5 December 2003
Bank Information Center Update: The Outcome of the Information Disclosure Policy Review
November 4, 2001
This update summarizes recent improvements in World Bank transparency, identifies ongoing contradictions and problems, and indicates opportunities for further action to promote the public's right to know about the projects and policies of the World Bank.
In September 2001, following an extensive review that took more than a year, the World Bank approved a new Information Disclosure Policy. The new Policy, which sets out what the public is, and is not, allowed to know about World Bank operations, is an improvement over the previous policy in a number of important ways. Unfortunately, the new Policy also represents an unwillingness within the Bank to transform its rhetoric on "inclusive decision-making" into concrete policy commitments. Some Bank staff appear genuinely committed to taking a more proactive role in disseminating information within borrowing countries. However, the Bank's Board of Directors, along with some of the more risk averse departments within the Bank, rejected calls for meaningful progress in the release of key documents. The idea that draft documents should be released so that people might more effectively provide input into project preparation was largely rejected. Calls to open the meetings of the Board of Directors so that people might know how they are being represented within the institution were similarly dismissed. In short, the Bank resisted calls to take a conceptual leap forward. Instead, the new Policy continues to focus on providing people with information about decisions that have already been made, rather than giving them the information that they need to participate in decision-making.
Nevertheless, the review of the Bank's Information Disclosure Policy did result in some potentially important progress. It also appears to have generated a momentum both within and outside the Bank that is likely to result in further progress in the near future. Outside the Bank, a diverse collection of civil society organizations (CSOs) came together and demanded more transparency and accountability from the institution. More than 550 organizations from over 100 countries expressed this view in a letter that was presented to the World Bank in April of this year. These organizations spanned the political spectrum and ranged from small agricultural associations, to international environmental networks, to the largest trade union umbrella organization in the world. Despite a range of problems with the consultative process, over 400 people representing some 250 interest groups attended consultations in 19 cities around the world. More than two dozen organizations submitted written comments directly to the Bank and many more expressed their views through their government and their Executive Director within the institution. (1) In the United States, legislators have responded to the growing demand for transparency in international financial institutions by drafting legislation calling for greater disclosure.
Inside the Bank a number of important issues are still being reviewed, such as a translations policy and procedures for releasing certain documents prior to Board consideration. The ongoing negotiations on the thirteenth replenishment of the Bank's concessional lending arm, the International Development Association (IDA 13), also presents opportunities to make further progress on transparency issues.
Aside from the specific policy changes described below, there are now a number of opportunities to improve the availability of World Bank information in borrowing countries. The new Policy gives borrowing governments a growing amount of discretion in deciding whether or not to disclose certain documents. Organizations can engage their governments to encourage them to use this discretion to promote a higher standard of transparency. The Bank has also decided to launch pilot initiatives where a select number of governments will agree to implement a higher disclosure standard. Specific countries have not yet been chosen, but organizations could speak to their governments about participating in these pilots. Local Bank offices are also being encouraged to improve the quality and quantity of the information that they disseminate.
What follows begins by reviewing the outcome of the Information Disclosure Policy review. More technical information along with explanatory notes can also be found in the corresponding endnotes. At the end of this update there is a list of outstanding issues that are still being debated within the Bank, as well as opportunities for interested organizations to continue to work towards greater transparency.
Additional information can also be found on BIC's website: http://www.bicusa.org/policy/infodisclosure/index.htm
The Outcome of the Policy Review:
The new Information Disclosure Policy is reviewed below under the following headings: Board of Directors; Country Assistance Strategies; Structural and Sectoral Adjustment Lending/Programmatic Lending; Poverty Reduction Strategy Papers (PRSPs) and Poverty Reduction Support Credits (PRSCs); Project/Investment Lending; Environmental and Social Documents; Evaluation Materials; and Policies and Sector Strategy Papers.
Board of Directors:
Under the new Policy the Bank's Board of Directors will continue to govern in almost total secrecy. Meetings of the Board of Directors will not be open to the public, nor to journalists. Transcripts of these meetings will not be disclosed, nor will minutes. For a very limited number of discussions Chairman's Concluding Remarks will now be made available. These are short accounts of a given Board discussion, but they are neither detailed nor will they be available for any discussions pertaining to individual loans. (2)
Under the new Policy the Board will now disclose the Biannual Strategic Overview of the Executive Director's Work Program as well as the Monthly Updates of the Board Schedule. (3) This will provide the public with additional information on when the Board intends to review certain issues and discuss proposed loans.
