CIF - A Independent Accountability Mechanism

Official Use

IFC/MIGA Independent Accountability Mechanism (CAO) Policy

JUNE 28, 2021IFC/MIGA IAM (CAO) POLICY ii

Official Use CONTENTS GLOSSARY ………………………………………………………………………………………………………………………………………iii SECTION I - BACKGROUND ..................................................................................................................... 1 SECTION II - PURPOSE ............................................................................................................................. 1

SECTION III - MANDATE AND FUNCTIONS ............................................................................................... 1

SECTION IV - CORE PRINCIPLES ................................................................................................................ 2 SECTION V - GOVERNANCE ..................................................................................................................... 3

SECTION VI - ACCESS TO INFORMATION AND DISCLOSURE .................................................................... 6

SECTION VII - LODGING A COMPLAINT AND SCREENING FOR ELIGIBILITY ............................................... 7

SECTION VIII - ASSESSMENT ..................................................................................................................... 12

SECTION IX - DISPUTE RESOLUTION ....................................................................................................... 14

SECTION X - COMPLIANCE .................................................................................................................... 17 SECTION XI - ADVISORY .......................................................................................................................... 27

SECTION XII - THREATS AND REPRISALS .................................................................................................. 28

SECTION XIII - OUTREACH AND COMMUNICATION ................................................................................. 29

SECTION XIV - COOPERATION WITH OTHER INDEPENDENT ACCOUNTABILITY MECHANISMS (IAMs) ... 31

SECTION XV - REVIEW OF POLICY ............................................................................................................ 31 SECTION XVI - MISCELLANEOUS ............................................................................................................... 31IFC/MIGA IAM (CAO) POLICY iii Official Use GLOSSARY Capitalized terms used in this Policy have the following meanings: Access to Information Policy or AIP(s): IFC’s or MIGA’s Access to Information Policy, or both, as applicable.

Active Project: A Project approved by the Board for which the IFC/MIGA Exit has not yet occurred.

Board(s): IFC or MIGA Board of Directors, as applicable (together, the Boards).

Business Days: Any day that is not a Saturday, Sunday, or other da y on which the World Bank Group headquarters remain closed.

occurred. Board(s): IFC or MIGA Board of Directors, as applicable (together, the Boards).

Business Days: Any day that is not a Saturday, Sunday, or other da y on which the World Bank Group headquarters remain closed.

CAO: The Office of the Compliance Advisor Ombudsman.

CAO DG: The Director General of the CAO.

Client (IFC): The legal entity to which IFC provides investment or advisory services. For IFC Projects in relation to which IFC has entered into Project agreements, the term Client refers to the legal entity that receives investment or advisory services from IFC under the Project agreements. For IFC Projects in relation to which IFC has not entered into Project agreements, the term Client refers to the legal entity that is engaged in active discussions with Management with respect to such investment or advisory services. Client (MIGA): The Project Enterprise, the Guarantee Holder, the borrower of any loan guaranteed by MIGA or any other entity responsible for the implementation of the Project (as such parties are set forth in MIGA’s contract of guarantee or if MIGA has not yet entered into a contract of guarantee as approved by the MIGA Board or MIGA Management (under delegated authority)), as is appropriate in the context. MIGA has no contractual relationship with the Project Enterprise; thus MIGA seeks to enforce requirements, including E&S Requirements, against the Guarantee Holder as outlined in MIGA’s contract of guarantee.

CODE: Committee on Development Effectiveness of the Boards.

Complainant(s): Individual(s) or group(s) of individuals identified as participating in a CAO process, who believe that they have been or may be harmed by a Project. Environmental and Social (E&S) Requirements: Project-level requirements as defined in the IFC/MIGA E&S Policies and Performance Standards as relevant, and other environmental and social obligations as may be agreed between IFC/MIGA and the Client. E&S Poli cies: (i) The Policy on Environmental and Social Sustainability of IFC or MIGA as

IFC/MIGA E&S Policies and Performance Standards as relevant, and other environmental and social obligations as may be agreed between IFC/MIGA and the Client. E&S Poli cies: (i) The Policy on Environmental and Social Sustainability of IFC or MIGA as applicable; (ii) the Project-specific provisions of the Access to Information Policy of IFC or MIGA as applicable; and (iii) any other Board -approved environmental and social commitments for Projects.IFC/MIGA IAM (CAO) POLICY iv Official Use FI: Financial intermediary.

