worldbank inspection and general administrative law

2010

Julius Che (331603)

Erasmus School of Law Rotterdam

15/3/2010

Analyze the accountability and legitimacy processes of the World

Bank Inspection Panel

Analyze the accountability and legitimacy processes of the World Bank Inspection Panel

2010

1.0 Introduction

In this paper, I will attempt to give a short definition of What the World Bank Inspection Panel is all about? , I will equally engage with the constitutionalism and Global Administrative law in the composition, process and elements of Procedure of the Inspection Panel. The accountability of the Inspection Panel shall equally be examined focusing on its management and operations. The Legitimacy of the Inspection Panel in relation to its fairness, efficiency and justness shall equally be examined. I will also have a close look on guarantees as to the independence of the Panel and its members. A conclusion and bibliography will seal off this discussion. However, this chronology will not be followed.

1.1 The establishment of an Inspection Panel

The World Bank Inspection Panel was created in 1993 by a resolution of the Bank’s Executive Directors1 as an independent body within the Bank’s structure. This was in response to the World Bank inadequacies to meet the standards as reflected in its policies and procedures2. This criticism came both from within the Bank (Lewis T. Preston) and from without (Non Governmental Organizations and civil society) base on the inadequacies of the old control mechanism of the Bank at the time3. The World Bank was perceived both from within and without to be less accountable and less transparent in its decision4. The Narmada dam project in India which shall not form part of this discussion set out a precedent that led to a review of the Bank’s activities5. Stamping out old tradition which says ‘you have to break a few eggs to get an omelet’6, the World Bank through the Inspection Panel was setting a precedent constituting “a progressive step in the development of both the law of international organization and the international law of

1 Resolution 93-10 of IBRD and 93-6 of IDA2 The Inspection Panel of the World Bank: A different Complaints Procedure; pages 7-9 and 16, edited by Gudmundur Alfredsson and Rolf Ring.3 Ibid, 4-8.4 The World Bank Inspection Panel: In Practice; pages 1 and 2 by Ibrahim F.I. Shihata.5 Ibid, 9-10.6 Demanding Accountability: a civil society claims and the World Bank Inspection Panel edited by Dana Clark, Jonathan Fox and Kay Treakle; Understanding the World Bank Inspection Panel, page 9 by Dana Clark.

2 The Rule of Law Assignment II- Julius Che | Erasmus School of Law Rotterdam


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human rights” where individuals can submit their complaints and see them addressed at the international level7.

The resolution that established the Inspection panel explicitly in its last paragraph says that the scope of the Inspection Panel covers the activities of both the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)8.

2.0 Legitimacy of the World Bank Inspection Panel

Fallon identifies three concepts of legitimacy, namely: legal, moral, and sociological. Legal legitimacy’ is measured by legal norms, and, hence, comes close to the notion of ‘legality9.An Institutions like the World Bank Inspection Panel needs to be legitimate in order to be effective in its operations as an independent monitoring organ of the World Bank. This input legitimacy of, efficiency and justness of the Panel shall be discussed in line with Dr. Andria Naudé four criteria derived from the UN Secretary General 2004 definition of the Rule of Law. Quoting Dr. Andria Naudé,

“…the Panel present itself as independent, its members are independent from the World Bank (they serve in their individual capacity), and it is normally shielded from political influence. It makes decisions (including admissibility) independently from management of the World Bank (and sometimes openly opposes it);

…the Panel has reaffirmed the binding character of the safeguard policies and its ‘operational policies and procedures’ are available on the internet…

…the Panel has criticized the ‘piecemeal’ enforcement of policies across World Bank projects. The Panel works increasingly in reference to its prior cases, thereby contributing to ‘legal certainty’ and it has developed a consistent approach to assessing compliance”10.

7 Ibid.8 The Inspection Panel of the World Bank: A different Complaints Procedure; pages 7-9 and 16, edited by Gudmundur Alfredsson and Rolf Ring.

9 The World Bank Inspection Panel and Quasi Judicial Oversight: In Search of the “Judicial Spirit” in Public International Law, page 41 and 41 by Dr. Andria Naudé of Erasmus University Rotterdam.10 Accountability and the Rule of Law at the International Level, page 10 and 11 by André Nollkaemper, Jan Wouters and Nicolas Hachez



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This means the Panel provides some degree of legitimacy and is accountable in the eyes of both the Board of directors and to those whom the Inspection Panel serves or affect11. The panel provides a forum or link between the World Bank Group and people who believe that they have been or are likely to be adversely harmed by the Bank’s projects or programmes to have their concerns heard by the Bank’s Board of Directors.

3.0 The Inspection Panel and Global Administrative Law

World Bank Resolution 93-10 adopted by the Bank’s Board of Directors and the Inspection Panel Operating Procedures set forth the basic procedures for the Panel. They define the composition of the Panel, the criteria for eligibility and the necessary components of a claim, and provide guidance for how the process should work12.

