Independent Accountability Mechanisms (IAM)
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  • Date submitted: 1 Nov 2011
  • Stakeholder type: Major Group
  • Name: Independent Accountability Mechanisms (IAM)
  • Submission Document: Download
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Citizen-driven Accountability for Sustainable Development:

Giving Affected People a Greater Voice?20 Years After

A Contribution by the Independent Accountability Mechanisms to UNCSD 2012

In the twenty years since the 1992 Earth Summit in Rio de Janeiro, a new set of Independent Accountability Mechanisms (IAMs) has been established as part of the governance structures of International Financial Institutions (IFIs), in response to increased public demand for greater accountability and transparency. The IAMs were founded with similar mandates?to provide recourse for citizens adversely affected by projects funded by the IFIs when relevant social and environmental safeguards are perceived to have failed ? and have formed an IAM network that regularly interacts to exchange knowledge and experience. This contribution was prepared on behalf of the IAM network by a sub-group of members tasked with helping prepare for UNCSD 2012, and which included the World Bank Inspection Panel; Compliance Advisor/Ombudsman (CAO) for the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA); the Inter-American Development Bank (IDB) Independent Consultation and Investigation Mechanism; and the European Investment Bank -- Complaints Mechanism.

Core Messages for the Outcome Document

Twenty years of experience of independent accountability mechanisms at International Financial Institutions have shown that ?citizen-driven accountability? works, and is critical for an effective institutional framework for sustainable development. These accountability mechanisms have pioneered a new means to give greater voice to citizens affected by IFI-financed projects, in support of better outcomes for people, for the environment, for development and for the institutions involved. The work of these accountability mechanisms provides an important example of ways to strengthen the effective implementation of sustainable development going forward.

EXECUTIVE SUMMARY

The first major step in the development of the independent accountability mechanisms occurred in 1993, in the wake of the Earth Summit in Rio de Janeiro and in response to widespread concerns voiced by civil society about the social and environmental impacts of projects financed by the World Bank. As a result, the World Bank?s Board of Executive Directors established an independent mechanism, the Inspection Panel, with a mandate to receive and investigate complaints from people about social and environmental harm linked to Bank-financed operations. This pioneering approach of ?citizen-driven accountability? provides a direct channel for citizens affected by projects to voice their concerns at the highest levels of decision making. Since then, all the major IFIs around the world have established their own independent accountability mechanisms (IAM), each based on a simple premise: giving affected citizens a greater voice in international development decisions that affect their lives.

Twenty years on, these mechanisms constitute an effective architecture to promote accountability, participation, and sustainability in the work of International Financial Institutions (IFIs). Through their work to address concerns of affected communities in diverse regions, sectors and environments, the IAMs have developed a solid body of findings related to IFI-financed projects. This collective experience provides a unique contribution to the discussion about the challenges of sustainable development and poverty reduction at UNCSD 2012, as well as lessons on how to strengthen accountability for sustainable development going forward, which the IAM network proposes to share with the international community.

Brief History

In June 1992, the international community gathered at the United Nations conference on Environment and Development in Rio de Janeiro to chart a new cooperative approach addressing interrelated issues of socio-economic development and environmental protection. Among other things, the Rio Summit contained strong calls for expanded participation of civil society and the public, in particular for strengthening the role of major groups such as indigenous peoples, nongovernmental organisations (NGOs), workers, farmers, trade unions, women, and youth in development. These and other actions reflected an evolution in the international community towards a more inclusive approach, whereby affected citizens were given the opportunity to participate as actors and decision makers in their own development.

One of the flashpoints leading up to the Summit involved the activities of international financial institutions (IFIs), in particular, the World Bank. In those years, there was growing international concern about negative social and environmental impacts of World Bank-financed projects. A core concern was that the Bank was not respecting its own policies, designed precisely to avoid such impacts and thereby promote sustainable development and outcomes. There was also widespread concern about lack of transparency in the decision-making processes. Some projects were seen as ?development disasters?, and affected communities felt voiceless in response.

It was within this context, and the new paradigm set by the Summit, that civil society, donors and some governments began to call for greater accountability, participation, and transparency in the operations of IFIs, initially, at the World Bank. As a result of remarkable efforts by civil society, governments and members of the Bank?s Board of Executive Directors, the Board established the independent Inspection Panel in 1993. It was given the authority by the Board to respond directly to the complaints of affected people and investigate whether operations supported by the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) (two institutions of the World Bank Group) were in compliance with World Bank policies and procedures, and related issues of harm.

