Panelists: Osvaldo Gratacós (Vice President, CAO) and CAO staff
CAO invites participants to meet the new head of CAO, Osvaldo Gratacós.
- Address complaints from project-affected communities.
- Report directly to WB President.
- Can be initiated internally, which is unusual.
- Full access to information is key, discuss decision making decision with organisations.
- Do not report to the Board.
Three main goals:
- Compliance, Dispute Resolution (DR) and independent advise (IA). This makes CAO unique. Comprehensive approach provides a greater understanding.
- DR – aim to bring together community and private sector/ entity against whom the complaint has been lodged. Voluntary process.
- Challenges faced by Panel pilot are similar to those of CAO – consultation, desires from communities. Once agreement has been reached the process goes into a monitoring process. Can be referred to compliance.
- Small team – Direct from communities or from DR process.
- Look to see how IFC/ MIGA performed to rules and regulations. Report results in compliance or non-compliance. Evaluation of IFC/ MIGA action.
- Organisation does respond and the response is published. Case is kept open and process is monitored. Well over 25 cases under consideration at present.
- Has supported discussion with staff on challenges faced by staff. Working on robust monitoring and evaluation framework – to assess also the impact on the institutions.
- As experience grows the unit can provide advice and input to CSOs and private sector.
- 47 Active cases in 17 countries. Upward trend in case numbers under environment of constrained resources.
- Extractives and FIs remain key components of the caseload.
- Need support from CSOs as organisations have much greater access and knowledge of local realities and contexts.
- Need support also in ensuring that communities are aware of the CAO.
- Two objectives:
- Want to be most effective mechanism. Provide a positive result for communities. That is why the threshold is for complaints is so low. Over the long-term the objective is to change the behaviour of IFC/ MIGA.
Regarding DR process.
How much of the CAO’s recommendations and advice has been taken up by the management. Does the CAO feel marginalised? What can CSOs do to assist?
DR – context is essential and vary – from 20,000 in Chad to other smaller groups. Seeks to identify local capacity and expertise – ensure not to impose Western values and frameworks.
Process – workshop with community, additional support provided. At some instances, due to imbalances, mediation may spend days with communities to prepare. Perhaps playing field and power structures can never be balanced.
Work to improve leverage of communities through, for example, ensuring compliance mechanism with force.
There is certainly tension. Structural shift – reputational risk now on par with financial risk.
CAO would have preferred that ES risk be considered as a third independent pillar.
Report aims to ensure development outcomes, as that is the mandate of the organisation. There are tensions and that is the reality.
What can be done by CSOs? Well, convey the importance of the cooperation and share with IFC that CSOs would like to improve the institution. IFC should reach out and seek additional engagement. Bring cases to CAO’s attention.
What is the reaction of the Board. Board seems mostly supportive. However the board is transitioning within the next few months. While CAO does not report to the Board, it is important that the Board understand the role of the CAO.
Increasing demand by WBG President for the development of Action Plans. There seems to be a greater uptake of information. Long-term impact may be difficult to gauge. Have not done many monitoring reports in the past. However this is a possibility.
Working on Management Action Tracking Record and are developing a scorecard to monitor progress.
Will information be private? The report is internal to CODE.
Similar to IEG?
It is easy for IFC to react to individual cases, however it may not address systemic response. Any plans for more sectoral audits? Any sectoral audit will be generated with good cause and management will be advised.
What is the Board and management’s reaction to rising number of cases?
Agrees that case-specific audit provides a possible escape route. Very valid concern/ suggestion that sectoral audits be considered. Disagreement with management regarding mandate. However CAO can trigger its own audits.
Regarding rising numbers:
Board is keen to understand causal relations. Board would like quick reaction and identification. Criticism – process takes too long. However number of staff is limited.
As investments grow cases will grown – therefore Bank must understand that additional resources are required to ensure a positive response to communities.
Q: Why no MIGA cases?
It is increasingly the case that projects have multiple financing parties – eg, newly launched GIF. Is there a way to alert other EDs, eg, Dutch government that concerns exist.
What triggers audit?
DR – given the important role of the mediators, how can one ensure that mediators are not on the side of the private parties – eg, likely lawyers are linked or have incentives to support government or private party.
Independent Mechanisms meet once a year – there are differences of opinions regarding potential for cooperation. No formal agreement to cooperate. Legal cooperation is fine, however it should not hinder access to remedy across a range of institutions. However there is communication. Seek to at least coordinate to the extent that it avoids duplication and a burdening of communities.
Mediators: This is a very difficult issue. There are many mediators, however difficult to find adequate experience. Perhaps twining mediators is an option. Have held 5 mediator trainings across regions.
There is an area in which the CSO community can help. Bring inadequate mediation to light. Seeking budget for training on private sector- community mediation training, as currently none exists.
There are mediators who refuse to work with CAO due to its affiliation with the WBG. Others are concerned about the risks. Mediators are not forced on communities.
How can CSOs help CAO – keep the pressure on, bring cases – perhaps lobby to move CSOs to WB building from I building…
Board must understand that a safe venue for communities is required.
What triggers an investigation? Independently based on assessment, or through the president’s office. Also, in cases where DR is not sufficient the case will proceed to compliance. Mainly citizen-driven.
Dinant – triggered by CAO VP.
What triggered the FI audit – triggered by VP based on the growth of the sector.
What about Tata Mundra – where compliance leads to disagreement from management, who has undertaken additional studies. This has led to frustration.
Action Plans – are they optional? What is the status of discussion?
What happens if a complaint arises at an early stage and than subsequent monitoring once implementation begins? To what extent will CAO investigate the level of compliance of local client to national law?
A: There is no formal obligation on the organisation to provide an Action Plan. However the president has in the past request a response through an Action Plan.
No barrier to lodging another compliant – yes, no barrier but what are the monitoring mechanism? Tata Mundra – CAO is engaged with community to gather input. Monitoring process is under development.
There are ongoing discussions with IFC during monitoring? Is there an exchange of advise – A: previously attempt to gather information to gage the level of compliance by IFC.
Compliance with domestic legislation is a requirement.
Why so few cases on MIGA? How can CSO support the strengthening of other mechanisms?
What can be done to assist communities that are affected by other outside loans once loan is repaid? What are the implications to DR process?
There is quite a lot of academic work on IMs world-wide. CAO is often consulted by other mechanisms.
In some cases negotiations continue, in others that is not the case. Perhaps establish compliance in legal agreement.
MIGA investments are not as publicised. Communities are unaware of MIGA investments. Conceptually very challenging.
Q: Concerns at rhetoric indicating that ‘mistakes will happen’ – CAO should stress that CAO is not the checks and balances for the IFC. This should be internalised.
A: Need to focus on beneficiaries not clients, that is the mandate. Do no harm should not be considered an aspiration.