World Bank’s accountability system needs reform: Experts map out how

The World Bank celebrated its 80th anniversary last month, and while much has changed in the past eight decades, one aspect of the institution has remained the same: its resistance to accountability. Past and current World Bank-funded projects have displaced people, destroyed livelihoods, polluted water, damaged biodiversity, and exacerbated sexual exploitation, among other harms. While harm to people and the planet is a well-known consequence of some of its projects, the World Bank does not routinely acknowledge or redress this.

Instead, it is up to brave human rights and environmental defenders to sound the alarm, demand justice, and convince the bank to take accountability. That should not be the norm. And now is an opportunity to finally change course. The World Bank’s board of directors can empower the institution’s accountability mechanism to identify and remedy harms to the environment and human rights.

The World Bank has an institutional channel—albeit a flawed one—to hear from people harmed by its projects, called the Independent Accountability Mechanism. The World Bank’s Inspection Panel was established by its board in 1993 in response to demands for accountability, and it investigates allegations of noncompliance with its own environmental and social policies.

The creation of the panel was a groundbreaking development that other development finance institutions have since adopted. And over the past 31 years, the panel has published multiple research reports that have confirmed the concerns expressed by communities worldwide.

Despite the successes and incremental changes made to the panel over the years, including the creation of a mediated dispute resolution process for affected communities and implementing agencies, the World Bank’s accountability mechanism has never been given the mandate to hold the organization fully accountable for the impacts of its projects or to provide solutions to address harm. Its mandate lags woefully behind that of other development finance institutions. This should be a matter of shame for the Bank, because it means that the organization knows there are better ways to ensure that projects do not harm the environment or violate human rights, yet is unwilling to take action.

The ways in which the World Bank has hampered its own accountability mechanism are numerous: the panel requires approval from the board of directors before it can launch an investigation, communities bringing cases are not allowed to choose their own lawyer, communities must consider engaging with the Dispute Resolution Service before launching an investigation, and the panel cannot even recommend corrective actions or monitor how the bank responds to the investigation’s findings, to name a few.

The shortcomings of the World Bank’s accountability mechanism are not theoretical. They limit communities’ access to justice and undermine the bank’s credibility. For example, the panel failed to monitor the bank’s actions after an investigation confirmed damage caused by an energy project in Nepal. The bank’s management failed to misrepresent the extent of community consent to the ongoing construction of the project and the nature of the government’s intimidation and violence against communities.

We demand that this changes now. The World Bank’s accountability mechanism must be best-in-class and truly have the mandate to support the bank’s ambitions to become bigger and better.

Last month, a team of experts published a draft report and recommendations for the World Bank’s Board of Directors based on an evaluation of the effectiveness of the Bank’s accountability mechanism and sought public feedback. The terms of that evaluation were limited and imperfect, but the report recommends several important improvements to the World Bank’s accountability mechanism. Civil society organizations provided detailed feedback based on our experience advocating alongside local communities demanding justice. Several important improvements are needed to make the World Bank’s accountability infrastructure truly effective.

The structure of the accountability process must promote fairness. The structure of the accountability mechanism hampers its effectiveness and is confusing for affected communities trying to understand what to expect from the case process. As discussed in the assessment report, a short-term solution is to separate the Inspection Panel from the Dispute Resolution Service and ensure that both are properly resourced to do their work.

The full accountability process must be accessible to affected communities. Barriers to access to the accountability process should be removed, including prohibitions on individuals filing complaints and restrictions on communities’ choice of representation. Importantly, communities should have the opportunity to choose how they want their concerns addressed, whether through a compliance investigation, a dispute resolution process, or both.

Findings indicating non-compliance should always be addressed. The World Bank should be required to repair and remediate any damage associated with any non-compliance the inspection panel finds during an investigation. To facilitate this, the panel should be empowered to recommend ways in which the bank can correct its course. And the panel should always monitor the implementation of the bank’s remedial measures to ensure that they are actually carried out.

The outcomes of the accountability mechanism’s dispute settlement procedures should be published and monitored in a transparent manner. Reaching an agreement to address community grievances is only one step in ensuring fairness. Given the large power imbalance between the parties, the bank’s borrowers can all too easily back out of commitments without transparency and effective oversight of the implementation of the agreement. The accountability mechanism should publish the specific outcomes of the mediation process so that expectations are clear. It should then monitor and publicly report on implementation.

The World Bank knows that its projects cause serious human rights and environmental harm that undermines its mission. It would like to hear about and correct wrongs to ensure that its financing is up to par and that the bank can be trusted by the people it claims to serve. A crucial way to do that is to ensure that the people who suffer have a fair and accessible way to raise concerns and have harm addressed. To make that happen, the World Bank’s review panel and its overarching accountability mechanism must be empowered to truly hold the institution to account. An 80th anniversary seems like a good time to chart a new course of accountability.