Draft report of the committee of nine on the general by-laws of the African development bank

UNITED NATIONS

ECONOMIC AND

SOCIAL COUNCIL

Distr0 LIMITED

15 June 1964 Original: ENGLISH

ECONOMIC COMMISSION FOR AFRICA Committee of Nine on the

Preparatory Work for the African Development Bank Fourth session

DRAFT REPORT OF THE COMMITTEE OF NINE ON THE GENERAL

BY-LAWS OF THE AFRICAN DEVELOPMENT BANK

64-2246

9/C8M4/AEB/45

DRAFT REPORT OF THE COMMITTEE OF NINE OK THE GENERAL BY-LAWS OF THE AFRICAN DEVELOPMENT BANK

TABLE OF CONTENTS

INTROKJCTORT NOTE by the Executive Secretary 1

IRAFT REPORT OF THE COMMITTEE OF NINE ON THE

GENERAL BY-LAWS OF THF AFRICAN DEVELOPMENT BANK 2-4

ANNEX I: DRAFT GENERAL REGULATIONS OF THE

AFRICAN DEVELOPMENT BANK 1~21

ANNEX II: DRAFT RULES OF PROCEDURE OF THE BOARD

OF GOVERNORS OF THE AFRICAN DEVELOPMENT

BAUK 1~17

ANNEX III: DRAFT RULES OF PROCEDURE OF THE BOARD

OF DIRECTORS OF THE AFRICAN DEVELOPMENT

BANK 1"18

E/CN.14/ADB/45

ABBREVIATIONS

Annotated ADB Agreement

ADB Agreement

IBRD

IFC

IDA

IADB EIB

ibrd/bg/rp ) ibrd/bd/rp ) IADB/BG/RP ) IADB/BD/RP )

Khartoum Rules of Prooedure

Annotated Draft Agreement Establishing an African Development Bank?

/ 14/FMAB/4/Addo 1

African Development Bank

International Bank for )

Reconstruction and Development ) as well ) as the International Finance Corporation ) consti-

International Development

Association

Inter-American Development Bank European Investment Bank

The symbols "BO", "BD" and "HP"

stand for "Board of Governors",

"Board of Directors", and "Rules of Procedure"9 respectively

Resolution 1 on Rules of Procedure of the Conferences adopted by the Conference of Finance Ministers on the Establishment of an African Development Bank held in Khartoums 31 July to 4 August 1963,

///

) tuent

) instru-

) ments es-

) tabliBhing

) these in-

) stitutions

3/CN.14/ADB/45

INTRODUCTORY NOTE

"by the

Executive Secretary

1. In order to facilitate the work of the Committee of Nine at its fourth session, the Executive Secretary has reproduced in the present document, in a revised form, the document on "Proposals for the Regulations and Rules of Procedure of the African Develop ment Bank" (E/CN.14/ADB/37)j with its first three Addenda, which the Committee considered at its third session, held in Tunis from 16 to 20 March 1964-

2. The present document oontains:

(i) a "Draft Report of the Committee of Nine on the General

By-Laws of the African Development Bank"; and

(ii) three Annexes - Annex 1, 2 and 3 - which are entitled

"Draft General Regulations of the African Development Bank", "Draft Rules of Procedure of the Board of Govern ors of the African Development Bank" and "Draft Rules of Procedure of the Board of Directors of the African Develop ment Bank", respectively. These three Annexes contain the rules and regulations in question in the form approved

"by the Committee at its third session*

3. The Executive Secretary proposes to submit to the Committee in

a separate document Draft Regulations on the terms of service of

Governors, Directors and their Alternates, the President and the

Vice-President(s) of the ADBa

S/CK.14/ADB/45

Page 2

DRAFT REPORT OP THE COMMITTEE OF NINE ON THE GENERAL BY-LAWS OF THE AFRICAN DEVELOPMENT BANK

1. Iftider the terms of parao l(c) of resolution 3 on Preparatory-

Work for the Establishment of the African Development Bank, adopted by the Conference of Finance Ministers in Khartoum at its final plenary session on 4 August 1963, the Committee of Nine was re quested to draft for the African Development Bank$ among others, its By-Laws*

2. The Committee requested the Executive Secretary of the United

Nations Economic Commission for Africa (EGA) to assemble all rele

vant material available from international institutions comparable

with the African Development Bank (ADB) and to submit it, together

with comments, proposals and drafts9 to the Committeeo Existing regulations were, consequently, obtained from the European Invest

ment Bank (EIB)0 The Inter-American Development Bank (IADB), the

International Bank for Reconstruction and Development (IBRD), the

International Development Association (IDA) and the International

Finance Corporation (IFC)O

3» In considering these regulations, the Committee noted that

the By-Laws of the IBRD contain provisions (ss* 3 to 9, 11 and 12)

which are, in essence, rules of procedure and relate to meetings of its Board of Governors; the IADB, on the other hand, has two separate instruments - one setting out the general regulations of that institution, the other providing the rules of procedure for its Board of Governors. In addition, each agency has an instrument containing the rules of procedure for its Executive Directors.

4. The Committee thought that for convenience of reference and with a view to possible amendments and developments, the ADB should follow the practice of the IADBO It has therefore prepared annotated drafts of three basic instruments which all contain rules and regula

tions within the meaning of Art0 31(4) of the ADB Agreement:

Page 3

(a) Draft General Regulations of the African Development Bank;

(b) Draft Rules of Procedure of the Board of Governors of the

African Development Bank; and

(c) Draft Rules of Procedure of the Board of Directors of the

African Development Bank*

The drafts of these instruments are reproduced, respect ively, in Annex I, II and III to this Report*

5. By virtue of Art. 31(4) of toe A3)B Agreement, the Board of Governors is empowered to adopt the first two of the proposed instru ments; a qualified authority for the Board of Directors to adopt its own Rules of Procedure is provided in Art. 7 of the proposed General

Regulations of the Bank.

6. The Committee calls attention to the fact that none of the instruments proposed for adoption is complete in itself but each of them must be read in conjunction with the ADB Agreement, and the Rules of Procedure in conjunction with the General Regulations.

Moreover, the instruments submitted by the Committee do not cover one subject: the terms of service of Governors, Directors and their Alternates, the President and the Vice-President(s) of the ADB (see Arts. 29(2)(d), 30(2) and 32(a) of the ADB Agreement). This subject

is provided for in the regulations of IBRD, IFC, IDA, and IADB, though only regulations of the IBRD specify the terms of service

of the President,

7. The Committee has come to the conclusion that this subject should not be dealt with in the General Regulations or Rules of Procedure of the Bank but should be provided for* as regards Governors, Directors and their Alternates, in separate administra tive regulations which the Board of Governors should adopt.