The Financial Times observed that some Bank Executive Directors had objected to releasing additional information about the Board's activities on the grounds that "this would invite external actors to become involved in the issues discussed by the board." (FT:31/08/01:P4) This unwillingness to subject Board meetings to public oversight will continue to undermine the credibility of the Bank's governance process. The Board has not yet acknowledged that the public has a right to know how they are being represented within the Bank.
Country Assistance Strategies:
The Bank rejected calls to make all draft and final Country Assistance Strategies (CASs) available to the public. The Bank's unwillingness to release draft strategies calls into question its professed commitment to preparing CASs in a "participatory" manner. The Bank also refused to guarantee public access to CASs prepared for middle-income countries. (4) This means that citizens in many places will continue to be denied access to the Bank's basic strategy for their country.
Structural and Sectoral Adjustment Lending/Programmatic Lending:
Structural adjustment programs (adjustment lending) (5) will be more transparent under the new Policy. However, the Bank rejected civil society calls to make all draft and final adjustment-related documents available to the public.
The Board of Directors is divided on the question of transparency in adjustment lending and these divisions are reflected in the unnecessarily complicated agreement that was finally reached. There will now be five key documents related to adjustment lending. (6) However, there will be two separate sets of standards for the disclosure of these documents. One set of standards will be applied to these five documents when they are generated within the context of a Poverty Reduction Support Credit (PRSC). Another set of standards will be applied to these same documents within the context of all other adjustment lending operations. (7)
The policy for the disclosure of documents related to PRSCs is described in the section below. With relation to all other adjustment lending, the new Policy opens up the possibility that four of the five key documents will be disclosed. The disclosure of the Project Information Document (PID) will continue to be mandatory. The disclosure of the Letter of Development Policy, previously confidential, will now also be mandatory. Two other documents, the Program Document and Tranche Release Memoranda, will now be disclosed at the discretion of the borrowing government. Any information that is deemed confidential or sensitive will be removed from these documents and placed in a separate document, called the Memorandum of the President, which will remain secret in all cases (for a short description of these documents see endnote vi). (8)
Under the previous policy, all but one of these five documents were confidential, so there is no doubt that the new Policy does provide for a greater degree of transparency in adjustment lending than had previously been the case. However, many civil society organizations called for the release of draft adjustment lending documents and sought guarantees that final documents would be available in all cases. The new Policy falls far short of this objective. In fact, under the new Policy the Bank has essentially abdicated responsibility for its own transparency by placing the decision of whether or not to disclose documents at the discretion of the borrowing government. (9) Under the new Policy the Bank has clearly chosen to deny the public its right to access key documents regarding adjustment lending.
Poverty Reduction Strategy Papers (PRSPs) and Poverty Reduction Support Credits (PRSCs):
The new disclosure requirements for Poverty Reduction Strategy Papers (PRSPs) are an important step towards more transparent and inclusive decision-making at the Bank. The PRSP must now be disclosed locally before it is considered by the World Bank's Board of Directors. The Bank has argued that this is consistent with the participatory principles upon which the PRSP is supposed to be based. The logic here is that if you want people to participate in decision-making, you have to give them the information that they need before all of the final decisions are made. While this is a laudable step on the part of the Bank, these provisions are unique to the PRSP. Core documents related to other forms of Bank lending are not released until after Board approval, if at all.
Poverty Reduction Support Credits (PRSCs) will set a new standard for the disclosure of adjustment lending documents under the new Policy. Four of the five documents related to PRSCs will now be disclosed. (10) However, any information deemed confidential or sensitive will be communicated to the Board of Directors through a fifth document, known as the Memorandum of the President, which would in all cases be kept secret.
The new Policy for the disclosure of PRSCs will only result in a substantial increase in transparency if the Bank develops strict guidelines limiting the removal of information on the grounds that it is "confidential or sensitive." It remains to be seen whether this will be the case.
The Bank rejected calls to bring the standards for the disclosure of PRSCs in line with those of PRSPs (ie., to release relevant documents prior to Board consideration). The Bank also rejected calls for the disclosure of draft documents related to PRSCs.
In some countries there is the possibility that there will be PRSC adjustment operations and non-PRSC adjustment operations occurring simultaneously. This raises the possibility that there will be two standards for the disclosure of adjustment lending occurring simultaneously in one country.