3.1 The composition, process and procedure of the Inspection Panel

3.1.1 Composition

The Panel is compose of three members of different nationalities from member countries nominated by the President of the World Bank and approve by the Board member for five years. The president of the Panel works full time and the others as need arise. The panel members must not have worked with the Bank for the last two years prior to their nomination and shall not work with the Bank after their term with the Panel expires. Their mandate is non renewable.13

The Inspection Panel is an independent entity within the World Bank and reports to the Board of Directors and not to the Executive Director or staff of the World Bank.14 The Panel’s mandate is to cross check, in response to requests related to specific projects on the Bank’s compliance with all

11 Envisioning Reform: Enhancing UN Accountability in the Twenty-First Century edited by Sumihiro Kuyama and Michael Ross Fowler: The World Bank Inspection Panel: participation and accountability, page271, by Edith Brown Weiss, Peter L. Lallas and Anna S. Herken.12 http://www.accountabilityproject.org/article.php?id=227 13 Envisioning Reform: Enhancing UN Accountability in the Twenty-First Century edited by Sumihiro Kuyama and Michael Ross Fowler: The World Bank Inspection Panel: participation and accountability, page271, by Edith Brown Weiss, Peter L. Lallas and Anna S. Herken, http://www.accountabilityproject.org/article.php?id=227 .14 Accountability in Global Governance. A global Administrative Law Project Workshop of the University of Institute for International Law and Justice page 13; New York University School of Law chaired by Kingsbury Benedict and Richard Stewart.


http://www.accountabilityproject.org/article.php?id=227

http://www.accountabilityproject.org/article.php?id=227


2010

applicable policies and procedures with respect to project design, appraisal and supervision15.

3.1.2 Process and Procedure

The Inspection Panel was established to investigate charges that official Bank policies were not followed in the design and implementation of projects.16 There must be an established claimed that the project in question has caused or is likely to cause adverse harm to the applicants for inspection. Request for Inspection to the Panel shall be in writing and must explain the steps already taken to resolve the issue and also the nature of the action or omission and the action taken to bring the issue to the notice of Bank’s management.17

The chairperson of the Panel shall informed the Executive Directors of the Bank of which they have 21 days to provide the Panel with evidence of compliance or intention to comply with Bank’s policies and procedure18. If it requires investigation, the chairperson of the panel will discharge inspectors with the responsibility in conducting the inspection and the report of the Panel shall be submit its report to the Executive Directors and the President who in turn must react within six week indicating its recommendation19. The decision of the Panel on procedural matters and its report shall be reached by consensus and in the absence; the majority and minority views shall be stated20. The decision shall be made public.

4.0 Accountability of the Inspection Panel (Input Legitimacy)

According to Kofi Annan, former United Nations (UN) Secretary General;

“We need new mechanisms to ensure accountability. Where there is accountability we will progress; where there is non we will underperform21”

15 Accountability in Global Governance. A global Administrative Law Project Workshop of the University of Institute for International Law and Justice page 13; New York University School of Law chaired by Kingsbury Benedict and Richard Stewart.16 Center for Global, International and Regional Studies; UC Santa Cruz, page 8.17 The World Bank Inspection Panel: In Practice; page 274, 275 and 2276 by Ibrahim F.I. Shihata.18 Ibid, 276.19 Ibid.20 Ibid, 277.21 Envisioning Reform: Enhancing UN Accountability in the Twenty-First Century edited by Sumihiro Kuyama and Michael Ross Fowler: Conceptual analysis of accountability: The structure of accountability in the process of responsibility page 73 by Hirohide Takikawa.



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The quest for accountability at the International level especially in International financial institutions like the World Bank has gathered a lot of momentum within the last three decades. The justification for being accountable has been based on compliance, efficiency and legitimacy. This demand is aimed at making those in position of power and authority to comply with rules in an attempt to prevent the abuse of power. Accountability by those in authority may also help improve performance and this may help enhance the legitimacy of their decisions as managers22.

The Panel’s mandate on accountability links three important concepts: non compliance with Bank’s policies, harm and causation23. Looking into the Inspection Panel of the World Bank, it was established as a quasi-judicial accountability process to investigate complaints brought to its notice by persons or groups of persons claiming to have been or would be adversely affected by the Banks non-compliance with its safeguard measures (policies and procedures)24. The Panel is thus mandated to check the excesses of the Bank staff, ensure compliance between stakeholders of Bank’s projects but its activities must also be accepted by stakeholders as being fair, efficient and justifiable.25

In Global Administrative Law, Kingsbury et all raised six questions aimed at input legitimacy in necessitating accountability of International organizations like the World Bank Inspection Panel. To them, this exemplifies the different structures of Global regulations in relation to legal and political accountability which stresses much on transparency.26 Though I will not engage in giving some answers to these questions, it helps us however better understand the importance and center stage this discussion on accountability and legitimacy has gained over the years.