Following the precedent of many international organizations, the terms of service of the President and the Vice-President(s) could be set out partly in individual contracts agreed by the Board of

Directors and partly in a brief administrative regulation adopted

by the Board (see Art. 32(a) of the ADB Agreement)*,

E/C1T.14/ADB/45

Page 4

8, In conclusion, the Committee recalls that, as a rule, it is

the Board of Directors of the ABB which "prepares the work of the Board of Governors" but, at the same time, that the Board of Directors cannot adopt rules or regulations except to the extent that it is authorized to do so by the Board of Governors (Artso

32 (b) and 31(4) of the ADB Agreement),, In the light of these

provisions of the Agreement, the Committee requests the Executive Secretary

- to submit the Draft General Regulations of the ADB first, for comment, to the Board of Directors at its first meeting and then, with its comments, to the Board of Governors,,

(if comments by the Board of Directors are not available

at the first meeting of the Board of Governors, that Board should adopt the Draft General Regulations at its first meeting provisionally and then adopt them finally at the next meeting after reviewing them in the light of the

comment from the Board of Directors);

- to submit the Draft Rules of Procedure of the Board of Governors to that Board at its first meeting since their adoption by the Board is urgently required; and

- to submit the Draft Rules of Procedure of the Board of Directors to that Board at its first meeting since their adoption by the Board is urgently required, such adoption, however, to be considered as provisional and subject to the adoption by the Board of Governors of Arts* 5 and 7 of the proposed General Regulations of the ADB and review of the said Rules of Procedure by that Board,,

S/CN.14/ADB/45

Annex I

ANNEX I

DRAFT GENERAL REGULATIONS OP THE AFRICAN DEVELOPMENT BANK

I. OFFICES OF THE BANK -1

Article 1

II. BOARD OF GOVERNORS Article 2: Procedure o

Article 3: Special Procedure 3-4

III. BOARD OF DIRECTORS

Article 4: Delegation of Powers 5

Article 5: Rules and Regulations 6

Article 6: Subsidiary Bodies '

o

Article 7: Rules of Procedure

Article 8: Annual Report and Financial Statements 9-10 Article 9: Special Representation of Members 11-12

IV. GENERAL PROVISIONS

Article 10: Financial Year 1^

Article 11: Audits 14

Article 12: Administrative Budget 3.5

Article 13: Application for Membership 3.6 Article 14: Suspension of Membership 17-3.8

Article 15: Disputes *°

V. FINAL PROVISIONS

Article 16: Amendments ^u

Article 17: Definitions 21

E/CN.H/ADB/45

Annex I

ANKEX I

XRAFT GENERAL REGULATIONS OF THE AFRICAN DEVELOPMENT BAUK

I. OFFICES OF THE BANK

Article 1

(l) The principal office of the Bank shall "be located in

(2) The Board of Directors may authorize the President to estab lish "branch offices or agencies of the Bank and to appoint rep

resentatives of the Bank in other countries.

Notes

1. See ADB Agreement, Arts, 39 and 52 (l)i IBRD By-Laws, s.lj

IADB By-Laws, s.l.

2. Para, (l) will be completed as soon as the Board of Governors,

at its First Meeting, has chosen the location for the principal office of the Bank in accordance with the provisions of Art. 39 (2)

of the ADB Agreement.

3. In para. (2) the Board of Governors delegates:

(i) To the Board of Directors, the power to authorize; and,

through that. Board 9

(ii) to the President, the power, where such authorization is

given, to establish branch offices or agencies or appoint

representatives of the Bank.

4. The location of branch offices, agencies and representatives is not confined to Member States of the Bank; see Note 2 to Art. 40

of the Annotated ADB Agreement•

Annex I Page 2

II. BOARD OP GOVERNORS

Article 2

Procedure

All matters before the Board of Governors shall "be determined either

(i) at the meetings of that Board, which shall "be governed

"by the Rules of Procedure of the Board of Governors; or

(ii) in accordance with the special procedure provided in

Article 3 of these Regulations.

Notes

1. The phrase "all matters before the Board of Governors" (of.

ADB Agreement, Art. 35 (2) ) describes the actual competence of

that Board which comprises all matters relating to the Bank except

those (i) with regard to which the ADB Agreement expressly provides for powers of the Board of Directors; and those (ii) with regard

to which the Board of Governors has delegated its own powers by

virtue of para (2) of Art. 29 of the ADB Agreement and does not

claim its ultimate authority by virtue of para. (3) of that

Article: see Note 4 to Art. 4 of these General Regulations.

2. Sub-para, (i) provides, in accordance with the practice

followed by the IADB (but not by IBRD), for separate Rules of

Procedure of the Board of Governors which seems desirable for convenience of reference and in view of the possibility of amendments.

Annex I

Article 3

Special Procedure

(1) Whenever the Board of Directors considers that the decision on a specific question which is for the Board of Governors to determine should not be postponed until the next annual meeting of the Board and does not warrant the calling of an ad hoc

meeting of that Board* the Board of Directors shall promptly transmit through the President to each Member its proposals

relating to that question with a request for a vote on such pro posals by the Governor representing that Member«

(2) In compliance with such a request, votes shall reach the Bank

within a period determined by the Board of Directors. Upon the

expiration of that period, the President shall report the votes to the Board of Directors which shall record the results of the

voting in applying the provisions of paragraph (2) of Article 31

and paragraph (2) of Article 35 of the Agreement as if a meeting

of the Board of Governors had been heldo The President shall

communicate the results to the Members.

Notes

1. See ADB Agreement, Art, 31 (3)? IBRD By-Laws, s. 13; IADB

By—Laws, s«5a

2- Para. (1): The "specific question whioh. is for the Board of Governors to determine"

(i) must be a question within the actual gom-petence of the Board of Governors - see Note I to Article 25

(ii) need not relate *c potion by the Bank (cf. the By-Laws

of the IBRD or IJ-JLii) r,ut may, for instances relate to

the interpretation of the ADB Agreement under Art. 61

(3) thereof; and

(iii) is a question which is submitted to the special procedure pursuant to a decision of i-he Board of Directors, which,

in accordance with Art. 31 (3) of the ADB Agreement, lies

within the discretion of that Board,

I/CN.14/ADB/45

Annex I Page 4

30 The "proposals" submitted by the Board of Directors to the Governors may represent a single motion or contain alternative

motions.

4* Para (2): The transmission of the proposals must "be "prompt".

The Board of Directors may, after hearing the advice of the President, determine the proper means of transmission and will take the chosen means, as well as the timp required for the transmission of the vote,

into account in determining the period within which the votes should

"reach" the Bank. This period will also take into account, if

appropriate, the time required for the Directors or their Alternates to communicate personally with their Governments before the votes are dispatched. Thus there is no need for the provision of s.13 of the IBRD By-Laws (not contained in s-5 of the IADB By-Laws) that

no Governor should vote until seven days after dispatch of the

proposals have elapsed.

5. In recording the results of the voting the Board of Directors must apply Arts. 31 (2) and 35 (2) of the ADB Agreement "as if a meeting of the Board of Governors had been held"■ This means that the decision on the proposals depends on a majority calculated on the basis of the voting power participating in the voting, unless the ADB Agreement provides otherwise and provided always that at least a majority representing the quorum required for a meeting

participates in the voting.

6O In view of the rule that the Alternate of a Governor may vote

"in the absence of his principal" (ADB Agreement, Art. 30 (l) )>

he may vote under this Article when, for instance, his principal

is absent from the capital of the Member State on a long-term

mission: see Art. 17 (l) of these General Regulations.

" ""- ^

Annex I Page 5

IIIo BOARD OF DIRECTORS Article 4

Delegation of Powers

The Board of Directors may exercise all the powers of the Bank except those reserved to the Board of Governors in accordance with paragraph (2) of Article 29 of the Agreement. The Board of Directors shall not adopt any measure "by virtue of this delegation which is inconsistent with any measure adopted by the Board of Governors.

