Handling the Symptoms but not the Disease

By Tea Soentoro


What is the incentive for affected people when their case is filed to ADB’s accountability mechanism was one of the significant questions raised during a briefing session on ADB’s accountability mechanism hosted by the Office of Special Project Facilitator (OSPF) and the Office of the Compliance Review Panel (OCRP) for civil society groups on 19 November 2009 at Discovery Suits, Manila. Robert May of OSPF and Bruce Purdue, the Secretary of OCRP, presented ADB’s accountability mechanism.[1] Present in the session were also Rusdian Lubis, Chair of CRP, Tony La Viña, member of CRP, and some other ADB staff. About 15 representatives of Manila-based NGOs, among others Transparency International, Affiliated Network for Social Accountability in East Asia and the Pacific, WWF, PRRM, LRC, PSI and the NGO Forum on ADB attended the session. That question raised after the two hours of discussion might reflect a skepticism to the accountability mechanism, among others, due to the narrow scope of its terms of reference, its difficulties in defining immaterial harms and long-term impacts, its site specific corrective measures without touching the project as a whole, and its incapability to restore lives of uprooted affected people.


As mentioned by Lubis, the briefing session was a part of ADB’s accountability mechanism outreach program to civil society groups. After Manila, another briefing sessions will be held in Jakarta and Sidney (or Melbourne). It seems that those two offices need a pro-active approach because only a small number of cases were filed. This condition can be perceived as ADB is doing the job well. This is a matter of existence too as Purdue said “… and therefore it might downsize the Offices…”


Since the Board approved the new Accountability Mechanism in May 2003 and has taken effect since December of the same year, OSPF received only 24 complaints. Out of which, 15 cases were found not eligible because they were not addressed to the Operation Department before going to accountability mechanism; 8 were eligible and 1 is still under review. Meanwhile, only 3 claims were filed to the OCRP. However, May felt encouraged as many of the 24 complaints were submitted during the past two years. It shows some improvement due to active outreach and also more NGOs are working with affected people, he said.


May’s statement still didn’t answer a question raised about their assessment on why not many cases were brought to the accountability mechanism. It seems that those offices are ignorant to various matters that can be the reasons for this situation: lack of information to affected people about the accountability mechanism. They are not aware that they can file their grievances.


Furthermore, most borrowers are not informed about this mechanism; even ADB’s consultants and staffs of the project. Affected people also fear their oppressive governments that’s why they don’t want to show their disagreement to a project. Lack of confident that the accountability mechanism can solve the problem in favor of the affected people is another reason for this situation.


Though the accountability mechanism handles grievances of affected people due to ADB projects –from infrastructure to co-financing and financial intermediaries– the scope of handling is too narrow because it only looks at direct and material harm caused by a project, and targets cost effective solution. Regarding a question on how to define or quantify material harm related to damage or lost of cultural site, the answer was “…it is the matter of interpretation… the material harm can be defined broadly to include such damage or loss…”


Another question that was not answered was about immaterial harm and long-term impacts from ADB’s Sharia banking project, as an example. The ADB is indirectly promoting the compliance to Sharia law by Muslims.[2] In a country such as Indonesia, Sharia law is a manifestation of the raising Islam fundamentalism that, among others, targets women to forcedly comply with and therefore leads to gender injustices. May said “… I really don’t know how to answer the question, and need to look at the case when it comes to me…” However, Purdue said that he wasn’t sure that ADB is not allowed to involve in project with religious dimension. The ADB is not allowed to intervene in the political affairs of a country, he said, though he was aware that the Sharia issues are becoming a political matter in a country such as Indonesia. Lubis added that the accountability mechanism is not the right venue to address this issue.


The issue on eligibility was raised particularly for projects that have already been closed– after the submission of the Project Completion Report (PCR)–but harm to people is still ongoing, just like in the case of the privatization of the power industry in the Philippines. Though those offices are aware that some projects have longer impacts beyond the submission of the PCR, they have to work within the terms of reference of the accountability mechanism. The role of OSPF is limited to facilitating or mediating only a problem that evolved directly from a project. Purdue said, once the financial stake is out, no more can be done. Therefore, a participant suggested that the scope of the accountability mechanism should be broadened by covering the continuing damage of a project and the scope of damage itself.


Regarding sanctions for non-compliance of a project to a policy of the ADB, they said the ADB is responsible for the project, not for the individual persons. According to Purdue, there are many factors that cause non-compliance. It could be some departments at the ADB or could be the borrowers. So there is no sanction or punishment to individuals. He continued that the significant change is to admit the problem and have the willingness to change the problem to make it more accountable. Furthermore, Purdue said that the CRP cannot cure non-compliances to the policy, but look for solution to correct them. La Viña added that the ADB will act accordingly on the recommendations from OSPF and OCRP to solving a specific problem. Therefore, it should be kept in mind that accountability mechanism is about correction of the problem that has occurred at the project level and there is no mandate to stop the project. Though on the other hand, the ADB cannot prescribe what governments should do. The ADB will not interfere with governments, but only give recommendation because it is a matter of sovereignty of the countries. Reaction to this statement came from a participant who said the sovereignty issue is a false issue. In the contract of the privatization of the power industry with the Philippine government, for example, the ADB required a particular policy reform. This was a clear evidence that ADB had intervened to the government’s sovereignty. A double standard is in practice.


The accountability mechanism has two separate but related phases – the consultation phase under OSPF and Compliance Review Phase under OCRP, according to Purdue. The SPF is for problem solving at the project level, and once the problem is shifted to addressing a policy of the Bank, it is then brought to the CRP as it is about Bank’s compliances with the policies. He emphasized that the CRP is not an appeal panel of the consultation phase if the complainants are not satisfied with the results of the consultation. For example, if complainants go to CRP because the compensation rate is lower as expected, this would be found as not eligible. Complaint process starts at the consultation phase at the SPF to look for solutions first, then it can be continued to be filed to CRP. Not only project affected people, but ADB Board of Directors (BOD) can also file a complaint. However, they can go directly to CRP without going through the process of the SPF.


Furthermore, Purdue explained the institutional arrangement of accountability mechanism: SPF is reporting to the ADB president; meanwhile CRP as an independent panel is reporting to the BOD. The ADB president is the chair of those two entities–the management and the BOD. This explanation invited a response about the president’s conflict of interest. Integrity, independency and output of decisions are questioned due to these dual positions. “The best system cannot help if the people in it are corrupt,” said a participant who is a judge. Purdue responded that this position is as stated on the Bank’s charter and has never been amended, though it can be done. However, he said, there is system of check and balance and more approach to accountability.


Many issues raised during the briefing session are key points for the next review of the accountability mechanism. However, Purdue said that they are yet to determine the date; but for sure, the review will be done next year. The Board will decide on this soon, and the management will do the review. The briefing sessions are the start and ground work for the review.


However, it still remains open whether the review is capable to fill principle gaps as raised during the briefing session and to make the new accountability mechanism more accountable and responsible to project-affected people by restoring their–material and immaterial, direct and indirect, short and longer terms–loss of livelihood and also open for a possibility to review the whole project once it proves harming people. Otherwise, the accountability mechanism will continue to serve its existing purpose, which is an image polishing that the ADB is accountable to people, and furthermore that this financial institution will again miss the point of being accountable and responsible.

Endnote: 1 More information about OCPF at www.adb.org/spf, and OCRP at www.compliance.adb.org 2 Living complies with Sharia law is among others pray 5 times a day, fast during Ramadhan (fasting month), Muslim dress code for women (head cover), zakat (donation) and borrow money from Sharia financial institutions

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