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Ensuring Accountability
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Accountability refers to the principle that individuals or organizations are responsible for the results of their actions against agreed-upon standards or commitments, and that they are obliged to explain those results to their stakeholders.
In the Asian Development Bank, accountability is used in several different contexts: accountability of the institution toward its shareholders, accountability of executing agencies for the projects financed by ADB, accountability toward project-affected people, and the internal accountability of management and staff members for the responsibilities given to them.
Increasing accountability and transparency in the multilateral development banks (MDBs) can be a slow process, and ADB at times has been criticized for not making sufficient progress. However, ADB is working hard to improve and has taken major steps in recent years. They include a quicker and less cumbersome Accountability Mechanism, a more prominent role for the Integrity Division of the Office of the Auditor General, the reporting of the Operations Evaluation Department directly to the Board of Directors, an ambitious new public communications policy that offers unprecedented access to information, and measures to ensure accountability among staff.
Simply put, “accountability is about results,” says Executive Director Stephen Sedgwick, chairman of the Compliance Review Committee of the ADB Board of Directors. Institutionally and personally, the organization and its staff have a responsibility for ensuring goals are achieved, he says.
ADB Vice President Geert van der Linden, who spearheaded the public communications policy process, shares that view, and adds that there must be regular monitoring of the results being achieved, there must be consequences attached to the nonachievement of results—either as rewards or sanctions—and accountability should be applied to all levels of staff and all organizational units.
The adoption of a managing for development results approach in 2003 is providing the organization with the tools and procedures needed to improve accountability through its emphasis on results within the institution, and in its country and project operations. By transforming the operational culture in ADB, results-based management will boost accountability.
ADB’s two-phase Accountability Mechanism is one manifestation of the changing culture. Launched in 2003, it is a less cumbersome replacement of the old inspection function and makes ADB more responsive to people with complaints about ADB-financed projects.
Critics of the MDBs had argued that MDBs were rarely held accountable for their actions, particularly with respect to the environmental, social, and cultural impacts of their projects. Pressure from governments and civil society led to the creation of independent accountability mechanisms that help ensure MDBs are in compliance with their own policies.
ADB’s mechanism features an innovative consultation phase and a compliance review phase. The consultation function starts when people affected by an ADB-assisted project file a complaint with the Special Project Facilitator (SPF), whose office has received five complaints since it started work in December 2003. Under the former Inspection Function, only two requests for inspection were received in 8 years.
Project-affected people are at the core of the consultation phase. They often belong to the most vulnerable groups and live in remote areas. Reaching out to those people remains a big challenge (see Getting It Right).
The three-person Compliance Review Panel (CRP), meanwhile, determines whether ADB has complied with its operational policies and procedures in designing, processing, or implementing projects. The panel accepts requests for review and decides eligibility. If found eligible, the panel will conduct an investigation of alleged violations and make recommendations to ensure compliance, including possible remedial actions.
In the case of the Southern Transport Development Project in Sri Lanka, for example, the CRP received a request for compliance review in December 2004. It found the project did not comply with several ADB operational policies and procedures, including involuntary resettlement, environmental, and gender considerations.
The Accountability Mechanism, says Mr. Sedgwick, provides “an additional option to assist in circumstances where established procedures have resulted in a dead end.” It is not a substitute for the responsibility of all staff to comply with ADB’s policies and procedures. “It is still too early, however, to judge the new mechanism,” he says. A formal review will be launched in 2007.
 Stephen Sedgwick Executive Director ADB Board of Directors |
" Accountability is about results, and in that sense it is about our day-to-day work. All ADB staff members are responsible for achieving better outcomes and are accountable for their personal actions. To improve accountability in the institution in recent years, ADB has been providing different tools. The accountability mechanism, for example, is one manifestation of the organization’s view of accountability, and a tool for achieving it. The role of the Compliance Review Panel supports the accountability obligations that we all have. It is no substitute, however, for the responsibility everyone has for complying with all of ADB’s policies and for achieving good development outcomes "
Clearly, ADB is accountable for following its own policies, such as its policies on environment, indigenous people, and involuntary resettlement. ADB ensures that its safeguard policies are adhered to through its Chief Compliance Officer in the Regional and Sustainable Development Department.
“Often, this is not a simple call—such as did someone run a red light,” says Arthur Mitchell, ADB General Counsel. Nor does it always involve issues of corruption—any number of factors can be at work when complaints arise, including the design of the project or its implementation.
One job of the Office of the General Counsel is to help in the design and implementation of projects to ensure compliance with ADB policy, and in the event of questions of compliance, the office helps investigate the facts. The office advises the ADB Board of Directors on these issues and also assists the CRP and the SPF in the Accountability Mechanism.
Accountability is critical to what ADB is doing: “If there are irregularities, and we do nothing about them, then we can close the shop,” argues ADB Auditor General Peter Pedersen.
The Office of the Auditor General conducts independent and objective audits of ADB activities to ensure internal controls are effective, and addresses alleged incidents of corruption or fraud in ADB projects or by its staff. It completed 29 audits in 2005, including issues related to financial and administrative operations of resident missions and a representative office, administration of loan and technical assistance projects in two countries, and reallocation of loan proceeds.
