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p. 10 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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F. Compliance Review Phase

1. Basic Features and Appointment

95. ADB will establish CRP consisting of three members, one of whom will be the chair, and OCRP to provide secretariat support. OCRP will have two professional staff members, one of whom will also be the secretary of CRP, and three administrative staff/national officers. CRP may engage technical experts as consultants in accordance with ADB's Guidelines on the Use of Consultants and other arrangements satisfactory to ADB, to assist it in its work, including postcompliance review monitoring.

96. Two panel members will be from regional countries, with at least one from a DMC. The third panel member will be from a nonregional country. The selection criteria for panel members will include (i) the ability to deal thoroughly and fairly with the request brought to them; (ii) integrity and independence from Management; (iii) exposure to developmental issues and living conditions in developing countries; and (iv) knowledge of and experience with the operations of ADB or comparable institutions, and/or private sector experience. The Board will approve the panel members upon the recommendation of the President. Each panel member will have a 5-year, nonrenewable term, except that the first three panel members will be appointed on a staggered basis of 3, 4, and 5 years, respectively.

97. One of the first three panel members will be appointed as the chair of CRP, to work full-time for a minimum of 1 year to organize OCRP, prepare the operating and administrative procedures, participate in public debate on the operating procedures, carry out outreach programs to the public, and facilitate access of the public. The remaining two panel members will be appointed part-time to work only when the workload of CRP requires their time. Directors, alternate directors, directors' advisors, Management and staff, and consultants will be ineligible to serve on CRP until at least 3 years has elapsed from their time of employment. After serving on CRP, former panel members will be barred from employment at ADB. In the performance of their duties, panel members will be entitled to the privileges and immunities accorded under the ADB charter. A panel member may be removed from office for cause only by a majority decision of the Board. A panel member will be disqualified from participation in a compliance review where he/she has a personal interest or has had significant prior involvement.

98. CRP will report directly to the Board on all activities, including postcompliance review monitoring and its outcomes, except on the specific activities provided for in para. 102 below, about which CRP will report to BCRC. CRP will have access to all ADB staff and Management, and all ADB records CRP deems relevant. CRP will adopt operating procedures to provide detail to the operational provisions in this paper. CRP will specify in the operating procedures the procedures to be followed in carrying out the compliance review and in preparing reports. CRP will also adopt administrative procedures to implement its powers and obligations. The administrative procedures will be complementary to the provisions in this paper and to the operating procedures, as well as to any ad hoc procedures adopted by CRP for the conduct of any particular investigation in a request for compliance review pursuant to the operating procedures. In light of experience, CRP will, if it considers necessary, revise the administrative procedures.

2. Functions of the Compliance Review Panel

99. The purpose of CRP is to investigate alleged violations by ADB of its operational policies and procedures in any ADB-assisted project that directly, materially, and adversely affects local people in the course of the formulation, processing, or implementation of the ADB-assisted project. The purpose of the compliance review is to focus on ADB's accountability in determining whether ADB has or has not complied with its operational policies and procedures in connection with the particular project under compliance review, and not to investigate the borrowing country, EA, the borrower, or the PPS. 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. After carrying out a compliance review, CRP will issue to the Board its findings and recommendations, including recommendations, if appropriate, for any remedial changes in the scope or implementation of the project.

100. Specific activities of CRP include the following:

1. receiving and determining the eligibility of requests for compliance review;

2. engaging with all stakeholders, including Management and staff, the requester, the EA/DMC government or the PPS, and the Board member representing the country concerned, in a thorough understanding of the issues during the compliance review;

3. coordinating its activities, to the extent appropriate, with those of the compliance review mechanism of any other cofinancing institution that is conducting a separate compliance review of the same project;

4. conducting thorough and objective reviews of policy compliance;

5. consulting with Management and staff, the requester, the EA/DMC government or the PPS, and the Board member representing the country concerned on its preliminary findings and recommendations;

6. issuing draft reports to Management and requesters that include findings and recommendations on policy compliance;

7. issuing final reports to the Board with its findings and recommendations;

8. monitoring implementation of decisions made by the Board;

9. issuing annual reports that provide advice based on lessons learned from past cases;

10. developing a roster of independent technical experts who can assist CRP in carrying out its work; and

11. liaising with accountability mechanisms at other institutions.