Questions (Kingsbury ET all)

22 Envisioning Reform: Enhancing UN Accountability in the Twenty-First Century edited by Sumihiro Kuyama and Michael Ross Fowler: Conceptual analysis of accountability: The structure of accountability in the process of responsibility page 73 -74 by Hirohide Takikawa.23 Center for Global, International and Regional Studies; UC Santa Cruz, page 8.

24 Accountability and the Rule of Law at the International Level, page 10 by André Nollkaemper, Jan Wouters and Nicolas Hachez.

25 Ibid.26 Accountability in Global Governance; A Global Administrative Law Project Workshop: November 17, 2006 by Benedict Kingsbury and Richard Stewart page 2.



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What are the elements of accountability and how do we make power holders accountable?

Who can invoke these mechanisms and to what ends? How would we operationalize these mechanisms towards decision

making techniques?27

What are the essential elements of accountability? What are different means of securing accountability? What are the potential normative goals of accountability

mechanisms?28

Kingsbury and Stewart say since the political form of accountability backed by elections is absence at the International level, there is greater need for consent and deliberative processes that must result in concrete normative expressions on the ideals to be achieved.29 Jacob Katz Cogen did also emphasize on the relative normatively of international law in making international institutions as the Inspection Panel accountable when he said.

“[t]though it is said that compliance with international law is high, the international system contains few legislative, judicial or executive processes analogous to those of state, and , consequently, the system’s ability to self correct and self enforce is much more limited, creating gaps between aspiration and authority, procedure and policy”30

5.0 The Independence of the Inspection panel and Panel members

Quoting Brown Weiss, Lallas and Herken;

“Members of the Panel shall be selected on the basis of their ability to deal thoroughly and fairly with the request brought to them, their integrity and independence from the Bank’s Management, and their exposure to developmental issues and … conditions in developing countries. Knowledge and experience of the Bank’s operations will also be desirable”31.

27 Ibid, 2.28 Ibid, 2.29 Ibid, 330 Accountability and the Rule of Law at the International Level, page 4 by André Nollkaemper, Jan Wouters and Nicolas Hachez.31 Ibid, Brown Weiss, Lallas and Herken; page 277.



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The Bank’s Resolution 93-10 (IBRD) and 93-6 (IDA) of September 22, 199332 emphasized on the independence of the Panel and its members aimed at guaranteeing impartiality and integrity. In line with the Panel’s resolution: The Resolution provides that “the Panel has the power to receive requests and investigate claims where the Bank has failed to comply with its operational policies and procedures –which consist of the Bank’s Operational Policies (OPs), Bank Procedures (BPs), and Operational Directives (ODs), and similar documents, but excludes Guidelines and Best Practices and similar documents or statement”33

1. Executive Directors, alternates, advisers and staff members of the World Bank Group shall not serve on the Panel until after a period of 2 years since the end of their last service with the World Bank,

2. Panel members are not allowed to participate in the investigation and hearing of any request relating to a matter he or she is linked to,

3. Panel members appoint their own chair person,

4. Panel members may be removed from office only by a decision of the Executive Directors34.

5. The Panel members have a non renewable 5 years mandate and cannot be re-appointed as staff members of the Bank35.

6.0 Conclusion

Though the Inspection panel operates an open door policy and its procedure, process and reports are usually made available on the internet for public consumption, there still exist gaps which create doubts and at times confusion and fear to those they are out to protect. These worries which at times are legitimate, exposes it as an arm of the Bank than an independent inspector working for the people and the Bank. The reasons are:

The persons who have or are to be affected by Bank’s projects have little or no information about the Panel and its pro-accountability mechanism. There

32 http://web.worldbank.org. 33 The World Bank Inspection Panel; A tool for accountability, page 12 by Yvonne Wong.34 Envisioning Reform: Enhancing UN Accountability in the Twenty-First Century edited by Sumihiro Kuyama and Michael Ross Fowler: Conceptual analysis of accountability: The structure of accountability in the process of responsibility by Brown Weiss, Lallas and Herken.35 The world Bank Inspection Panel: In Practice; page 207 and 208 by Ibrahim F.I. Shihata.