Harm: Any material adverse environmental and social effect on people or the environment resulting directly or indirectly from a Project or Sub -Project. Harm may be actual or reasonably likely to occur in the future.

IAM: An independent accountability mechanism. For the purpose of this Policy, IAM refers to an independent accountability mechanism that is a member of the IAM Network.

IAM Network: A network of independent citizen‐driven complaint and response mechanisms at international development finance institutions that have a mandate to consider social an d environmental impacts/concerns, which may be found at independentaccountabilitymechanism.net IBRD: International Bank for Reconstruction and Development.

IDA: International Development Association.

IFC: International Finance Corporation.

IFC/MIGA Exit: For IFC: With respect to any Project, the earlier of (i) the termination of the financing, investment, or advisory relationship with the Client for such Project pursuant to the applicable Project agreements; or (ii) when the Project ceases to exist, or the Project has been dropped by IFC after Board approval.

For MIGA: With respect to any Project, the earlie st of (i) the expiration of the guarantee period;

(ii) the termination of MIGA’s contract of guarantee; (iii) the cessation of MIGA’s liability under MIGA’s contract of guarantee; (iv) when the Project ceases to exist, or the Project has been dropped by MIGA after Board approval; or (v) when the Client ceases to have control ov er the

MIGA’s contract of guarantee; (iv) when the Project ceases to exist, or the Project has been dropped by MIGA after Board approval; or (v) when the Client ceases to have control ov er the Project.

Management: The management of IFC or MIGA, or both, as applicable.

MAP: Management Action Plan.

MIGA: Multilateral Investment Guarantee Agency.

Operational Guidelines: CAO’s Operational Guidelines dated March 2013.

Parties: The Complainant(s) and the Client(s) and/or Sub-Client(s).

Performance Standards: IFC’s or MIGA’s Performance Standards on Environmental and Social Sustainability, or both, as applicable.

Policy on Environmental and Social Sustainability: The Policy on Environmental and Social Sustainability of IFC or MIGA, or both, as applicable.IFC/MIGA IAM (CAO) POLICY v Official Use

Policy: IFC/MIGA Independent Accountability Mechanism (CAO) Policy.

President: The President of the World Bank Group.

Project (IFC): (1) With respect to investment services or advisory services provided by IFC to a Client, the investment or advisory services contemplated by the relevant services agreement; and (2) with respect to financing or investment engagements , the business activities that are contemplated or may be supported under the applicable Project agreements. Where relevant engagements or agreements have not been definitively agreed or executed, Project means the services, project or activities being discussed or contemplated by IFC and the Client. Project (MIGA): A project or set of projects in to which the investment covered by MIGA or approved by the MIGA Board or MIGA Management (under delegated authority) has been made or is to be made. For Projects in relation to which MIGA has entered into a contract of guarantee, the term Project refers to the Investment Project (as such term is defined in MIGA’s contract of guarantee). For Projects in relation to which MIGA has not yet entered into a contract of guarantee,

or is to be made. For Projects in relation to which MIGA has entered into a contract of guarantee, the term Project refers to the Investment Project (as such term is defined in MIGA’s contract of guarantee). For Projects in relation to which MIGA has not yet entered into a contract of guarantee, the term Project refers to the project that the MIGA Board or MIGA Management (under delegated authority) had approved.

Sub-Client: A business directly supported by an FI Client that is within the use of proceeds requirements in IFC’s finance or investment documents or MIGA’s contract of guarantee.

Sub-Project: A business operation of a Sub -Client within the use of proceeds requirements in IFC’s finance or investment documents or MIGA’s contract of guarantee.

Sustainability Framework: IFC’s or MIGA’s Policy on Environmental and Social Sustainability, Performance Standards, and Access to Information Policy, as applicable.

