Hemantha Withanage, Executive Director, NGO Forum on ADB
Asian Development Bank proudly presented its new accountability mechanism as the medicine for its project-related disputes in 2003. When presenting, former ADB President Tadao Chino said, “I am confident that with support from all stakeholders, the Accountability Mechanism will satisfy their demand that ADB address the complaints of project-affected people on the ground and establish a transparent process that will increase ADB’s accountability.” Theoretically, it provides mediation through the Special Project Facilitator (SPF) and a verdict on the violation of ADB policies through the Compliance Review Panel (CRP). But after two years of its existence, has it delivered any solutions to people’s issues? The recent CRP monitoring report on STDP, which was issued in July 2006, shows that the ADB management and the Road Development Authority have not complied with most of the remedial action proposed by the CRP report issued in July 2005. Said report was a response to the complaints made by project affected people. The report issued by the CRP stated that the management has fully complied with three recommendations and partially complied with six specific recommendations. However, it also stated that the management has not complied with three general recommendations and seven specific recommendations that include: “Management should require that all affected persons be fully compensated by actual payment before they are moved.” The Panel also reported that “some of the affected people remain dissatisfied with specific impacts of the project. There are many potential reasons for these objections, ranging from highly specific issues such as construction-related cracks in buildings to broad anxieties related to the disruption of cultural norms such as the integrity of extended families in landholdings of historical significance.” There is no question that the CRP team did its best to bring up the irregularities of the STDP to the ADB Board of Directors. It raises concerns among the CRP and the ADB management, co-financing agency, i.e. Japan Bank for International Corporation (JBIC), as well as the national government. But, has it served the purpose of solving the problems of the STDP? There is a similar tug-of-war on the Chasma Right Bank Irrigation project in Pakistan. Affected people make it harder by deciding not to participate in the CRP process, as well as by not paying irrigation taxes to the Pakistan government. Perhaps, this could be a better alternative if one believes that they cannot achieve any justice through the accountability mechanism.
Accountability and bureaucracy
The CRP report raises serious questions about the effectiveness of its accountability mechanism. If the ADB management does not respect it, how will its accountability mechanism deliver any good? What control does the ADB have once a given project is already under the control of the executing agency and the respective government? The best explanation for the failure of the accountability mechanism could be “bureaucracy.” The bureaucracy in the ADB management and national executing agencies seems to be the biggest barrier for the accountability mechanism. Bruce Rich wrote, “The bank is microcosm of a larger global political and environmental crisis, a crisis of accountability and sustainability. What are the roots of crisis? For one thing, economic and social modernization, Max Weber noted, spur two trends that are at best in tension with one another and are often opposed—bureaucratization and democratization. National bureaucracies are held accountable in varying degrees (most insufficiently) to the political institutions of the nation-states in theory, and more often only to themselves in practice.” Although the ADB wants to setup an accountability mechanism for “window dressing,” it is not ready for a true accountability. Until now, the ADB management does not resolve the problems of the STDP. This is true for the national government, too. The bureaucracy within the state agencies is a major syndrome in most developing countries. As Max Weber wrote, “Once fully established bureaucracy is among those social structures which are the hardest to destroy.” It is clear that most CRP recommendations are not entirely adopted. One bureaucratic hurdle that STDP is facing is the coordination of conflicting issues among the two major co-financers and the Government of Sri Lanka. The CRP recommended that the ADB management should review its co-financing arrangements in the STDP to strengthen the project’s compliance to the Safeguard Policy; specifically on environmental and resettlement policies. The panel reported that “ADB undertook discussions with JBIC on joint strengthening of compliance in September/October 2005, with a view to ensuring strong monitoring of project compliance with the safeguard documents covering both segments of the highway…” Following this discussion, the ADB and JBIC signed a memorandum of understanding (MOU) on 31 March 2006. However, the panel reported that “the MOU does not address this issue, instead, the MOU states that ‘Each party will be responsible to ensure that commonly agreed standards and environmental and social safeguards would be applied in the section of the Project such party is financing.’ Noting that each party has already effectively treated the Project as two separate projects, this reference is unfortunate. It does not attempt to address the event of conflict between policies of the two financiers and may create the possibility of ADB derogating from its own compliance” The Panel believes that the management has not taken steps to ensure strengthening of compliance of the whole project to the Safeguard Policy. The MOU will not be able to resolve any potential situations where the policies of the two agencies could come into conflict. Further, it said that the MOU does not settle the issue raised in its recommendation. It is unfortunate that ADB’s accountability mechanism has become a jailbird of bureaucracy. Project compliance has become the duty of the CRP instead of all parties. How long will CRP policing among co-financers, executing agency and the ADB management continue? Within the two arms of the accountability mechanism, the Office of the Special Project Facilitator (OSPF) believes that they are the best solution for the dispute resolution. It believes that the STDP-affected people would have had better remedied the problem if they have agreed with the Road Development Authority. While theoretically this could be true, practically it is not the case. The OSPF failed to meet the expectations due to its bias towards the ADB and immature mediation process. On the other hand, although the CRP produces the best reports, they are unpromising due to their failure to effectively enforce them. The ADB needs to end this poor legacy if they are really committed to its accountability.
