The Inspection Panel Annual Report July 1, 2005, to June 30, 2006 © 2006 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org E-mail feedback@worldbank.org All rights reserved. The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Board of Execu- tive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is copyrighted. 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A FREE PUBLICATION Table of Contents Abbreviations and Acronyms 7 Letter of Transmittal 9 The Panel 11 Message from the Panel 13 The Inspection Panel 17 Requests Received in Fiscal Year 2006 21 Request No. 37, Democratic Republic of Congo 22 Transitional Support for Economic Recovery Credit Operation (TSERO) and Emergency Economic and Social Reunification Support Project (EESRSP) Request No. 38, Honduras 28 Land Administration Project Request No. 39, Romania 33 Mine Closure and Social Mitigation Project Request No. 40, Nigeria 38 Ghana: West African Gas Pipeline Project Investigations Completed 43 Request No. 31, Colombia 44 Cartagena Water Supply, Sewerage, and Environmental Management Project Requests No. 32 and 33, India 50 Mumbai Urban Transport Project Request No. 36, Cambodia 58 Forest Concession Management and Control Pilot Project Investigations in Process 67 Request No. 34, Pakistan 68 National Drainage Program Project Table of Contents 3 Request No. 37, Democratic Republic of Congo 72 Transitional Support for Economic Recovery Credit Operation (TSERO) and Emergency Economic and Social Reunification Support Project (EESRSP) Request No. 38, Honduras 73 Land Administration Project Actions on Earlier Investigations 75 Request No. 26, Paraguay and Argentina 76 Yacyretá Hydroelectric Project--Follow-up and Progress Report on Implementation of Management Recommendations and Action Plan Request No. 23, India 78 Coal Sector Environmental and Social Mitigation Project--Management Report on Status of Outstanding Issues following the Inspection Panel Investigation Report and Management's Response Outreach and Other Activities 80 ANNEXES Annex 1 Panel Members' and Executive Secretary's Biographies 86 Annex 2 Joint Statement on the Use of Country Systems 89 Annex 3 Resolution No. IBRD 93-10/Resolution No. IDA 93-6, The World Bank Inspection Panel 90 Annex 4 Review of the Resolution Establishing the Inspection Panel 1996 Clarification of Certain Aspects of the Resolution 95 Annex 5 1999 Clarification of the Board's Second Review of the Inspection Panel 97 Annex 6 Operating Procedures 101 Annex 7 The Inspection Panel Budget 130 BOXES Box 1 Democratic Republic of Congo Project Information at a Glance 22 Box 2 Honduras Project Information at a Glance 28 Box 3 Romania Project Information at a Glance 33 Box 4 Ghana Project Information at a Glance 38 Box 5 Colombia Project Information at a Glance 44 Box 6 India Project Information at a Glance 50 Box 7 Cambodia Project Information at a Glance 58 Box 8 Pakistan Project Information at a Glance 68 Box 9 Democratic Republic of Congo Project Information at a Glance 72 Box 10 Honduras Project Information at a Glance 73 Box 11 Paraguay and Argentina Project Information at a Glance 76 Box 12 India Coal Sector Project Information at a Glance 78 4 The Inspection Panel Annual Report TABLES Table 1 Summary of Inspection Panel Cases, June 30, 2006 117 Table 2 Alleged Violations of Policies and Procedures per Request, June 30, 2006 121 FIGURES Figure 1 Inspection Panel Process 20 Figure 2 Policies Most Often Raised in Requests, as of June 30, 2006 126 Figure 3 Financing for Projects Subject to Requests, June 30, 2006 126 Figure 4 Percentage of Requests Received per Region, June 30, 2006 127 Figure 5 Panel's Request Record, as of June 30, 2006 127 MAPS Map 1 Geographical Distribution of Requests for Inspection 128 Table of Contents 5 Abbreviations and Acronyms ACUACAR Aguas de Cartagena BP Bank Procedure DED Deutscher Entwicklungsdienst DRC Democratic Republic of Congo EA Environmental Assessment EAP East Asia and Pacific ECA Europe Central Asia EESRSP Emergency Economic and Social Reunification Support Project EIA Environmental Impact Assessment ESIA Environmental and Social Impact Assessment FCMCPP Forest Concession Management and Control Pilot Project FoE-Ghana Friends of the Earth-Ghana GEXSI Global Exchange for Social Investment GTZ Deutsche Gesellschaft fuer Technische Zusammenarbeit, the German Agency for Development Cooperation IBRD International Bank for Reconstruction and Development IDA International Development Association IEGDG Internal Evaluation Group Director-General IFC International Finance Corporation IFIs International Financial Institutions ILO International Labour Organization INFVP Infrastructure Vice-Presidency IPDP Indigenous Peoples Development Plan JVLR Jogeshwari-Vikhroli Link Road LCR Latin America and Caribbean Region MUTP Mumbai Urban Transport Project NEXI Nippon Export and Investment Insurance NGO nongovernmental organization OD Operational Directive OFRANEH Organización Fraternal Negra Honduras OP Operational Policy OPIC Overseas Private Investment Corporation OPN Operational Policy Note PATH Programa de Administración de Tierras de Honduras NRM Natural Resource Management Abbreviations