Accountability & International Financial Institutions: Community Perspectives on the World Bank's Office of the Compliance Advisor Ombudsman
Accountability & International Financial Institutions, March 2017, ISBN: 978-1-938722-06-6
112 Pages Posted: 12 Apr 2017
Date Written: March 2017
Abstract
The World Bank Group (“World Bank”) created the Office of the Compliance Advisor Ombudsman (CAO) in 1999 to ensure that development projects financed by its private-sector lending arm are environmentally and socially sound. This study examines the effectiveness of CAO in addressing complaints by private citizens about World Bank-financed companies.
The study uses quantitative and qualitative methods to offer an empirical view of how CAO works, what factors influence its approach and outcomes, and when communities believe it is effective and fair. The study finds that during its first decade of operation (2000-2011), CAO had some success facilitating agreements between affected communities and World Bank-financed companies, but failed to produce an agreement or conduct an audit in the majority of its cases. Our data also suggests that several factors — such as the wealth of the company, the involvement of international NGOs, and the size of the World Bank’s loan — may have influenced CAO’s process and outcomes. A forthcoming study will examine cases filed with CAO between 2011-2016.
In CAO, the World Bank has created the expectation of accountability, but seldom the reality. We recommend that the World Bank strengthen CAO’s accountability mandate. CAO currently does not have the authority to hold accountable the bank or the private companies the bank finances for breaches of bank social and environment policies. Nor does CAO have the authority to provide a remedy for harms caused by development projects. We also suggest ways CAO should address power imbalances between parties and create opportunities for meaningful participation by affected communities throughout its complaint process.
Today, every major International Financial Institution (IFI), including the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank, and the Inter-American Development Bank, has established an accountability mechanism similar to CAO. These IFI accountability mechanisms are often the only form of recourse available to affected communities.
Keywords: Accountability, World Bank, Alternative Dispute Resolution, Human Rights
Suggested Citation: Suggested Citation