Compliance with Operational Standards: The Contribution of the World Bank Inspection Panel

Book Chapter

Reference

Compliance with Operational Standards: The Contribution of the World Bank Inspection Panel

BOISSON DE CHAZOURNES, Laurence

BOISSON DE CHAZOURNES, Laurence. Compliance with Operational Standards: The Contribution of the World Bank Inspection Panel. In: G. Afredsson. The World Bank Inspection Panel. Alphen aan den Rijn : Kluwer Law International, 2001. p. 67-85

Available at:

http://archive-ouverte.unige.ch/unige:41984

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Compliance with Operational Standards:

The Contribution of the World Bank Inspection Panel

Laurence Boisson de Chazoumes•

The establishment of the Inspection Panel broke new ground in the international legal order. ^As a pioneering endeavor in the international organizations field, individuals were granted the right to bring complaints in an international forum for alleged failures of an international organization: under the procedure put in place, private persons are given direct access to the World Bank (hereinafter the

"Bank") if they believe they are directly and adversely affected by a Bank- financed project due to the bank's failure to observe its policies and procedures regarding the design, appraisal and implementation of the projects it finances.' Not only is the Inspection Panel innovative from an institutional viewpoint, but it also provides a mechanism by which to increase scrutiny over the Bank's activities in sheding light on a feature of great interest, i.e. the standards governing the operational activities of an international organization - in the present case, the World Bank- and the extent to which the organization ensures its respect in its lending activities.

The creation of the Inspection Panel was triggered by the goal of improving quaHty control in the Bank's operations during project preparation and in the supervision of the implementation of projects financed by the Bank.² In this context, the lnspec6on Panel was established as an independent and perma-

nent organ within the Bank's structure. It was granted the competence to receive and, subject to the approval of the Bank's Board, to investigate complaints from groups of individuals whose rights or interests have been or are likely to be directly and adversely affected by the Bank's failure described above. An individual Executive Director in the Bank and the Bank's Board may also instruct the Panel to conduct an investigation.

• Senior Counsel, Environment and lntemationaJ Law Unit, Legal Department, World Bank

1 The mandate of the Inspection Panel covers projects financed by the International Bank for Reconstruction and Developmem (IBRD) and the International Development Association (lOA).

2 On the motives for thee tablishment of the Inspection Panel, see l.FJ. Shihata, The World Bank Inspection ^Panel, ffiRD - ^{Oxford University} Press, 1994, ^pp.S-13.

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nature, ome being mandatory requirements for Bank taff. With respect to the ln pection Panel, aJleged policie ' mandatory character i a condition of eligibility of complaint . The question of the binding nature of the tandards a contained in these eries of documents wa , in great part, re olved with a decision of the Management of the Bank adopted in 1992 in order to ensure greater clarity of, and compliance with, the standard . Thi deci ion was the re ult of di cussions about the need to clarify the limit of flexibility in the application of the Operational Directive , as well a the need to implify the

Bank's bu ine practices.⁸ In this context, it was decided to gradually replace the document called "Operational Directives" (ODs) with statements termed

"Operational Policie "(OPs), "Bank Procedure " (BPs) and "Good Practices"

(GPs).

While OP and BPs are binding on the staff of the Bank within the limits of flexibility provided therein,⁹ GPs are not. The latter are intended to di eminate knowledge and indicate successful examples. The con equence of thi decision for the ln pection Panel's competence is that reque ts alleging

failure of the Bank to follow requirements as pelled out in the recent erie of document entitled OPs and BP , meet one of the eligibility requirement

with re. pect to the ratione materiae competence of the Panel as they are binding on the taff of the Bank. ¹⁰

At pre ent, however, not all OD and other documents is ued before the OD erie was launched, have been converted to OPs, BP and GP . In addition. reque t brought to the Inspection Panel may originate in "pre- conver ion" iruations in which the relevant instrument for appreciation of an alleged Bank' failure are OD and other series of document. .¹¹ These situations may be sources of legal controversies. Such controversie could