Project/Investment Lending:
The Bank rejected almost all of civil society's recommendations for the release of additional documents during the preparation and implementation of project or investment loans. (11) Civil society organizations were calling for the release of draft Project Appraisal Documents (PADs), which is the key document outlining a given loan. CSOs argued that this was essential for meaningful participation in project preparation, but the Bank rejected this recommendation. (12) CSOs also called on the Bank to release documents during the actual implementation of projects, but the Bank also refused to take significant measures in this regard. (13)
The gap between Bank rhetoric and reality is particularly acute in regards to project lending. The Bank claims that it is interested in including affected communities and organizations in decision- making, but it refuses to make key documents available until after decisions are made and it refuses to address the fact that the public does not have access to the documents that are generated during project implementation. The release of these documents is admittedly not the only means by which the Bank can promote involvement in the design and implementation of its projects, but the Bank's unwillingness to release this information undermines the credibility of the its commitment to a participatory development model and reduces the development effectiveness of its operations.
Environmental and Social Documents:
There were a number of small improvements in the disclosure of documents related to the environmental and social dimensions of projects, but in at least one important regard the Bank seems to have taken a step backwards in relation to the transparency of environmental documents (14).
The Bank will now release Environmental Assessments for all Category B projects. (15) Separate environmental documents were previously only required for projects with the most severe and irreversible impacts on the environment (known as Category A projects). The release of separate, even if short, Environmental Assessments for Category B projects will provide additional insight into environmental issues associated with a given project. The new Policy will also require the Bank to release separate (or "self-standing") Indigenous Peoples Development Plans and Resettlement Action Plans in projects where these documents are required. These documents had previously often been incorporated into Environmental Impact Assessments (EIAs), which made it difficult to track their availability.
The Bank has explicitly undermined the previous rule of making all Environmental Impact Assessments (EIAs) for Category A projects available to the public at least 120 days prior to project approval. This rule is not explicitly mentioned in the Bank's Environmental Impact Assessment Policy but it is called for under US legislation known as the Pelosi Amendment and it is observed in practice. Unfortunately, the new Policy states that the Bank is not required to release EIAs 120 days prior to project approval in the case of "guarantees" offered by the Bank ("guarantees" are a kind of financing). (16) EIAs for Bank "guarantees" will now be required to be disclosed only 60 days prior to project approval.
Evaluation Material:
The new Policy will result in a major increase in the disclosure of documents related to loan evaluations and other evaluation material. Most significantly, Implementation Completion Reports and Performance Assessment Reports, which are evaluations conducted at the end of a project to assess impact, will now be disclosed. (17)
Policies and Sector Strategy Papers:
Operational Policy Papers and Sector Strategy Papers will now be available while they are still "under preparation." While this was often the case in the past, it was not explicitly required under the previous Policy. The new Policy helps to assure interested organizations that they will have an opportunity to comment on policies and strategies before they are finalized.
Opportunities to Promote Further Transparency:
The statement of the Board of Directors that was issued following the approval of the new Policy notes that there was an "active debate about the next phase of the work on disclosure" and that there is a need for "further work in a number of areas." There are, in fact, opportunities for groups to work at the local, regional and international levels to continue to push for greater transparency. Amongst others, these include:
- The Bank will be conducting "pilot" disclosure programs in an as yet undisclosed number of countries. Under the pilot programs, governments will agree to release a greater amount of information than is foreseen within the new Policy. Interested organizations could approach their governments to encourage them to become a pilot country. Organizations from pilot countries can also play an important role in monitoring the actual implementation of these pilots.
- A Task Force has been created to improve the Bank's information outreach and dissemination strategy in borrowing countries. This presents an opportunity for groups that are interested in improving the availability of World Bank-related information in their country. The Task Force hopes to have a report prepared by mid-February 2002, but work on this issue will be ongoing over the next couple of years.
- As described above, borrowing governments will now be allowed to decide whether or not to disclose certain structural adjustment documents. There is a need to monitor how this discretion is exercised and to encourage governments to release as much information as possible. Organizations in borrowing countries will need to engage their governments in order to encourage them to set high disclosure standards.
- A Task Force has also been created to develop rules regarding the translation of World Bank documents. Since the current Policy does not require any translation, it is assumed that the new rules can only improve existing practice. Interested organizations could engage relevant staff within the Bank on how to approach the question of translations.
- The Bank is now preparing an "Issues Paper" that will address outstanding issues related to transparency. The paper will seek to clarify policy in a number of areas, including: the disparity in disclosure requirements for countries that borrow from IDA rather than IBRD; the development of a redaction policy that would govern the removal of information that is deemed sensitive or confidential (such as adjustment lending documents); the possibility of implementing more or less cost recovery for Bank documents; and how to handle procedures for the release of documents prior to their consideration by the Board (such as the PRSP). Over the next two months the Bank will establish a process for addressing these issues and there may be an opportunity in the months that follow for interested organizations to inform the Bank's work in these areas.
- Management will provide a "progress report" to the Board on the implementation of the new policy in one year (September 2002). This report will be an opportunity to encourage stronger transparency requirements.
