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OVERVEWJUNE1 998 24fl4 June 1998 for the WQ0KLTh [Z4 EkHiX International Bank for Reconstruction and Development & International Development Association lt he Inspection Panel is a Processing

1 OVERVEWJUNE fl4 June 1998 for the WQ0KLTh [Z4 EkHiX International Bank for Reconstruction and Development & International Development Association lt he Inspection Panel is a Processing requests resolutions of the Bank's board of three-member body creat- executive directors (the Board) ed in 1993 to provide an Requests for Inspection are that created the Pantel.? Because independent forum to private processed as follows: this is the first body of its kind to citizens who believe that they or give voice to private citizens in their interests have been or could The Panel receives a request an international context, the be directly harmed by a project and decides whether the Panel's operations and role confinanced by the World Bank.' request is within its mandate. tinue to evolve. That means that Affected groups and people may a The Panel sends the request to the Panel's operational procepresent their concerns through a Bank Management, who pre- dures and its operations need to Request for Inspection to the pare a response to the allega- be innovative and fluid. Panel. lions and submit it to the Twelve formal requests have The Panel's method of func- Panel. been received since Panel opertioning is laid out in Operating a The Panel makes a preliminary ations began in September Procedures developed by the review of the request, conducts The texts of Panel reports are Panel members to implement the an independent assessment of the merits of Bank publicly available. Management's response to it, 1. References to the "World Bank" or 'Bank" Who can file a request and recommends to the Board include the International Bank for Reconwhether the claims should be struction and Development (IBRD) and the At minimum requesters must investigated. International Development Association (IDA) show i n writing umreq2 that: The Boards of the TBRD and IDA are responshow in writing that: a If the Board approves a recomi- sible foroverall pohcya nd operatons and are mendation to investigate, the composed of representatives (Executive They live in the project area (or Panel proceeds with the investi- Directors) from both borrower and nonrepresent people who do) and gation. bcrrower member countnes with weighted are likely to be affected voting power according to the level of their adversely by project activities. a When the Panel finishes an capital subscriptions investigation, it sends its findo They believe that actual or likely ings to the Board and to Bank harm results from failure by the Management. Bank to follow its policies and procedures. a Bank Management then has six weeks to submit its recommeno Their concerns have been dis- dations to the Board on what cussed with Bank management, actions the Bank should take in and they are not satisfied with response to the Panel's find- UwW g the outcome. ings. Detailed steps are explained in the a Based on the Panel's findings Panel's Operating Procedures. and Bank Management's rec- JB8I NM u &3 ommendations, the Board takes the final decision on what should be done. t,lx[

2 I N S P E C T I O'N P A N E L R E S U L T S Who1 { a De A11e P a ne me( 1111mb@$ers The first three Panel members were appointed in April 1994 by the Executive Directors on the basis of their knowledge of and experience with development and their ability to deal thoroughly and fairly with complaints. Every year the Panel selects one of its members as a chairperson. Dr. Ernst-Giunther Brbder served as chairman for the first two years, from 1994 to July Mr. Richard E. Bissell served as chairman from August 1996 to July The present chairman, Dr. Alvaro Umania Quesada, replaced Mr. Bissell at the end of his nonrenewable three-year term in July Alvaro Umaiia Quesada is the current Ernst-GDnther Broder is the former Jim MacNeill is a policy advisor on the chairman of the Inspection Panel. president ( ) and director environment, energy, management, and Mr. Umaha was formerly professor and ( ) of the European Investment sustainable development to international director of the Natural Resources Bank. He has held several supervisory organizations, governments, and Management Program at INCAE, a Latin and consultative positions in international industry. He is chairman of the American graduate school of manage- banks and other institutions. Mr. Broder International Institute of Sustainable ment. He served as Costa Rica's first was a governor of the European Bank for Development and a member of the minister of natural resources from Reconstruction and Development from boards of the Woods Hole Research under President Arias. Mr to 1993 and a member of the Center, the Wuppertal Institute on Climate Umaha is a member of the boards of the special advisory group for the Asian and Energy Policy, the Environmental Rockefeller Foundation and the World Development Bank in Manila from 1981 Education and Training Institute of North Resources Institute. He has published to He is a member of the Panel of America, and Ontario Hydro. He was several books and many technical articles Conciliators for the International Centre secretary general of the World on energy, the economics of natural for Settlement of Investment Disputes, Commission on the Environment and resources, and the environment. Washington, D.C. Before being appointed Development (the Brundtland Mr. Umahia is a private entrepreneur in president of the European Investment Commission) and a major author of the the ecotourism and conservation areas Bank he served from 1964 to 1984 with commission's world-acclaimed report, and is involved in sustainable wildlife the Kreditantstalt fur Wiederaufbau in "Our Common Future." He served for reproduction and export. He holds a Frankfurt, where he was a member of the seven years as director of environment Ph.D. in environmental engineering and a managing board from 1975 to 1984 and for the Organization for Economic master's in economics from Stanford a spokeperson since He has Cooperation and Development. Earlier, he University. He also holds a master's in written and coauthored several books and was a deputy minister in the government environmental pollution control and a articles on financial and economic of Canada. Mr. MacNeill holds a graduate bachelor's in physics from Pennsylvania subjects. Dr. Br6der holds a doctorate in diploma in economics and political State University. Mr. Umaha's tenure economics from the University of science from the University of Stockholm expires August 1,1998. Freiburg and studies political and natural and bachelor's degrees in science (mathsciences at the Universities of Cologne, ematics and physics) and mechanical Mainz, and Paris. engineering from Saskatchewan University. Qa inn2 niffmi1 ienmmmh nmfilc Nn orian, onipi,

