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p. 4 of 13 BACK | NEXT Introduction Rationale The Inspection Function in Other Multilateral Organizations A. The World Bank's Independent Inspection Panel B. The Inter-American Development Bank's Independent Investigation Mechanism C. Other Inspection Mechanisms and Proposals Proposal for an ADB Inspection Function Recommendations

Establishment of An Inspection Function : The Inspection Function in Other Multilateral Organizations

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The World Bank's Independent Inspection Panel

In September 1993, the Executive Directors of the World Bank approved the establishment of an Independent Inspection Panel (the WB Panel), which is comprised of three individuals of different nationalities nominated by the President of the World Bank and appointed by the Executive Directors. Members of the WB Panel are appointed for five-year staggered terms and yearly elect from among themselves a chairman. The WB Panel reports to the President and the Executive Directors. All reports and recommendations of the Panel are subject to the approval of the Executive Directors.

The function of the WB Panel is limited to receiving and acting upon requests for inspection presented by affected groups (including organizations, associations, societies and other groups of individuals) who can demonstrate that their rights or interests have been or are likely to be directly affected by an action or omission of the World Bank involving a failure to follow its operational policies and procedures with respect to design, appraisal and/or implementation of a World Bank-financed project². Under the Board Resolution establishing the WB Panel, the Panel can only consider a request with respect to a World Bank-financed project if

• the World Bank's alleged failure to follow its policies and procedures has had or threatens to have a material adverse effect on the group
• the alleged violation of its policies and procedures is of a "serious character"
• the issue has already been raised with the World Bank's Management, and Management has failed to demonstrate that it has followed or is taking adequate steps to follow World Bank policies and procedures

The following requests will not be considered

• complaints that do not involve any act or omission by the World Bank
• complaints against procurement decisions of World Bank borrowers brought by suppliers or losing tenderers
• requests filed after the Closing Date of the loan financing the relevant project, or after the loan has been substantially disbursed
• requests relating to matters as to which the WB Panel has already made a recommendation, unless justified by new evidence or circumstances

Once a request for inspection has been submitted to the WB Panel. Management is first required to notify the Panel of any action it has taken or is considering taking with respect to the request. After receipt of this notification, the WB Panel must assess whether the request for inspection meets the eligibility criteria outlined above, and on this basis the Panel makes a recommendation to the Executive Directors as to whether the matter should be investigated. This recommendation is presented on a no-objection basis. If the Executive Directors decide that an investigation is warranted, an inspection of the request is then carried out by one or more WB Panel members. When the inspection has been completed, the Panel makes a recommendation to the Executive Directors and the President. The initial decision of the Executive Directors as to whether to proceed with an inspection (together with copies of the request for inspection and the WB Panel's recommendation thereon) is made publicly available, as is the final report of the WB Panel on any inspection and the World Bank's response thereto.

The country in which the relevant project is located, and the Executive Director representing that country. must be consulted on any request for inspection, both before the WB Panel's recommendation as to whether to proceed with an inspection and during any inspection. Inspection in the territory of such country cannot be held without its prior consent.

During its first year of operation, the WB Panel reviewed four inspection requests, one of which--concerning the proposed Arun III Hydroelectric Project in Nepal -- resulted in a full inspection; the second and third inspection requests were dismissed on the basis that each failed to meet the relevant eligibility criteria; and, although the fourth inspection request was found eligible by the WB Panel. the Board of Executive Directors has instructed the Panel to obtain more information about the materiality of the adverse effects alleged before the Board authorizes an inspection to proceed. The budget for the WB Panel's first year of operation was $1.5 million. Despite substantial start-up costs, and including the expenses of the Arun III inspection, the WB Panel's actual expenses for the first year are expected to be substantially under budget. Given the uncertainties concerning the volume of inspection requests that may be received over the next year, the World Bank's Management has budgeted 51.5 million for the Panel's second year of operation. Although only four formal inspection requests were considered by the WB Panel in its first year, the Panel and its staff devoted considerable time to responding to inquiries and requests for information from individuals and groups outside the World Bank. To handle the volume of informal inquiries, as well as formal inspection requests, two World Bank professional staff members are currently assigned to serve as Executive Secretary and Alternate Executive Secretary to the WB Panel.

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