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Report calls for development banks to provide stronger complaints mechanisms for people harmed by their projects

Glass Half Full?

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27 January 2016

Glass Half Full? The State of Accountability in Development Finance

Author: Caitlin Daniel, Accountability Counsel, Kristen Genovese & Mariëtte van Huijstee, SOMO & Sarah Singh, Accountability Counsel (editors) & other organizations

…[D]evelopment – the way it is currently practised by Development Finance Institutions (DFIs)…has been associated with the dispossession of land, loss of resources, diminished livelihoods and environmental degradation…While the aim of this report is to ensure that people who have been harmed by these development projects receive adequate remedy, the ultimate goal of the 11 organisations that have authored this report is that DFIs should pursue a development model based on human rights…[T]he accountability systems at the DFIs provide a vital but crude backstop for those people and communities that have been harmed by the current development model…Complainants are undoubtedly better off than they would be in the absence of any complaint procedure…However, the outcome rarely provides adequate remedy…Ultimately, however, these accountability mechanisms operate in a constrained environment constructed by the DFIs that administer them…The current report provides two sets of recommendations.  The first set seeks to perfect the current system by identifying best practices that should be adopted by all IAMs and DFIs…A new accountability system must be established with mechanisms that are empowered to make binding decisions and DFIs that no longer claim immunity in national courts…

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27 January 2016

Report finds development banks fail people harmed by their projects

Author: SOMO (Netherlands)

A new report launched today documents the hurdles communities and workers face in obtaining remedy from development banks whose projects cause them harm.  The 11 civil society organizations that authored the report…call on development…to strengthen their systems for providing remedy to those harmed by the activities financed by the banks…[M]any development banks have established independent accountability mechanisms…[T]hey can offer to convene the complainants and the borrower…to resolve the conflict, conduct an investigation to determine if the bank’s…policies have been violated…[T]he report finds…that even though complainants are undoubtedly better off than they would be in the absence of any complaint procedure, the outcome rarely provides adequate remedy…The banks impede the accessibility and effectiveness of the complaint mechanisms from the very beginning by failing to require their borrowers to tell project-affected people about their existence.  Even more critically, the banks have limited the mandates of the mechanisms so that they cannot issue binding decisions…The report includes a number of best practice recommendations that should be adopted at all development banks…A new accountability system must be established as a matter of urgency, with complaint mechanisms empowered to make binding decisions on banks and their borrowers, and an end to immunity for development banks…

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