International development banks remain opaque institutions

2 October 2012, Public Service Europe

*Despite the establishment of internal bodies to help increase transparency and address complaints – international development banks still offer a very limited right to redress, /PublicServiceEurope.com /reports*

In the 1990s, the World Bank was under pressure for the alleged environmental damage caused by some of its projects. Non-governmental organisations accused the bank of lacking transparency in its procedures. The bank responded by establishing a three-man internal inspection panel aimed at collecting all complaints relating to its activities. The panel was equipped with a budget and reported directly to the board of the institution. Problem solved? Not really. Since being established in 1993, the panel has investigated only 32 cases. This surprisingly low number is not the result of setting admissibility rules too strictly. Instead, it is the number of complaints which is extremely low at just 80 in almost 20 years.

“The thing is that the bank has not been proactive in making this mechanism known; a lot more can be done, people should be more informed,” says Alf Morten Jerve, one of three members of the panel. The system is in place but nobody knows that it exists. Transparency is guaranteed in principle, but is seriously lacking in practice. The World Bank is not the only institution using these tricks. The European Investment Bank, the financial arm of the European Union for development projects, has a poor record too. In 2011, the total number of complaints received across the wide range of projects it is involved in around the world had reached only 56, of which 40 have been considered legitimate and therefore have been investigated.

“The interpretation of their accountability is also very restrictive,” explains a lawyer specialising in these issues, who prefers to remain anonymous. In practice, complaints are legitimate only in a limited number of cases. Despite receiving almost identicalcriticism over its accountability in comparison to development banks, the European Ombudsman office emerges as a champion of transparency. The ombudsman is in charge of dealing with complaints addressed to EU institutions. Every year, it receives between 2,500 and 3,000 complaints – of which around 600 are investigated, according to the ombudsman Nikiforos Diamandouros. Celebrating the 10th anniversary of the International Right to Know Day, on September 28, Diamandouros called for a culture change in international institutions and national administrations. “Public access to documents should be the norm, not the exception,” he said during a conference in the European Parliament, in Brussels.

The gap between his appeal and reality remains far too wide. International organisations reluctantly disclose information, even when they are obliged to do so by law or by internal procedures. Often, they can rely on national jurisdictions which are supportive of their anti-transparency stance. Only 93 countries in the world, less than half of the total, recognise the right of citizens to access information related to public administrations. Even within Europe, this right is far from being acknowledged everywhere. In Spain, for instance, there is no law establishing such a right. Application of this right is difficult even when it is recognised.

“If transparency does not lead to the possibility of actual action, is that enough?” asks Helen Darbishire of campaign group Access Info Europe. For example, recent changes in the World Bank funding policy make it more difficult to establish how funds have been used. “In these conditions, even if we obtain information on a project and we are in principle free to send a complaint, how can we build a case if the responsibility is not clear?” says Darbishire.

Decreasing the involvement of international organisations in development projects is obviously not the right answer. “In South America, the improving economic situation has lowered the presence of international donors – but as a consequence, the principles of transparency are fading away,” warns Isabel Lavandez-Paccieri of the Inter-American Development Bank. The European Bank for Reconstruction and Development faces the same challenge. “Often we receive complaints for co-funding projects which cause environmental concerns – but if we do not do this, the projects will go ahead without any accountability; our presence makes the process more accountable,” claims Anoush Begoyan of the EBRD.

International development banks remain crucial. Over the years, they have undergone a process of structural change to become more transparent and accountable – which makes them even more valuable in countries were these values are not understood or recognised. However, there is still a long way to go before the culture of transparency takes root. Internal control panels are now in place in almost all institutions, although they rely on blurred mandates and are usually understaffed. As an expert of the sector put it like this: “It is good to be known and receive many complaints, but up to a certain point, otherwise the machine will not function any longer.”