Terms of Reference: CAO’s Terms of Reference, instituted by the President, that established the CAO’s mandate and formed the basis for the Operational Guidelines.

Threats and Reprisals: In connection with CAO pursuing its purposes, a ny detrimental act suggested, threatened, or taken, directly or indirectly, against a person to silence or punish him or her, prevent interaction with CAO or prevent the submission or continued processing of a complaint. Forms of Threats and Reprisals include attempts at intimidation, harassment, discriminatory treatment, withholding of entitlement, risks to livelihood or reputation, and threats of physical violence, criminalization, or incarceration.

World Bank Group: IBRD, IDA, IFC, MIGA, and the International Centre for Settlement of

Investment Disputes.IFC/MIGA IAM (CAO) POLICY 1 Official Use

SECTION I - BACKGROUND

1. As members of the World Bank Group, the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) believe that an important component of achieving positive development outcomes is the environmental and social sustainability of

1 Official Use

SECTION I - BACKGROUND

1. As members of the World Bank Group, the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) believe that an important component of achieving positive development outcomes is the environmental and social sustainability of IFC and MIGA-supported business activities. IFC and MIGA pursue such environmental and social sustainability by applying their respective Polic ies on Environmental and Social Sustainability and associated Performance Standards.

2. The Office of the Compliance Advisor Ombudsman (CAO) was established in 1999 to address complaints related to IFC /MIGA Projects and to enhance environmen tal and social outcomes of these Projects.

3. This IFC/MIGA Independent Accountability Mechanism (CAO) Policy, which supersedes and replaces in its entirety the CAO Operational Guidelines and CAO Terms of Reference, outlines CAO’s purpose, mandate and functions, core principles, governance, and operating procedures. Also, upon the adoption of this Policy, CAO will report to the Boards.

SECTION II - PURPOSE

4. As the independent recourse and accountability mechanism for IFC /MIGA, CAO facilitates the resolution of compla ints related to their Projects and Sub -Projects, undertakes investigations of IFC’s and MIGA’s environmental and social compliance , fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA, as further described in this Policy.

5. In executing its mandate, CAO facilitates access to remedy for Project -affected people in a manner that is consistent with the international principles related to business and human rights included within the Sustainability Framework.

6. Accountability at IFC /MIGA is an institution -wide effort, incorporating multiple and interconnected roles and responsibilities for CAO, the Boards, and Management. The role of IFC/MIGA is to support effective and efficient execution of CAO’s mandate pursuant to this Policy and to be accountable to the Boards. With this Policy, the Boards reaffirm the

interconnected roles and responsibilities for CAO, the Boards, and Management. The role of IFC/MIGA is to support effective and efficient execution of CAO’s mandate pursuant to this Policy and to be accountable to the Boards. With this Policy, the Boards reaffirm the importance of the CAO’s mandate, its independence (as described in the core principles below) and integrity. The Boards have the final author ity to interpret this Policy and will oversee its implementation.1

SECTION III - MANDATE AND FUNCTIONS

7. CAO’s mandate is to:

1 In connection with overseeing the implementation of this Policy, any Executive Director may request, within a reasonable time, for discussion by the Board, any item circulated for information pursuant to Section 3 (Actions Before, During, and After Board Meetings) of the Corporate Secretariat’s Board Manual (SEC9.01-OTH.101).IFC/MIGA IAM (CAO) POLICY 2 Official Use a. Facilitate the resolution of Complaints from people who may be affected by Projects or Sub-Projects in a manner that is fair, objective, and constructive; b. Enhance the environmental and social outcomes of Projects or Sub-Projects; and c. Foster public accountability and learning to enhance the environmental and social performance of IFC/MIGA and reduce the risk of harm to people and the environment.

