CIF - Summary of Formal Public Consultations

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Summary of Formal Public Consultations from April 5 – May 19, 2021 and Feedback on the Draft IFC/MIGA Independent Accountability Mechanism (CAO) Policy

I. Overview In August 2020, IFC and MIGA Boards of Directors (“Boards”) released the report of the independent External Review Panel on the External Review of IFC’s/MIGA’s Environmental and Social Accountability, including the Compliance Advisor Ombudsman’s (CAO) Role and Effectiveness (“ External Review1”). The report reflected the extensive consultations that the External Review Panel had with the Reference Group comprising civil society organizations, IFC/MIGA clients, independent experts, and other DFIs and their independent accountability mechanisms (IAMs).

The External Review report was published and additional public comment on it was solicited from August 12 to September 12, 2020, generating a total of 74 submissions from civil society, clients, other DFIs, IAMs, governments, academia, and others. In response to recommendations of the External Review Panel, the Boards tasked a Joint CAO/IFC/MIGA Working Group (the “Working Group”) to develop a draft IFC/MIGA Independent Accountability Mechanism (CAO) Policy (“CAO Policy” or the “Policy”)). The Working Group conducted an informal stakeholder engagement with the Reference Group on the outline of the Policy in February 2021 before developing a full draft Policy during February and March 2021. A critical component of the development of the IFC/MIGA Independent Accountability Mechanism (CAO) Policy has been engagement with, and seeking feedback from, stakeholders. A Working Group comprised of CAO, IFC , and MIGA staff (“Working Group”) jointly designed and conducted a consultation process , including formal public consultations on the draft CAO Policy from April 5 -May 19, 2021. The objective was to conduct an open, inclusive, and transparent consultation process despite the challenges imposed by COVID-19. Efforts were made to engage civil society, clients of IFC and MIGA, complainant groups and

was to conduct an open, inclusive, and transparent consultation process despite the challenges imposed by COVID-19. Efforts were made to engage civil society, clients of IFC and MIGA, complainant groups and others who have directly participated in a CAO process, development finance institutions, independent accountability mechanisms, and other interested groups. The use of technology, in addition to an experienced facilitation team2, outreach to stakeholders, and the use of translation and interpretation services allowed for good participation, discussion , and feedback from a range of stakeholders . Written comments submitted by stakeholders provided detailed and thoughtful inputs. This report provides a summary of the consultation process, feedback received during the formal consultation sessions, feedback received from written submissions, and a table summarizing all input received and how the issue or suggestion was addressed in the final draft Policy.

II. Summary of the process To initiate the consultation process, a dedicated website was launched on April 5, 2021, which made the draft Policy available in English, Arabic, Chinese, French, Japanese, Portuguese, Russian, and Spanish.

Stakeholders could submit comments on the draft Policy through an online form on the website or via an

1 For more information about the External Review, go to https://www.worldbank.org/en/about/leadership/brief/external-review-of-ifc-miga-es-accountability 2 All sessions were led by a team of experienced mediators/facilitators including Mr. Juan Dumas, Ms. Aparna Mukhergee, Mr. Adi Gavrila, Mr. John Garrison, Ms. Alma Jadallah, and Ms. Mariama Conteh and supported by team members from CAO, IFC, and MIGA.2

email link. Information about the consultation sessions and the draft Policy, as well additional ac tions being taken by IFC and MIGA in response to the External Review to strengthen accountability and the process for developing potential remedial solutions were also posted on the website. On April 12, 2021, t he Working Group hosted an informational ses sion to provide stakeholders an