Notes

1. See ADB Agreement^ Art. 29 (2) and (3); IBRD BT-Laws, s.15*

IADB By-Laws, s*4-

2. As in the case of the By-Laws of the IBRD and IADB, this Article provides for a "blanket" delegation of powers to the Board of

Directors. This delegation refers, in particular, to powers which the ADB Agreement vests in the "Bank" and which9 in view of Art. 29 (l), are prima facie powers of the Board of Governors. The delega tion does not extend to powers reserved to that Board by virtue of Art. 29 (2) either specifically or by reference to other Articles of the ADB Agreement contained in Art, 29 (2) (g). (See in this connexion Notes 5 and 6 to Arta 29 in the Annotated ADB Agreement.)

3. In addition to its delegated powers, the Board of Directors

has its own powers reserved to it in Art* 32 (2) and elsewhere in the ADB Agreement (see Notes 1 (b) and 2 to Art* 32 in the Annotated ADB Agreement). Thus, in particular* it has to "prepare" the work

of the Board of Governors, including work on matters reserved to that Board for determination (see9 for instance, Art= 13 of these General Regulations)«

4. The delegation contained in this Article does not affect the

ultimate authority of the Board of Governors over any delegated matter by virtue of Art. 29 (3) of the ADB Agreement which it would be likely to exercise where a measure adopted by the Board of

Directors was inconsistent with a measure adopted by the Board of

Governors.

Annex I Page 6

Article 5

Rules and Regulations

The Board of Directors may, subject to these Regulations, adopt such rules and regulationsf including financial and staff regulations, as are necessary or appropriate for the conduct of the general opera tions of the Banks Any rules and regulations so adopted, and any amendments thereto, shall be subject to review by the Board of Governors at its next annual meetings

Notes

1, See ADB Agreement, Art, 31 (4); IBRD By-Laws, s = 16; IADB By-Laws,

S« OoQ

2. Art0 31 (4) of the ADB Agreement specifies that the Board of

Directors may adopt rules and regulations "to the extent authorized"

b;y the Board of Governors* The present Article authorizes it to do so within the limits required by "the conduct of the general opera tions of the Bank", that is to say within the limits of the general

competence of the Board of Directors, as defined in Arto 32 (l) of

the ADB Agreements

3« Under Art0 4* last sentence, any rules or regulations adopted by the Board of Directors must not be inconsistent with any measure adopted by the Board of Governors» Moreover, as in the case of the

IBRD (though not the IADB), such rules and regulations as well as

any amendments thereto are "subject to review'* by the Board of Governorsa This means that they shall be in force as adopted by the Board of Directors unless? at the annual meeting immediately succeeding their adoption, they are rescinded^ in whole or in part, by the Board of Governors.

4* The reference to finarjoial and staff regulations clarifies the relationship between the Board of Directors and the President and, in particular, the reference to "regulations adopted by the

Bank" in Art- 3? (2) of the ADB Agreement, It does not9 however,

affect the power of the President to make rules or issue general instructions in his capacity as the chief administrative officer of the Bank and chief of its staff responsible for its organization.

Annex I Page 7

Article 6

Subsidiary Bodies

The Board of Directors may3 subject to these Regulations,

establish such subsidiary bodies as are necessary or appropriate to facilitate the conduct of the general operations of the Bank.

Notes

1. Arto 31 (4) of the ADB Agreement specifies that the Board of Directors may establish subsidiary bodies "to the extent authorized"

by the Board of Governors„ The present Article authorizes the Board of Directors to do so within the limits required to assist

it in "the conduct of the general operations of the Bank", that is to say within the limits of its general competence, as defined

in Art* 32 (l) of the ADB Agreement„

2» The subsidiary bodies established by the Board of Directors

cannot be autonomous; they must act within the "blanket" delega tion of powers to the Board of Directors contained in Art- 4 and

can only be established to "facilitate" the conduct of general

operations by that Board, Equally, they are bound by the rule in the second sentence of that Article that no measure of the Board of Directors (including that establishing a subsidiary body) may be inconsistent with a measure of the Board of Governors. As to

the Rules or Procedure of subsidiary bodies, see Art, 7*

Annex I

Page 8

Article 7

Rules of Procedure

Subject to these Regulations, the proceedings of the Board of Directors and its subsidiary bodies shall be governed by rules of procedure adopted by that Board*

Notes

1. The Rules of Procedure for the Meetings of the Executive Directors of the IBRD were "adopted" by the Executive Directors and "accepted" by the Board of Governors of the IBRD, The General Regulations of the ADB confer, from the outset, express powers on the Board of Directors to adopt its own rules of procedure.

However, these rules are subject to the General Regulations* They must, therefore, not be inconsistent with any measure adopted by

the Board of Governors (Art. 4, last sentence) and are - as well as any amendments thereto - subject to review by that Board (Art, 5, last sentence). Certain other provisions of the General Regula

tions directly affect the proceedings of the Board of Governors - see e.g. Art. 8.

2. On the other hand, subsidiary bodies of the Board of Directors have no power to determine their procedure which will be governed by rules adopted by that Board. As to other limitations set for suoh bodies, see Art* 6 and the Notes thereto.

Annex I Tage 9

Article 8

Annual Report and Financial Statements

(1) At each annual meeting of the Board of Governors, the Board

of Directors shall submit for approval:

(i) An annual report on the operations and other activities of the Bank during the preceding financial year, which may contain recommendations on the activities of the Sank and shall include its administrative budget for

the current financial year, as approved by the Board of

Directors; and

(ii) A statement of the accounts of the Bank for the preced ing financial year, including its general balance sheet and statement of profit and loss, together with the

corresponding report of the auditors,

(2) The Board of Directors shall adopt each quarter and transmit to the Members a summary statement of the financial position of the Bank and a Statement of Profit and Loss showing the results

of its operations in respect of that quarter,

(3) The financial statements referred to in this Article shall show the ordinary operations and the special operations of the

Bank separa t el.y.

■■-,-1 ... --- -I ■; ('■'■■ 90 '■;'■ t'i), V (e) and 41

1. oee .v.Ds Agreement, ..■.-■ts. o U ,■ ■* * • ^ - ■ ^-1 " , n

IBEi)-By-Laws, ss. 10 ami 19; I^B 3y~-L.aw8 ss. fc ar.a LU.

2. Upon its approval by the Board of Governors the annual^report prepared by the Bo^rd cf Directors will become ui8^n?iual_ **&***

of the Bank'* published in accordance with ;.n. 41 ',3; of the

Agreement, As regards its contents, the IBHD By-Laws require a

report "in which shall be discussed the operations and p^icies

of the Bank and which, shall make recommendations to the Board ol

S/CN.14/ADB/45

Annex I Page 10

Governors on the problems confronting the Bank". IADB By-Laws, on the other hand, speak of a report on the operations carried out by the Bank, which may contain recommendations on "matters relating to the activities of the Bank".

3. As to the definition of the financial year of the Bank, see Art. 10.

4. As to the administrative budget of the Bank, see Art. 12.

The budget is approved by the Board of Direotors and need not be approved again by the Board of Governors, Both the IBRD and IADB By-Laws require that the budget should be "incorporated" in the annual report of the Board of Directors. But this does not neces sarily mean that it should be published as an integral part of the ADB Annual Report.

5. Para, (l) (i) combines the requirements stipulated for the submission of the accounts of the Bank in Arts. 29 (2) (f) and 32 (e) of the ADB Agreement. As to audits, see Art, 11 of these

General Regulations.