 Geert H.P.B. van der Linden ADB Vice President |
Mr. Pedersen acknowledges that the process toward greater accountability among organizations like ADB has been slow. He stresses, however, that accountability has changed for the better compared with several years ago, a process that he says comes down to greater awareness. “Ten years ago, there was little focus on accountability; now conditions are improving in the sense that we have a higher degree of transparency and people are more aware of the fact that there is wrongdoing.” Awareness, says Mr. Pedersen, is one of the pillars upon which accountability will rest in the future.
To that end, the Office of the Auditor General’s Integrity Division has been working hard to promote understanding of ADB’s Anticorruption Policy. The division is the focal point for dealing with alleged incidents of corruption or fraud in ADB projects or by its staff.
Under the policy, the Integrity Division’s mission is to screen allegations and investigate credible complaints; conduct project procurement-related audits to help prevent and detect fraud or corruption; and to collaborate with the Budget, Personnel and Management Systems Department to provide fraud and corruption awareness training for ADB staff (see Combating Corruption). To increase awareness of accountability issues, the Integrity Division publishes annual reports of its activities. In 2005, it opened 102 investigations into allegations of wrongdoing, for a total of 565 investigations since ADB adopted the Anticorruption Policy in 1998. ADB declared 40 firms and 33 individuals ineligible to participate in ADB-financed activities and reprimanded two firms and one individual in 2005. A cumulative total of 146 firms and 148 individuals had been declared ineligible by the end of 2005.
ADB has also taken measures to increase the authority of its Operations Evaluation Department (OED), making it an independent department in January 2004. It now reports to ADB’s Board of Directors through its Development Effectiveness Committee. OED evaluates ADB projects, programs, and technical assistance through performance evaluation reports; the ongoing project portfolio, through its annual report on portfolio performance; broader thematic issues, policies, practices, and procedures through special studies; and the effectiveness of ADB operations at a country level through country assistance and sector assistance program evaluations.
OED is beginning to provide real-time feedback to improve the performance of ongoing operations and the design of new operations. It also reviews and validates about half of the project completion reports prepared by operations departments. OED has moved to greatly increase the strategic relevance of its evaluations.
OED’s more timely and strategic evaluations—and its independence—reflect ADB’s growing commitment to accountability (see Impartial Observer).
ADB took another important step forward in ensuring accountability in 2005 with the approval of its new public communications policy (see Open and Accessible). Replacing two older policies, it heralds an ambitious shift toward sharing knowledge that puts ADB ahead of other international finance institutions. Among its unique features, it will not only react to requests for information, as is common elsewhere, but also proactively make information publicly available by posting it on the web.
It also puts the onus on ADB staff to justify why information cannot be released, rather than on the public.
Overall, the transparent approach under the public communications policy ensures that much more information will be available to the public in the early stages of policies, strategies, and projects.
“By making many more reports publicly available, we enable those outside ADB to hold us accountable for the results we achieve or do not achieve. This applies both to ADB-wide performance as well as to the performance of individual projects. I consider the public communications policy an important step forward in improving the external accountability of ADB,” says Mr. van der Linden.
Greater disclosure of information reinforces another objective of ADB: engaging stakeholders in preparing and implementing ADB-assisted projects, programs, and policies. Well-applied participation has been shown to have a positive impact on poverty reduction by bringing disadvantaged groups into decision making and promoting their involvement in formulating projects.
Involving people in decisions that affect their lives strengthens accountability of governments and institutions like ADB that support the development aims of governments. As stated in ADB’s Governance Policy, “the principle of participation derives from an acceptance that people are at the heart of development. They are not only the ultimate beneficiaries of development, but also the agents of development.”
In April 2006, ADB published a staff Guide to Consultation and Participation to reinforce participation-related guidance in ADB’s operational policies, sector strategies, and other documents.
Internally, ADB’s new Human Resources Strategy is overhauling the way it manages staff, including reorienting its human resources toward “managing for results,” with an eye to improving staff accountability at all levels of the organization. The new performance management system clearly links an individual staff member’s work plan to the organization’s goals and provides a more objective basis for assessing performance.
At the beginning of the year, supervisors and staff members discuss expected work outputs, competencies, and performance indicators and also the learning and development plan, which is designed to help staff members achieve their work plans and for their career development. A key responsibility of supervisors is to provide positive and constructive feedback during the year so that staff members know how they are progressing and also receive required support. It provides mechanisms for rewarding good work, for improving performance, and for terminating staff who consistently fail to meet expected standards within a specific time frame.
The role and responsibility of line managers in the external recruitment of professional staff members have been strengthened through the implementation of the new two-panel selection process-one panel to assess technical expertise and experience, and the other, employment potential. Managers also played a key decision-making role in the recent staff separation program.
The measures ADB has adopted in recent years, says Mr. Sedgwick, are raising the “comfort level” among staff with the importance of public accountability and transparency. “There is a heightened sensitivity to the fact that we have to defend what we are doing in the public domain.”
This edition of ADB Review looks at the issue of accountability, and includes a closer examination of how ADB is improving as well as how other institutions and organizations are making changes.
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