8 I.F.I. Shihata, The World Bank Inspection Panel, op.cit., pp.44 45.

9 With regard to the content of OPs and BPs. the World Bank Policy on Disclosure of Information state. that '"Operational Policies' as shon statements (usually one or two pages) of policy. 'Bank Procedure ' spell out the required documentation and common set of

procedures needed to en ure operational con i tency and quality.'' (Washington, DC: March 1994)

10 A!> provided by the Re olution, the Panel's rarione materiae competence i ascenained in the light of four requirement! : I) an alleged failure of the Bank to foUow its operational policieJ and procedures in the design, appraisal and/or implementation of a project financed by the Bank. 2) the alleged failure must be of a certain gravity. 3) the alleged failure must relate to the Bank'-; own policies and procedures and 4) the alleged failure mu ^t be such as to have or to be likely to have an adverse material effect on the complainant, see Role of the Inspection Panel in the Preliminary Assc.•, mcnt of Whether to Recommend Inspection- A Memorandum of the Senior Vice President and General Counsel, January 3. 1995, 34lntemational Legal Materiah 503 ( 1995), pp.525-534.

11 See, for example, Inspection Panel Repon on Review of Present Project Problems and Asse sment of Action Plans (Argentina/Paraguay: Yacereth Hydroelectric Project). in which the In pection Panel listed a series of Operational Directives and other documenL-. applicable to the requc t, INSP/R97-I 0, p.56.

Compliance with Operational Standards 71

ari e due to the fact that ODs may contain standard which are not binding on the staff of the Bank. An a e ment of the binding nature of their provisions on the taff depend on the wording of each standard.¹²

Having stated the principle that operational policie and procedure as defined in the Re olution are applicable standard , the violation of which may give ri e to complaint before the Inspection Panel, the Re olution al o indicate that the notion of operational policie and procedure "does not include Guideline and Best Practices and similar documents or statements". This sentence makes clear that non-binding operational tatement do not

pertain to the competence of the PaneL

Procurement Guidelines

Special mention should be made of the "Procurement Guideline "a the title may be mi leading. While they are called "guideline ", they become in fact mandatory requirement once referenced to in loan agreement . The Re olu- tion it elf makes clear that complaints against procurement deci ions reached by the Bank borrower in connection with upplie of goods and ervice financed by Bank loan are beyond the cope of an inve tigation by the Panel.¹³ Thi should, in fact, be viewed as a reiteration of the principle according to which complaints brought for borrowing countrie ' violations do

not fall within the mandate of the Inspection Pane1.¹⁴ ln the cour e of the Panel' activities, a problem, however, arose as to procurement action taken by the Bank. Following a request brought before the In pection Panel, the Executive Director. adopted a decision, ¹⁵ reiterated in the Clarification endorsed by the Executive Director on October 17, 1996, (hereinafter the Clarification )^{16• 1t} made clear that "No procurement action i ubject to inspection by the Panel, whether taken by the Bank or a borrower" and that "A

12 I.F.I. Shihaw, The World Bank Inspection Panel, op.cir., p.45.

" Pamgmph 14 (b) of the Resolution reads as follows: "Complaims againw procuremem

decisions by Ban/.. borrmn~rs from supfJiiers of goods and sen•icesjinanced or expecred to be financed by the Ban/.. wuler a loan agreement, or from losing tenderers for the supply of any goods

or sen•ices, ll'hich will continue ro be addressed by .rraff under exisring procedures''

14 L.Forgct, Le "Panel d'in!.pcction'' de la Banque mondiale, Annuairc fmn\ai'> de droit international, 1996. p.656.

15 Sec Dechion Number I: lni>pcction Panel's Mandate on Procurement Matter,, The Inspection Panel, Repon, August I, 199-t to July 31, 1996, pp.55-56.