6. Para. (2) makes the Board of Directors responsible for the quarterly financial statements etc., provided in Art. 41 (3) of

the ADB Agreement.

7- Para. (3) gives effect to Arts. 41 (3)> last sentence, and

Arto 13 (4) of the ADB Agreement.

Annex I Page 11

Article 9

Special Representation of Members

Whenever the Board of Directors is to consider a request made by, or any other matter particularly affecting, any Member of the Bank, the Board shall, if there is no Director or Alternate Director of its nationality on the Boardj promptly notify that Member through the President of the date fixed for the consideration of such re

quest or other matter. The Board of Directors shall take no definitive action concerning such request or other matter, nor

submit such request or other matter to the Board of Governors, until

the Member concerned has been given a reasonable opportunity to

present its views in writing and be heard at a meeting of the Board of Directors of which that Member had reasonable notice* The Member

concerned may waive this rights It shall be deemed to have been

waived if that Member is not represented at the meeting fixed for

the consideration of such request or matter0

Motes

1, See ADB Agreement, Arts, 34 (3) and 61 (2); IBRD By-Laws, s.l8;

IADB By-Laws, s»6e

2, The right to special representation exists under the ADB Agree ment only where there is no Director or Alternate of the nationality

of the Member concerned. (Art, VIII (3) (g) of the IADB Agreement is wider in this respect,)

3, The term "request" in the corresponding provision of the IBRD

By-Laws (s. 18) has not been interpreted as applying to applications

for loans or guarantees. The Board of Directors of the ADB will

develop its own practice in this respect* bearing in mind that the ADB Agreement provides that the "Bank shall adopt such rules and regulations as are required for the consideration of projects sub mitted to it" (Art* IT (2) ) - see also Art. 5 of these General

Regulations.

ttimu

1/CJT.14/ADB/45

Annex I Page 12

4» Notification of the meeting to the Member concerned must "be

"prompt"o In this respect the Board of Directors may, after hear ing the advice of the President, determine the proper means of

transmission,, Moreover, the Member concerned must have "reasonable"

notice of the meeting, that is to say there must be a reasonable period of time provided for that Member to formulate its views and transmit them to the Bank,

5<> The occasion at which the written views or oral representa tions by the Member concerned may be made known must amount to a

"reasonable opportunity"; the Member concerned has no right to ask for moreo Uo doubt, the Board of Directors will develop a procedure in such matters which takes into account the interests and special problems of all Members of the Bank.

E/CN.14/A3B/45

Annex I Page 13

IV. GENERAL PROVISIONS

Article 10

Financial Year

(1) The financial year of the Bank shall begin on 1 January and end on 31 December of each year,

(2) Notwithstanding the provisions of the preceding paragraph,

the first financial year of the Bank shall begin on 196

and end on 31 December 196 .

Notes

1. See IADB By-Laws, s»9-

2. The Article defines the financial year in a legal sense; this

is important, for instance, for the implementation of Articles 8

or 12. From an accounting or auditing point of view the year will begin at the opening of business on the first working day, and end at the close of business of the last working day of the financial year. If necessary, this may be so defined in the Financial Regula

tions of the Bank.

3. The first financial year of the Bank may comprise more or less than twelve months - according to what seems appropriate in the light of the date on which the operations of the Bank shall commence

(cf. Art. 66 (3) of the ADB Agreement).

Annex I Page 14

Article 11

Audits

(1) The accounts of the Bank shall "be audited at least once each year "by the outside auditors selected by the Board of Governors.

(2) The annual audit shall "be based on a comprehensive examination of the financial records of the Bank. For this purpose the auditors shall have access to all the accounts and records of the Bank and to all other supporting evidence of its financial transactions.

The President shall furnish to the auditors such additional informa

tion as they may require.

(3) The auditors shall respect the confidential nature of their service and of the information made available to them for the

purpose of the audit.

Notes

1. See ADB Agreement, Art. 29 (2) (e) and (f); IBRD By-Laws, s.19;

IADB By-Laws, s. 10; EIB Reglement Interieur, Art. 22.

2, Para. 2 of this Article provides for the general framework of

the audit; it does not contain - as do the IADB By-Laws or the BIB

Reglement Interieur - the actual terms of reference for the auditors

which remain a subject for negotiation with the auditors chosen.

E/CNO14/ABB/45

Annex I Page 15

Article 12

Administrative Budget

(1) The President shall submit to the Board of Directors for approval, "before 1 October of each year, the administrative "budget of the Bank for the following financial yearo

(2) Unless the Board of Directors approves the administrative

"budget for the following financial year "before 31 Deoember, the President shall "be provisionally authorized to continue to incur administrative expenditure in that financial year on the "basis of the administrative "budget last approved until such time as the new administrative "budget is approved and, in any event, not "beyond 31 March of that financial yearo

(3) Notwithstanding the provisions of paragraph (l), the President

shall submit to the Board of Directors for approval, before .. <> « •••«.

1961 , the administrative budget for the first financial year of the Banks

Notes

1. See IBRD By-Laws, So 19; IADB By-Laws, so 10. As to the presenta tion of the administrative budget, as approved by the Board of

Directors, to the Board of Governors, see Art. 8 (l) (i) and, parti

cularly, Note 4 thereto0

2a Para. (2) of the Article provides an exceptional procedure designed to avoid the most undesirable consequences of a delay in the approval of the administrative budgeto

3. As to the definition of the financial year, see Art. 10 which,

in parao (2), defines the first financial year of the Bank.

E/CN.14/ADB/45

Annex I Page 16

Article 13

Application for Membership

When submitting to the Board of Governors a declaration of intention to accede to the Agreement, made by a State in accordance with Article 3 and paragraph (2) of Article 64 thereof, the Board

of Directors shall make recommendations to the Board of Governors concerning the initial subscription as well as any other terms which, in the opinion of the Board of Directors, the Board of Governors should determine for the acquisition of membership by that State-

Notes

1. See ADB Agreement, Arts 20; IADB By-Laws, s.ll*

32 (b) and 64 (2); IBRD By-Laws$ a.

2, The combined effect of Arts* 3 (l) and 64 (2) of the ADB Agree

ment is that any African country which has the status of an independ ent State and has not acquired membership of the Bank in accordance

with Arts 64 (l)> has a right to become a Member by acceding to the

Agreement "on such terms as the Board of Governors shall determine" <, The State concerned becomes a Member, upon the deposit of an

instrument of accession, on the date appointed by the Board of

Governors,. See Note 2 to Art. 3 (l) and Notes 1 and 5 to Article

65 in the Annotated ADB Agreements

3* The present Article is an application of the rule that the Board of Directors should prepare the work of the Board of Govern ors also in matters the determination of which is reserved to that

Board in Art, 29 (2) of the ADB Agreement (see Art. 32 (b) )■ The

Board of Directors may, however, use for the definitive determination of the terms, the appointment of the date etc., the special prooe- dure provided in Art, 3 of these General Regulations.

E/CN»14/A3)B/45

Annex I Page 1?

Article 14-

Suspension of Membership

(1) Before the Board of Directors records the suspension of a Member, it shall promptly notify that Member through the President of the complaint against it and of the date fixed for the considera tion of suspension. The Beard of Directors shall not record the suspension until the Meaner concerned has been given a reasonable opportunity to present its views on that complaint in writing and be heard at a meeting of the Board of which that Member had reason able notice. The Member concerned may waive this righto It shall be deemed to have "been waived if that Member is not represented at the meeting fixed for the consideration of suspension.