3 P N S P E C T D 0 N P A N E L R E S U LT S Name of request Registered Panel recommendation Board decision Last action 1 Nepal/Arun III Yes 10/94 Investigation Approved Panel reports 12/94, 6/95 2 Ethiopia/Expropriation No 5/95-3 Tanzania/Power Yes 6/95 No investigation Agreed 4 Brazil/Rondonia Yes 6/95 Investigation Not approved Review by Panel 3/97 5 Chile/Pangue No 11/95 - Panel report 6/95 6 Bangladesh/Jamuna Yes 8/96 No investigation Review in 12 months Pending 7 Argentina and ParaguayNacyretA Yes 10/96 Investigation Not approved Reviewed by Panel 9/97 8 Bangladesh/Jute Yes 11/96 No investigation Agreed 9 Brazil/Itaparica Yes 3/97 Investigation Not approved Review India/NTPC Yes 5/97 Investigation Approved/limited Report sent 12/97; decision pending 11 India/Ecodevelopment Yes 3/97 Pending 12 Lesotho-South Africa/Highlands Yes 5/98 Pending NOTE: Summaries are available on the Panel's Web site, from the Panel office, or from World Bank offices around the world (see back page). The texts of Panel reports are publicly available. 1 Request Nepal: Proposed Arun III Hydroelectric Project (1994) Requesters Group of Nepalese citizens and residents of the project area Date filed October 1994 Project description Claims of harm Building a 201 megawatt power station in the Arun Valley, which required construction of a long access road through the valley Lack of adequate economic evaluation; harm to the environment and indigenous people; unnecessary involuntary resettlement Policies allegedly violated OP/BP 10.04; BP and Annex A; OD 4.01; OD 4.20; OD 4.30 Inspection Panel findings Outcome Significance Summary Project alternatives not adequately examined; insufficient environmental and social preparation Board authorized limited investigation. After the Panel report, management withdrew support for the project. First Request for Inspection. It established precedents on eligibility and processing of Requests for Inspection. Presented in October 1994, the request alleged violations of IDA's policies on environmental assessment, involuntary resettlement, and indigenous peoples, among others. The main gf300-0

4 Ed S P E C T I O N PA N E L R E S U LT S complaints were related to the overall economic impact and to construction of the access road (needed to build the 201 megawatt power station) in a valley where there were no roads and significant environmental and cultural resources, including rich ethnic diversity. IDA management's response to the request denied any acts or omissions in violation of its policies. The Panel disagreed. In this first request, the Board accepted the Panel's recommendation for an investigation but restricted it to alleged violations of environmental assessment, involuntary resettlement, and indigenous people policies. The Panel's review focused on the main impacts of the project related to the access road. In June 1995, after the Panel had submitted its report, Management reassessed the proposed project and decided to withdraw its support. Although the Board did not authorize an investigation into the analysis of economic alternatives that had been conducted for the project, the Panel's report pointed out that project alternatives had not been considered with the same level of effort and therefore that a "realistic comparison of the risks associated with the proposed project and its alternatives could not have been carried out." The Panel pointed out that alternatives, such as smaller hydroenergy-based solutions, were not adequately analyzed. The project would have been the largest project ever undertaken by Nepal. Total investment was estimated at more than $1 billion-nearly equivalent to Nepal's annual budget, in a country with a per capita annual income of approximately $200 Given the country's low level of electrification, the demand for power did not justify such a large investment, and expected power sales to India-necessary to guarantee an adequate economic rate of return-were uncertain. Considerable international attention was paid to this project, and nongovernmental organizations (NGOs) took an active role in questioning the project's economic viability and environmental and social impacts. 2 Request Ethiopia: Compensation for Expropriation of Foreign Assets in Ethiopia Requesters A Greek family with investments in Ethiopia Date filed March 1995 Project description Claims of harm IDA's lending program Lack of compensation for expropriation of assets and blocking of bank accounts Policies allegedly violated OMS 1.28, OP/BP 17.50, OMS 1.19 Inspection Panel findings Outcome Significance Summary Request not eligible Panel made no recommendation. First request based on IDA's lending program In April 1995 the Panel received this request, which alleged that IDA had violated provisions of Operational Manual Statement 1.28 by extending credits to Ethiopia and now was nego-

What To Do When Project Impacts Are In Dispute? Participatory Monitoring and Joint Fact-finding

What To Do When Project Impacts Are In Dispute? Participatory Monitoring and Joint Fact-finding Scott Adams Specialist, Dispute Resolution, CAO Addis Ababa, Ethiopia September 16, 2014 Side Event at United