being taken by IFC and MIGA in response to the External Review to strengthen accountability and the process for developing potential remedial solutions were also posted on the website. On April 12, 2021, t he Working Group hosted an informational ses sion to provide stakeholders an overview of the draft Policy and information about the consultation process. This was followed by a series of eight interactive multi -stakeholder regional consultation sessions from April 26 -May 7, 2021 for participants from Latin America, Sub -Saharan Africa, the Middle East and North Africa, East Asia, South Asia, and Europe and Central Asia, concluding with a ninth global consultation on May 10, 2021. Where possible, consultation meetings were conducted in native languages with English translation. In addition, meetings were held with 6 complainant groups from Central Asia, Eastern Europe, Latin America, and SubSaharan Africa. More than 350 participants attended the information and consultation sessions from civil society, the private sector, IFC/MIGA clients, academia, and other development finance institutions (DFIs) and independent accountability mechanisms (IAMs). Summaries of each consultation session are included in this report and available on the consultation website. In total, the Working Group collected more than 330 comments 3 from stakeholders during the consultation process. Through the website, the Working Group received 26 written submissions : including 7 submissions from civil society (including one submission representing 24 civil society organizations), 1 submission from a group of 10 judges, 4 submissions from IFC/MIGA clients, 2 submissions from consultancies, 7 submissions from other DFIs, 1 submission from an IAM, 1 submission from a United Nations (UN) entity, 2 submissions made in a personal capacity, and 1 submission from a World Bank Group (WBG) staff member. The comments fall into several common themes including transparency, access to remedy, governance, and policy implementation, among others. The table below summarizes the feedback and comments received and includes responses from the Working Group regarding how the issues were addressed in the

World Bank Group (WBG) staff member. The comments fall into several common themes including transparency, access to remedy, governance, and policy implementation, among others. The table below summarizes the feedback and comments received and includes responses from the Working Group regarding how the issues were addressed in the final proposed version of the Policy. Feedback regarding the consultation process itself was overwhelmingly positive, with many stakeholders openly expressing appreciation for the extensive efforts undertaken during COVID -19 to ensure the process was inclusive and robust. CAO, IFC and MIGA wish to thank all who supported or participated in the consultations.

III. Summary of Consultation Meetings This section of the report was prepared by the team of professional facilitators who designed and conducted all the public consultation meetings virtually , with support from notetakers. The report summarizes comments provided by the approximately 253 stakeholders, including representatives of communities, civil society organizations, private companies, international accountability mechanisms, international financial institutions, academia, governments and other individuals, that took part in the nine virtual meetings of the consultation process. For ease of understanding of participants in different regions where sessions were held, interpretation was made available in Arabic, French, Portuguese,

3 It is possible that, in some instances, a single institution submitted the same or a similar comment during a consultation meeting and through a written submission. In some cases, multiple parties made the same comment, including through joint written submissions.3

Russian, and Spanish. In each meeting, members of the CAO/IFC/MIGA Working Group responsible for drafting the Policy presented information on the drafting and consultation process followed, key elements of the draft CAO Policy, including changes to CAO's processes, and next steps before finalizing the Policy and submitting it to the IFC and MIGA Boards for approval in June 2021 4. Participants were asked to provide their input and questions on the different sections of the draft Policy: 1) Purpose, Mandate, Functions and Core Principles (including Remedy) ; 2) Governance; 3) Eligibility of Complaints; 4)

