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p. 1 of 13 BACK | NEXT Introduction Rationale The Inspection Function in Other Multilateral Organizations Proposal for an ADB Inspection Function Recommendations

Establishment of An Inspection Function

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Introduction

1. In response to the growing emphasis by its member countries on efficiency and effectiveness in the operations of multilateral organizations, the Bank completed in January 1994 a major review of its operations with a view to enhancing the quality of its portfolio, as reflected in the Report of the Task Force on Improving Project Quality. One of the Report's recommendations, which is now being implemented by the Bank, is to promote greater beneficiary involvement in the preparation and implementation of Bank projects. The call for greater efficiency and effectiveness in multilateral organizations has also included a demand for greater accountability and transparency. Recognizing the relevance of these concerns, the Bank adopted in September 1994 a policy on confidentiality and disclosure of information to increase public access to information about the Bank's operations.

2. As a result of this new Bank policy, the public will be able to obtain more information about the Bank's operational policies and procedures, as well as pending and ongoing projects. In addition, intended beneficiaries of Bank-financed projects can expect greater opportunities to participate in the processes of formulating and implementing those projects. However, if a group affected by a Bank project believes that the formulation or implementation of the project is inconsistent with Bank policies and procedures, to the material detriment of that group, no formal procedure now exists for airing such a grievance. Related to a general interest in improving their governance, accountability and transparency, other multilateral organizations have established or are considering establishing forums, independent of their respective managements, in which such grievances could be heard. It has been proposed that the Bank also consider creating such a forum to complement its other efforts to increase transparency and accountability, and also complement the Bank's existing supervision, audit and evaluation systems.

3. This paper first considers the rationale for establishing a body independent of the Bank's Management to review complaints concerning the Bank's compliance with its operational policies and procedures in connection with proposed and ongoing Bank projects. The paper then reviews the approaches taken by the World Bank and other multilateral organizations to create an independent inspection function for their operations. Finally, the paper outlines a proposal for the creation of a special committee of the Bank's Board of Directors to consider complaints concerning the formulation or implementation of Bank projects, with assistance from a roster of independent outside experts.

4. In this paper, the Bank's "operational policies and procedures" are defined as the Bank Policies and Operational Procedures set forth in the Bank's reorganized Operations Manual (OM) and, to the extent applicable, corresponding sections in earlier editions of the OM, hut do not include Guidelines on Operational Procedures and similar documents or statements. The Bank's "operational policies and procedures" also include Staff Instructions that relate to the formulation, processing or implementation of Bank projects and that are intended to be incorporated eventually into the OM. A Bank "project" is defined as any public sector¹ loan, guarantee or technical assistance grant financed or to be financed in whole or in part from Bank resources, or administered or to be administered by the Bank. A "proposed" project refers to a project under preparation that has not yet been approved by the Bank's Board of Directors, while an "ongoing" project refers to a project that has been approved by the Board.

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