16 Under the basi of paragmph 27 of the Resolution, a Board review of the In pection wa<;

conducted and completed in July 1996. Tt resulted in the i uancc by Lhe Board of Clarification ''which in fact introduced omc amendments (by addition) to the resolution", I. F. I. Shihata. The World Bank lnllpection Panel - A Background Paper on it Historical, Legal and opcmtional A!.pccts. thi11 volume.

s ^{t !) nal}

72 Laurence Boisson de Chazournes

eparate mechani m is available for addres ing procurement-related com- plainrs".17

Related eligibility criteria

Together with their alleging of a violation of operational policie and procedures, the complainants mu t demonstrate that the violation i due to an omi ion or action of the Bank with re pect to the de ign, apprai aJ, and implementation phase of a project financed by the Bank.¹⁸ The Clarifications have made clear that "the word 'project' as u. ed in the Re olution has the ame meaning as in the Bank' practice, and includes projects under consid- eration by Bank management as well as projects already approved by the Executive Directors." A defined, the notion of "project" is wide and encompas. e · all developmental activities eligible to be financed by the Bank^{19• As} to the notions of design, appraisal and implementation, they houJd be understood in light of the concept of project cycle in Bank operation encompas ing variou phases, the Bank having a cenain role, and therefore

different re. pon ibilitie , in each of them.¹⁰

The reque. t for in pection may relate either to a project under consideration by Bank Management, i.e. a project in the de. ign, preparation, pre-appraisaJ or apprai aJ . tage, or to a project already approved by the Board and financed by the Bank. More particularly, with respect to the implementation phase, the Resolution specitie that a complaint can be lodged for " ituation where the Bank i alleged to have failed in it follow-up on the borrower' obligation

17 Sec paro 1.15. Guidelines on Prcx:urement under IBRD Loan and lDA CrediL41 (Washington, DC: January 1995, revi-,ed January nnd ^Augu~>t 1996 and September 1997).

18 The Resolution refer to the "( ... )failure of rile Bank ro follow its operational policies and

procedures with respect to the de.~ign. appraisal amVor implememmitm of a project jinmrced by the Bank (including siruarions where the Bank is alleged to ltal't' failed in its follOINtp ⁰¹¹

tire borroll'u·,~ ohli~:atiowr under loan agreemellls witlr re.\pecr to mc/1 po/icie!> and proce-

duusX ... )"

19 The notion of project i:. not limited to pecific inv~ tmento;. ^It includ~ projects consio;ting of programs or activities other than specific physical work . ^!>CC Decision No.2 of the Executive Directol"\: cope of the Panel'-, Mandate - Compcn ation for Expropriation and Extension of rDA Credit!> to Ethiopia under OMS 1.28. The Inspection Panel. Report. Augu t I. 1994 to July 3 I. 1996. p.57. More generally. see ''Project nnd Non-Project Financing under the IBRD

Anicle~". Legal Opinion of the Senior Vice-Prc idcnt and General Counsel. December 2 1. 1984.

::!0 The Ban~.'!> project cycle cove~ the life of a project from identification of need.\ and

prioritic. until the final completion of work and evaluation of re ull~: ~cc W. C. Braum, The Project Cycle. IBRD. 1982; The World Bank's Partnership with Nongovcmmcntal Organiza-

tion~. The World Bank. May 1996, p.7.

I

Compliance with Operational Standards

73

under loan agreements" with re pect to operational policie and procedure ^21• The Panel has the mandate to investigate whether the Bank has properly followed up on the carrying out by the borrower of it obligations under a loan agreement. The latter include the notion of green conditionality. A a matter of fact, a number of legal techniques have been developed for en uring that policy requirement are reflected in loan agreements. Specific loan covenants a well as other technique , uch as the attachment of an implementation program or plan of action a a chedule to the loan agreement, are u ed for specifying the action to be taken by the borrower.²² Within the framework of it re pon ibilitie , the Bank should exercise all due diligence required to make sure that the borrower's ooligations are fully complied with in a timely fashion, i.e. that the borrowing country does abide with aJI its contractual obligations.

2. ENVIRONMENTAL AND SOCIAL STANDARDS AND THElR RELATIONSHIP WITH LNTERNATIONAL LAW

The Bank' operational policie and procedures integrate a number of ocial and environmental i ue and consideration , ranging from the protection of pecitic vulnerable group of people to water re ource management i · ue . Some of the e in trument are of a general application, other more pecific. They provide for guideline and requirements to be followed by Bank taff in

Bank financed projects. They also indicate the borrower country' responsi- bilitie in taking into account the environmental and social i ue .