(2) If the Board of Directors records the suspension, it shall call, for the consideration of the matter, an ad hoo meeting of the Board of Governors or, in exceptional circumstances, proceed under the special procedure provided in Article 3 of these Regula

tions. The Member concerned shall be promptly notified of the action taken by the Board of Directors and the date, if any, fixed for the meeting of the Board of Governors, The Board of Governors shall not take a decision in the matter of suspension until the Member concerned has been given a reasonable opportunity to present

its views to that Boardo

Notes

1. See ADB Agreement, Artc 4* (I)} IBRD By-Laws, s.2l; IADB By-Laws

s.12*

2e If the Board of Directors finds that a member has failed to fulfil any of its obligations to the Bank, it has ~ under Art. 44

(1) of the ADB Agreement - ££_o£tion but to record the suspension

of membership. This suspension may be subsequently declared inoperative by a decision taken *by the Board of Governors by a

qualified majorityo

I/C1M4/AEB/45

Annex I Page 18

3. The procedure for the notification of the Member concerned and for providing that Member with a "reasonable opportunity" to present its views orally and in writing follows closely the

procedure for Special Representation of Members in Article 9 - see, in particular, Notes 4 and 5 thereto.

4O Under para0 (2) the Board of Directors may, in exceptional circumstances, use the special procedure provided in Arto 3 instead of calling an ad hoc meetings This may be a useful means of avoid ing publicity and expenditure in cases where, for instance, the Member concerned acquiesces in its own suspension.

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Annex I Page 19

Article 15

Disputes

Whenever a dispute within the meaning of Article 62 of the Agreement is submitted to arbitration pursuant to that Article,

the third arbitrator of the tribunal shall be appointed, unless the parties to the dispute otherwise agree, by the President of the International Court of Justice or, should the President be a national of one of the parties to the dispute, by the Vice- President of that Court or the next Judge in order of seniority

who is not a national of one of such partiesa

Notes

1. See ADB Agreement, Art* 62; IBRD By-Laws, s. 22°

2. This Article is based on the text of Art. 63 of the Annotated ADB Agreement submitted to the Khartoum Conference of Ministers of

Finance together with an amendment thereto suggested in a letter

of 16 July 1963 by the Deputy Registrar of the International Court of Justice. The Conference endorsed the substance of the present Article and suggested it should be included in the Regulations of

the Banko The Executive Secretary submitted the text of the

present Article to the President of the International Court of

Justice who, on 28 February 1964, stated that he is entirely

agreeable to accept the function proposed to be conferred upon him in certain eventualities by Art, 62 of the ADB Agreement and Art.

15 of these General Regulations»

E/CH.14/ADB/45

Annex I Page 20

V. FINAL PROVISIONS

Article 16

Amendments

The Board of Governors may amend these Regulations at any of its meetings or, at the initiative of the Board of Directors, in accordance with the special procedure provided in Article 3 of these Regulations*

Note

See IBRD By-Laws, s. 23; IADB By-Laws, s. 13.

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Annex I Page 21

Article 17

Definitions

lo For the purpose of these Regulations:

- "Agreement" shall mean the Agreement Establishing the

African Development Bank;

- "Bank11 shall mean the African Development Bank;

- "Governor" shall include the Alternate of that Governor when that Alternate acts for such Governor;

- "Member" shall mean Member of the Bank; and

- "President" shall mean the President of the Bank.

2. These Regulations shall be known as the "General Regulations

of the African Development Bank11.

E/CN.14/ADB/45

Annex II

II

DRAFT RULES OF PROCEDURES OP THE BOARD OF GOVERNORS OF THE AFRICAN DEVELOPMENT BANK

Rule l!

Rule 2:

Rule 3:

Rule 4;

Rule 5s Rule 6t Rule 7:

Rule 8;

Rule S%

Rule 10:

Rule 11:

Rule 12s Rule 13:*

Rule 14s

Meetings „ . D a .1-2

Notice of Meetings ... 3

Arrangements for Meetings 4

Quorum .„.„••..<> • • » 5

Agenda e0O8 6-7

Participation in Meetings .8-9

Officers ... •..«.•• ° • 10

Subsidiary Bodies . • - ° 11

Voting 0 . . . . > • • 12 Secretary . . • = . • . - • • « -^

Languages 0O....e.•>•>■••• 14

Publicity , 15

Transitional Provisions ....*•••• 16

Definitions ••••...•••••«"• 17

E/CNe14/ADB/45

Annex II

DRAFT RULES OF PROCEDURE OP THE BOARD OF GOVERNORS OF THE AFRICAN DEVELOPMENT BANK

Rule 1 Meetings

(1) The annual meeting of the Board of Governors shall be held9

■within four months after the end of the preceding financial year, at such time and place as the Board may determine provided that the Board of Directors may, if it considers it necessary because of special circumstances, change the time and place fixed for any

annual meeting*

(2) Other meetings of the Board of Governors may be called by that Board or the Board of Directors at any time. They shall be called

by the Board of Directors whenever requested by five Members hav ing one quarter of the total voting power of Members. "Whenever

any Member requests the Board of Directors to call a meeting of the Board of Governors, the President shall notify all the other

Members of that request and of the reasons given therefor.

(3) The Board of Governors may adjourn any meeting of the Board.

Notes

1. See ADB Agreement^ Art, 31 (l); IBRD By-Laws, so 3 (a) and (b);

IADB/BG/RP, s, 1 (a)» (b) and (f)<,

2- Time of annual..meetings: The ADB Agreement provides that the Board of Governors must approve the annual report and the accounts for each financial year, including the General Balance Sheet and Statement of Profit and Loss of the Bank, prepared by the Board of Directors (Arts. 29 (2) (i) and 32 (e); see also ADB General Regula

tions, Arts. 8 and 10). As the financial year of the Bank runs

from 1 January to 31 December and some time must be allowed for audit

ing and the preparation of these documents, Rule 1 provides that

the annual meeting should be held within four months after the end

of the preceding financial year; the exact time is determined, for

each occasion, by the Board of Governors subject to the power of

the Board of Directors to alter it in special circumstances.

E/CNO14/ADB/45

Annex II Page 2

3« Place of annual meetings: Should Rule 1 state with more pre cision where the annual meetings should be held? - The IBRD has introduced the practice of holding every third annual meeting else

where than at its headquarters, IADB/BG/RPs so 1 (a), on the other

hand, provides for a system of rotation between the capitals of Member States obligatory for all annual meetings which might appear as too restrictive or expensive to the Bank0 Under Rule 1, the Board of Governors may in the first years of the Bank's existence, when financial considerations are likely to make this imperative, hold its annual meeting at the principal office of the Bank and afterwards introduce a practice according to which, for instance, every third meeting would be held in the capital of a Member under a system of rotation0

4» Rule 1 (2) leaves the question where "other meetings" of the

Board should be held advisedly openc In certain circumstances — eogB when the date of an ad hoc meeting coincides with some other African conference — the Board of Directors may consider it ap propriate to convene such a meeting elsewhere than at the principal office of the Banko

5» Arrangements for the holding of all meetings are in the hands of the Chairman of the Board of Governors jointly with the President

(see Rule 3)» On the other hand, the Board of Directors "prepares"

the work of the Board of Governors (see ADB Agreement, Arto 32 (b)).