and Acronyms 7 RAP Resettlement Action Plan R&R Resettlement and Rehabilitation SCLR Santa Cruz-Chembur Link Road SEA Strategic Environmental Assessment SFMP Sustainable Forest Management Plan TA Technical Assistance TSERO Transitional Support for Economic Recovery Operation USOA United Shop Owners Association VENRO Verband Entwicklungspolitik Deutscher Nichtregierungsorganisationen e.V. WAPCo West African Gas Pipeline Company UNITS OF MEASURE AND CURRENCIES km kilometers US$ U.S. dollars 8 The Inspection Panel Annual Report Letter of Transmittal The Annual Report of the Inspection Panel for the period July 1, 2005, to June 30, 2006, has been prepared for the International Bank for Reconstruction and Development and the International Development Association in accordance with the 1993 Resolution establishing the Panel. It is being circulated to the President and to the Executive Direc- tors of these institutions. The Panel wishes to thank the Executive Directors for their steadfast support for the Panel. The Panel also thanks Mr. Paul Wolfowitz, the President of the World Bank Group, and Senior Management for their continued support of the Panel as an essential element in ensuring accountability and transparency by the World Bank. The Panel is also grateful for the continued support of civil society and for their efforts in promot- ing accountability and transparency. Edith Brown Weiss Chairperson June 30, 2006 Letter of Transmittal 9 The panel The Inspection Panel consists of three members who are appointed by the Board for non- renewable periods of five years. As provided for in the Resolution that established the Panel, members are selected on the basis of their ability to deal thoroughly and fairly with the Requests brought to them, their integrity, their independence from Bank Manage- ment, and their exposure to developmental issues and to living conditions in developing countries. A Panel member is disqualified from participating in the investigation of any Request related to a matter in which he or she has a personal interest or had significant involvement in any capacity. Panel members may be removed from office for cause, only by decision of the Executive Directors. The Panel's structure and operations further safeguard its independence. It is func- tionally independent of Bank Management, and reports solely to the Board. In addition, Panel members are prohibited from ever working for the Bank after their term ends. Current Members. The members of the Panel are Edith Brown Weiss (member since Sep- tember 2002), Tongroj Onchan (member since September 2003), and Werner Kiene (member since November 2004). Panel members are required to select their chairperson annually. The present chairperson is Ms. Edith Brown Weiss. The chairperson of the Panel works full time while the two other Panel members work on a part-time basis as the need arises. Former Members. Richard Bissell (1994­97), Alvaro Umaña (1994­98), Ernst-Günther Bröder (1994­99), Jim MacNeill (1997­2002), Edward Ayensu (1998­2003), and Maartje van Putten (1999­2004). Secretariat. The Panel has a permanent Secretariat, which is headed by Executive Secre- tary Eduardo G. Abbott. The office also consists of Deputy Executive Secretary Peter L. Lallas; Assistant Executive Secretary Anna S. Herken; Operations Officers Serge Selwan and Tatiana Tassoni; Senior Executive Assistant Francine Coscolluela; and Program Assistants Luis Schunk, who replaced Nimanthi Attapattu earlier this fiscal year. The Sec- retariat provides administrative and operational support to the chairperson and Panel members, and assists the Panel in processing Requests, conducting investigations, and responding to queries from potential Requesters. The Secretariat also organizes and par- ticipates in outreach activities, seminars, and other events; disseminates information about the Panel and its activities; and provides general research and logistical support to the members of the Panel. The Panel 11 message from the panel In accordance with its mandate, the Panel is dedicated to providing an effective forum to which people affected by a World Bank-financed project or program can complain if they have suffered or may suffer harm because the World Bank has not followed its poli- cies and procedures. This year has been the busiest since the Inspection Panel was estab- lished in 1993. During the past year, the Panel registered four new Requests: one each from affected people in the Democratic Republic of Congo (DRC), Honduras, Romania, and Nigeria. The four Requests concern projects with different subject matters: forestry in the DRC; land titling in Honduras; closure of mines in Romania; and the West African Gas Pipeline in Nigeria. The Panel recommended, and the Board approved, investigations for the first two Requests, which came from the DRC and Honduras. After the Request from Romania had been registered and the Panel had visited the site to determine the eligibility of the Request, the Panel received a letter from the Requesters asking that it defer a decision on whether to recommend an investigation for six months because the problems giving rise to the Request were now being