8. CAO operates through three complementary functions, which all contribute to delivering on

this mandate: a. Dispute resolution function: CAO helps resolve issues raised about the environmental and/or social impacts of Projects and/or Sub -Projects through a neutral, collaborative, problem-solving approach and contributes to improved outcomes on the ground. b. Compliance function: CAO carries out reviews of IFC/MIGA compliance with the E&S Policies, assesses related Harm, 2 and recommends remedial actions to address non-compliance and Harm where appropriate. c. Advisory function: CAO provides advice to IFC /MIGA and the B oards with the purpose of improving IFC’s/MIGA’s systemic performance on environmental and

E&S Policies, assesses related Harm, 2 and recommends remedial actions to address non-compliance and Harm where appropriate. c. Advisory function: CAO provides advice to IFC /MIGA and the B oards with the purpose of improving IFC’s/MIGA’s systemic performance on environmental and social sustainability and reducing the risk of harm.

9. CAO has no authority with respect to judicial processes. CAO is not a judicial or legal enforcement mechanism, nor is CAO a substitute for courts or regulatory processes , and CAO’s analyses, conclusions, and reports are not intended or designed to be used in judicial or regulatory proceedings or for purposes of attributing legal fault or liability.

SECTION IV - CORE PRINCIPLES

10. CAO carries out its work guided by the following core principles:

a. Independence and impartiality: As independence and impartiality are prerequisites to encourage stakeholders’ trust and confidence in CAO: not being identified with or beholden to any sector or interest and operating independently of Management, reporting directly to the Boards; conducting work without undue influence and ensuring the fair and objective conduct of staff; and making provisions to avoid conflicts of interest. b. Transparency: Making every effort to keep Parties informed about processes and the progress of a complaint, and ensuring transparency and disclosure of CAO reports, including findings and outcomes.

2 References to the capitalized term "Harm" in this Policy have the specific meaning ascribed to this term in the Glossary. References to "harm" in this Policy that are not capitalized should be read in accordance with the ordinary and customary meaning given to such term.IFC/MIGA IAM (CAO) POLICY 3 Official Use c. Accessibility: Being known, accessible, and available to all stakeholders ; mitigating barriers of access and promoting safe access through confidentiality and reprisal risk provisions; providing a process responsive to gender and disabilities ; and communicating effectively with stakeholders to enhance their understanding of CAO. d. Responsiveness: Being flexible, timely, and solutions -driven while considering disparities in power and resources between Parties.

provisions; providing a process responsive to gender and disabilities ; and communicating effectively with stakeholders to enhance their understanding of CAO. d. Responsiveness: Being flexible, timely, and solutions -driven while considering disparities in power and resources between Parties. e. Fairness and equitability: Carrying out CAO processes so that all relevant stakeholders are able to participate and be heard; have reasonable access to information, advice, and expertise; and are treated respectfully on fair, equitable, and informed terms. f. Predictability: Offering clear and consistent processes and procedures with relevant timeframes and providing clarity with respect to the types of available outcomes and means of monitoring implementation to facilitate stakeholders’ understanding and expectations of such processes and procedures. g. Consistency with good practice: Following international good practice standards consistent with this Policy, including the responsibility of business to respect human rights. h. Continuous learning: Consistently enhance CAO’s effectiveness ba sed on feedback from stakeholders , foster systemic improvements in the environmental and social performance of IFC/MIGA, and reduce the risk of harm to people and the environment. SECTION V - GOVERNANCE Director General, Office of the Compliance Advisor Ombudsman

11. CAO will be led by a Director General (CAO DG), as follows: Roles and responsibilities

12. CAO is based in Washington, D.C., at IFC headquarters and led by the CAO DG. The CAO DG reports to the Boards under the oversight of the Committee on Development Effectiveness

(CODE). The CAO DG is responsible for the implementation of this Policy, managin g CAO operations, and making decisions pursuant to this Policy. The CAO DG is directly accountable to the Boards and is not part of, and does not report to, Management. Pre-employment conditions

13. To preserve CAO’s independence, credibility, and integrity, candidates for the CAO DG position will be external to the World Bank Group, with the exception of CAO staff3 who may apply for the CAO DG position. Executive Directors, Alternates, Advisors, and World

Pre-employment conditions

13. To preserve CAO’s independence, credibility, and integrity, candidates for the CAO DG position will be external to the World Bank Group, with the exception of CAO staff3 who may apply for the CAO DG position. Executive Directors, Alternates, Advisors, and World

3 For purposes of this Policy, the term “staff” refers to all persons holding World Bank Group appointments as defined in Staff Rule 4.01, including persons holding consultant and local consultant appointments.IFC/MIGA IAM (CAO) POLICY 4 Official Use Bank Group staff (other than CAO staff) may not be candidates for the CAO DG position or serve as CAO DG until two years have elapsed since the end of their service with the World Bank Group. Experience and credentials

14. The CAO DG will be a person of impeccable integrity and credibility, strong interpersonal skills, empathy, sound judgment, and a proven record of respected international leadership.