E/CN.14./ADB/45

Annex II Page 3

Rule 2

Notice of Meetings

The President shall inform the Members of the time and place of each meeting of the Board as promptly as possible and in any event not later than 42 days before the date fixed for an annual meeting and not later than 15 days before the date of any other meetings

Ho tes

1, See IBRD By~Laws, so 4; IABB/bC/RP, s( 1 (c).

2. The IBRD By-Laws provide for 42 days11 notice for all meetings

except a ten days' notice in urgent cases0 The IADB/BG/RP provide

for 30 days' notice for ordinary meetings, 15 days' notice for extra ordinary meetings^ and ten days8 notice in urgent cases,,

Annex II Page 4

Rule 3

Arrangements for Meetings

Except as otherwise determined by the Board, the Chairman of the Board jointly with the President shall, during his period of office, have charge of all arrangements for the holding of its meetings,,

Notes

1. See IBRD By-Laws* s. 6 (d); IADB/BG/RP, s. 1 (i).

29 The Rule provides for oo—operation between the Chairman of the Board and the President as regards the "physical" arrangements for meetings of the Board? not for preparations as regards the substance of the issues "before the Boards the latter is in the

hands of the Board of Directors (ADB Agreement, Art, 32 (b) ).

3» Under this Eules the Chairman of the Board is9 together with the President, responsible for all arrangements for the annual meet ing at which he has been elected; for the next; annual meeting until his successor is elected; and all other meetings held during his

period of office (see Rule 7)"

4o The Rule does not apply where the Board of Governors has pro

vided otherwise — see, for instance., Rule 6 (5) as regards admis

sion of observers to meetings of the Boards

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Annex II Page 5

Rule 4

Quorum

A quorum for any meeting of the Board shall be a majority of the total number of Governors, or their Alternates, representing not less than two~thirds of the total voting power of the Memberso The President may adjourn any meeting of the Board at which a quorum shall not be present from time to time* for altogether up to three days; notice of the meeting thus adjourned need not be given0

Notes

lo See ADB Agreement, Art. 31 (2)j IBRD By~Laws, so 3 (o)?

IADB/BG/RP, s. 1 (d) and (e).

2a Where the required quorum is not attained^ the Governors and Alternates present do not represent a validly constituted meeting of the Board, In the circumstances, the Presidents who is in the best position to know when a quorum is likely to be present, may adjourn the meeting several times subject, however, to the rule that the adjournments must not, in aggregate, exceed three dayse

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Annex II Page 6

Rule 5

Agenda

(1) Under the direction of the Board of Directors* the President shall draw up a provisional agenda for each meeting of the Board of Governors and shall transmit that agenda to the Members together

with or "before the notification of such meeting*,

(2) Any Governor may have an additional item included in the pro visional agenda for any meeting of the Board of Governors provided

that he gives notice thereof to the President not less than fifteen

days before the date set for that meeting.

(3) In special circumstances, the President, by direction of the Board of Directors, may at any time include an additional item in the provisional agenda for any meeting of the Board of Governors,,

(4) The President shall notify the Members as promptly as possible of any item added to the provisional agenda in accordance with paragraph (2) or (3) of this Rule*

(5) A complete provisional agenda shall be submitted for adoption to the Board of Governors at the first session of each meeting- However, at an annual meeting, the Board may at any time decide on

the inclusion of any further item in its agenda*

Notes

1. See IBRD By-Laws, s> 6 (a) to (c)j IADB/BO/BP, 8. 2*

2, The role played by the Board of Directors in the compilation of the provisional agenda is an application of the principle that it Is that Board which "prepares- r.he work of the Board of Governors (ADB Agreement^ Art, 32 (b) ), The latter Board may, however, dir ect the Board of Directors to Include a certain item m the provi

sional agenda of a meeting of the Board of Governorso

3a The period of fifteen days provided in para. (2) of the Rule is that applied by the IADB. The IBRD By-Laws require in such cae^ - -^v, davs' notice, which would seem to render impossible

(in practice)the communication of all additional items to all Gover

nors of the ABB before the meeting,.

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Annex II Page 7

4* Under the IBRD By-Laws, the Board of Governors may "at anj_

time authorize &r§£ subject to be placed on the agenda for any

meeting" of the Board (s0 6 (c) )* In Rule 4 (5) the AEB follows

the practice of the IADB which restricts the possibility of adding new items to the provisional agenda emphatically to "ordinary"

(ioee annual) meetings (s0 2 (d) and (c) )0

e/cn.h/aeb/45

Annex II Page 8

Rule 6

Participation in Meetings

(1) At any meeting of the Board the President shall circulate a

list of Governors, Alternates and any temporary Alternates whose appointment has been officially communicated to the Bank« He shall also circulate a list of observers who attend the meeting.,

(2) An Alternate Governor may attend any meeting of the Board but

may not participate in or vote at a meeting except in the absence of his principals. If the principal is absent, a Temporary Alter nate may vote at a session of the Board at which the regularly ap pointed Alternate is unable to be presento

(3) Directors9 their Alternates and the President may attend the

meetings of the Board. They may, without vote? participate in any meeting provided that no Alternate Director shall participate except in the absence of his principal or if the Director concerned requests the Chairman of the Board to invite his Alternate to address the meeting.

(4) The Chairman of the Board in consultation with the Board of directors and9 in urgent cases*in consultation solely with the President may invite observers to attend a meeting of the Board of Governors. The Chairman of the Board may invite an observer to address the meetings,

lo See A.DB Agreement, ArtSc 30 (l) and 21 (1)5 IBRD By~Laws>

ss= 5 and \2\ IADB/BG/BP,, ss0 1 (g) and (h) and 3°

2. The provisions of £arao_Xll take th@ Place of a f°riaal proce

dure for verification of credentials %hich is more suitable for a diplomatic conferenceo The President will, no doubtj, report to the Board of Governors any case where there is no "official" com»

munication of an appointment and the Board will take the necessary decision in the light of the circumstances. As to the appointment of Temporary Alternates, see Rule 9*

3* In para. (2) it is suggested, in order to restrict the prac

tice of appointing temporary Alternates, that sued Alternates may only vote but may not otherwise participate in a meeting m that capacity ■» not even when the Governor concerned acts as Chairman

or Vice-chairman of the Board (see Rule 7 (3) )o

4* Paras__3 provides for the right of Directors, their Alternates and the President not only to attend but to participate, without vote, in meetings of the Board of Governors., An Alternate may speak at a meeting not only when his principal is absent but in his presence provided he is invited to address the meeting by the

Ghai-rman at the request of his Director (cf. Rule 6(3) of the ADB Rules of Procedure of the Board of Directors). This qualified right

to participate in meetings is Justified on the grounds that Alter nates are of different nationality than their Directors.. The point required clarification in the Ruleo On the other hand, in conform

ity with general principles of administration the President may be expected to be accompanied at meetings of the Board by the Vice-

President(s) and other senior officers of the Bank as his advisers.