Why little demand?
Lack of demand is another issue that the ADB should consider for the survival of its accountability mechanism. Among many ADB project-related disputes in the developing member countries, the OSPF received only five complaints. Only one case, i.e. Community Empowerment for Rural Development (CERD) in South Kalimanthan in Indonesia, was successfully completed. The CRP received only two complaints and only the protest on the Southern Transport Development Project in Sri Lanka was completed in full process. One should ask why there is such a little demand for both options. Does this lack of interest means that the ADB is doing well in other projects? From our experience, it is not the case. Although the ADB believes that the process is so simple and “less cumbersome,” it is not simple for the lay people. Although original requests can be made simple, it needs more expert knowledge at the later stage. STDP lessons shows that some documents required, such as “Involuntary Resettlement Plan,” were not even available for the affected public at the time. Not to mention that the bureaucrats maltreat them when they complained to the accountability mechanism. In addition, the state agency did not pay extra 25% compensation for those who filed the complaints. The CRP report on STDP states that they are “concerned about allegations of discrimination to affected people for having filed claims with the ADB Accountability Mechanism. The Panel cannot confirm these allegations, but the Panel hopes that all stakeholders in the Project are equally committed to transparency and participation, with full redress of valid complaints.” This is perhaps a clear warning for future complainants. In such situation, how does the ADB expect people to come forward? The recent experience in India shows that people do not believe the accountability mechanism. They even decided to walkout from the outreach workshops of the OSPF. The belief of the ADB that a few outreach programs can build the trust of the people to bring up issues to its accountability mechanism is a myth. It is a known fact that ADB’s sugar-coated mechanism does not provide answers to all its accountability issues. Most projects in question have corruption allegations, and the accountability mechanism does not have the mandate to investigate them. So far, people’s experience shows that the accountability mechanism is not effective beyond making recommendations. One big question that the ADB should answer is how to get accountability mechanism build the lost trust among the civil society.