S/he must demonstrate a set of core competencies, which include understanding or experience with: a broad range of civil society, including marginalized and vulnerable groups; the social, environmental, legal, or economic development fields; dispute resolution practices, including mediation and dialogue; compli ance investigations/audits; the private sector business environment and financial products, especially frontier markets and developing countries; and institutional oversight, recourse and accountability functions, including grievance mechanisms. Selection process

15. To maintain the independence of the CAO DG, a selection committee will be established to conduct an independent, transparent, and participatory selection process that involves stakeholders from diverse regional, sectoral, and cultural backgrounds, including civil society and business communities. CAO, IFC, and MIGA will solicit nominations for the selection committee from stakeholders and forward them to the CODE Chair and Vice-Chair for their consideration. The CODE Chair and Vice-Chair will appoint six people to form the selection committee, including two Executive Directors, two senior representatives from the global business community, and two senior representatives from the civil society community , and

committee from stakeholders and forward them to the CODE Chair and Vice-Chair for their consideration. The CODE Chair and Vice-Chair will appoint six people to form the selection committee, including two Executive Directors, two senior representatives from the global business community, and two senior representatives from the civil society community , and appoint one of these Executive Directors as chair of the selection committee . World Bank Group Human Resources will provide administrative support to the selection committee, including identifying and engaging a reputable and recognized recruitment firm, but will not provide any view or advice on any candidate. The selection committee will review applications, determine a shortlist, and conduct interviews with shortlisted candidates.

16. The selection committee will establish a process for receiving formal input from CAO, Management, and the CODE Chair and Vice-Chair, including the conduct of interviews with shortlisted candidates. CAO and Management may be invited to interview shortlisted candidates.

17. The selection committee will recommend the finalist candidate(s) to the President, with ranking if ne eded, for further consideration. The President will select the final candidate and/or may request additional information. World Bank Group Human Resources will ascertain the candidate’s interest and availability and conduct necessary reference checks.

Following further consultation with the selection committee as necessary, the President will put forward the nomination to the Boards for their decision. Term and renewal

18. Following the selection process, the Boards will nominate the CAO DG to be appointed for

a five-year term based in Washington, D.C. The CAO DG’s term may be renewed for oneIFC/MIGA IAM (CAO) POLICY 5 Official Use additional five -year term, following the recommendation of CODE and approval of the Boards. The CAO DG will inform the Boards in wri ting of his/her interest to seek a second term. If so, the President will consult the Boards in an executive session, following which a recommendation will be made to the Boards for approval. If the CAO DG does not seek renewal, or if the renewal is not ap proved, the vacancy will be advertised, and the selection

term. If so, the President will consult the Boards in an executive session, following which a recommendation will be made to the Boards for approval. If the CAO DG does not seek renewal, or if the renewal is not ap proved, the vacancy will be advertised, and the selection process initiated. Upon conclusion of the appointment, the CAO DG is restricted for life from obtaining employment with the World Bank Group. Immunities and compensation

19. The CAO DG is a full-time employee at the level of Vice President. S/he is subject to the World Bank Group Staff Rules. The Boards will review and determine the compensation package to be offered to the CAO DG (including standard benefits available to IFC /MIGA fixed-term staff) upon the President’s recommendation. The performance review of the CAO DG is managed under the oversight of CODE with the advice of the Vice President, World Bank Group Human Resources. The CAO DG does not receive a performance rating and is not entitled to performance-based compensation. The same annual salary adjustment that the Boards approve for Vice-Presidents will apply to the CAO DG’s salary unless the Boards decide otherwise.