With the concurrence of the Chairman, he may request any of them to address the meeting in his stead on a subject which falls within the special competence of the officer^, In such a oase? the officer is speaking on behalf of the President,,

% Under Earjw__[j^ the Chairmen of the Board of Governors m co~

operation with the Board of Directors may be expected to establish the practice of inviting international organizations most intimately connected with the development of Africa and with, the work of the Bank to be represented by observers at the annual meetings of the Board of Governors,,

6o i ■■ scould be rsf;a.lisi that plenary =:es^ic--.s of the board's meetings wi'il, a.s a rulet. bo held in nub-lie =* see Hule 120

E/CNo14/ADB/45

Annex II Page 10

Rule 7

Officers

(1) At each annual meeting the Board shall designate one of the Governors as Chairman of the Board and two Governors as its First and Second Vice-Chairmen* They shall hold office until the elec tion of officers at the next annual meeting of the Board.

(2) In the absence of the Chairman of the Boards the First Vice- Chairman and, in his absence, the Second Vice-Chairman shall take his place9

(3) The Chairman of the Boards or a Vice-Chairman acting as Chair- man, shall participate in the meeting in that capacity and not as the representative of the Member concernedc He shall not voteo His Alternate shall represent that Member in such cases9

Notes

1. See ADB Agreement, Art. 30 (l); IBRD By-Laws, sc 7; IAIffi/

EG/HP, So 4; Khartoum Rules of Procedure, Rule 10o

20 The IBRD By-Laws provide, for "at least" two Vice-Chairmen$

the lADB/BG/RP, on the other hand, do not provide for the election of a Vice-Chairman*,

3o Para, (3) provides an exception to the rule that an Alternate

may participate and vote only in the absence of his principal (Rule 6 (2) ).

4-e As to the officers of the first meeting of the Board of Govern ors*, see Rule 13o

B/C1U14/ADB/45

Annex II Page 11

Rule 8

Subsidiary Bodies

(1) The Board may at any meeting establish such subsidiary bodies

as may be necessary or appropriate to facilitate its work.

(2) Subsidiary bodies shall report to the Board meeting in plenary

session. Their reports should call attention to the different views expressed by their memberso

1. See ADB Agreement^ Art.. 31 (4)5 Khartoum Rules of Procedures

Rule 16.

2O This Rule does not affect the power of the Board of Governors

to establish under Art* 3.1 (4) of the ABB Agreement other subsidiary

bodies which, may be "necessary or appropriate to conduct the business of the Bank" but is solely concerned with the committee structure at a given meeting of the Board, The bodies concerned cannot9 there fore, be autonomous but "report" to the plenary session of the Board.

They meet in private - see Rule 12 (l)o

B/CJSM4/ADB/45

Annex II Page 12

Rule 9

Voting

(1) Except as otherwise expressly provided in the Agreement, all matters "before the Board shall "be decided by a majority of the voting power represented at the meetingo

(2) At any meeting of the Board the Chairman of the Board may ascertain the sense of the meeting in lieu of a formal vote but he shall require a formal vote at the request of any Governor,, "When

ever a formal vote is required, the written text of the motion shall

be distributed before the vote,,

(3) A Member mays through the Governor representing that Member or by other official means, designate a Temporary Alternate to vote for that Governor.

(4) Subject to paragraph (3) of this Rule, no Governor or Alter nate may vote at any meeting by proxy or by any other method than

in person0

Notes

1, See ADB Agreement^ Art, 35 (l) and (2)5 IBRD By-Laws, as. 11 and 12? IADB/BG/RP, so 6o

2O Paras, (l), (2) and (4) of the Rule are inspired by Art. 35 of the ADB Agreement and the relevant IBRD and IAEB ruleso Para0 (3)

provides a clearer indication than the IBRD or IADB rules as to the official nature of the appointment of a Temporary Alternate,

The extent of the participation of Alternates and Temporary Alter

nates is governed by Rule 6 (2)o

E/CNo14/ABB/45

Annex II Page 13

Rule 10

Secretary-general of the Bank shall serve as the Secretary of the Board*

(2) The Secretary shall keep summary records of the proceedings

of the Board and a full record of its decisionso The summary records and the text of the decisions of the Board shall be filed and made available to the Members and the Board of Directors.

ffotes

See IBRD By-Laws9 sso 8 and 9j IADB/B<3/RP9 ss0 5 and 7, Parao (l)g The IBRD By-Laws provide that the "Secretary of

Bank" should serve as Secretary of the Board; in the IADBj its Board of Executive Directors appoints an officer of the Bank to serve as such As to the Secretary of the Board at its First Meet-

ing9 see Rule 13 (2)6

3° Parao (2)g Neither the IBRD By-Laws nor the IADB Rules pro

vide that summary records or decisions of the Board should be officially circulated to the Members„ Rule 10 provides the same solution,,

4. As to the languages in which the decisions must be available, see Rule 11 (3),

E/CH.14/ADB/45

Annex II Page 14

Rule 11

Languages

(1) The working languages of the Board of Governors shall Toe, if possible, African languages, English and French.

(2) Speeches made at any meeting of the Board in either English or French shall be interpreted into the other of these two languages.

(3) The text of the decisions of the Board of Governors shall be made available in English and French and, if possible, in the other

working languages of the Banke

Notes

1. See ADB Agreement, Art. 41 (l); IADB/BG/RP, s. 8.

2- Para. (3): Though neither the IBM) nor the IADB rules provide that the decisions of the Board must be available in several lang uages, in the case of the AJDB it is more apposite to have these

texts available in English and French. This, however, does not imply that the text of the decisions must be circulated to the

Members - cf. Note 3 to Rule 10e

E/CNol4/ADB/45

Annex II Page 15

Rule 12

Publicity

(1) Unless the Board agrees otherwise in plenary session, its meet

ings shall "be held in public. Meetings of its subsidiary bodies shall be held in private.

(2) At the close of any meeting of the Board a communiciue summariz

ing the results of the meeting shall be published,,

Notes

See IADB/BG/RP, s0 1 (3); Khartoum Rules, Rules 48 and 49.

E/CNO14/ADB/45

Annex II Page 16

Rule 13

Hfransitional Provisions

(1) The Secretary-General of the United Nations, appointed Trustee

of the Agreement Establishing the African Development Bank by virtue of paragraph (l) of Article 66 of that Agreement, or the Executive Secretary of the United Nations Economic Commission for Africa act ing on his behalf, shall provisionally act as the Chairman of the

Board at its first meeting.

(2) The Executive Secretary of the United Rations Economic Comis- sion for Africa shall appoint a member of its staff to act as

Secretary of the Board at its first meeting.

Notes

1. See ADB Agreement, Art, 66 (l); IADB/BG/RP, Transitional Pro visions; Khartoum Rules, Rules 14 (d) and 43=

2o Under parao (l) the United Nations Secretary-General or the Executive Secretary of the United Nations Economic Commission for Africa will act as provisional Chairman of the Boardj that is to say that he will open the meeting and preside while the Agenda and Rules of Procedure are being adopted and the election of the officers

takes place. Under this Rule? the Governor of the Host State or

any other Governor may be elected Chairman for the first term of

office - see Rule 7 (l)0

Annex II Page 17

Rule 14

Definitions

(1) For the purpose of these Rules:

- "Agreement" shall mean the Agreement Establishing the African Development Bankj

- "Bank" shall mean the African Development Bank;

- "Board" shall mean the Board of Governors of the Bank?

