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Civil society calls for IFC and MIGA to build upon CAO reform

13 July 2021

On 1 July, the board of directors of the International Finance Corporation (IFC), the World Bank’s private sector lending arm, and the Multilateral Investment Guarantee Agency (MIGA), the World Bank’s political risk insurance arm, announced that it had finalised the development of a new policy for the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism of IFC and MIGA.

Reacting to the new policy, Carla García Zendejas of US-based civil society organisation (CSO) Center for International Environmental Law stressed that, “while the changes in operations at the CAO are well received, a core objective of this reform process must be transforming the IFC’s commitment to providing remedy into a reality for communities who have been harmed by IFC-financed development projects.” Margaux Day of US-based CSO Accountability Counsel concurred: “The CAO facilitates access to remedy, but the IFC and MIGA ultimately need to provide it.” Despite the policy’s overall strength, civil society organisations were concerned that it nonetheless dilutes portions of the CAO’s mandate, including through a restriction on the CAO director general’s decision to investigate; projects pending board approval no longer being eligible for CAO review; and eligible complaints will not be published until the conclusion of the assessment phase, with ineligible complaints not published at all.

The new policy was developed after an external review of IFC and MIGA’s environmental and social accountability framework. The review, published in August 2020, included an assessment of  the role and effectiveness of the CAO (see Observer Winter 2019).  In May, 24 CSOs who have worked with communities seeking remedy for harm caused by IFC and MIGA, submitted comments to a draft CAO policy published in April. The submission raised concerns about the above-mentioned dilution of the CAO’s mandate adopted in the final policy.