Mo t of the request o far made to the In pection Panel allege that the Bank ha not followed its environmental and social policies and procedure . ²³ Among the most quoted, are the Environment Asse sment policy, the

Indigenous Peoples policy and the Involuntary Resettlement policy, a. well a the policie dealing with the Involvement of Nongovernmental Organiza-

21 The Resolution lates as n principle that no reque ~will be declared eligible regarding a

project after the project's loan "closing d:ue" or after 95 percent or more of the loan proceed~

have been disbun,ed. For an interpretalion of lhi requirement, ee "Time-Limits on the Eligibilily of Complaints Submjtted lo the Inspection Panel'', Legal Opinion of the Senior Vice President and Gcncml Counsel. July 28, 1997.

21 On lhc u~ of uch techniqu for environmental protection purpose , ^!.CC l.F.I. Shiha1a, The World Bank And the Environment : Legal Instrument for Achieving Environmental Objcclives, The World Bank in a Changing World. op.cit.. 1995. pp.l99-20 .

23 Sec R. E. Bi et. An Environmental Inspection Mechanism for World Bank Projects, Ecodcci ion. Spring 1997, pp.47-50. Por an analysis of tltc Planned Arun UJ Hydroelectric Project in Nepal ( 1994): D. D. Brodlow. A Test Case for the World Bnnk. American University Journal of lnlemnlional Law & Policy, 1996, Vol. 11, pp. 247-294.

74 Lourence Boisson de Chazoumes

tions ( GO ) in Bank- upported Activities and Di closure of Operational Information. ^2"

En\!iromnental assessment policy

The Bank' operational policy on environment as e sment (EA) con titute a cornerstone for project activities with potential environmental con equences.

lt lay down standards and procedure for the conduct of environment assessment. Its purpo. e is to ensure that the project options are environmen- tally sound and su. tainable, and thu to improve decision making. All Bank projects are screened in reference to three categories (categoric A, B and C) to determine the appropriate level of environment a se. ment.²⁵ Such an as e sment will be conducted to ensure that development options under consideration are environmentally ound and u. tainable and that any environmental con equence are recognized early in the project cycle and taken into account in the project design. Environmental assessments identify way for improving projects environmentally, and minimizing, mitigating or compen ating for adver e impacts. Among other i sues to be taken into account, the environment a e ment should aJ o make . ure that the project i in full compliance with dome tic Jaw requirment a well a~; with the international treatie to which the borrowing country i a party.

The mo t rigorou as e ment process i required for a project which i likely to have ignificant adverse environmental impacts (i.e category A project ), uch as impacts that are ensitive, diver e or unprecedented or that affect an area broader than the sites or facilities subject to physical works. If the environmental impacts are less adver e (category B projects), a less cxhau tive form of environmental as essment is required. In the case where the project ha no, or minimaJ, adver e environmental impact (category C projects), no environmentaJ a ses mentis required. Meaningful consultations with project-affected groups and local NGO are required during the environ- ment a e sment proce . Consultations hould be initiated a early a

24 The operational policie and procedures are available on lhe Bank' web ite

(WW\\ . worldbank.org). As of February 20, 1998, the Environment As~c~~ment polic}. the lndigenou People policy and lhe lnvoluntary R~tlement policy nrc still m lhc OD fonnat.

GP l-t70 on Involvement of Nongovemment Organization ^tn Bank-\upponcd Acti\ 1ties wns

i~~ued in March 1997 and BP 17.50 on Disclosure of Operational lnfonnation wa~ i~ ucd in Septemhcr 1993.

25 OP ·tOI on Environmental ~essment (fonhcoming) include~ a founh catcgol). i.e:

.. Categor) Fl: A propo\cd proJCCl is clas ified as Category Fl if it invoh c m vestment of Bank fund'> through a financial intermediary. in ubprojccts that may rc~ult in environmental impa ^L\". 11 aJ o specifics lhm in the context of a proposed project, the analy\is of alternative!.

to environmental implications hould include a "without project" !lituation.

