The African Development Bank (AfDB) is a regional multilateral development finance institution, established in 1964 and engaged in mobilising resources towards the economic and social progress of its Regional Member Countries (RMCs). It is head-quartered in Abidjan (Côte d’Ivoire), but has been operating from Tunis since 2003. It includes 54 African countries and 27 non African countries 1 .
Similar to the World Bank, its mandate is “to combat poverty and improve the lives of the people on the African continent.” According the AfDB, its mission is to promote economic and social development through loans, equity investments and technical assistance. Many projects funded by the AfDB are co-financed with other major financial institutions such as the World Bank. The AfDB has specific mandates from the New Partnership for Africa’s Development (NePAD) and is now taking the lead in certain areas such as infrastructure projects in Africa 2 .
In 2004, the AfDB put in place an Independent Review Mechanism (IRM) 3 , operated by the Compliance Review and Mediation Unit (CRMU), which provides people affected by a project financed by the Bank with an independent mechanism through which they can request the Bank to comply with its own policies and procedures. The IRM handles requests through two functions:
- Compliance Review
In 2011, the AfDB approved a new Disclosure and Access to Information Policy, 4 which was developed in consultation and with input from CSOs, and requires the AfDB to publicly disclose all documents unless there is a compelling reason for confidentiality. Should a request for information be denied by the Information Disclosure Committee of the AfDB, an appeal may be lodged to an Appeal Panel. In January 2015, the AfDB issued revised Operating Rules and Procedures for the IRM 5 . According to the new rules, the IRM, at the President and/or the Boards’ request, is able to provide advisory services to the Bank on its projects, programs, policies and procedures, in particular in relation to the Bank’s social and environmental impacts. 6
What are the issues that can be dealt with?
The Bank’s policies address several topics such as food production, poverty reduction, quality assurance and results, regional integration, or financial crisis 7 . On 17 December 2013, after a one-year process that involved public participation through consultations 8 , the Bank’s environmental and social policies were replaced for the first time 9 . The policies, now called the Integrated Safeguards System (ISS), entail five operational safeguards 10 :
- Environmental and social assessment: This operational safeguard aims to integrate environmental and social considerations into the Bank’s operation – including those related to climate change – for the Bank’s activities to contribute to sustainable development.
- Involuntary resettlement: land acquisition, population displacement and compensation : This operational safeguard aims at ensuring fair and equitable treatment to those who will have to be relocated as a result of the implementation of a project financed by the Bank, as well as compensation and resettlement assistance.
- Biodiversity, renewable resources and ecosystem services: This operational safeguard underlines the requirement for the Bank’s clients to sustainably use biodiversity and natural habitats.
- Pollution prevention and control, hazardous materials and resource efficiency: This operational safeguard underlines the requirement for the Bank’s clients to prevent pollution and achieve high-quality environmental performance.
- Labour conditions, health and safety: This operational safeguard underlines the requirement for the Bank’s clients to respect and protect the workers’ rights and provide with their basic needs.
Although civil society organisations denounced serious flaws in relation to the protection of Indigenous Peoples in the ISS, the latter remains a significant improvement of the Bank’s former safeguards. It is especially the case for risk management in lending operations, as the new standards will enable the automatic screening of policy loans according to the environmental and social risks they imply, and their categorization per risk level. A Strategic environmental and Social Assessment (SeSA) tool has been put in place to provide for public consultation processes and for the elaboration of environmental Social Management Plans to address the issues related to projects involving moderate or significant environmental and/or social risks. 11
Who can file a complaint? 12
- Any group of two or more people in the country or countries where the Bank-financed project is located who believe that as a result of the Bank Group’s violation of its policies and/or procedures, their rights or interests have been, or are likely to be, adversely affected in a direct and material way. They may be an organisation, association, society or other grouping of individuals.
- A duly appointed local representative acting on the instructions and as the agent of adversely affected people. Foreign representatives may act as agents in cases where no adequate or appropriate representation is available in the country or countries where the project is located.
- The Boards of Directors of the Bank Group
Under what conditions? 13
The CRMU will accept requests that allege that an actual or threatened material adverse effect on the affected persons’ rights or interests arising directly from an act or omission of a member institution of the Bank Group, as a result of the failure by the said institution to follow any of its own operational policies and procedures during the design, appraisal and/or implementation of a Bank Group-financed project.
Matters related to fraud or corruption, or to procurement from bidders and suppliers are handled by other units within the Bank Group.
There is no specific format for requests. Requests may be treated confidentially if requested, and must be submitted in writing, in the language of the Bank (english or French), and dated and signed.
The CRMU will not accept requests that:
- are filed more than 24 months after the physical completion of the project concerned or more than 24 months after the final disbursement under the loan or grant agreement or the date of cancellation of the disbursement amount, whichever comes first.
- relate to matters before the Administrative Tribunal of the Bank, or before other judicial review or similar bodies;
- relate to adequacy or unsuitability of Bank Group policies or procedures;
- relate to matters considered frivolous, malicious or anonymous complaints;
- relate to matters over which the CRMU, a Panel, the President or the Boards has/ have already made a recommendation or reached a decision after having received and reviewed a Request, unless justified by new evidence or circumstances;
- allege human rights violations, other than those involving social and economic rights alleging any action or omission on the part of the Bank Group;
- Actions that are the sole responsibility of other parties, including the borrower or potential borrower, and which do not involve any action or omission on the part of the Bank Group.
