Calling for urgent ADB accountability reforms to end exclusion, ensure independence, and deliver justice
- NGO Forum on ADB
- Jul 3
- 13 min read
The ADB Accountability Mechanism (AM) remains fundamentally broken. It prioritizes institutional protection over justice for communities devastated by ADB-financed projects. The persistent failure to deliver remedy, the embedded conflicts of interest, and the procedural barriers erected against affected people are a stain on the ADB’s commitment to poverty reduction and sustainable development.
This submission, informed by decades of frontline evidence documented by the NGO Forum on ADB, demands immediate and radical reforms
ABOLISH the "Good Faith Efforts" requirement for complaint filing;
RESTRUCTURE for GENUINE INDEPENDENCE by merging Dispute Resolution (DR) and Compliance Review (CRP) under a single, truly independent Compliance Review function, EXCLUDING Directors from countries under investigation from BCRC participation;
EMPOWER the Mechanism to SELF-INITIATE investigations;
INSTITUTE BINDING Remedial Action Plans ( RAPs) with independent monitoring; and
ENSURE EQUITY in investigations through bonding requirements, fair process control, and equal complainant voice.
Failure to implement these reforms confirms the AM as a sham and the ADB as unaccountable.
Introduction
The ADB trumpets its AM as a beacon of good governance. Communities living with the wreckage of ADB projects – forced displacement, poisoned rivers, lost livelihoods, shattered cultural heritage – know a different reality. They know a system rigged against them. The AM, as currently constituted, is not a tool for justice; it is an instrument of delay, dilution, and denial. NGO Forum on ADB, through its relentless monitoring and support for affected communities, has documented systemic failures: complaints dismissed on technicalities, investigations compromised by conflicts, recommendations ignored with impunity, and remedy consistently elusive. This paper confronts the core pathologies enabling this injustice and demands non-negotiable reforms.
CRITICAL DEFICIENCIES & MANDATORY REFORMS
1. ABOLISH "Good Faith Efforts"
Problem
The requirement for complainants to demonstrate "good faith efforts" to resolve issues with ADB Management before filing a complaint is an unconscionable barrier. It ignores power imbalances, risks retaliation against vulnerable communities, assumes Management acts in good faith (often demonstrably false), and allows Management to run out the clock or offer meaningless dialogue while harms escalate. It effectively empowers the accused (Management) to gatekeep access to accountability.
Our Demand
IMMEDIATELY REMOVE the "good faith efforts" requirement from the AM Policy. Access to the Mechanism must be based solely on the complaint meeting basic eligibility criteria (project linkage, harm, ADB non-compliance prima facie). Communities must have unimpeded access to seek recourse when their rights are violated and ADB policies are breached.
Kiratpur-Nerchowk Four Lane Road Project, Himachal Pradesh, India
In July 2019, the NGO Forum on ADB and Building and Wood Workers' International (BWI) Asia and Pacific filed a complaint with the CRP for a compliance review of the ADB-funded Kiratpur-Nerchowk Four Lane Road Project. The Himachal Pradesh Building and Road Construction Workers Union had been actively pursuing justice for workers on the site who were owed several months in back wages by the sub-contracted company, Infrastructure Leasing & Financial Services (IL&FS). IL&FS was declared financially insolvent and bankrupt during the project period.
Direct social harms included:
The union had consistently worked to exhaust all domestic remedies, with no success, up until early 2018. From August 2018 to March 2019, BWI actively engaged with the ADB to resolve the issues. In the complaint filed with the CRP, BWI and the NGO Forum detailed all prior efforts to solve the problems and issues with the ADB operations department, including the Resident Mission concerned. These prior efforts included:
Accompanying documentation for the issues and prior efforts were submitted as annexures along with the complaint filed with the CRP.
However, the CRP deemed the complaint ineligible as the time period for filing the complaint had lapsed three months prior to its submission.
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2. RESTRUCTURE for GENUINE INDEPENDENCE
The Problem
Diluted Independence: The separation of DR and CRP is artificial and detrimental. DR, housed within Operations, is inherently conflicted. Its mandate to "resolve" disputes often means pressuring communities into accepting inadequate settlements to avoid a compliance finding. It lacks true independence and undermines the pursuit of accountability.
BCRC Captivity: The Board Compliance Review Committee (BCRC), tasked with overseeing CRP investigations and approving reports/recommendations, is fatally compromised by the presence of Executive Directors (EDs) whose own countries are under investigation. This is a blatant conflict of interest that politicizes the process and erodes confidence in impartiality. EDs representing borrowing countries under scrutiny cannot objectively judge findings against their own governments or the ADB's role.