I

sch t s atenal

Compliance with Operational Standards

75

possible. For Category A projects, the projects with the most potential significant environmental impacts, public participation is required at lea t at two tages, i.e. shortly after environmental screening and before the tenns of reference for the EA are finalized, and once a draft EA is prepared, as well as

throughout project implementation.

Dam and re ervoir projects receive a special treatment in the Bank' EA procedures. The purpose is to avoid, minimize, or compen ate for adverse environmental impacts wherever possible, using design features and measures implemented as part of the project. The potential project impact is determjned at an early tage with the advice of environmental specialists. At the earliest stage, during project identification and before assigning an environmental category to the project, the Bank must ensure that the borrower elects independent, recognized experts to carry out environmental reconnrus ·ance that include identification of the project impacts, ascertainement of the cope of the EA, a e sment of the borrower's capacity to manage an EA process and advising on the need for an independent advisory panel which would normaJly be et up for large dam projects.

Indigenous peoples

The Bank has a pecific policy which addresses the concern of indigenous people . The notion of indigenous people covers group including "indige- nous ethnic groups", "tribal groups" and "scheduled tribes", but is not restricted to these groups. They are defrned as social groups whose social and cultural identity is distinct from that of the dominant ociety and makes them vulnerable to being di advantaged in the development process. The defini- tional criteria focused on the issue of vulnerability and distinctiveness, although other criteria have a role to play: close attachment to ancestral territorie , indigenous language, self identification, pre ence of customary social and political institutions and primarily ·ubsistence-oriented production.

The purpo. e of the policy is that these social groups benefit from development project and that potentially adverse effects of Bank projects on indigenous people are avoided or mitigated. The Bank calls for their "informed participa- tion" in projects and programs that affect them. To this effect, an indigenou peoples development plan is prepared by the borrowing country to provide the framework for indi.genous peoples' participation in project activities and to ensure that these peoples receive socially and culturally appropriate benefits.

From a .legal viewpoint, the poJlcy requires that the development plan as esse : (i) the legal status of groups covered by the policy, as reflected in the

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76 IAurence Boissvn de Clw:oume.~

country's con ·titution and legislation; and (ii) the ability of . uch group!\ to obtain acce~s to and effectively u e the legal y tern to defend their rights.

lm·olumarv reselllement _~

As a ba ic policy objective, involuntary re ettlement hould ^be avoided or

I

minimized where feasible and aJl viable alternative project de. igns should be

reviewed. Any operation that involve involuntary land acqui ition i reviewed for potential re ettlement requirements early in the project cycle.

The objective of the policy is to assist displaced people who have lost their land, hou es, or both, or their means of livelihood, in their efforts to restore or improve former living standards and earning capacity.

Where di ·placement is unavoidable, the borrower country is required to prepare and carry out re ettlement plans or development programs indicating the compen atory mea ure to be carried out, an implementation scheme, including a reference to a grievance mechani m permitting affected peoples to bring complaints, a well a a time-table and a budget. The policy defines the reference standards for deterrnining the compen atory measures. Displaced people should be (i) compen ated for their lo e · (land-for-land/market value/mixture of land-based and non-land-ba ed strategies}, (ii) as i ted with the move and upported during the tran ition to the re. ettlement site, and (iii) a si ted in effort. to improve their fanner living tandard and income earning capacity. Particular attention hould ^be paid to the needs of the poore. ^t.

Informed participation and con ultation with the affected people i required during the preparation of the re ettlement plan. Community partici- pation in planning and implementing re ettlement should also be encouraged.

Appropriate attention hould be given to indigenous peoples, ethnic minoritie and "pastoralists" who may have cu tomary rights to the land or other re ources taken for the project.

NGOs and disclosure of information

Bearing in mind the potential contribution of GO , among other , in areas concerning environmental degradation, involuntary re eulement and indige- nous people . a Bank policy- at pre ent, a "Good Practices" policy - ets out a framework for involving these organizations in Bank-supported activities and provides taff with guidance for working with them. The pot icie and procedure on environment impact as es ment, indigenous people and

Compliance with Operational Standards 77

unvoluntary re ettlement also contain specific provisions requiring the involvement of NGO .