- In a number of ways, the new World Bank Information Disclosure Policy is now significantly better than the corresponding policies at other multilateral development banks (such as the Asian Development Bank, the African Development Bank, the European Bank for Reconstruction and Development and the Inter-American Development Bank). Organizations could encourage the regional development banks to bring their policies in line with that of the World Bank. While the World Bank's new Policy is far from satisfactory, there is no reason why regional development banks should maintain lower standards.
- The part of the Bank that lends to the poorest countries, the International Development Association (IDA), is currently asking for more money from donor countries. This is the 13th time that IDA has requested more money, and the process for deciding on this replenishment is known as IDA13. The negotiations surrounding IDA's replenishment are an opportunity to call for greater transparency. The Group of Seven industrialized states (the G7) has expressed its official support for certain additional improvements in the Bank's Disclosure Policy. For instance, it is G7 policy to promote the disclosure of all draft and final country strategies. These seven countries have substantial influence in the IDA13 negotiations and they should be encouraged to require additional transparency as a condition of replenishment.
- The Bank's Information Disclosure Policy claims to be based on the principle of a "presumption of disclosure" in absence of a compelling reason not to disclose. In practice, this is not the case. Instead, the Bank tends to identify a list of documents that will be disclosed and generally applies a presumption against disclosure for all those documents that are not on that list. This problem is partially grounded in the unaccountable nature of the institution (ie., there are no appropriate appeals mechanisms when information requests are denied and citizens have no recourse to legal or democratic processes in relation to the World Bank). This problem is also partially the result of an absence of coherent procedures within the Bank for treating individual information requests. Many CSOs are calling for the creation of an Information Ombudsman that would be responsible for assessing how the Bank is interpreting the "presumption of disclosure" in practice and for reviewing the implementation of the Bank's policy.
Anyone interested in additional information on any of the issues raised above should please contact:
Graham Saul at the Bank Information Center: ; Tel.+1-202-624-0626; Fax +1-202-737-1155.
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Footnotes:
1. The Bank Information Center (BIC) intends to conduct a more thorough assessment of the consultative process, both in terms of the problems encountered and the diverse ways in which organizations and individuals attempted to influence the process.
2. Chairman's Concluding Remarks will be made available for Board discussions related to Country Assistance Strategies, Transitional Support Strategies, Sector Strategy Papers, and "other select policy, strategy and topical issues." However, Chairman's Concluding Remarks for these discussions will not be disclosed if the document under discussion is itself not disclosed or if "the Board decides otherwise."
3. Documents that are themselves strictly confidential will not be listed in the Board schedule.
4. "Middle-income" is intended here to refer to countries that are only eligible to borrow from the International Bank for Reconstruction and Development (IBRD), the less concessional lending arm of the World Bank.
5. Adjustment lending is used here to refer to all sectoral and structural adjustment lending, sometimes also referred to as programmatic lending.
6. Prior to the adoption of the new Policy there were four key documents related to adjustment lending. These included: (i) the Project Information Document (PID) - prepared by the World Bank prior to loan approval, this document provides very basic information about an adjustment loan; (ii) the Letter of Development Policy (LDP) - prepared by the borrowing-country government, this document outlines the policy reforms that the government has agreed to implement as a condition of lending; (iii) the President's Report, also known as the Report and Recommendation of the President - prepared by the World Bank, this document outlines in detail the proposed loan and the policy reforms that the government has agreed to implement as a condition of lending; (iii) the Tranche Release Memorandum (TRM) - prepared by the World Bank during the implementation of the loan, this document reviews the degree to which the government has implemented the agreed policy reforms and makes recommendations on whether sufficient reform has occurred to warrant moving forward with loan disbursal. There was also a fifth document called the Memorandum of the President (MoP), which usually amounted to little more than a short note from the World Bank's President officially requesting that the Bank's Board of Executive Directors approve a given amount of money for a given adjustment loan.
Under the new policy, the President's Report will be replaced by a new document called the Program Document (PD), which will have a function that is identical to that of the previous President's Report. The MoP will take on a new importance in that it will become a kind of depository for all information that is deemed confidential by a borrowing government. The PID, LDP and TRM will remain unchanged.
7. Poverty Reduction Support Credits (PRSCs) are a new kind of adjustment loan that is specifically designed to support the implementation of a Poverty Reduction Strategy (PRS or PRSP) in low-income countries. Countries are required to produce PRSPs in order to gain access to World Bank-related debt cancellation, such as the Heavily Indebted Poor Country (HIPC) initiative. Over time, PRSPs will probably be extended to all low-income countries that borrow from the World Bank (ie., all those that are eligible to borrow from the International Development Association). Since PRSCs are designed to support the implementation of PRSPs, over time the PRSC may become the only form of adjustment lending that the Bank conducts in many countries.