Removal

20. The CAO DG may be removed from office only by a decision of the Boards, for cause, as determined by the Boards on the recommendation of CODE. Any decision to remove him/her for cause is subject to the Boards’ approval. The Boards make this decision based on a report prepared by CODE that the President transmits to the Boar ds. In the transmittal document, the President may express his/her disagreement with the course of action recommended by CODE. A decision taken by the Boards for the removal of the CAO DG will be an administrative decision, subject to recourse directly bef ore the World Bank Group Administrative Tribunal pursuant to the Appeals Procedures and Rules of Procedure.

Budget

21. The Boards will provide CAO such budgetary resources sufficient to carry out its activities.

The CAO DG will prepare an annual itemized budget identifying a sufficient level of resources to ensure that CAO can carry out all of the roles, responsibilities, and activities set

Budget

21. The Boards will provide CAO such budgetary resources sufficient to carry out its activities.

The CAO DG will prepare an annual itemized budget identifying a sufficient level of resources to ensure that CAO can carry out all of the roles, responsibilities, and activities set out in this Policy in an effective way. The CAO DG will be responsible for determining the allocation of resources within CAO, including appropriate staffing and recruitment of consultants and experts. The CAO DG will submit the annual budgetary requir ements for consideration to CODE and the Budget Committee and approval by the Boards. Staffing

22. The CAO DG manages CAO staff, to whom applicable World Bank Group Human Resources policies and procedures apply. CAO staff are staff of the World Bank Group for all purposes, including with respect to immunities and privileges and are subject to World Bank Group Staff Rules. The CAO DG is free to make staffing decisions within the approved budget limits, without the Boards’ or Management’s involvement. Contracts for CAO staff restrictIFC/MIGA IAM (CAO) POLICY

6 Official Use staff at the level of specialist and above from obtaining employment with IFC or MIGA for two years after the end of their engagement with CAO, subject to any exception to this restriction that may be mutually agreed between the CAO DG and the Vice President responsible for human resources at IFC or a member of senior management responsible for human resources at MIGA, as applicable, with the goal to avoid any actual or perceived conflict of interest. The credibility of CAO staff and consultants is critical to CAO’s work. If a CAO staff or consultant has a conflict of interest about a particular case, that person will withdraw from involvement in that case. In exceptional circumstances, contractual arrangements for CAO consultants may impose time -bound restrictions on their future involvement with IFC or MIGA. Accountability and Reporting

23. CAO is accountable to and reports directly to the Boards.

24. CAO informs the Boards and provides regular updates to CODE regarding its activities. CAO

arrangements for CAO consultants may impose time -bound restrictions on their future involvement with IFC or MIGA. Accountability and Reporting

23. CAO is accountable to and reports directly to the Boards.

24. CAO informs the Boards and provides regular updates to CODE regarding its activities. CAO case reports, advisory work, and annual reports are all made publicly available. Although CAO reports to the Boards, CAO communicates with the President as relevant or requested.

SECTION VI - ACCESS TO INFORMATION AND DISCLOSURE

Access to Information

25. IFC/MIGA will cooperate to provide CAO with full and timely access to Project -related information held by them, including access to their staff, consultants, and files (including electronic and hard copy files), as the CAO DG reasonably considers relevant for carrying out CAO’s role under this Policy.

26. Financing or advisory agreements, and contracts of guarantee between IFC /MIGA and their Clients will include obligations for the Clients to permit CAO to (i) have access to the Clients’ records relating to the Project, and in the case of financial intermediary (FI) Clients, such FI Clients’ records relating to relevant Sub-Clients and relevant Sub-Projects, and (ii) visit and inspect the Project, for the purpose of carrying out CAO's role under this Policy, upon reasonable prior notice to the Clients, and subject to any applicable laws and regulations.

Disclosure

27. In carrying out its work, CAO will apply a presumption in favor of disclosure of environmental and social information, and at the same time, maintain the confidentiality of sensitive commercial information.

28. CAO is covered by the Access to Information Polic ies (AIPs