Our Demands
ABOLISH the standalone DR function. Integrate its potential (but only where genuinely appropriate and requested by complainants) into a single, robust, and TRULY INDEPENDENT CRP. This unified function must be structurally and financially independent from ADB Management and report directly to the ADB Board through an independent oversight body. Its primary mandate must be investigating compliance and securing remedy, not brokering compromises that shield the Bank.
EXCLUDE Executive Directors representing borrowing countries UNDER INVESTIGATION in a specific complaint from ANY participation in the BCRC deliberations and decisions related to THAT complaint. Their presence is intolerable and destroys any semblance of impartiality. The BCRC composition for each case must be free of such direct conflicts.
3. EMPOWER SELF-INITIATION
The Problem
The Mechanism is entirely reactive, relying solely on affected communities to navigate complex procedures, often under duress. This allows systemic violations, environmental destruction, or human rights abuses occurring across multiple projects, or where communities are too intimidated or incapacitated to file, to escape scrutiny entirely. The AM should proactively safeguard ADB standards.
Our Demand
GRANT the Head of the independent compliance review function the explicit authority to SELF-INITIATE investigations based on credible evidence of serious policy violations, significant environmental/social harm, or systematic failures identified through monitoring, audits, or external reports, even without a formal complaint. This is crucial for addressing widespread issues and protecting those silenced by fear.
4. BINDING RAPs with INDEPENDENT MONITORING
The Problem
The AM's current Achilles' heel is the lack of enforcement. CRP findings and recommendations are often ignored, diluted, or implemented partially and without meaningful consultation. Management and Borrowers face no real consequences for non-compliance with AM recommendations. "Remedy" remains theoretical for countless communities. Monitoring is often left to the very entities responsible for the harm.
Railway Rehabilitation Project, Cambodia
While the ability to make recommendations for remedy and monitor its implementation was a function in the previous Accountability Mechanism Policy, it was removed in the 2012 policy and moved under Management. This poses limitations on what the panel should be able to act upon after taking into account the outcome of its investigation and findings.
In the Railway Rehabilitation Project in Cambodia, the CRP found that the ADB failed to comply with its policies and procedures regarding the resettlement of more than 4,000 families displaced by the project. The policy breaches left a substantial number of affected households worse off and impoverished, the CRP found. The Panel’s report followed a 17-month investigation into allegations of gross negligence by ADB made in a complaint filed on behalf of affected families by Inclusive Development International (IDI) and Equitable Cambodia. On January 31, 2014, ADB’s Board of Directors approved the Panel’s findings and recommendations. The Panel found that families affected by the Railway project “suffered loss of property, livelihoods, and incomes, and as a result have borne a disproportionate cost and burden of the development efforts funded by ADB.”
Importantly, the CRP report made a number of recommendations for remedy. Following the commencement of this corrective action plan, the CRP conducted an annual review to assess the implementation status of each recommendation. Unfortunately, despite fulfilling many of the requirements set forth in the CRP report, remedial actions still fell short. Had the CRP not played a key role in making recommendations and monitoring, the project-affected communities would have been even worse off had management been in charge of remedy. As Inclusive Development International noted in a report regarding this case, “the CRP’s recommendations, which were informed by its deep and impartial examination of the harms and areas of non-compliance and then approved and made binding by the ADB Board, provided a critical high-level framework for remedial action. Given ADB Management’s extensive denial and pushback on the CRP’s findings (as demonstrated in its Management Response to the CRP investigation report), it is clear that Management would have never proposed such robust remedial measures if left to its own devices. This was further apparent in the remedial action plan that Management developed in response to the CRP recommendations, which was developed in close consultation with the Cambodian government, but reflected almost no effort to consult with the Complainants and affected people. The plan that Management produced was therefore inadequate on many different levels. The CRP reviewed the Management’s proposed action plan and provided feedback before it was submitted to the Board for approval. Following the Management’s submission of the action plan to the Board, the CRP sent further comments to the Board Compliance Review Committee, noting, “several aspects of the plan that fell short of the Board-approved recommendations.”
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Our Demands
MANDATE the development of a BINDING RAP for every CRP investigation that finds policy non-compliance causing harm. The RAP must be developed through a process co-designed and agreed upon with the complainants, outlining concrete, time-bound actions to provide full remedy (restoration, compensation, restitution, guarantees of non-repetition).
ESTABLISH INDEPENDENT, THIRD-PARTY MONITORING of RAP implementation, funded by the ADB but reporting directly to the independent Compliance Review function and the complainants. The monitoring body must have full access to information and sites.
INSTITUTE CLEAR CONSEQUENCES for non-implementation: This must include suspension of ADB disbursements to the project or borrower, and potentially cancellation of future financing, until RAP commitments are met.