101. OGC through the General Counsel will be responsible for advising OCRP, BCRC, and the Board concerning ADB's legal status, rights, and obligations under the ADB charter and any agreement to which ADB is a party, and on any other matters relating to ADB's rights and obligations with respect to any request for compliance review.

3. Board Compliance Review Committee

102. BIC will be restructured as BCRC to have an oversight function for the following: (i) clear CRP's proposed terms of reference (TOR) and time frame before they are released by CRP, and (ii) review CRP's draft reports on monitoring implementation of any remedial actions approved by the Board as a result of a compliance review before CRP finalizes them. BCRC's function in clearing the proposed TOR and time frame is to ensure that CRP operates within the scope of compliance review. BCRC will review CRP's draft monitoring reports to ensure that CRP has carried out a satisfactory process in monitoring the implementation of any remedial actions approved by the Board following the compliance review. BCRC will consist of the same Board members as BIC, i.e., six Board members, including four regional Board members (at least three of whom must be from borrowing countries) and two nonregional Board members. The replacement and reappointment of BCRC members will be in accordance with the Board's Rules of Procedure. OCRP will provide secretariat support to BCRC. Operating expenses will include costs of administrative support to BCRC. BCRC will adopt operating procedures to provide detail to the operational provisions provided in this paper, including conflict of interest provisions to ensure that BCRC members are not directly involved in CRP's operations.

4. Eligibility

103. Who Can File a Request for Compliance Review. Requests for compliance review may be filed only by (i) any group of two or more people (such as an organization, association, society, or other grouping of individuals) in a borrowing country where an ADB-assisted project is located or in a member country adjacent to the borrowing country; (ii) a local representative of the affected group; (iii) a nonlocal representative, in exceptional cases where local representation cannot be found and CRP agrees; or (iv) any one or more members of the Board of Directors, after raising their concerns first with Management, in special cases involving allegations of serious violations of ADB's operational policies and procedures relating to an ongoing ADB-assisted project that have or are likely to have a direct, material, and adverse effect on a community or other grouping of individuals residing in the country where the project is being implemented or residing in a member country adjacent to the borrowing country.

104. If a request for compliance review is made through a representative, it must clearly identify the people on whose behalf it is made and provide evidence of authority to represent the project-affected people. If a request for compliance review is made by a Board member, it is understood that the compliance review is not intended to affect or limit the existing rights of Board members individually or collectively to request or initiate reviews of ADB policies and procedures.

105. The filing of a request for compliance review will not suspend or otherwise affect the processing of formulation, processing, or implementation of the project unless agreed to by the DMC or PPS concerned and ADB.

106. How to File a Request for Compliance Review. Requests for compliance review must be in writing and specifically addressed to the "Secretary, Compliance Review Panel." The working language of the ADB accountability mechanism is English, but requests may be submitted in any of the official or national languages of ADB's DMCs if the requester is unable to provide an English translation. In those cases where the complaints are submitted in languages other than English, additional time will be required for translation. Requests will be accepted by mail, facsimile, electronic mail, or hand delivery to the Secretary, CRP at ADB headquarters. Requests will also be accepted by any ADB office such as a resident mission or representative office, which will forward them to the Secretary, CRP. The Secretary, CRP will keep the identity of requesters confidential if requested to do so, but anonymous requests will not be accepted.

107. Contents of the Request for Compliance Review. The request for compliance review must specify the following:

1. that the requester is, or is likely to be, directly affected materially and adversely by the ADB-assisted project;

2. that the requester 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;

3. a description of the direct and material harm, i.e., the rights and interests that have been, or are likely to be, directly affected materially and adversely by the ADB-assisted project;

4. an identification of the requester (and any representatives) and contact information;

5. if a request is made through a representative, identification of the project-affected people on whose behalf the request is made and evidence of authority to represent them;

6. a brief description of the ADB-assisted project, including the name and location if available;

7. the desired outcome or remedies that the project-affected people believe ADB should provide or help through the accountability mechanism;

8. an explanation of the results of the requester's efforts to address the complaint first to OSPF (or if the SPF has rejected the complaint as ineligible, an explanation of why the request is nonetheless eligible for compliance review);

9. an explanation of why any of the above information cannot be provided; and

10. any other relevant matters or facts with supporting documents.