provide their input and questions on the different sections of the draft Policy: 1) Purpose, Mandate, Functions and Core Principles (including Remedy) ; 2) Governance; 3) Eligibility of Complaints; 4) Assessment; 5) Dispute Resolution; 6) Compliance; 7) Advisory; 8) Threats and Reprisals; 9) Outreach; and 10) Access to Information and Disclosure. As this report is meant to summarize inputs received from all the stakeholder consultation meetings, it does not include the many questions asked by participants on the text of the draft Policy and answers provided by the W orking Group. The list and dates of meetings held is attached as Annex I and a general agenda for the sessions is included as Annex II. Similar facilitator’s reports summarizing input received from each stakeholder consultation meeting are publicly availab le here. Stakeholder Feedback Stakeholders were generally supportive of the draft Policy and welcomed several sections that confirm, clarify, or change current CAO practice. At the same time, throughout various consultation meetings, some stakeholders consistently raised concerns regarding the limitation barring the acceptance of complaints pertaining to projects in their pre -approval stage as well as the possibility of review by the IFC/MIGA Boards of a CAO decision to go forward with a compliance investigation. They also requested that the draft Policy provide greater detail on certain aspects such as seeking the consent of complainants to transfer a case from Dispute Resolution to Compliance, the deferral of a compliance investigation, project-level outreach about CAO’s existence, or the protection of complainants in case of threats and reprisals. This summary presents these r ecurring issues along with other comments and recommendations received during the consultations. Purpose, Mandate, Functions and Core Principles (including Remedy) CAO Accessibility. Many stakeholders commented on the importance of CAO being accessible to anyone who can be impacted by an IFC/MIGA project and noted that accessibility is directly linked to an outreach challenge: how best to let communities know that a project is supported by IFC/MIGA, and that CAO is

CAO Accessibility. Many stakeholders commented on the importance of CAO being accessible to anyone who can be impacted by an IFC/MIGA project and noted that accessibility is directly linked to an outreach challenge: how best to let communities know that a project is supported by IFC/MIGA, and that CAO is available to receive complaints. Relevant stakeholders’ recommendations are summarized in the Outreach section of this report. Human rights. Some stakeholders requested that the responsibility to protect human rights be explicitly included under the Core Principles. A participant observed that a practical outcome of such inclusion would be for the CAO to conduct focused human rights impact assessments (HRIA), for example, of concerns related to security and human rights or gender-based violence and harassment (GBVH). Remedy. Many stakeholders welcomed the reference to remedy in the CAO draft Policy. However, there were several requests to further clarify what it means. A recommendation was also made that the same emphasis on remedy be included in the section on Management’s response and action plans. A correction was suggested regarding the language used to define "access to remedy" in the CAO draft Policy, which

4 The presentation can be found and downloaded here. IFC/MIGA also presented on other actions they are developing to strengthen environmental and social accountability as well as on their work program on enabling remedial solutions.4

gives an equivocal idea that CAO can provide a remedy when all it can do is provide access to mechanisms to address grievances that is not a remedy in itself. While stakeholders generally understood that remedy can take many forms, several participants highlighted the need to include and prepare for financial remedial actions, especially for situations where affected communities have experienced significant losses. A proposal to establish a remedy fund was put forward, claiming that peer institutions such as ADB have similar funds in place, which would prove that arguments that it would be too expensive or entail business losses are unfounded. Some stakeholders stated the need for coordination and harmonization of remedy frameworks when similar complaints regarding a project are submitted to accountability mechanisms of diff erent IFIs supporting it. Stakeholders highlighted that lack of coordination has resulted in delays and limited remedy.

arguments that it would be too expensive or entail business losses are unfounded. Some stakeholders stated the need for coordination and harmonization of remedy frameworks when similar complaints regarding a project are submitted to accountability mechanisms of diff erent IFIs supporting it. Stakeholders highlighted that lack of coordination has resulted in delays and limited remedy. Some stakeholders mentioned a few extreme examples where operations of an IFC -funded project have led to fatal impacts or where environm ental harm, social conflict, and threats and reprisals persist and even intensify after IFC/MIGA exit from the project. They, therefore, look forward to IFC/MIGA’s “Issues and Options” paper and their specific consultation process. Eligibility of Complaints Financial intermediaries, primary suppliers, and subcontractors. Many stakeholders welcomed the inclusion of criteria related to primary suppliers and their subcontractors and the provision on complaints pertaining to financial intermediaries (FIs), an area of concern to many CSOs because more than 60 percent of IFC’s portfolio is invested in FIs. Some stakeholders felt the low proportion of complaints lodged with CAO when compared to IFC’s FI portfolio size is due to the lack of transparency and difficulty in linking sub-projects to an IFC -backed FI. A suggestion was a lso made to expand the definition of “active subclients” of financial intermediaries in the Policy to include sub -clients who are the recipient of advisory and underwriting services from FIs. Pre-Board approval. While participants welcomed IFC’s/MIGA’s ef forts to strengthen their process to respond to complaints and engage with stakeholders, a concern was consistently raised about the ineligibility of complaints regarding projects pending Board approval. Several participants indicated that the pre-approval stage would be the appropriate time to introduce changes in a project that may cause environmental or social harm, on the basis that project documents/summaries are already disclosed, and valid community concerns exist. Some participants indicated that th ere are situations where there is a mismatch between documents, including the ESRS and what happens on the ground. A complaint would