Accountability and bureaucracy
The CRP report raises serious questions about the effectiveness of its accountability mechanism. If the ADB management does not respect it, how will its accountability mechanism deliver any good? What control does the ADB have once a given project is already under the control of the executing agency and the respective government? The best explanation for the failure of the accountability mechanism could be “bureaucracy.” The bureaucracy in the ADB management and national executing agencies seems to be the biggest barrier for the accountability mechanism. Bruce Rich wrote, “The bank is microcosm of a larger global political and environmental crisis, a crisis of accountability and sustainability. What are the roots of crisis? For one thing, economic and social modernization, Max Weber noted, spur two trends that are at best in tension with one another and are often opposed—bureaucratization and democratization. National bureaucracies are held accountable in varying degrees (most insufficiently) to the political institutions of the nation-states in theory, and more often only to themselves in practice.” Although the ADB wants to setup an accountability mechanism for “window dressing,” it is not ready for a true accountability. Until now, the ADB management does not resolve the problems of the STDP. This is true for the national government, too. The bureaucracy within the state agencies is a major syndrome in most developing countries. As Max Weber wrote, “Once fully established bureaucracy is among those social structures which are the hardest to destroy.” It is clear that most CRP recommendations are not entirely adopted. One bureaucratic hurdle that STDP is facing is the coordination of conflicting issues among the two major co-financers and the Government of Sri Lanka. The CRP recommended that the ADB management should review its co-financing arrangements in the STDP to strengthen the project’s compliance to the Safeguard Policy; specifically on environmental and resettlement policies. The panel reported that “ADB undertook discussions with JBIC on joint strengthening of compliance in September/October 2005, with a view to ensuring strong monitoring of project compliance with the safeguard documents covering both segments of the highway…” Following this discussion, the ADB and JBIC signed a memorandum of understanding (MOU) on 31 March 2006. However, the panel reported that “the MOU does not address this issue, instead, the MOU states that ‘Each party will be responsible to ensure that commonly agreed standards and environmental and social safeguards would be applied in the section of the Project such party is financing.’ Noting that each party has already effectively treated the Project as two separate projects, this reference is unfortunate. It does not attempt to address the event of conflict between policies of the two financiers and may create the possibility of ADB derogating from its own compliance” The Panel believes that the management has not taken steps to ensure strengthening of compliance of the whole project to the Safeguard Policy. The MOU will not be able to resolve any potential situations where the policies of the two agencies could come into conflict. Further, it said that the MOU does not settle the issue raised in its recommendation. It is unfortunate that ADB’s accountability mechanism has become a jailbird of bureaucracy. Project compliance has become the duty of the CRP instead of all parties. How long will CRP policing among co-financers, executing agency and the ADB management continue? Within the two arms of the accountability mechanism, the Office of the Special Project Facilitator (OSPF) believes that they are the best solution for the dispute resolution. It believes that the STDP-affected people would have had better remedied the problem if they have agreed with the Road Development Authority. While theoretically this could be true, practically it is not the case. The OSPF failed to meet the expectations due to its bias towards the ADB and immature mediation process. On the other hand, although the CRP produces the best reports, they are unpromising due to their failure to effectively enforce them. The ADB needs to end this poor legacy if they are really committed to its accountability.
Why little demand?
Lack of demand is another issue that the ADB should consider for the survival of its accountability mechanism. Among many ADB project-related disputes in the developing member countries, the OSPF received only five complaints. Only one case, i.e. Community Empowerment for Rural Development (CERD) in South Kalimanthan in Indonesia, was successfully completed. The CRP received only two complaints and only the protest on the Southern Transport Development Project in Sri Lanka was completed in full process. One should ask why there is such a little demand for both options. Does this lack of interest means that the ADB is doing well in other projects? From our experience, it is not the case. Although the ADB believes that the process is so simple and “less cumbersome,” it is not simple for the lay people. Although original requests can be made simple, it needs more expert knowledge at the later stage. STDP lessons shows that some documents required, such as “Involuntary Resettlement Plan,” were not even available for the affected public at the time. Not to mention that the bureaucrats maltreat them when they complained to the accountability mechanism. In addition, the state agency did not pay extra 25% compensation for those who filed the complaints. The CRP report on STDP states that they are “concerned about allegations of discrimination to affected people for having filed claims with the ADB Accountability Mechanism. The Panel cannot confirm these allegations, but the Panel hopes that all stakeholders in the Project are equally committed to transparency and participation, with full redress of valid complaints.” This is perhaps a clear warning for future complainants. In such situation, how does the ADB expect people to come forward? The recent experience in India shows that people do not believe the accountability mechanism. They even decided to walkout from the outreach workshops of the OSPF. The belief of the ADB that a few outreach programs can build the trust of the people to bring up issues to its accountability mechanism is a myth. It is a known fact that ADB’s sugar-coated mechanism does not provide answers to all its accountability issues. Most projects in question have corruption allegations, and the accountability mechanism does not have the mandate to investigate them. So far, people’s experience shows that the accountability mechanism is not effective beyond making recommendations. One big question that the ADB should answer is how to get accountability mechanism build the lost trust among the civil society.
