without exception:
   Once again, we feel that the EBRD should achieve a level of transparency that is at least comparable to the best practices amongst multilateral development banks. Loan and Credit Agreements for World Bank projects and sector loans are made available. The EBRD should not only follow this lead, but also make these kinds of documents available on its website.
10. Social and environmental monitoring reports should be disclosed:
    Social and environmental monitoring reports that are periodically prepared for private sector projects are obviously relevant to the health and safety of affected communities and ecosystems. They also represent a means by which actors can monitor the degree to which minimum standards and safety precautions outlined in an EIA or environmental analysis are being pursued within a given project. This is fundamental to transparency within EBRD supported operations since it allows affected communities to hold the EBRD and private sector actors accountable for the commitments they make during project design.
11. Project evaluations should be disclosed:
    The public has a right to information concerning the development effectiveness of the institutions that its governments and tax dollars are supporting. Evaluations are the key means by which the EBRD assesses its own impact and learns from its experience. This information is relevant to interested parties outside the EBRD and further public scrutiny will increase the Bank's overall effectiveness by encouraging substantive responses to problematic patterns in project design and implementation.

III. The Information Policy includes qualifiers that should be removed because they obscure the commitments being made and undermine the credibility of the Policy.

The repeated use of qualifiers, such as "normally" or "whenever possible", unnecessarily obscures the commitments the Bank is making to the public. For instance, the Policy states that the Project Summary Document (PSD) is "normally" prepared for each project and is "normally" available 30 or 60 days prior to Board approval. Following approval, a summarized version of the Board report will "normally" be made available. Finally, "whenever possible", the EBRD is guided by the presumption that information will be made available. These qualifiers are often redundant, since the Policy already stipulates that "compelling reasons" may warrant exceptions. More importantly, the qualifiers obscure the conditions under which the Bank can be held accountable for transgressing its own Policy.

BIC's experience shows that EBRD staff, when asked why they failed to meet the timeframes for dissemination stipulated in the Policy, have on occasion replied that they are only required to "normally" make information available within the stipulated timeframe. No effort was made to explain why this project fell outside the norm. Simply making reference to the word "normally" was deemed sufficient to excuse the late release of information. This use of qualifiers provides unnecessary scope for the Bank to fail to achieve the timeframes stipulated without having to justify the exceptional circumstances surrounding the Policy transgression. The EBRD is the only multilateral development bank to make use these vague and opaque qualifiers. They should be withdrawn from the Policy.

IV. While the proposed procedures for policy reviews are laudable, some clarification of process is needed.

Section A-2-(i) of the policy explains that, following certain provisional approvals within the Bank, draft Policies will be posted on the EBRD's website for a period of 45 days for comment. It also states that "a summary of such comments will be made available to the Board of Directors before final approval of policies". This seems reasonable, but we would like to request that the Policy more explicitly include reference to two important aspects of this process.

First, early in this section (Section A-2-i), the Policy should state that the EBRD will announce well in advance (perhaps two or three months is reasonable) that a given policy review will be carried out and that the public is invited to input into the process. While this is implied within the Policy, we feel that it should be further clarified so that the procedure clearly encourages EBRD staff to solicit input prior to beginning the review. This helps facilitate the inclusion of opinions at an early stage.

Second, the process by which comments on draft policies will lead to modifications is not clear. If EBRD staff feel that certain comments warrant changes within a given draft policy, how will these changes be incorporated? Will staff take the liberty to change the policies prior to distribution to the Board? Will staff advocate particular changes within the "summary of comments" that they prepare for the Board? At what stage prior to Board approval will the summary be distributed? What process will be followed if Board members feel that certain changes should be made based on comments received? While the drafters of the Information Policy may already have the answers to these questions, they should be clarified so that stakeholders feel that their comments on draft policies are able to affect change.

V. Broader commitments for the translation of project-documents and policies are needed.

Access to key information in relevant local languages is crucial for meaningful participation. If the ongoing review of the policy on information disclosure does not recommend a substantial increase in the translation of key documents, it will undermine the EBRD's attempts to achieve greater transparency and accountability. The draft Information Policy states that consideration will be given, "on a case-by-case basis, to increasing the volume of policy papers translated into some of the most commonly used languages in the relevant countries of operations." We feel that this is a laudable effort on the part of the Bank and we would like to encourage the EBRD to go further by translating all policies into these language and by making them available both at Resident Offices and on the web. We also feel that the Policy should also provide for the translation of key project-related documents "on demand" by local communities.

VI. The EBRD should implement a clear system to monitor compliance with the information policy and hold staff accountable for the way in which they respond to information requests.

A policy that is incompletely followed will greatly undermine the credibility of the institution, as well as the public's capacity to input into project and policy design and implementation. BIC recommends that the EBRD require all staff to, in written form, either: register incoming information requests; fulfill or properly forward the requests; or refuse the request and cite the rationale based on the information policy. Copies of these actions should be sent to a unit within the EBRD responsible for policy compliance and quality control. The goal of this procedure is not to create more bureaucracy. Rather, such an internal control would ensure that Bank staff members are held accountable for the way in which they implement the spirit and procedures of the information policy. Also, attempts to hold staff accountable for their compliance will be undermined in the absence of mandatory training.

We would like to thank the EBRD for this opportunity to comment on the Policy and we look forward to seeing how the various comments received will influence the final outcome.

Sincerely,

Lisa Jordan
Executive Director
Bank Information Center