addressed. The Panel recommended such a deferral and the Board approved this recommendation. The Panel has recently received a letter from the Requesters indicating their satisfaction thus far. In the last request from Nigeria, the Panel's report and recommendation were being finalized as of the end of the fiscal year. During this last year, the Panel has been engaged in five investigations concurrently: · Mumbai Urban Transport Project (India) · Cambodia Forest Concession Management and Control Pilot Project (Cambodia) · National Drainage Program Project (Sindh province, Pakistan) · Forestry component in the Transitional Support for Economic Recovery Opera- tion and the Emergency Economic and Social Reunification Support Project (DRC), and · Land Administration Project (Honduras) A sixth investigation, the Cartagena Water Supply, Sewerage and Environmental Management Project (Colombia), was completed at the end of the previous fiscal year, but considered by the Board during this fiscal year. Of the five concurrent investigations, the Panel completed two this year: the Urban Transport Project in Mumbai, India, and the Forest Concession Pilot Project in Cambodia. The Panel's Investigation Report on Message from the Panel 13 the project in Pakistan will be delivered to the Board at the beginning of the new fiscal year. Investigations of the Requests from DRC and Honduras are under way. The status of the completed reports follows. As a result of the Panel's findings in its Investigation Report on the Mumbai Urban Transport Project (India), the Bank suspended disbursements on the road and resettle- ment components. Management's Response and Action Plan subsequently set forth the need for progress and completion of a suite of actions related to these components. At the Board meeting on March 28, the Board asked the Panel to review Management's progress when it reports to the Board in six months. The Panel returned to Mumbai in early May to convey the results of its investigation and to discuss its findings and the Bank's Action Plan with affected people. One of the Panel's experts was invited to attend subsequent meetings in Mumbai with affected people as an Observer. In response to the Panel's Investigation Report on the Cambodia Forest Concession Management and Control Pilot Project, Bank Management explained to the Board at its meeting on June 29 how it planned "to use the lessons learned from the Panel Report and the project in its future work in forestry and natural resources management in Cambo- dia."1 The Panel intends to return to Cambodia and convey the results of its Investigation Report to the Requesters. During fiscal year 2006, the Board also considered the Panel's Investigation Report for the Cartagena Water Supply, Sewerage and Environmental Management Project (Colombia). The project calls for the disposal of Cartagena's municipal wastes via pipeline and submarine outfall about 20 kilometers north of the city. Management's Re- sponse to the Panel's Investigation Report provides for the villages near the outfall to re- ceive water and sewerage connections and community centers, in association with the Project. The Panel is encouraged by the Board of Executive Directors approval of the Panel's recommendations regarding whether to conduct an investigation and their endorsement of the Panel Investigation Reports presented this year. It appreciates their implicit unfail- ing support. The Panel also appreciates the support of the new Bank Management for the Inspec- tion Panel. President Paul Wolfowitz noted in the Panel's brochure for staff that the Pan- el is "indispensable to the work and credibility of the World Bank . . . The Panel provides accountability and transparency. The world's poorest citizens can take their concerns about Bank-funded projects to the Panel and know that their voices will be heard. Bank staff have the chance to address these concerns." A major focus of the Panel's activities this year has been to familiarize Bank staff with the work of the Panel and findings in the Panel reports. The Panel held variations of re- gional town hall meetings with three regions: East Asia, Latin America, and Africa. The meeting for East Asia was held in Bangkok, with country offices included by video. The Panel Chairperson also spoke at a meeting organized by the Infrastructure Sector to con- sider its program. 1World Bank press release, "Improving management of forests is critical to better livelihoods, economic growth in Cambodia--World Bank Discusses Inspection Panel Investigation of Cambodia Forest Concession Management and Control Pilot Project." June 29, 2006. 