environmental or social harm, on the basis that project documents/summaries are already disclosed, and valid community concerns exist. Some participants indicated that th ere are situations where there is a mismatch between documents, including the ESRS and what happens on the ground. A complaint would not be a call to pause projects but a warning to IFC/MIGA that there are issues to be addressed before moving forwards. Several participants believe that CAO is best positioned to handle these cases, given its mandate to facilitate mediation if the parties wish to engage in dialogue. In their view, there is a need for an overall change in IFC’s culture to ensure that it respon ds to these issues effectively, and until that happens, complainants will be left with no choice but to wait for a project to be approved in order to file a complaint with CAO. Some stakeholders were of the view that without an option to file a complaint a t an early stage, communities would be left without an effective channel to propose changes to a project. A stakeholder also pointed out that not accepting complaints regarding pre -approved projects would represent an additional challenge to harmonizing processes with other IAMs that do accept complaints at this stage.5

Post-Exit. Many stakeholders welcome the inclusion of a window of opportunity to submit complaints after IFC/MIGA exit. Some stakeholders understood that leverage with the client to work on solutions would be reduced and proposed that new clauses be added in the finance agreements to cover this 15month period. Even if leverage is limited, some stakeholders believe submitting a complaint is still helpful. It can help make the issue more visib le and be a learning opportunity for IFC/MIGA. Some concern was raised regarding the additional requirements outlined in the draft Policy, which are considered subjective, would depend on CAO’s discretion, and are not aligned with other IAMs that allow for two years after the exit with no limitations. Disclosure of complaints. Some stakeholders requested that all complaints, regardless of whether or not they meet the eligibility criteria required by CAO, be made public by CAO. Eligibility criteria. A stakeholder suggested that the process of finding a complaint eligible needs t o be

exit with no limitations. Disclosure of complaints. Some stakeholders requested that all complaints, regardless of whether or not they meet the eligibility criteria required by CAO, be made public by CAO. Eligibility criteria. A stakeholder suggested that the process of finding a complaint eligible needs t o be more objective, with strong substantive criteria being met at the outset to avoid the risk of prolonged engagement based on a prejudiced complaint. In this stakeholder’s view, the current text leaves too much room for subjective interpretation.

Governance Reporting line: Most participants welcomed the change in reporting line to involve the highest governance bodies in the institution, further distance CAO from Management, strengthen oversight of the implementation of Management Action Plans, and align with other independent functions that CAO interacts with. However, some concern was expressed about the risk of some decisions becoming more political.

Assessment Depth of assessment. A stakeholder observed that there are no requirements on the quality a nd depth of the assessment. Early resolution. Participants did not express objections to IFC’s or MIGA’s engagement to facilitate early resolution of complaints at the Assessment stage of a CAO process. Dispute Resolution Roles of IFC/MIGA. A stakeholder commented that the extent of IFC/MIGA participation in the dispute resolution process under the new draft Policy should be measured more clearly. Another stakeholder welcomed IFC/MIGA engagement in the Dispute Resolution (DR) process as it is instrumental in addressing the grievance and helping supervise the client’s response. It would also serve as a way to shift the power imbalance between clients and complainants. In this stakeholder’s view, if requested by complainants, IFC’s/MIGA’s engagement should be a requirement and not just an option. Timeline and basic information for the DR process . A stakeholder indicated that the new draft Policy should be more prescriptive concerning the terms and timeline for the DR process and should include clear key performance indicators for a more efficient DR process.6

