The process of the World Bank reforming the Inspection Panel (IPN) to adapt it to the changing environment, the newly adopted Environmental and Social Framework (ESF) started in 2017 but, the changes that they have recommended so far are inadequate and far from strengthening the IP or the communities.   

Foremost among the concern is the minimum consultation with the CSOs and communities in making these recommendations. By not taking adequate steps to include affected communities in the consultation process, for whom the IPN is established, the process lost an opportunity to make it an inclusive and genuine process. 

We welcome the recommendation to extend the time limit for bringing complaints to the IPN.  

In response to an external review, the IP-tool-kit encompasses seven areas of reform of which the creation of a new dispute settlement procedure is the most concerning. This process started with specific reforms and ended up with a whole new structure on which the civil society was not consulted at all.

The formation of the new World Bank Accountability Mechanism, with both IPN and the Dispute Resolution Service (DRS) being housed under it have raised serious concerns regarding the independence of the IPN. The new “Accountability Mechanism Secretary” (AM Secretary) who will be appointed by and report directly to the Bank’s Executive Directors would be responsible for planning and overseeing the processes of the Accountability Mechanism. The independence of the Inspection Panelmust in no way be weakened by the design of the position of the new AM Secretary. The processes and decision-making powers of the Inspection Panel must not be restricted, slowed down or in any way impeded by the mandate of the AM Secretary.  

The objective of the reform process should be to strengthen communities to hold institutions accountable. Any provisions that dilute the powers of the IP will leave these processes meaningless. 

In September 2018, Indian Civil Society groups had made a submission to the Inspection Panel Working Group regarding the changes that are required in policies to strengthen this institution. Is unfortunate that we don’t see any of those recommendations reflect in the ‘toolkit’. We want to reiterate that IPN should have recommendatory powers beyond its role of reporting violations of World Bank policies in a project. IPN should have powers to recommend a moratorium on work until such compliances are ensured. 

Affected communities need to be at the core of the IPN process. They should have access to all studies/documents emerging out of the IPN process, and they should be part of an independent monitoring team to monitor the progress of implementation of Action Plans. IPN should have powers not only to report the violations but also to fix responsibility on erring Bank officials.

Also, another critical recommendation from civil society was that the IPN should have suo moto powers to investigate problem projects. The onus of identifying Bank’s lending to a particular project, understanding the Bank Safeguard Policies, knowing about the existence of IPN and developing a complaint in a manner acceptable to IPN is on affected communities. This structure disempowers the communities for they are never consulted in advance with full disclosure of impacts, lenders and of compensation/rehabilitation for their losses in most of the projects. Hence in projects, IPN has knowledge about severe consequences, it should have powers to take suo moto investigation as well as actions. Particularly in cases of Category A projects, that have potential high risks, the IPN should proactively lookout for the involvement of the potentially affected communities and facilitate their observations/complaints.

Another critical area of concern is the process of dispute resolution /GRS which inherently disempowers communities. This process just adds layers of complexity in the process of accountability. The fact that “No further compliance investigation in case if an agreement is reached” is problematic. ‘Settling’ a dispute between a company and community does not entail correcting the non-compliance of policies. Investigation of non-compliance is to fix non-compliance. One process should not nullify the other. 

Monitoring of Dispute Resolution agreements should not rest with the management. For the IPN, it should be their discretion on how to trigger and carry out verification. It is usually a prerogative of the accountability mechanisms to have the authority to define and tailor the scope of its confirmation. In cases of failure by the Bank/project proponent to implement in a timely manner, AM should have powers to take punitive and exemplary action against them. 

It would be unfortunate if, after 25 years of its existence when the IPN decided to undergo reforms, the Bank chose to make the process opaque with minimum scope for community and CSO engagement. The fact that civil society is expected to engage on this without even seeing the documents talks about the seriousness that has been given to a consultative process. It is essential that a draft of the resolution is shared with the civil society for feedback before it is approved by the Board. It is important for the new mechanism to keep the communities at the centre of the process and ensure the independence of the IPN and above all, provide communities with a genuine and strengthened accountability mechanism.  

~ Centre For Financial Accountability 
July 30, 2020