The filing of a Request or carrying out of a compliance review or problem-solving exercise will not suspending processing or disbursements for Bank Group-financed project. Interim recommendations to suspend further work or disbursements may be issued if the project’s processing or implementation is deemed to cause irreparable harm. 14
Process and Outcome 17
The process before the CRMU can be divided into two main procedures: Problem-solving (mediation) or Compliance review (investigation).
Common procedures for both mediation and compliance review:
- Preliminary review by the Director CRMU upon receipt of a request to determine whether the request contains a bona fide allegation of harm from a Bank Group- financed operation.
- Within 14 days of receipt, the Director CRMU shall decide whether to: - register the request; - ask for additional information, in which case the decision period may be extended until the necessary information and documents have been filed, or - decide that the request is outside the mandate of IRM.
- If the request contains a bona fide allegation of harm arising from a Bank Group-financed operation, the Director CRMU shall determine whether the request shall be registered for mediation exercise, or for further consideration for a compliance review.
These two procedures are not exactly independent; it is possible that both be used for the same request.
“If requests are eligible for problem-solving, the Director will initiate a process that could include mediation, fact-finding or dialogue facilitation. At the end of the process, the Director reports to the President and the AfDB Boards regarding any results achieved and any recommendations or comments from relevant parties. The President or Boards will then decide whether to accept or reject the recommendations and a summary is made public.” 18
“If the complaint presents evidence of a violation of Bank policy, the Director of the CRMU or the IRM Roster of experts may recommend a compliance review. It is up to the President or Boards to approve a compliance review. experts from the CRMU Roster conduct the investigation of compliance review, which could include site visits and meetings with the affected community. Once completed, the experts submit the compliance review report and any recommendations for remedial action to the President or Boards.
Following the release of the compliance review report, Bank Management has 90 days to prepare a response and action plan. Thereafter, Bank Management and the CRMU jointly present the findings to the Boards. The President or Boards will make the final decision to accept or reject the findings and recommendations of the compliance review report. The relevant parties are informed of their decision, and it is published on the AfDB’s website. CRMU and one of the experts monitor the implementation of the approved Management remedial action plans.” 19
To date, the CRMU has ten registered cases. 20
The CRMU in action
The Bujagali Hydropower Project in Uganda
On 8 May 2007, the CRMU received a request from local NGOs and individuals to conduct a compliance review of the Bujagali Hydropower Project and the Bujagali Interconnection Project in Uganda. This project was managed by Bujagali Energy Limited (BEL), a company jointly owned by subsidiaries of the international development company Sithe Global Power, LLC and of the Aga Khan Fund for Economic Development, an international development agency. The request alleged non-compliance with the Bank Group’s policies regarding the assessment of hydrological and environmental risks, the project’s economics, and more specifically its affordability and alternatives analysis, consultations with affected people on resettlement and compensation and cultural and spiritual issues. 21
Upon finding prima facie evidence of harm or potential harm, the CRMU director made a recommendation to the Board of Directors to approve the compliance review of the Bujagali projects.
On 7 September 2007 the Board of Directors authorised the compliance review together with the establishment of the review panel. Since a similar request for investigation of the Bujagali Hydropower Project had been submitted to the World Bank’s Inspection Panel (IPN), the CRMU and the World Bank agreed to collaborate on the Bujagali review.
The Inspection Panel and IRM Bujagali Review Panel, accompanied by specialists on key issues raised in the request, undertook a fact-finding mission in Uganda from 26 November to 8 December 2007. In addition, the IRM Bujagali Review Panel conducted document research and interviews with the staff at the Bank.
On June 20, 2008, the IRM released its report on the Bujagali projects compliance review 22 . In March 2009, the Bank management published its action plan in response to the IRM’s report, including actions to be taken to comply with the Bank’s policies 23 .
An IRM Monitoring Team was authorised on 9 July 2009 by the Board of Directors of the Bank Group to monitor the implementation of the findings of non-compliance issues raised by the IRM Review Panel’s Compliance Review Report and the related management action plan. The IRM Monitoring Team conducted a mission to Uganda in May 2009.
The mission found the project lacking in compliance in the following 3 areas: resettlement and compensation, cultural and spiritual issues, and Forest Reserves Mitigation Measures. Between 2009 and 2012, four monitoring reports assessing the implementation of the Action Plan were submitted to the Board.
To close the complaint case on the project, the IRM obtained a copy of the Project Completion Report that Management submitted to the Board, however it was silent on the resolution of the resettlement and compensation cases. Following the submission of a “revised Project Completion Report,” the IRM decided to close the complaint relating to the Bujagali Projects because, in its assessment, it satisfactorily reported on the outcomes of the resettlement and compensation of affected people, a prior condition placed in the Fourth IRM Monitoring Report for closing the Request. The IRM recommended to the bank’s Boards of Directors to invite the Bank Management to continue advising Uganda’s Energy firm UETCL and to monitor the conclusion of the compensation process and to provide adequate support to both UETCL and BEL to measure the sustainability outcomes of the projects, but also to consider and approve the recommendation of the IRM. The case was closed in 2019 24 , however, this project remains one of the world’s most controversial and expensive hydro-power plant projects. 25
As the AfDB appears to be having a growing influence on the development agenda of the African continent, civil society organisations are slowly starting to pay more attention to the AfBD’s conduct. Whilst the bank remains under-staffed and has been criticised in the past for being secretive and deprived of any significant influence, it has undergone changes and its growing influence on the African continent should be accompanied by increased efforts by civil society to monitor its actions. The review process of the Independent Review Mechanism (IRM)’s, which took place between 2013 and 2015, was criticised by CSOs for providing highly inadequate opportunity for public comment on the IRM’s new policy. CSOs also provided recommendations to improve the IRM’s accessibility and independence. 26