5. ENSURE EQUITY IN INVESTIGATIONS
The Problem
Investigations are inherently unequal. Borrowers and ADB Management command vast resources; affected communities struggle to participate meaningfully. Imbalances manifest in:
Consultant Hiring: Management/Borrowers hire expensive consultants; communities lack funds for their own technical experts.
Process Control: Management/Borrowers often dictate consultation agendas, venues (frequently intimidating or inaccessible for communities), and timelines.
Decision-Making Weight: Community voices are marginalized in shaping the investigation scope, methodology, and interpretation of findings.
Our Demands
IMPLEMENT BONDING REQUIREMENTS: The AM Policy must require the ADB to establish a dedicated, ring-fenced fund accessible to eligible complainant groups upon registration of a complaint. This fund must provide equal financial resources to those available to Management/Borrowers, enabling communities to hire their own independent technical experts, legal counsel, translators, and logistics support throughout the entire AM process (consultation preparation, review of draft reports, monitoring).
GUARANTEE EQUAL VOICE & PROCESS CONTROL: All key decisions during an investigation must be made through a documented process of meaningful consultation and agreement with the complainants. This includes:
Selection and terms of reference for key consultants (ensuring neutrality).
Location, timing, format, and agenda for all consultations and meetings.
Scope and methodology of the investigation.
Content and conclusions of draft investigation reports.
FORMALIZE THE RIGHT TO REBUTTAL: Complainants must have a formal right, with adequate time and resources, to submit detailed rebuttals to Management/Borrower responses to CRP findings and to draft investigation reports, with these rebuttals fully incorporated into the final record.
THE COST OF INACTION
ADB cannot claim leadership in sustainable development while operating an accountability system designed to fail those it harms. The continued existence of the "good faith efforts" barrier, the embedded conflicts within the BCRC, the powerless DR function, the lack of self-initiation, the toothless recommendations, and the profound inequity in investigative processes are not mere technical flaws; they are evidence of institutional disregard for accountability. Each day these flaws persist is another day communities are denied justice, environmental destruction continues unchecked, and the ADB's credibility erodes.
Tata Mundra Power Project (CGPL) - Illustrating Systemic Failures and Costs
This detailed account of the Tata Mundra project (CGPL) is extremely powerful and provides concrete evidence for multiple points about the failures of the ADB accountability mechanism. This case study is produced by Centre for Financial Accountability (Machimar Adhikaar Sangharsh Sangathan and Joe Athialy)
It demonstrates the pervasive issues within the ADB AM, highlighting not only the lack of genuine remedy and independent oversight but also the astonishing financial costs incurred without meaningful benefit to affected communities.
The Costs We are astonished by the fact that $5 million (2023 prices) was spent on the project since the complaint was filed with CRP until it was closed prematurely in 2018. The expenses listed in Table 21 can be broken down as follows -
Only 1% was allocated for staff salaries, consultancies, and studies (which should have been carried out before the project was approved, and outcomes of these studies were never shared with the complainants), while the affected people received nothing significant. Despite these huge costs, people continue to suffer, and their lives have not improved since they filed the complaint with CRP.
ADB assumed that “The project area is a plain of barren, sandy land with no human settlements and no significant vegetation or wildlife” (Summary Environmental Impact Assessment). It took a CRP complaint for them to recognize that there were people living there and that their livelihood depended on where they lived. Interestingly, the complainants’ expenses mentioned in the table seem to be the tea CRP offered to them during meetings, as no other expenses, including travel, were met by CRP.
The livelihood expenses, even though a paltry amount, never resulted in anything. Facilities like water supply provided by CGPL, which is captured in Table 25 as annual savings of INR 1.89 million, were discontinued by CGPL immediately after the IFC vs Jam judgment was delivered in February 2019. While the report claims INR 1.89 million in savings for 133 families, the fact remains that ADB did not even care to check whether the water supply still continued or not. Today, they are forced to buy drinking water from the market, incurring large amounts of money from their pockets.
Another claim of an ‘all-weather road resulting from the RAP implementation’ is yet again a hollow claim. A couple of monsoons back, the road was heavily damaged and CGPL did not care to repair it, leaving people to navigate through slush and broken roads. Table 23 claims an annual saving of INR 0.98 million. This is another example of ADB either being completely disconnected from the ground realities or willingly being misled by CGPL.