14 The Inspection Panel Annual Report The Panel has continued to emphasize outreach efforts to civil society and communi- ties affected by World Bank-financed projects. The Panel held regular meetings with civ- il society, in various locations, and spoke at various university and other events about ac- countability and about the Inspection Panel. It has continued to update its Web site, to facilitate inquiries in multiple languages, and to make the site easier to use. The Panel's brochure, which provides a succinct introduction to the Panel, has been published in twelve languages and distributed broadly. In May 2006, the North American Commission on Environmental Cooperation in Montreal, Canada, hosted the third informal meeting of the accountability and recourse mechanisms at international financial and related institutions. The Inspection Panel host- ed the inaugural meeting of this group at the World Bank in May 2004, and the Asian Development Bank hosted the second meeting in Manila, Philippines, the following year. The meeting of principals of these mechanisms has become an annual event. At the Mon- treal meeting, principals from all of the mechanisms at international financial institutions participated, including the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, and the International Finance Corporation. Principals from national export agen- cies with similar mechanisms in Canada, Japan, and the United States also joined in the meeting. In all of the Panel activities, the staff members of the Panel's Secretariat have played a critical role. We are grateful for their superb skills, excellent support, and outstanding dedication to the Panel's activities, including in visits to the field. The Panel especially ap- preciates the fine teamwork among Panel members, Panel experts, and Secretariat staff in the various investigations this last year. The Panel also wishes to express its appreciation to the Board of Executive Directors for their support of the Panel, to Bank Management and staff for their cooperation in re- sponding to inquiries from the Panel, to civil society for its support of the Panel, and to the people affected by World Bank-financed projects who entrust the Panel with their concerns. We hope that our work will contribute to ensuring sustainable and equitable development, an important goal of the World Bank. Edith Brown Weiss, Chairperson Tongroj Onchan Werner Kiene June 30, 2006 Message from the Panel 15 The inspection panel The World Bank created the Inspection Panel in 1993, on the eve of its 50th anniversary, to serve as an independent mechanism to ensure accountability in Bank operations with respect to its policies and procedures.2 It was an unprecedented act in the history of in- ternational financial institutions. Since its inception, the Panel has provided people af- fected by Bank-financed projects with direct access to an international forum through which their complaints can be addressed. After almost five years of the Panel's opera- tion, in April 1999, the Board confirmed "the importance of the Panel's function, its in- dependence and integrity."3 Subject to Board approval, the three-member Panel is empowered to investigate problems that are alleged to have arisen as a result of the Bank having failed to comply with its own operating policies and procedures. As directed by the Resolution that es- tablished the Panel, the Executive Directors reviewed the Panel's experience after two years of operations. The review was concluded on October 17, 1996, with the approval of certain Clarifications of the Resolution. In March 1998, the Board launched a second review of the Panel's operations, which ended in April 1999 with the approval of the sec- ond Clarifications of the Resolution (see annexes 3, 4, and 5, respectively, for the full texts of the Resolution and the 1996 and 1999 Clarifications). PANEL PROCESS The Panel's process is straightforward. Any two or more individuals or groups of indi- viduals who believe that they or their interests have or are likely to be harmed by a Bank- financed Project can request that the Panel investigate their complaints. After the Panel receives a Request for Inspection, it is processed as follows: · The Panel determines whether the Request is barred from Panel consideration. · If not, the Panel registers the Request--an administrative procedure. 2See Resolution No. IBRD 93-10; Resolution No. IDA 93-6, establishing the World Bank Inspection Panel. The Panel's 1994 Operating Procedures provide details to the Resolutions. For the purposes of the Inspection Panel, the World Bank includes the International Bank for Reconstruction and Development (IBRD) and the International De- velopment Association (IDA). 3Conclusions of the Board's Second Review of the Inspection Panel (hereinafter "1999 Clarifications"), IBRD and IDA Board of Executive Directors, April 20, 1999, at paragraph 1. The Inspection Panel 17 · The Panel promptly notifies the members of the Board that a Request has been re- ceived and sends the Request to them and to Bank Management. · Bank Management has 21 working days to respond to the allegations of the Re- questers. · Upon receipt of Management's Response, the Panel conducts a review in 21 working days to determine the eligibility of the Requesters and the Request for an Investiga- tion. · The Panel delivers its eligibility report and any recommendation on an Investigation to the Board for its approval on a no-objection basis. · If the Panel does not recommend an investigation, and the Board accepts that recom- mendation, the case is considered closed.4 · After the Board's approval of the Panel's recommendation, the Requesters are noti- fied. · Shortly after the