A recent article on the much-acclaimed accountability mechanism of World Bank, the Inspection Panel (IP), indicates that all is not well with it and it could get its wings clipped. The discussion on the review of the Panel happened at the Bank’s Spring Annual meetings in Washington during the second week of October this year.

Accordingly, the Board promptly instituted a review of Panel by the Committee on Development Effectiveness to “ascertain the boundaries of the Inspection Panel,” identify potential “accountability gaps,” and also address specific questions around the panel’s mandate, eligibility criteria, and other issues.” The news report further mentions that the review will provide guidance on whether or not panel members should play a role in monitoring, and evaluate whether bank staff are in fact implementing the management plan, which some say would create a conflict of interests.

The World Bank’s Inspection Panel was the first accountability mechanism (1993) of its kind for the development finance institutions, which was established as a result of people’s struggles against the Sardar Sarovar Dam Project on river Narmada. The tenacious campaign around this project led to the formation of the Morse Commission, which strongly criticized the World Bank’s performance in the areas of environment and resettlement of people displaced by the construction of energy projects. Over the years, the Panel has played a major role in trying to adhere to accountability at the Bank and attempting to secure redress of grievances in some cases. Though established as an independent mechanism from the Bank management, the Panel reports the eligibility of the complaint to the Board of Directors of the Bank and do not possess strong recommendatory powers.

It would be interesting to link this with a couple of recent developments which took place after the Panel’s visit to India during mid-September this year, following the registration of a complaint filed by farmers from Andhra Pradesh, stating their grievances in the development of the Bank funded Amaravati Capital City Project. This project had garnered much attention in the country owing to the massive land acquisition and ‘voluntary land pooling’. The farmers alleged harm to their livelihoods, environment, and food security, along with lack of consultation and participation of affected people. Media reports from Andhra Pradesh narrated various versions of the Panel’s visits.

Soon after, in the first week of October, the Bank’s website published the Inspection Panel’s report — which was taken down within few days — with recommendations for investigation into the grievances of the complainants against forced land pooling, coercion and intimidation, lack of sufficient public consultations, grave threat to food security and loss of fertile floodplains to establish Amaravati. The Panel concluded that there are indeed “issues of potential harm and policy non-compliance.” It further observed that the people “raised issues of a serious character that can only be fully ascertained in the context of an investigation.” The Panel recommended “carrying out an investigation,” which “will primarily focus on the resettlement aspects of the Bank’s proposed project, as well as environmental concerns, and issues related to consultation, participation and disclosure of information as they pertain to the Bank’s financing, policies and procedures.”

The Bank promptly responded by issuing a press statement saying that the Panel’s report was inadvertently published before being reviewed by the Bank’s Board of Executive Directors. All the affected groups, the communities, supportive CSOs and media are now watching Board’s decision closely, which will decide on the further investigation into Bank’s non-compliance with its operating policies. The independence of the Inspection Panel, the commitment of the Board on following its procedures and the influence of the Indian Government will be tested once the Panel’s report is published on the Bank website again.

In October, as part of its ‘Emerging Lessons Series’, the Inspection Panel published its fourth report on the public consultation, participation, and disclosure of information. 106 out of the total 120 cases received by the Panel were interconnected issues on the public participation, and 30 out of 34 cases investigated by the Panel involved this area specifically. Emerging lessons series is an attempt to examine few crucial cases to highlight the lessons, which could guide Bank for the better engagement with the communities. Towards this end, the Panel previously published documents on involuntary resettlement, indigenous peoples, and environmental assessment.

Especially, now that the international climate is conducive for development banks and lenders to thrust funds in the guise of mega infrastructure financing, it is likely that the Bank would witness a large number of objections as well since it involves significant displacement of land, loss of natural resources and livelihoods. Disregard of national and state laws, violation of environmental and social safeguards and hiding of critical information to affected communities will still continue. Earlier this year, there were calls by the CSOs for greater ‘independence’ and ‘legitimacy’ of the Panel by including external stakeholders in its Panel, which could be from the academia or CSOs. Not to deviate from the point of attention here, the development banks harp regularly about strengthening their accountability, but their actions seem to weaken their mandate by limiting the role of their complaint handling mechanisms. This, in turn, reflects their undermining of the systems and responsibilities they uphold. Similarly, vested interests of the Panel should also be perceived against the backdrop of the Bank pursuing massive private capital for public ends.

While the Bank is now considering revising the directives of its accountability mechanism, the affected communities, the CSOs and the rest of the developing world would keenly call forth to bolster the mandate of the Panel and not to weaken it. It would be interesting to wait and watch until next year.

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