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p. 8 of 16 BACK | NEXT Executive Summary Current ADB Inspection Function Consultations on the Review of the ADB Inspection Function Proposal for a New ADB Accountability Mechanism: A Two-Step Approach of Consultation and Compliance Review Reasons for a New ADB Accountability Mechanism Introduction to the New ADB Accountability Mechanism Specific Issues Related to the New ADB Accountability Mechanism Policy under the New ADB Accountability Mechanism Consultation Phase Compliance Review Phase Resource Implications Status of Operations Manual Updating in the Context of the Inspection Policy Effective Date of the New ADB Accountability Mechanism Transition Arrangements Review of the ADB Accountability Mechanism Recommendation

ADB Accountability Mechanism : Proposal for a New ADB Accountability Mechanism: A Two-Step Approach of Consultation and Compliance Review

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D. Policy under the New ADB Accountability Mechanism

57. The rationale for the establishment of the Inspection Function as provided in the 1995 Board paper continues to apply to the new ADB accountability mechanism, namely, (i) establishment of the mechanism is consistent with ADB's policy of encouraging transparency and accountability in its operations; (ii) establishment of the mechanism complements ADB's policy of allowing greater public access to ADB documents and publications, as well as ADB's increased emphasis on beneficiary participation in the formulation and implementation of projects; (iii) independent investigation of facts underlying the complaint of a group arguably affected by ADB's failure to follow its operational policies and procedures permits a fair hearing of the views of the affected group; (iv) the activities and recommendations of CRP helps to educate the public at large about the variety and complexity of issues involved in development programs in the region; and (v) the existence of CRP fosters greater confidence in, and support for, ADB and its operations.

58. The new ADB accountability mechanism is guided by the following principles in its establishment and operation. The mechanism will (i) enhance ADB's development effectiveness and project quality; (ii) be responsive to the concerns of project-affected people and will be fair to all stakeholders; (iii) reflect the highest professional and technical standards in its staffing and operations; (iv) be as independent and transparent as possible; and (v) be cost-effective, efficient, and complementary to the other supervision, audit, quality control, and evaluation systems already existing at ADB.

59. The new ADB accountability mechanism will apply to private sector operations (loan, guarantee, equity investment to the extent that ADB's operational policies and operational procedures are covered by it, or TA grant).

60. The policy of the consultation phase of the new ADB accountability mechanism is to assist project-affected people with specific problems caused by ADB-assisted projects through a number of informal, consensus-based methods with the consent and participation of all parties concerned, e.g., consultative dialogue, good offices, or mediation. To this end, the consultation phase is designed to deal with complaints from any complainant who (i) is, or is likely to be, directly affected materially and adversely by an ADB-assisted project, irrespective of any allegation of noncompliance by ADB of its operational policies and procedures; and (ii) claims that the direct and material harm is, or will be, the result of an act or omission of ADB in the course of the formulation, processing, or implementation of the ADB-assisted project. Also, the consultation phase will not supplant the existing project administration and problem-solving functions inherent in each OD, which has the initial responsibility for responding to the concerns of affected communities. The SPF will confine his/her role to ADB-related issues on ADB-assisted projects. The SPF will not interfere in the internal matters of any DMC and will not mediate between the complainant and local authorities.

61. The policy of the compliance review phase of the new ADB accountability mechanism is to establish ADB's accountability in its operations by providing a forum in which project-affected people (and in special circumstances, any Board member) can air their complaints against ADB in a fair, objective, and transparent manner by filing requests for compliance review. To this end, the compliance review phase is designed to deal with requests for compliance review from any requester who (i) is, or is likely to be, directly affected materially and adversely by the ADB-assisted project; and (ii) claims that the direct and material harm is, or will be, the result of an act or omission of ADB's alleged failure to follow its operational polices and procedures in the course of the formulation, processing, or implementation of the ADB-assisted project. The compliance review will focus on ADB's conduct in connection with the particular project under compliance review, and the conduct of other parties, including the borrowing country, EA, the borrower, or the PPS, is not the subject of the investigation. The conduct of these other parties will be considered only to the extent directly relevant to an assessment of ADB's compliance with its operational policies and procedures. Since the compliance review is not intended to provide judicial-type remedies, such as injunctions or money damages, CRP's findings and recommendations are not adjudicative.

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