108. Although there is no mandatory requirement to cite alleged violations of specific policies in the request, the requester is free to allege any policy violations that the requester believes are linked to an action or omission of ADB because of ADB's alleged failure to follow its operational policies and procedures.

109. If the SPF has already determined that the complaint meets the eligibility criteria for the consultation phase, CRP will determine whether in the request for compliance review, the direct and material harm claimed by the requester is linked to ADB's alleged failure to follow its operational policies and procedures in the course of the formulation, processing, or implementation of the ADB-assisted project. CRP will obtain from OSPF all materials and analyses relating to the complaint at the consultation phase, including the SPF's determination on the eligibility criteria. If the SPF has rejected the eligibility of the complaint, CRP will determine independently whether in its judgment the request for compliance review meets CRP's eligibility criteria.

5. Scope and Exclusions

110. CRP will examine whether the direct and material harm complained of by the requester is the result of ADB's alleged failure to follow its operational policies and procedures in the course of the formulation, processing, or implementation of the ADB-assisted project. The scope includes all ADB operational policies and procedures as they relate to the formulation, processing, or implementation of the project (including situations where ADB is alleged to have failed in its follow-up on the borrower's obligations under the loan agreements with respect to such policies and procedures). These policies and procedures are referred to as "ADB's operational policies and procedures." They do not include guidelines and similar documents or statements, but staff instructions or other documents that relate to the formulation, processing, or implementation of a project and that are intended to be incorporated eventually into ADB's operational policies and procedures are subject to compliance review.

111. ADB's operational policies and procedures that apply to the project under compliance review will be (i) in the case of a proposed project, those that were in effect when the complaint was filed with the SPF; and (ii) in the case of an ongoing project, those that were in effect at the time of Board approval with respect to the formulation or processing of the project, and those that were in effect when ADB's alleged act or omission took place with respect to the implementation of the project. A "proposed project" refers to a project under preparation that has not yet been approved by the Board of Directors or the President (as delegated by the Board), and an "ongoing project" refers to a project that has been approved by the Board of Directors or the President (as delegated by the Board).

112. On a project processed or approved prior to the updating of the OM, the operational policies and procedures that apply will be those approved by the Board, whether or not they were expressly incorporated into the existing OM. CRP will determine the relevant policies and procedures based on the information provided in the request for compliance review and through consultation with the OD concerned and other stakeholders.

113. All types of complaints specifically excluded from the consultation phase are also specifically excluded from the scope of CRP. In addition, for the purpose of compliance review, the following complaints will be excluded from the scope of CRP: (i) complaints relating to actions that are the responsibility of other parties, such as a borrower, EA, or potential borrower, unless the conduct of these other parties is directly relevant to an assessment of ADB's compliance with its operational policies and procedures; (ii) complaints that otherwise do not involve an action or omission by ADB's failure to follow its operational policies and procedures; (iii) complaints relating to the laws, policies, and regulations of the EA/DMC government concerned unless they directly relate to ADB's compliance with its operational policies and procedures; and (iv) complaints that have not first been filed with the SPF.

114. CRP will not consider the policies and procedures of other institutions (except to the extent that ADB's policies and procedures expressly refer to those of the other institutions).

6. Procedural Steps and Time Frame

115. The following are the procedural steps and proposed time frames for the compliance review process. The "days" referred to in these steps are calendar days. This phase is preceded by the consultation phase described in Section E, except in cases where a member of the Board of Directors files a request for compliance review, which then would go directly to CRP.