Board decides whether an investigation should be carried out, the Panel's Report (including the Request for Inspection and Management's Response) is publicly available at the Bank's InfoShop and the respective Bank Country Office, as well as on the Panel's Web site (www.inspectionpanel.org). · If the Board approves the Panel's recommendation for an investigation,5 the Panel un- dertakes an investigation. The investigation is not time-bound. · When the Panel completes an investigation, it sends its findings on the matters alleged in the Request for Inspection to the Board, and to Bank Management for its response to the Panel findings. · Bank Management then has six weeks to submit its recommendations to the Board on what, if any, actions the Bank intends to take in response to the Panel's findings. · The Board then takes the final decision on what should be done based on the Panel's findings and Bank Management's recommendations. · Shortly after the Board's decision, the Panel's Report and Management's Recommen- dations are publicly available through the Inspection Panel's Web site and Secretariat, the Bank's InfoShop, and the respective Country Office. · The Panel's Report, Management's Response, and the press release concerning the Board's decision are posted on the Panel's Web site (www.inspectionpanel.org). 4The Board could, nevertheless, decide and instruct the Panel to make an investigation. 5See Conclusions of the Board's Second Review of the Inspection Panel, paragraph 9: "If the Panel so recommends, the Board will authorize an investigation without making judgment on the merits of the claimant's request. . ." See 1999 Clarification, available at the Inspection Panel's homepage (www.inspectionpanel.org) and included in Annex 5 of this report. 18 The Inspection Panel Annual Report Who may submit a Request for Inspection? · Any two or more persons directly affected by a Bank-supported Project. · Local representatives on behalf of directly affected persons with proper proof of au- thorization. · Subject to Board approval, a non-local representative (in exceptional circumstances where local representation is not available) may file a claim on behalf of locally af- fected persons. · An Executive Director. What are the criteria for recommending an Investigation? · The affected party consists of any two or more persons in the borrower's territory who have common interests or concerns. · The Request asserts that a serious violation by the Bank of its Operational Policies and Procedures has, or is likely to have, a material adverse effect on the Requester. · The Request asserts that its subject matter has been brought to Management's atten- tion and that, in the Requester's view, Management has failed to respond adequately in demonstrating that it has followed or is taking steps to follow the Bank's policies and procedures. · The matter is not related to procurement. · The related loan or credit has not been closed or more than 95 percent disbursed. · The Panel has not previously made a recommendation on the subject matter or, if it has, the Request asserts that there is new evidence or circumstances not known at the time of the previous Request. The Inspection Panel 19 FIGURE 1 INSPECTION PANEL PROCESS Inspection Panel Eligibility Phase Inspection Panel Investigation Phase Panel receives Request for Inspection. If Board authorizes an investigation... Archives Is the Request frivolous or clearly Chairperson appoints one or more lead outside the Panel's mandate? inspectors. Panel initiates headquarters if YES work: selection of experts and consultants, collection of official and unofficial documents, if NO and interviews with staff and consultants. Panel registers Request, sends Request to Bank Management, and informs Board. Panel conducts fact-finding in Project area. Panel receives Management Response to Request within 21 working days. Panel deliberates and determines facts. Panel determines eligibility of Requesters and Panel submits Investigation Report Request. Evaluates Management Response. to the Board and the Bank's President. Panel visits Project area. Bank Management has six weeks to submit its Report and Recommendations in response to the Panel's findings. Panel issues Eligibility Report within 21 working days, including a recommendation on whether to investigate. Board meets to discuss Panel findings and Management Recommendations and makes a decision. Board authorizes/does not authorize an investigation on a no-objection basis. Panel's Investigation Report, Management's Report and Recommendations, and content of Board decision are made public. Panel's Eligibility Report, Management Response, Request, and content of Board decision are made public. 