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2010

Analyze the accountability


and legitimacy processes of
the World Bank Inspection
Panel

Julius Che (331603)


Erasmus School of Law Rotterdam
15/3/2010
Analyze the accountability and legitimacy 201
processes of the World Bank Inspection 0
Panel

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
1
Resolution 93-10 of IBRD and 93-6 of IDA
2
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
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Panel was setting a precedent constituting “a progressive step in the
development of both the law of international organization and the
international law of 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…

Inspection Panel, page 9 by Dana Clark.


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.
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…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.

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
10
Accountability and the Rule of Law at the International Level, page 10 and 11 by André
Nollkaemper, Jan Wouters and Nicolas Hachez
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,
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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
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.

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.
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.
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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”

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

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.
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.
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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)

• 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,

26
Accountability in Global Governance; A Global Administrative Law Project Workshop:
November 17, 2006 by Benedict Kingsbury and Richard Stewart page 2.
27
Ibid, 2.
28
Ibid, 2.
29
Ibid, 3
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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.

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.
30
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.
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
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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
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

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.
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.
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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
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.

38
World Bank Inspection Panel; A tool for accountability, page 32 by Yvonne Wong.
39
Ibid.
40
www.worldbank.org .
41
Ibid.
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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.

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.

42
World Bank Inspection Panel; A tool for accountability by Yvonne Wong.
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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

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