116. The requester will know whether the request for compliance review has been authorized by the Board after at least 49 days from receipt of the request for compliance review by ADB. The requester will know the outcome of the Board decision after at least 128 days from receipt of the request for compliance review by ADB. These periods exclude the time taken by the parties in the consultation phase, translation time, any request for extension of time to provide information or file documents, and the duration of CRP's review, which is not time bound. The 128-day period takes into account the step for the complainant to respond and comment on CRP's draft report (step 7 of the compliance review process), which is provided for the first time in any international financial institution accountability mechanism on compliance review. Also, the procedure has been streamlined so that the Board will now decide on one document from CRP, which attaches responses from Management and the requester, instead of several documents from CRP.

117. In terms of minimum time taken by the parties in the consultation phase, excluding translation time, and any request for extension of time to provide information or file documents, before the complainant can file a request for compliance review, there are three scenarios: First, the complainant can file a request if and when the complaint is found ineligible by the SPF (at the end of step 3 of the consultation process). Second, the complainant can file a request in the case of an eligible complaint if and when the complainant receives the SPF's findings on his/her review and assessment of the complaint, and decides not to carry on with the consultation phase (at the end of step 4 of the consultation process). Third, in instances when the complainant has serious concerns on compliance issues, the complainant may also file a request while carrying on with the implementation of the course of action (step 7 of the consultation process).

118. Step 1: Filing of the Request. A request for compliance review is filed with OCRP. As long as the complaint is subject to the consultation process conducted by the SPF, an affected party or its representative is not allowed to request compliance review unless the request is made for a parallel process of both compliance review and consultation at any time during the implementation of the course of action (step 7 of the consultation process).

119. Step 2: Registration and Acknowledgement of the Request. Within 7 days from receipt of a request for compliance review, OCRP will register the request and acknowledge it. The registration of the request will be made on a register accessible to the public through the web site. CRP will inform the Board of any registration of the request. CRP will also release a press advisory that it has registered the request.

120. Step 3: Determination of Eligibility of the Request. Within 14 days from registration of the request for compliance review, CRP will determine the eligibility of the request and will inform the requester of its decision. If the SPF has determined that the complaint is ineligible, CRP will determine the eligibility of the request within 21 days from registration of the request for compliance review. Because the SPF would have already reviewed most eligibility issues, the primary issue for CRP to address is whether the request implicates potential policy violations. If the requester does not allege any specific policy violations, CRP will evaluate the request itself to determine if, in its opinion, the request raises issues of potential policy violations. During the eligibility stage, CRP may consult all stakeholders, including Management and staff, the requester, the EA/DMC government or the PPS, and the Board member representing the country concerned. The determination of eligibility includes a desk-based review and/or a site visit. If CRP determines that the request is ineligible, it will inform the Board of the ineligibility of the request. If CRP determines that the request is eligible, it will recommend to the Board that a compliance review should be authorized.

121. Step 4: Board Authorization of the Compliance Review. Within 21 days from receipt of CRP's recommendation, the Board will authorize the compliance review on a no-objection basis and without making a judgment on the merits of the request. Within 7 days from receipt of Board authorization, the requester will be informed of the Board's decision on authorization of the compliance review, and the Board's decision will then be posted on the web site.

122. Step 5: Conducting the Compliance Review. As soon as the Board authorizes the compliance review, CRP will begin its review. CRP's review is not time bound, because the amount of time will vary considerably depending on the nature, complexity and scope of the project and the potential policy violations. CRP will clear with BCRC the proposed TOR and time frame before they are released by CRP. Within 14 days from receipt of Board authorization of the review, CRP will release the TOR and time frame that will indicate the methodology and estimated duration of the review. The TOR and time frame will be provided to the Board and to all stakeholders, and posted on the web site in the registry of requests.

123. During this period, CRP will conduct the review and consult all concerned stakeholders, including Management and staff, the requester, the EA/DMC government or the PPS, and the Board member representing the country concerned. They will be given an opportunity to record their views. CRP will review documentation. CRP may also carry out site visits in its investigation while conducting the compliance review. Any site visit carried out in CRP's investigation will take place only if the country concerned and the PPS concerned as applicable have no objection, and the prior consent of the country concerned and the PPS concerned as applicable have been obtained by CRP.