This new bottom-up, citizen-driven accountability at the World Bank was a pioneering step not only among IFIs, but in international law generally. The Panel was the first such mechanism established by an IFI providing a direct channel for citizens affected by projects to voice their concerns at the highest levels of decision making. This innovation was followed in 1999 with the Board of Executive Directors? creation of the Office of the Compliance Advisor/Ombudsman (CAO), an independent mechanism providing dispute resolution and compliance oversight to citizens affected by the Bank?s private sector operations financed by two other institutions of the World Bank Group, the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA).

In the intervening years, the IFIs, as well as some bilateral agencies, have followed this lead by establishing their own accountability mechanisms to address citizens? concerns about social and environmental project impacts?including the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank , and the Inter-American Development Bank.

Over the years, these independent mechanisms have already gone through a round of reforms, as well as consultation procedures with civil society, and have become a central part of the governance structures and the institutional frameworks of the IFIs. In this sense, these IAMs are ?children? of Rio, and reflect some 20 years of operational experience in giving life to its core principles of participation and sustainability. Their objective is to promote greater accountability and sustainability in IFI operations and thus better outcomes for people and the environment.

The Architecture for Citizen-driven Accountability

While the structure and functions of the accountability mechanisms vary from one institution to another, they operate on the basis of several core principles which together form a common platform. These shared principles include independence, impartiality, transparency, and integrity, in addition to ensuring maximum accessibility and responsiveness to people affected by IFI-financed operations.

Typically, the mechanisms are modelled around two complementary functions in responding to complaints from affected people: a ?consultation? or ?early problem solving? function; and a ?compliance review? function. In addition, each of the mechanisms has a budget and capacity to carry out independent fact-finding to investigate whether the IFI management has complied or not with applicable operational policies and procedures, including policies designed to avoid or minimize harm to people or the environment. In this way, these mechanisms constitute important international fact-finding bodies charged with looking into key issues of compliance, harm and sustainability in the operations of IFIs. On the basis of their fact-finding, the mechanisms develop independent reports to the highest levels of decision making at their institutions, which include their findings in response to the claims from affected communities, and the institutions have a responsibility to take action to address findings of non-compliance and harm.

As the mechanisms have evolved over time, new elements have been included, such as post-investigation monitoring and evaluation of outcomes. The IAMs are currently putting together a comparative analysis of each of the individual mechanisms, which will provide a horizontal view of the IAMs and how they function. It is hoped that this comparative view will be of value in identifying opportunities, challenges and best practices for strengthening systems of accountability at international organizations as part of the forward looking agenda noted below.

Outcomes and Trends in the Work of the IAMs Over 20 Years

The IAMs have made substantial contributions to the evolution of the IFI?s social and environmental performance by pursuing issues of compliance and responsible application of standards. Their work has also created opportunities for the design of development projects to be improved by giving affected communities a voice, and ensuring their concerns are heard and acted upon by IFI management, local and national decision makers, and public and private sector operators. Twenty years of experience among the IAMs has produced a solid body of independent findings spanning multiple regions, development activities, cultures, and environments around the world. This provides a unique glimpse into the practical challenges of sustainable development and poverty reduction from a grassroots perspective.

As a contribution to Rio+20, the IAMs are gathering data from their work to highlight the types of systemic risks, issues, and trends evidenced in complaints from affected communities over the past 20 years. As global development increases so it comes with increased risk, and the work of the IAMs reflects the greater pressures that exist on demand for food, water, land, and energy. These data will highlight the types of social and environmental risks that drive complaints to the IAMs, including competition over natural resources, public and private assets, and the socio-economic concerns which underlie many complaints, as people raise questions about access to project benefits, job creation, and impacts to livelihoods. In addition, through the IAMs, affected communities have sent a clear message about consultation and Information disclosure, project processing and supervision, which points to the importance of good local participation for development projects to be successful.

The Forward Looking Agenda

As the international community looks to the next twenty years, it is likely that governments, donors, and IFIs will still struggle to find the right balance between economic growth, social development, and environmental protection?now being captured under various headings such as ?green economy? or ?green growth?. Following the Rio Summit, new and innovative financial instruments have been created to fund sustainable development involving not only public but also the private sector. The international aid architecture is also evolving towards a model with greater emphasis on country ownership, balanced with results orientation and mutual accountability. The issue of ensuring accountability becomes even more relevant in this context.

The cumulative experience of the accountability mechanisms is a valuable addition to this debate and could contribute to how development actors achieve that balance and help refine the role they play in underpinning sustainable development outcomes.
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