The policy on disclosure of operational information sets out the procedures with respect to Bank documents.²⁶ In particular, it states the procedures to be followed for making acce sible ^to affected groups and local NGOs in borrowing countries copies of environmental assessments and of environ- memal action plans. This policy, as well as the one on the involvement of NGOs, complement in many respects the other above-mentioned policies. All together, the policy requirements "operationalize" important international standard , such a acce to information, public awarene s and participation in decision-making through Bank's projects.

Relationship with international law standards

As can be seen, the World Bank does not operate in a closed world. The environmental and social operational policies and procedure reflect concerns related to the promotion of sustainable development as expressed in many other fora. Operational policies and procedure are in fact vehicles for achieving this objective, although they are not necessarily exhaustive in covering all is ues which pertain to their scope of application.²⁷ The relation- ship between these policies and international law standards contributes to promoting ustainable development. In particular, the policies' references to international law promote respect for good practices as endorsed in interna- tional instruments of a binding character as well as of a non-binding character.

Before presenting the relation hip of the operational policies and proce- dure with international law standard , it should be remembered that opera- tional policies and procedures are not by themselves binding under interna- tional law. Policy requirements related to the implementation of projects only become binding when they are reflected in loan agreements. By entering into an agreement, the borrowing tate is under the obligation to take nece sary measures to comply with its contractual obligations which may include policy i sues. Within the framework of it responsibilitie , the Bank should exerci e

all due diligence requjred to make sure that all borrower's obligations are ^fully complied with.

26 The Bank ha'< established a Public Jnfonnation Cemer, presemly called '"lnfo hop··. through which much of the material covered by the policy is available. ll i located at the Bank Headquarters and serves the public in member counllies lhrough the Internet and through Bank

field office .

27 As a note of caution. on each operational policy figures a tandard notice which stales lhat lhe policy is "not nece arily a complete tremmem of the subject".

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78

At the outset, it i to be noted that the policie on environment as ment.

indigenous population and involuntary re ettlement require that the project financed by the Bank are in compliance with the dome tic legal order of a borrowing country. Variou means allow for countries to integrate their international commitments in their legal order. A uch, they become pan of the dome tic legal order of the borrower and hould be taken into con idera- tion when implementing the relevant poJicie and procedure . Moreover, a a general requirement, first tated through a policy adopted in J 984,²⁸ the

Bank has committed it elf not to finance project that contravene any international environmental agreement to which a member country concerned is a party. Thi principle wa reiterated in the OP on fore try²⁹ and in the OP on environment as e sment³⁰ This commitment, which hapes the conduct of the Bank with re pect to international environmental agreement , al o

increa e the awarene of borrowing countrie with respect to the ignifi- cance of international environmental law requirements and the importance of their being implemented.

Operational policie and procedure may at o expre ly refer to interna- tional tandard as a mean for identifying the good and be t practices to be

followed. A an example, the OP on management of cultural property in Bank-fmanced projects make explicit reference to country obligation under international treatie for defining cultural property under the policy.³¹ The OP on pe t management aJ o refer to international law in trument as an indication of good practices to be followed in the area covered by the policy.³² Other international in truments. even though not referred to explicitly, may play a imilar role, at least for interpretation purpo e . Thi may, for example, be the case when the UN convention on biological diver icy3³ i con idered in the context of the application of the policy on indigenou people . These various interactions between international law and operational tandard underline, if needed, the pragmatic nature of the laner aimed at identifying be t practices for usrajnable development purpo e .

23 See OMS 2.36 on Environmenlal Aspects of Bank Work ( 1984).

29 Operalional Policy (OP) 4.36 on Forestry .

.lO Opernlional Policy (OP) 4.01 oo Environment Asses ment (fonhcoming)

31 The Convention Concerning the Protection of the World Cui rural and at:ural Heritage ( 1972) i. given ru a reference, see OP 4.1 1, par.2 (a) (forthcoming).