Role for mediators/independent third parties. Some stakeholders requested that they be consulted on

Timeline and basic information for the DR process . A stakeholder indicated that the new draft Policy should be more prescriptive concerning the terms and timeline for the DR process and should include clear key performance indicators for a more efficient DR process.6

Role for mediators/independent third parties. Some stakeholders requested that they be consulted on the selection and approval of the mediator(s). They believe this will increase the parties’ confidence in the process. Agreements and Compliance with Performance Standards . While expressing support for the changes proposed by the draft Policy, a stakeholder commented that CAO does not have sufficient power in the DR process to ensure that IFC cli ents sign agreements that ensure they fully meet IFC Performance Standards. Transfer of unresolved complaints from DR to Compliance . Several stakeholders commented that compliance issues should be investigated independently of the consent of complainants, notably because the DR process may not resolve structural issues. Additional reasons were related to the risks of the complainant's safety and exposure to pressures, threats, and loss of livelihood resulting from the complainant's requirement to provide ex plicit consent for the transfer. A stakeholder commented that the Policy should have more clarity on how CAO assesses whether or not complainants are being pressured to withhold their consent for the complaint to be transferred to Compliance. A participant indicated that the choice of language related to the complainants' explicit consent for the transfer to Compliance is not aligned with the zero-tolerance approach regarding threats and reprisals and does not clarify the conditions to waive the requirement to consent explicitly to move to Compliance. Another stakeholder suggested that while it is good practice to get a complainant’s consent before transferring a case from the DR to the Compliance function, the process of getting consent should be simple and efficient. Dispute Resolution and Compliance. A stakeholder emphasized that IFC’s/MIGA’s compliance should be investigated even after complaints are successfully resolved at the DR stage.

Imbalance of power: Some stakeholders stated that a power imbalanc e in the process is specific to the dispute resolution space. It usually involves large companies with economic power and political links on

investigated even after complaints are successfully resolved at the DR stage.

Imbalance of power: Some stakeholders stated that a power imbalanc e in the process is specific to the dispute resolution space. It usually involves large companies with economic power and political links on one side and local communities on the other side. While a stakeholder recognized that CAO, especially the DR function, does everything it can to respect both sides, another one indicated that the CAO should protect complainants in a DR process from the power imbalance with big companies against which complaints are filed and emphasized potential threats and intimidation stem from this power imbalance.

Legal frameworks for resettlement. One stakeholder submitted that while in many cases the policies of the World Bank Group are more evolved than those of states, and many complaints are linked to compensation and viability of resettlement frameworks, it is important that the CAO Policy more clearly outlines how CAO and the project complaints mechanisms will address gaps between legal frameworks and Performance Standards with regard to resettlement. Compliance Efficiency. A stakeholder commented that the Compliance section is very well drafted as it verifies the integrity, authenticity, and genuineness of the complaint and this will result in the efficiency of the compliance process. Purpose of Compliance. A stakeholder expressed concern that the language used to present the purpose of the compliance process could lead to "immobilization" of CAO. Specifically, the statement that "CAO7

cannot make findings on compliance of a Project, Sub -project, Client or sub-client with the Performance Standards" used under the Compliance Section A can be understood to mean that CAO will not assess the client's actions. However, CAO needs to examine the client's actions. To this end, the language of the current Operational Guidelines is preferable as it is more explicit than the draft Policy. Client compliance. A stakeholder suggested that the Policy does not go far enough and has missed the opportunity to expand CAO’s mandate to review client compliance and not just IFC’s/MIGA’s compliance. In this stakeholder’s view, if CAO had an explicit mandate to examine client compliance, this could have a

Client compliance. A stakeholder suggested that the Policy does not go far enough and has missed the opportunity to expand CAO’s mandate to review client compliance and not just IFC’s/MIGA’s compliance. In this stakeholder’s view, if CAO had an explicit mandate to examine client compliance, this could have a strong deterrent effect on risky and harmful actions, becoming a game changer for accountability. The stakeholder believes this is a missed opportunity of the draft Policy and regrets that CAO’s assessment of the ground level impacts has to be read between the lines.