8. Under the new policy, and in reference to adjustment lending documents that are not related to a Poverty Reduction Support Credit (PRSC), the Bank will "presume disclosure by the Government" of the Letter of Development Policy (LDP). However, in the case of Program Documents (PDs), there will be "voluntary disclosure…after Board approval of the operation." Similarly, "voluntary disclosure after tranche approval" will apply to Tranche Release Memoranda (for a short description of these documents see endnote vi).
9. Ironically, the adjustment lending document that now has the strongest "presumption" of disclosure, the Letter of Development Policy (LDP), is a document that is prepared by the borrowing-country government. Other documents that are related to the very same adjustment loan, but are produced by the World Bank itself, such as the Program Document or the Tranche Release Memorandum, are held to a lower standard of transparency. This means that, on the one hand, borrowing governments will now decide whether or not to disclose documents produced by the World Bank and, on the other hand, the World Bank will tell borrowing governments that they must disclose a document (the LDP) that is produced by the borrowing government itself. This arrangement is at once counter-intuitive and consistent with other aspects of the Information Disclosure Policy. Two of the documents with the highest standard of disclosure, Poverty Reduction Strategy Papers and the Environmental Impacts Assessments, are both produced by borrowing governments. It seems that the Bank is more willing to set high standards for the disclosure of documents produced by borrowing governments than it is for its own documents.
10. Project Information Documents will be disclosed as was previously the case, and all but one of the other key documents (including the Letter of Development Policy, the Program Document/previously known as the President's Report, and Tranche Release Memoranda) will now also be disclosed. The Memorandum of the President will not be disclosed.
11. Project or investment lending refers to loans for specific projects such as infrastructure, health or agricultural investments.
12. The new Policy will, however, provide the public with a list of Factual Technical Documents (FTDs). FTDs are documents such as feasibility studies and engineering plans that are prepared in order to inform project design. Under the previous policy these documents were hypothetically available to the public, but the public did not get access to a list of these documents until after the project was approved (ie., until after it was too late to feed into many of the crucial decisions about the design of a given project). Under the new Policy, a list of FTDs will be attached to the Project Information Document (PID), which is supposed to be released well before project approval. Ironically, while this will increase the ability of CSOs to identify the FTDs that are being used in a given project, the new Policy actually restricts the public's right to access these documents. Under the previous policy there was a presumption that FTDs would be released to the public upon request. In practice, however, FTDs were released largely at the discretion of Bank staff. The new Policy removes the rhetorical presumption of disclosure related to FTDs and codifies the fact that their release is largely at the discretion of Bank staff and borrowing governments.
13. The new Policy does have some minor provisions that represent small steps towards addressing the absence of information during project implementation. The Bank agreed to disclose the Annual Status of IBRD/IDA Projects in Execution. As the name implies, however, this document is not "project specific" and will not provide the kind of detail that will be of significant assistance to groups trying to participate in project monitoring. Instead, CSOs recommended that documents such as Mid-Term Reviews and Supervision Reports should be made public. While the Bank has agreed to consider this recommendation within the context of a limited number of "pilot" schemes, it refused to mainstream the measures across the institution.
14. This section refers to documents that must be prepared if certain World Bank policies apply. For instance, if a project is likely to affect indigenous communities, the Bank's Indigenous Peoples Policy requires that a Indigenous Peoples Development Plan be prepared. If a project involves involuntary resettlement, the Bank is required to produce a Resettlement Action Plan.
15. The Bank has a classification system for projects that is supposed to reflect the degree to which a project is likely to have a negative or irreversible impact on the environment. Different degrees of environmental analysis are required depending on the classification. Projects with the most severe and irreversible impacts are classified as Category A projects, and they require a full and often elaborate Environmental Impact Assessment. Projects with potentially significant but not as irreversible impacts, are often classified as Category B projects. There is also a Category C, for projects that are not expected to have significant environmental impacts.
16. "Guarantees" are a particular kind of financial instrument offered by the Bank whereby the Bank essentially insures against the risk that an individual government will not be able to meet its payment obligations to a private sector corporation. For instance, a government might agree to pay a private corporation $100 million per year in exchange for the electricity produced by a private hydropower dam. In order to reduce the risk that the corporation will not receive its money, the Bank may offer a "guarantee" that will cover a portion of the payment to the private corporation if the government finds itself unable or unwilling to pay.
17. "Process Evalu