- "Chairman of the Board" shall mean the Chairman of the Board;

- "Member" shall mean Member of the Bankj

- "President" shall mean the President of the Banks and - "Vice-President" shall mean a Vice-president of the Banko

(2) These Rules shall be known as the "Rules of Procedure of the

Board of Governors of the African Development Bank"*.

knzisx III aknex :n

DRAFT RULES OF PI-: 0CEPU3.E CF THE BOARD OF DIRECTORS OF THE AFRICAN IjEVELOPMEMT 3AM

Rule It Rule 2:

Rule 3;

Rule 4:

Rule 5s Rule 6:

Rule 1%

Rule 8:

Rule 9:

Rule 10s Rule 11s Rule 12s Rule 13:

Rule 14:

Rule 15:

Meetings o,o*«aoO1>

jJ5Ltioe_of_Jlfee tings * o « Quorum o 0 „ . 0 ,. ,-, „ o Agenda D f. e * a , 0 • • Chairman of the Board Participation m Meetings

;^Bodies * < ■> ^

Secretary of the Board

Amendments c o « « , o Transitional Prc-Tisions Definitions , a o e n «

1-2 3 4 5-6

8 - 9

10 11 12 13 14

15

16 17 18

E/CN.14/ADB/45

Annex III

DRAFT RULES OF PROCEDURE OP THE BOARD OP DIRECTORS OF THE AFRICAN DEVELOPMENT BANK

Rule 1

Meetings

(1) Meetings of the Board shall be held regularly at such times as the

Board, shall from time to time determine.

(2) In addition, meetings of the Board may be called by the President

at any time. He shall call a meeting of the Board at the written request of two Directors.

(3) The Board may adjourn its meeting at any time,

(4) The Board shall meet at the Principal Office of the Bank unless

it decides that a particular meeting shall be held elsewhere,

Notes

1. See ADB Agreement, Art»34 (l); IBRD/BD/RPS s. 2 (a) (b) and (e);

IADB/BD/RP, s, II (1) (b) and (d).

2S The ADB Agreement requires the Board to "function in continuous session" at the principal office of t^e "Sank and to meet "as often as

the business of the Bank may require''l/+ Rules 1 and 2 are designed to

arrange the meetings8 mechanism of the Board in such a way* For this

purpose, para. (I) of Rule 1 proposes that there should be a regime of regular or periodic (e.g. monthly or weekly) meetings which the Board

may change from time to time in the light of the Bank's requirements.

It can also exempt certain months of the year from such regime.

3* Para. (2) of Rule 2 provides that the President may and - at a

written request by two Directors must - call meetings of the Board at any time in addition to the regime of regular meetings established by

it under para. (l)c The utility of this provision will depend on the

length of the period between regular meetings of ths Board which will also determine the need for tne permanent physical presence of the Directors p.rsd their Alternates at the location of the Principal Office

of ths Bcini-.Z'/ ■

U ":^te I to Arta 34 of the Annotated ADB Agreement states: "It is suggested that, in the first years of the existence of the Bank, the Board of Directors may prefer to meet* say? at monthly or - throughout part of the year - even longer intervals and therefore not require that all Directors should reside at the place of the Principal Office of the Bank".

2/ See footnote 1.

E/CN.I4/AUB/45

Annex III Page 2

4. Para. (4) admits, as is consistent with Art. 34 (l) of the

ADB Agreement, that the Board may meet elsewhere than at the Principal Office of the Bank. This may "be useful when, for inst ance, the Board desires to meet while the Board of Governors is meeting in the capital of some Member country - of. Rules of Prooe- dure of the Board of Governors of the African Development Bank,

Rule 1 (l) and Note 3 thereto.

5. If and when he is aoting for his Director, an Alternate may

request the President to convene a meeting of the Board - see Rule 15

(l) under "Director".

Annex III Page 3

Rule 2

Notice of Meetings

The Secretary of the Board shall inform the Directors and their Alternates of the time and place of each meeting of the Board as promptly as possible and in any event not later than »oaoa days before the date fixed for such meetings? provided that a period of . .,„. days shall suffice for such notice in urgent cases and that no notification shall be required where the Board has adjourned its meetingo

Notes

1. See IBRD/BD/RPs s» 2 (a) and (b); IADB/BD/RPs so II (l) (o).

2O Together with Rule 1, this Rule is designed to arrange the meetings' mechanism of the Board in such a way that it may be con sidered as functioning in "continuous session" (see Notes 2 and 3

to Rule l). For this purpose, the periods of notice provided in

the Rule must be as brief as communications between the principal office and the capitals of the Member countries permit = unless

the Directors and/or their Alternates will be permanently physioal-

ly present at the location of the Principal Office. The IBRD Rules are based on the assumption that the date of regular meetings is known in advance and notice thereof need therefore not be given;

they provide for a minimum notice of one day for other meetings0 The IADB Rules require, except in urgent cases, a minimum notice of two days for all meetings„

3« As Directors and Alternates are of different nationality and

may reside in different places. Rule 2 provides that "both should be notified of meetings*.

4« As to the term "Secretary of the Board'% see Rule 9 (l)o The choice of the most suitable means of prompt notification is left to him; see however Rule 12,

E/CN.14/ADB/45

Annex III Page 4

Rule 3

Quorum

A quorum for any meeting of the Board shall "be a majority of

the total number of Directors, or their Alternates, representing

not less than two-thirds of the total voting power of the Members,

The President may adjourn any meeting at which a quorum shall not

be present from time to time, for altogether up to three days;

notice of the meeting thus adjourned need not be given*

Notes

1. See ADB Agreement, Art. 34 (2); IBRD/BD/RP, s. 2 (c); IADB/

ED/HP* s. II (l) (e)o

2. Where the required quorum is not attained^ the Directors and

Alternates present do not represent a validly constituted meeting

of the Board, In the circumstances9 the President* who is in the

best position to know when a quorum is likely to be present, may

adjourn the meeting several times, subject, however, to the rule

that the adjournmentb must not, in aggregate, exceed three days.

Annex III Page 5

Rule A

Agenda.

(1) The President shall draw up a provisional agenda for each meet

ing of the Boardo He shall transmit that agenda to the Directors and their Alternates as promptly as possible and. except in urgent cases9 not later than one day before that meeting. Any Director may have an item included in the provisional agenda for any meet ing of the Board provided he advises the President of his request at least three days before the date of that meetings

(2) A provisional agenda shall be submitted for adoption to the Board at the first session of each meeting* At the request of the President or of a Director<, the Board may at any time decide on

the inclusion of any additional item in its agenda. However, un less the Board decides to dispose of such additional item forth with, it shall not take any decision concerning such item until its next meeting*

(3) If the President or any Director shall so request, the adop tion of a decision of the Board concerning any atems whether it be included in its agenda or not, shall be adjourned for not less

than two days provided that such adjournment may not be repeatedo (4) Where the consideration of any item has not been completed by the Board, that item shall be included in the provisional agenda for its next meeting, unless the Board decides otherwise,,

Kg tss

1. See ABB/BG/BP, Rule *>; 1BRD/B3/RPS s( 3; IADB/BD/RP, 8. II (2),

2O As the Board is organised to function in "continuous session"9

the intervals between its regular meetings are likely to be short and, in addition;, any two Directors may have a meeting called at

any time (see Rule 1 and Notes 2 and 3 thereto), there is no need

to arrange for the inclusion of additional items In the provisional

agenda once such agenda has been drawn up (ofc ADB/BG/RPj Rule 5 (2)

to (4) )o If a Director Is unable to ask the President for its