32 For the purpose of the policy {OP 4.09), minimum tandard are defined with reference to the FAO'. Guideline for Packaging and Storage of Pesticide (Rome, 1985). Guidelines on Good Labeling Practice for Pesticides (Rome, 1985) and Guidelines for the Di posal of Waste Pesticide and Pel ticide Containers on the Farm (Rome, 1985). See also. the fonhcoming policy on npplicntion of EA to project involving pe t management (BP 4.01-Annex C).

33 Ph.Sands. R. Taraso~ ky and M.Wei . Documents in international environmental law, Manchester, Manche ter University Press, 1994 p.845.

Compliance with Operational Standards 79

The fact of taking into consideration the international instrument to which a borrowing country has committed itself or which are considered as reflecting agreed international good practice , shows the close relationship of the operational policies and procedures with international law principle and standards in areas which fall within the scope of application of the policie . In addition, operational policies and procedures constitute means which generate new practices and standards in borrowing countries and a uch favor the emergence or consolidation of international practices.³⁴ The highlighting of this umodel' role reveals in ome respects the difficulties surrounding the application of operational policies and procedure . As a matter of fact, they promote respect for progressive and process-oriented standard who e application on the ground may face resistance or uncertainty as to how to

implement them in a sound manner.

The required pubUc participation policy and/or meaningful consultations provides a good example of how challengeable and difficult it may be to meet the e standards from one region to another or from one country to another. It is one thing to establish the sequencing of actions to be conducted and the timing for certain procedural requirements in terms of public participation, but quite another to put in place a real and meaningful participation process.

Factors such as cultural traditions, the notion of public space for debate, the existence of an institutional framework or the rate of literacy, all play a significant role towards implementing these principles and should be taken into account in the context of the flexibility provided by the relevant ^opera~

tional policies and procedures. Ln this context, the borrowing country should do it best efforts to take the most appropriate measure for implementing the policy requirements in light of the aim of meaningful public participation for ensuring the protection of the environment and of the affected people.l⁵ The Bank, on its sjde, should exerci e due diligence for makjng sure that the

34 The Bank's operational policies and procedures may al o serve as a model for other mullilateral and bilater;.ll donors. In this context, eo-financing of investment operations is one way to promote such practices. See S. Mahony, World Bank's Policie and Practice in

Environmental Impact As essmenl, Environmental and Planning Law Journal, I 995, ^{Vol. I} 2, pp. 97-1 15; S. Guyeu, Environmental & Lendjng, Lessons of the World Bank, Hope for the European Bank for Reconstruction and Development, New York University Journal of lmemational Law and Politics, 1992, Vo1.24, p.896.

35 Parallels can be drawn with international law notions for interpreting the notion of be ^t efforto;. Such can be the case with the obligation to undertake to take steps with a view to achieving progressively the full realization of economic, sociaJ and cultural right"i, as spelled out in Article 2, para. I of the Jmemation.al Covenant on Economic, Social and Cultural Rights.

On this marter, see the General Comment of the UN Commiuce on Economic, Social and Cultural Rights, Compilation of General Comments and General Recommendations adopted

by Human Rights Treaty Bodie , HRI/GEN/l/Rev.3, para. l-14.

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80 Laurence Boisson de Cha:.oumes

borrower complies with the policy requirements dealing with public pankipa- tton• .

3. THE INSPECTION PANEL AND THE PROMOTION OF COMPLIA CE WITH OPERA TlONAL POLICiES AND PROCEDURES

Compliance with environmental and ocial operational policies and proce- dures is undoubtedly an important tool for en uring quality in the Bank's acti ities. Although the creation of the In pection Panel i an important achievement in this re pect. various other means contribute to compliance with operational policie and procedures. Besides check. and balance , mcchani m and procedures such as internal review processes during the preparation of a project and the imposition eventually of mea ures of a di ciplinary nature, there are rule-oriented mechanisms which promote respect with policy requirement . This i the case, for example. with the legal technique mentioned earlier which have been developed for ensuring that policy requirement are reflected in loan agreement , the borrower thereby being legally committed to implement them. On it side, the Bank exerci es with due diligence it. upervi ory functions to ensure that the borrower comply with its contractual commitments. A a final re. ort, the Bank may take more extreme mea ure , uch as the uspension of di bur ement or the cancellation of a loan if the borrower doe not carry out its contractual obligations.³⁶

