Catalog

ADB In Action: A Chance to Challenge
ADB's inspection function provides recourse for project beneficiaries; few have ever used it

By Anjum Ibrahim
Secretariat Officer

Zhou was determined to climb to the top of the growing earth mound, one last time. She cried out as she slipped and scraped her knee on a jutting piece of wood. Instinctively she lifted her foot to kick at the offending article and stopped as the village leader’s words clearly came back to her: “You tell us the dam will be good for our crops. You tell us it will provide us with electricity. All we know and care about is we will lose our homes, the only sanctuary we have ever known. The outside world promises us new homes, but we are happy here.” With the bad there is good, she thought. Unconsciously her foot edged toward the wood and she used it to propel herself to the top.

Somvang drank the water from the tap. Idly he looked at Panom’s small thatch-roofed factory. Next year, he thought happily, I will have enough saved as collateral to go to the bank to borrow, too—and become rich just like Panom. He did not notice the factory spewing effluent into the river, the sole water supply for the entire village. Less than 200 meters away, his two-year-old daughter sipped water and vomited.

Zohra listened as they talked of the need to improve the sanitation sys- tem. “How will we pay for it?” she asked hesitantly. “We will subsidize it initially,” they said. “But why lay new pipes?” she persisted. “Because the old ones need to be replaced.” She saw them walk away and was unable to voice her thoughts aloud: We are poor. We do not have money to feed ourselves let alone pay for the new pipes. Why don’t you seek cheaper alternatives?

A Bit of History

These three hypothetical case studies, reflecting actual cases for inspection received by multilateral development banks (MDBs), focus on beneficiaries’ concerns related to involuntary resettlement of indigenous peoples, environmental aspects, and disclosure of information. The last case parallels the only direct request for inspection received by the Asian Development Bank (ADB).

Whether real or imagined, the public’s sentiment of distrust or discontent for publicly funded development projects and services is not a new phenomenon. It was in 1809 that the Swedish Parliament established the office of ombudsman, a gender neutral term, to perhaps indicate that even inherent gender bias would not be allowed to prejudice the workings of the office. Today, 90 or so countries have an ombudsman—all drawing from the Swedish model.

It was only a matter of time before demands for establishing an office of “ombudsman” in MDBs would be raised, funded as they are by monies of member countries, and with each board member answerable to a specific constituency. In 1991, World Bank President Lewis Preston initiated a review, later known as the Wapenhans Report after its author, of that bank’s overall efficiency. The review came to the conclusion that the World Bank was underperforming and referred to the “approval culture,” defined as trying to get as many projects approved as possible, as a prime example. By mid-1992, the Narmada case in India had captured international headlines because of the World Bank’s failure to accurately assess the required numbers to be resettled. The two factors together brought home to the MDBs the need to establish an independent inspection function.

Professor Daniel D. Bradlow of the American University’s Washington College of Law suggested the appointment of an ombudsman at the World Bank while testifying before the Canadian Parliamentary Committee in February 1993 and the American Congressional Committee in March 1993. MDBs became the focus during the early 1990s and promptly began responding to external factors in establishing their inspection functions. Yet, equally, they were responding to the concerns of their own staff members.

The World Bank led the way for the MDBs. It stipulated that only affected groups, associations, and nongovernment organizations (NGOs) could file a complaint, logically restricting the function to cases where the World Bank had not adhered to its own policies and procedures. The inspection mechanisms employed differ across MDBs. The World Bank, for example, established a permanent independent inspection panel, which would first screen the request and then make a recommendation to its Board, which, in turn, would have the authority to decide. The Inter-American Development Bank (IDB) gave its Board the authority to decide if an investigation is warranted, an approach not requiring a permanent panel. A similar approach was adopted by ADB. IDB and ADB also differed from the World Bank in establishing a roster of experts from which an inspection panel could be framed, and allowing the experts to be employed by them after a two-year gap. The World Bank precluded any member of its inspection panel from ever working for it.

What It Means for ADB

“The inspection function is to ADB what specific parliamentary committees are to national governments.”
Bindu Lohani, ADB Secretary

“The inspection function does not imply that ADB has failed, intentionally or otherwise, to follow its policies or procedures,” says ADB Secretary Bindu Lohani. “It does not even imply that internal controls ranging from audit to evaluation to interdepartmental comments prior to Management approval of any project have failed. What must be recognized is that we prepare extremely complex projects in extremely complex economies, and we do take great care in preparing high-quality projects. The inspection function is to ADB what specific parliamentary committees are to national governments. More recently, a specific plan has been developed to strengthen the Inspection Function of ADB.”

Informing the Public

An outreach program to familiarize ADB project beneficiaries with the recourse they have through this function was launched by the Secretary of the Board’s Inspection Committee, Jill Drilon, with the endorsement of the Board, Board’s Inspection Committee, and Management and with the cooperation of ADB’s resident missions. Initiatives include conducting workshops for NGOs, briefing government officials, and translating the policy guidebook into selected local languages.

“To date we have received only two requests for inspection pertaining to the same project, the Korangi Wastewater Management Project in Karachi, Pakistan. We did not entertain these requests because the loan was canceled,” Ms. Drilon explains. “However, two requests were lodged with the World Bank for projects where ADB was a cofinancier, though not the larger one. Our position now is to proactively disseminate information on the inspection function at the grass roots.” Secretary Lohani agrees. “We meticulously adhere to our policies and procedures, which were set with high standards in mind. This does not detract from the need to be careful, and the inspection function provides a forum for affected groups if they can establish that ADB has not adhered to its own high standards.”

As the inspection function is still in its early stages of evolution, it will undoubtedly continue to be the subject of considerable debate in the MDBs—including ADB—for years to come. Of great importance, however, is that less than a decade after its formal inception, the function can boast of stimulating greater in-house attention to policy guidelines on environment, resettlement—involuntary or otherwise—and disclosure of information policy guidelines.

For more information, send an e-mail to jdrilon@adb.org .
Information on upcoming activities related to the inspection function is available at http://www.adb.org/Inspection

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