Despite all this, even if we take for granted the expenses incurred for the communities, just the CRP professional fees are nearly 5 times more than what was spent on communities, where benefits to the community were zero. If this is not wasteful and unjustifiable expenditure, we do not know what else is! It looks like complaints to CRP are more to justify salaries than for any remedy for the complainants. Engagement with CRP The analysis states that “…the complainants and the NGO representatives participated actively during the 3-year RAP implementation period.” (Page 29). It would be good to recall the response of complainants to the RAP. They said, “From a position of self-sufficient communities we are made to seek charity from the company and ADB now. Our dignity is ripped off. Whatever is prepared in the name of an Action Plan is insult to injury. We do not have any option but to reject this Action Plan. Unless we see an action plan which addresses the fundamental findings of CRP, where we are a part of the planning, implementation, and monitoring, we will continue our struggle for justice.”
They urged the ADB to “engage in a process, in consultation with the affected people, to develop an action plan based on the findings of CRP and with a genuine intent to mitigate the impacts resulting from their investment in Tata Mundra project.” The hope that ADB and CRP would engage in a genuine process is what led people to engage with CRP during the process.
Consultations At no stage were the communities consulted – before approving the project, when the action plan was made, on the progress of any compliance by the company, or before closing the case.
They were taken for a ride, while the project was justified under the pretext that it “… will undoubtedly provide significant economic benefits to the state and the country. It will make its best effort to minimize the environmental impacts unavoidably associated with power generation.”
Complaint Closure Despite significant non-compliance reported by CRP, its unilateral decision to close down the project raises many questions. What did CRP achieve after spending 5 years on the case and despite spending $5 million in the process? How did CRP’s process benefit the people? If CRP and ADB are so powerless to make their client insist on compliance, how does it ensure that things will be any different in other and future investments? Why should any community anywhere have confidence in CRP that they will be adequately heard and their complaints satisfactorily addressed?
That the client repaid the loan is a lame excuse to close down the case, for the reason that while the loan was active, there wasn’t anything significant done by CRP to address the issues. Nor in any legal contract can a client escape consequences for what they have done/not done after taking a loan, just because they repaid it.
CRP Process: A Waste of Time for Complainants and Wasteful Expenditure People would not have knocked at the doors of CRP if they had another option. ADB invested in the project without the knowledge or approval of the people. It took many years after the investment for people to even know about it. From a location where there is a history of violence against religious minorities, which discriminates against complainants on the basis of their religion and food habits, they took huge courage to make this complaint, risking reprehension, social, and economic boycott. They put faith in the CRP process. They patiently engaged with the process for 5 long years, only to be told that, despite serious non-compliance, CRP was closing the case and moving on.
This is a joke on the people and natural justice. What ADB and CRP have done in CGPL is a warning to the rest of the communities wherever ADB is investing.
It’s not too late. People are still there, continuing to suffer from the bad decisions of investors like ADB. Nothing stops ADB from reopening the case once again and ensuring that the people are adequately remedied. |
RECOMMENDATIONS
Forum network and allies demand the ADB Board of Directors and Management take the following immediate and concrete actions –
Amend the accountability mechanism policy within the next 6 months to ELIMINATE the "good faith efforts" requirement for complaint eligibility.
Restructure the AM by bringing the OSPF under the purview of a single, truly independent CRP, ensuring both problem-solving and compliance review functions are fully independent and report directly to the Board through an independent oversight body.
Amend the BCRC Charter to FORMALLY EXCLUDE Executive Directors representing borrowing countries UNDER INVESTIGATION in a specific complaint from all BCRC discussions, deliberations, and voting related to that complaint.
Grant the Head of the independent CRP function the explicit authority to SELF-INITIATE investigations based on credible evidence of serious policy violations or harm.
Institutionalize the development of BINDING RAPs co-designed and agreed with complainants for every non-compliance finding, backed by INDEPENDENT THIRD-PARTY MONITORING with clear consequences (including financial suspension) for non-implementation.
Establish a COMPLAINANT SUPPORT FUND with bonding requirements to provide equal financial resources to complainants for hiring experts and legal counsel throughout the AM process.
Enshrine in policy the REQUIREMENT FOR JOINT AGREEMENT with complainants on consultant selection, consultation venues/agendas, investigation scope/methodology, and the right to formal rebuttal.
NGO Forum on ADB, alongside communities across Asia and the Pacific, has borne witness to the human and environmental costs of the ADB's failed accountability for too long. We reject cosmetic tweaks and empty assurances. The reforms demanded here are not optional; they are the absolute minimum necessary for the ADB accountability mechanism to begin to fulfill its intended purpose.
The ball is in your court, ADB Board and Management. Implement these demands substantively and urgently, or admit publicly that the ADB prioritizes its own convenience and the interests of powerful borrowers over the rights, dignity, and environment of the people it claims to serve. Continued resistance to these fundamental reforms will only solidify our conclusion: the ADB accountability mechanism is beyond salvage and must be abandoned in favor of truly independent, external arbitration.
The time for justice is now.
Rayyan Hassan
Executive Director
NGO Forum on ADB