Impact of compliance on DR: A stakeholder raised a concern regarding a disconnect between the results of compliance investigations and the dispute resolution process. They felt there is more value for the parties if a DR process includes the results from a compliance process, which essentially decides the validity of some issues raised in the complaint. The suggestion made was for DR to be available even after a compliance investigation. It is also important that communities are properly and clearly informed about the two options of DR and compliance.

National laws and Performance Standards . A stakeholder commented that, with regard to the hum an rights of indigenous people, government policies and laws may not align and are often in conflict with IFC/MIGA’s Performance Standards and suggested that the Policy should address how to resolve this conflict in the compliance investigation of private sector-financed projects. Another stakeholder added that contextual risk assessment is imperative as each area has its own local conditions that need to be taken into consideration. Human rights. One stakeholder commented that human rights or the concept o f severe human rights impact have not been explicitly stated in the draft Policy. In the compliance investigation process, the International Bill of Rights, which is a foundation reference framework for the United Nations Guiding Principles (UNGPs) on Business and Human Rights, is not included as a non-compliance area. The comment made was that the draft Policy is not thorough on requirements of human rights obligations related to environmental and social responsibility. Deferral of decision to investigate. Several stakeholders commented that the deferral of a decision to investigate may unnecessarily delay investigations. They were of the view that while agreeing with the

made was that the draft Policy is not thorough on requirements of human rights obligations related to environmental and social responsibility. Deferral of decision to investigate. Several stakeholders commented that the deferral of a decision to investigate may unnecessarily delay investigations. They were of the view that while agreeing with the deferral option as a sound approach before proceeding to investigation, Management should be required to present a detailed plan and a remedy framework to solve issues raised in the complaint within the sixmonth timeline, including how community input will be obtained. Board review of CAO’s decision to investigate. While support was expressed for keeping the decision to investigate at the discretion of CAO’s DG, several stakeholders had concerns about what exactly would constitute “exceptional circumstances” for review b y the Board. Additionally, some stakeholders commented that the Board’s review of CAO’s decision to investigate would make the process more political, will harm CAO’s independence, and may lead to a decrease in complaints to CAO. They deemed that diversion from current practice where CAO is the sole decision -maker will infringe on CAO’s8

independence. According to a participant, fear of national elites’ influence over IFC/MIGA Boards will likely deter complainants from submitting complaints. Timeframes and risks. Stakeholders commented that there are negative impacts when completion of the compliance process is delayed, and IFC/MIGA exits the project. According to them, complainants’ lives have been put at risk, with many of them being beaten and deaths occurring, and IFC washed their hands of this. Threats and Reprisals Protection of complainants : Several stakeholders explained that threats and intimidation do happen, prevent complainants from coming forward or from feeling entirely safe in a dispute resoluti on process, and suggested that IFC/MIGA should take action beyond a statement of zero tolerance to threats and intimidation. A recommendation was put forward for IFC/MIGA to map out non -governmental organizations (NGOs) that can provide support in protecting individuals who have raised complaints. Some stakeholders expressed their concerns about local politics and their impact on the complainants’

intimidation. A recommendation was put forward for IFC/MIGA to map out non -governmental organizations (NGOs) that can provide support in protecting individuals who have raised complaints. Some stakeholders expressed their concerns about local politics and their impact on the complainants’ safety and the fear of reprisal by the State. They explained that when the process moves from DR to compliance there seems to be a requirement that complainants appro