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Justice bleak for complainants with compromised mechanisms in development banks

Updated: Jan 12, 2019

Manila –For many communities facing uncertainty and harm caused by investments of development financial institutions (DFIs) including displacements, loss of livelihood, loss of social and cultural lifeways, harassment, intentional misinformation and degradation of the environment –- accountability mechanisms (AMs) provide hope for powerless communities seeking information, dialogue, redress, compensation and project cancellation especially when local authorities and private developer fail to respond.

International norms guide the formulation of AM policies that influence its decisions – but that is not always the case. Deriving a satisfying outcome from a complaint process is filled with complex challenges including compromised independence of AMs to management, high eligibility criteria for complaints, lack of information on development projects, weak linkages of independent CSO watchdogs to affected communities, among others. For many documented cases, engaging these AMs is never a walk in the cloud for affected communities and watchdogs despite the existence of MDB policies on safeguards, public disclosure, and transparency. The underlying reason for the conduct of the 13thAnnual Meeting of the Independent Accountability Mechanisms with Civil Society Organizations is to understand the problems in engaging the AMs of DFIs. Representatives and top leaders of around national and international DFIs participated in the event. The Asian Development Bank (ADB) known to be one of the leading DFI in Asia have been under fire for several years regarding how they take on responsibilities of the projects that they are financing using public money but recent cases showed a dissonance between its policies and actual implementation of AM recommendations to make projects comply with DFIs own social and environmental safeguard policies. In a welcome speech, ADB President Takehiko Nakao emphasized the effectiveness of the AM, citing specifically the successful response to the complaint of project-affected communities in the Cambodian Railway Rehabilitation Project. Sim Pov, a public school teacher forcibly displaced from the said project claimed differently. He narrated that it has been 10 years and there are still families who have not been relocated. There is still no potable water in some relocation sites, no source of livelihood, and no available public transport. Poipet, a relocation site a few meters away from the dumpsite and families are neck deep in debt. The teacher, himself, was resettled in Battambang, one of the five uninhabitable resettlement sites. Pov also said that there are still families who have not been paid in full. Land titles in the resettlement sites promised to them some 5-7 years ago have not yet been handed to them which makes them feel insecure about their land rights should another ‘development’ project need their land. ‘Why is ADB making these policies when they themselves cannot follow them?’ and added, “The ADB’s Mechanism gave us hope. We engaged again and again, but nothing happened”. Pov ended his statement by saying that the affected families from Cambodia is disappointed and has a big cynicism towards ADB. Anirudha Nagar from Accountability Counsel said ‘everything looks on good on paper, but in reality, it is another story’ referring to the experience of the Sindhuli Community of Nepal on how the World Bank misled them to implement an energy project, much like what had happened to Cambodia. An ADB official recognizes the truthfulness of what Mr. Pov’s statement and said that ‘the right people to address the problems are the ADB Board’. He then asked how can the NGO’s target and influence the board. As the session ended, Rayyan Hassan, Executive Director of NGO Forum on ADB said that ‘the NGO’s cannot do it alone, the international AMs cannot do it alone, the community cannot do it alone. It is an uphill battle that we have to take altogether’. For complainants, earning the stamp of eligibility provides hope that the wheels of justice could work in their favor. A groundbreaking study of AMs by SOMO, CIEL, Both ENDs, IAC, IAP and many other independent watchdogs engaging DFIs with communities worldwide adversely affected by development projects, the attrition rate of filed cases is high. The section on ADB showed that nine complaints filed were deemed ineligible for the AM’s Special Project Facilitator problem-solving function or were otherwise closed without reaching a substantive phase of the complaint process between July 2014 to June 2015. Complaints that have successfully passed the test of eligibility face a variety of hurdles. Complainants are required to first raise their concerns with ADB’s Operations Department before filing a complaint to the Mechanism there appears to be no standardized procedure for receiving and responding to those concerns or similar tracking system. For complaints that have been reviewed due to lack of compliance with ADBs own policies, Management is required to consult with the Compliance Review Panel on remedial actions, however, it is not required to consult with the complainant, “which is a major flaw in the remedial process”, the study reveals. Such is the case of complainants of the Cambodian Railway Rehabilitation project who are still in a bitter battle with Management due to incomplete implementation and unresolved issues despite glaring CRP findings and recommendations in favor of the complainants. One of the recommendations of the study is to lift the privilege of immunity given to DFIs that enables them to act with impunity.


Written by Jen Derillo. Jen is NGO Forum on ADB's Program Coordinator for Communications.


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