124. Step 6: CRP's Draft Report. At the completion of its review of compliance, CRP will issue a draft report of its findings and recommendations to Management and the requester for comments.

125. Step 7: Management's Response and Requester's Response to CRP's Draft Report. Both Management and the requester will have 30 days from receipt of CRP's draft report to provide their responses to it. Each party is free to provide comments on the draft report, but only CRP's final view on these matters will be reflected in its final report.

126. Step 8: CRP's Final Report. Within 14 days from receipt of the responses to CRP's draft report from Management and the requester, CRP will consider their responses and make changes as necessary before issuing to the Board its final report with its findings and recommendations to ensure project compliance, including recommendations, if appropriate, for any remedial changes in the scope or implementation of the project. CRP's final report will contain CRP's findings and recommendations, and the responses from Management and the requester will be attached to it. CRP's findings and recommendations will be reached by consensus and, in the absence of a consensus, the majority and minority views will be stated.

127. Step 9: Board's Decision. Within 21 days from receipt of CRP's final report, the Board will consider the report and make the final decision regarding any recommendations on how to bring the project into compliance and/or mitigate any harm, if appropriate. Within 7 days from the Board's decision, the Board decision and CRP's final report, with the responses attached, will be released to the requester, and then posted on the web site.

128. Any remedial actions in project scope or implementation approved by the Board (or, if warranted, the suspension or cancellation of the project) will be carried out in accordance with applicable ADB procedures (which will require the consent of the borrower or grant recipient concerned or the PPS concerned, except as otherwise provided in ADB's Loan Regulations, as applicable, or other relevant legal documents).

7. Transparency and Information Dissemination

129. CRP's operations at all stages of the compliance review phase will be as transparent as possible, subject to this paragraph, and consistent with relevant ADB policies and procedures and the need to ensure that there is engagement with Management and staff, the requester, the EA/DMC government or the PPS, and the Board member representing the country concerned on a thorough understanding of the issues during the compliance review. CRP will have the authority to issue its own press releases and media communications. Prior to releasing any news releases or other media communications, CRP will inform OER, not for purposes of review, but in order to provide ADB with an opportunity to prepare a response to queries from the media or public. CRP will exercise discretion, maintain a low profile in the borrowing country, and not give media interviews while making site visits in the borrowing country. CRP will not give any media interviews at any stage of the compliance review.

130. Specific milestones during the compliance review phase where there is information disclosure will include the following:

1. registration and acknowledgement of the request (step 2);

2. determination of eligibility of the request (step 3);

3. Board authorization of the compliance review (step 4);

4. conducting the compliance review (step 5);

5. CRP's draft report (step 6);

6. CRP's final report (step 8); and

7. Board's decision (step 9).

131. CRP will issue annual reports that contain a description of the claims considered, a summary of activities, monitoring information, budgetary information, and policy advice based on lessons learned from previous requests for compliance review. CRP will maintain its own web site and have its own distinctive logo and letterhead.

132. CRP members and OCRP staff will be subject to ADB's confidentiality and disclosure of information policy, including those provisions aimed at ensuring that confidential business information is not disclosed. When requested, CRP may withhold the identity of the claimants from other stakeholders. Any material or information submitted to any CRP member or the Secretary, CRP on a confidential basis from any party may not be released to any other parties without the consent of the party that submitted it.

8. Monitoring

133. CRP will monitor implementation of any remedial actions approved by the Board as a result of a compliance review. Unless the Board specifies a different timetable, CRP will annually report to the Board implementation of Board decisions related to remedial measures, including its determination on the progress in bringing the project into compliance. The methodology for monitoring will include consultations with Management, the requester(s), the EA/DMC government or the PPS, and Board members; document review; and site visits. CRP will also consider any information received from the requester and the public regarding the status of implementation. CRP will forward to BCRC its draft reports on monitoring implementation of any remedial actions approved by the Board as a result of a compliance review for its review. CRP will finalize the reports in consultation with BCRC before making them available to the Board, Management, the requester, the EA/DMC government or the PPS, and the public.

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