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may also be a lack of a clear cut distinction between Bank’s project and state projects since they are many a times interwoven. This usually leaves the blame solely on the government who are exploiting Bank’s projects as government projects for political gains.36

Even where there is awareness of the Panel, lack of information as to safeguard measures and Panel procedures frustrate cases of non-compliance because there is no complainant. The cost demands in filing a complaint usually scare those who have legitimate cases of breaches by the Bank. Some victims of Bank’s projects simply stay out of the compliant process for fear of reprisals since they have to sign the complaints or the written authorization if complaint was to be filed in by a third party on their behalf37. Also the lack of confidence on the Panel as independent in the eyes of most claimant makes the process to some degree under utilized by all who are victims or potential victims of the Bank’s failures to comply with process and procedures. This is because the Panel is seen by some as an arm of the Bank since its Board is appointed by the Bank’s board and they have to make recommendations to the Executive Director of the Bank. There is no appeals body for action against the Panel or the Board for dissatisfied claimants which leaves behind some dissatisfaction on the part of the complainant when decision of Panel and Board are unsatisfactory to them.38

The lack of a real enforcement mechanism in the Inspection Panel could be seen as a real setback in its effort in holding both the Bank and itself fully accountable. Recommendations which are issued to the Banks Board is not enough to bring about lasting checks and balances and to curb the arbitrariness of some of the Bank’s officials I n relation to power and implementation. This is because the final decision power still rest in the hands of the Executive Directors and staff who are in no way subject to the Panel’s decision39.

Also, the Panel’s policy to take decision base on consensus than qualified majority vote is somehow political in character. This means legitimate decisions at times may become stifled because someone does not agree on

36 The World Bank Inspection Panel; A tool for accountability, page 12 by Yvonne Wong.

37 The World Bank Inspection Panel; A tool for accountability, page 12 by Yvonne Wong.38 World Bank Inspection Panel; A tool for accountability, page 32 by Yvonne Wong.39 Ibid.



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something which is of great significance to improving on the Panel and its activities40.

The Panel’s inability to exercise competence on all matters linking the Bank in its activities with member countries becomes a matter of frustration and some sort of duplication of functions as these have been left in the hands of the Arbitration Body of the Bank which performs similar and related duties like the Panel.

Also the Panel’s inability to review on issues which it had earlier made recommendations on is somehow frustrating as this blocks all avenues for the Panel to revisit areas where it may have faltered as a result of lack of inadequate information or lack of information or a complete misrepresentation. This gives the affected victims of the Panel’s decision no room for redress since there is no appeals body to handle such cases41.

Despite the above short comings as seen by complainants, the Panel has for the last years received more than 43 requests for inspection which is a sign of its workability and acceptance by the public.42 The Banks compliance on most of the Panel’s recommendations makes the Panel a credible and effective body and guarantees its independence from Bank interference.

7.0 Bibliography

1. Envisioning Reform: Enhancing UN Accountability in the Twenty-First Century ed by Sumihiro Kuyama and Michael Ross Fowler, published by the United Nations University Press; New York.

2. Demanding Accountability: A Civil-Society Claims and the World Bank Inspection Panel ed by Dana Clark, Jonathan Fox and Kay Treakle.

3. The Inspection Panel of the World Bank: A different complaints procedure ed by Gudmundur Alfredsson and Rolf Ring; Published by Martinus Nijhoff Publishers.

4. The World Bank Inspection Panel: In Practice; second edition by Ibrahim F.I. Shihata; Published by the Oxford University Press.

40 www.worldbank.org .41 Ibid.42 World Bank Inspection Panel; A tool for accountability by Yvonne Wong.


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5. An Interactional Theory of International Legal Obligation: Legal studies Research series No. 08-16 of July 2008 by Jutta Brunnee and Stephen J. Toope of University of Toronto (Faculty of Law)http://ssrn.com/abstract=1162882 .

6. Legitimacy and Accountability in Global Regulatory Governance: The Emerging Global Administrative Law and the Design and Operation of Administrative Tribunals of International Organizations; by Benedict Kingsbury and Richard Stewart.

7. Accountability and the Rule of Law at International Level by André Nollkaemper, Jan Wouters and Nicolas Hachez of Amsterdam University Law School.

8. The Concept of “Law” in Global Administrative Law by Benedict Kingsbury; EJIL (2009), Vol. 20 No. 1, 23-57 of the European Journal of International Law Vol. 20 No 1.

9. Accountability in Global Governance. A global Administrative Law Project Workshop of the University of Institute for International Law and Justice; New York University School of Law chaired by Kingsbury Benedict and Richard Stewart.

10. The World Bank Inspection Panel; A tool for accountability, by Yvonne Wong.

11. The World Bank Inspection Panel and Quasi Judicial Oversight: In Search of the “Judicial Spirit” in Public International Law, by Dr. Andria Naudé of Erasmus University Rotterdam

12. www.worldbank.org

13. www.catalogue.nla.gov.au/records/511195


http://www.catalogue.nla.gov.au/records/511195

http://www.worldbank.org/

http://ssrn.com/abstract=1162882

worldbank inspection and general administrative law

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