The establishment of the In pection Panel complement the above- mentioned series of mean because it allows individuals to put under crutiny the Bank' compliance with its operational standard . The Bank has institu- tionalized the compliance concern in establishing a specific organ to conduct investigation and by providing for the possibility of remedial action taken by

the Bank in the ea e of a violation of operational policies and procedures which has impaired the right or intere ^ts of a group of people. Moreover, beside allowing for remedie to individual , the e tabli hment of the In pection Panel has encouraged a proce on a Bank-wide level which demon. trate its potentialities for clarifying the content of operational policie

and procedures and to increasing awarene of the need to comply with these policie and procedure .

. \6 Sec I.F.I. Shihala. The World Bank and the Environment Legal Instruments for Achieving Environmental Objectives, op.cit .. pp.199-208.

Compliance with Operational Standards 81

Powers of the Inspection Panel

Before looking at thi two-fold contribution, it hould be noted that the In pection Panel i not ve ted with normative power of a general nature. ^lt rule-making powers are trictly Limited to the adoption of rule for "procedural matter. relating to the work of the Pane1''.³⁷ The Panel adopted uch rule on August 19, 1994 (hereinafter the ·•operational Procedure ''). The e rule are based on the Resolution e tabli rung the In pection Panel and are aimed at providing detail on its operational aspects.³⁸ The In pection Panel therefore does not have the competence to legislate or enact new standards, nor does it have the competence to amend existing operational policic and procedures.

Ye. ted with investigatory power , the latter are however of a limited cope.

They can only be exercised with respect to request alleging a failure by the Bank to follow its policie and procedure in pecific operational activitie ·.

Thi entai Is that the Panel is not entitled to review "the consistency of the Bank' practice with any of it policie and procedures"³⁹ regardle s of it content, nor i the Panel entitled to decide on a general ba i the adequacy of

a panicular policy or procedure . .w Within the limit of it mandate, however, the Panel play. an important role for promoting compliance with operational

tandard .

Clarification and a1rareness as means to pronwre compliance with operational standards

The Panel exerci e it investigatory and quasi-inve tigatory power ⁴¹ on a ea e-by-casc basis, not to say on a project-by project basi . In . o doing, the Panel must decide on the applicability of relevant policies and procedures. The Panel mu ^t then interpret their content with regard to the po ible failure of the Bank in complying with them. Through its interpretative function,⁴² it may

37 Sec paragraph 24 of the Re:.olution e:.tabli hing the Inspection Panel

Jll Sec introduction to the Operating Procedures.

-'9 Sec Clarification~ (Eligibility and Access)

.lU Sec L. Forget, Le .. Panel d'inspection'' de la Banque mondialc. Annuairc fran~ai~> de droit intemational. op.cit.. pp.65+655.

41

In reference to Lhe pr:.tcticc developed ^1.0 far and described by I.F.I. Shihota. The World Bank

I n..,pcction Panel - A Background Paper on i~ Hi toricaJ. Legal and Operational AspccL'>. op.cit.

The Clarification:. i<;o,ucd h> the Bank' Executive Directors Late. in fa L, the practice which hru been follo"cd b> the Panel by providing that '"11·here the Inspection Panel believes tlwt it would be appropriate ro wulenake a "preliminary assessment" of the damog~s alleged by the reque.Her (in particular when such prelimilutry· assessmefll could lead to a resolution of the mauer without the need for a full im•t!.\figation), the Panel may undertake the preliminary rusessmefll mu/ indicate to the Board the dme on which it would present its findings lmd recommemuuiom. as 10 the need, if

any, for ^t1 full im·e.\ligmion ".

-ll Thio, interpretative function is limited to operational policies and procedures and i~> exercised under the ovcmll review of the Bank' Board, and to the extent that they do not involve the Bank's