20 The Inspection Panel Annual Report Requests Received in Fiscal Year 2006 DEMOCRATIC REPUBLIC OF CONGO REQUEST NO. 37 Transitional Support for Economic Recovery Credit Operation (TSERO) (IDA Grant No. H 192-DRC) and Emergency Economic and Social Reunification Support Project (EESRSP) (IDA CREDIT NO. 3824-DRC AND IDA GRANT NO. H 064-DRC) THE REQUEST BOX 1. DEMOCRATIC REPUBLIC OF CONGO PROJECT INFORMATION AT A GLANCE The Panel received a Request for Inspec- Project Name: Transitional Support for Economic Recovery tion on the above mentioned TSERO and Country Project (TSERO)/Emergency Economic EESRSP Projects on November 19, 2005. and Social Reunification Support Project (EESRSP) The Request, dated October 30, 2005, was submitted by the "Organisations Au- TSERO EESRSP tochtones Pygmées et Accompagnant les Region: Africa Africa Autochtones Pygmées en République Dé- Sector: General Finance Central Government mocratique du Congo" on their own be- Administration half and on behalf of affected local com- Environmental Category: Not Categorized B munities living in the Democratic IDA Credit Amount: US$90 million US$214 million Republic of Congo (DRC). Representa- (equivalent) (equivalent) tives of local communities of Kisangani in Board Approval Date: December 8, 2005 September 11, 2003 the Orientale Province, of Béni and Effective Date: December 27, 2005 December 5, 2003 Butembo in the Nord-Kivu Province, of Closing Date: December 31, 2006 September 30, 2008 Kinshasa/Mbandaka and Lokolama in the Equateur Province, of Inongo in the Bandundu Province, of Kindu in the Maniema Province, and of Bukavu in the Sud-Kivu Province were signatories to the Re- quest. The Panel received the Request in French and registered it on December 1, 2005. The Requesters claimed that they have been harmed and will be harmed by the forestry-sector reform activities supported by the TSERO and EESRSP Projects. They were concerned mainly with the implementation of a new commercial forest concession system and the preparation of a forest zoning plan for the forests of the Equateur and 22 The Inspection Panel Annual Report D Orientale Provinces, where the Pygmies have lived for generations. They claimed that if E the Projects are implemented without consulting the indigenous peoples and consider- MOCRA ing their interests, it may cause irreversible harm and lead to violations of their rights to occupy their ancestral lands, to maintain the integrity of their lands, to access exist- ing resources, to manage their forests and resources according to traditional knowledge and practices, and to protect their cultural and spiritual values. They claimed this TI would lead to the destruction of their natural living environment and means of subsis- C tence, it would impose or force change in their way of life, and it would cause serious REPUBLI social conflict. According to the Requesters, the EESRSP was based on a Forest Code that fails to take their interests into account. The Requesters contended that, because of the sensitive impacts of the policies to be implemented under the EESRSP on indigenous people and on forests, the Project was erroneously classified as Category B under OP 4.01 on Environmental Assessment (EA) C and should have been classified as Category A. The Requesters noted that the EA was O still not available. The Requesters stated that the Bank ignored the application of OD F 4.20 on Indigenous Peoples despite the presence of indigenous people in the Project im- CONGO plementation area, noting that the Pygmies were the first inhabitants of the region and have lived and traveled in the forests of the Equateur and the Orientale Provinces for centuries, even millennia. The Requesters alleged that the Bank prepared terms of ref- erence for a pilot zoning plan covering the axis Maringa-Lopori-Wamba and that these terms of reference recognized the presence of Pygmies' indigenous communities in these forests. The Requesters further stated that Bank activities pertaining to the forestry sector in DRC are not consistent with OP 4.36 on Forests. According to the Requesters, the EESRSP is based on the Forest Code, which was adopted without the participation of civil society or the involvement of the indigenous population and without implemen- tation of any safeguards. They claimed that activities are being implemented without Panel meets with adequate consultation and do not respond to indigenous peoples' concerns or to the Pygmy villagers requirements for sustainable manage- ment of the Congolese forests and the de- velopment of their inhabitants. The Requesters feared that the EESRSP will lead to the lifting of the moratorium on granting titles for forest exploitation and will result in granting new forest con- cessions, although the zoning plan would not have been prepared. They noted that no regulation related to the rights and in- terests of local communities or to environ- mental protection has been adopted. The Requesters argued that the type of lending instrument used resulted in the Bank by- passing its safeguard policies and proce- dures related to environment, forestry, and indigenous peoples. The Requesters also Requests Received in Fiscal Year 2006 23 Timber harvesting, Province Orientale expressed concerns with regard to the TSERO, which includes a component on forestry- sector governance. The Requesters' claims describe actions or omissions that may constitute violations by the Bank of various provisions of the following operational policies and procedures: OP/BP 4.01 on Environmental Assessment, OP 4.12 on Involuntary Resettlement, OD 4.15 on Poverty Reduction, OD 4.20 on Indigenous Peoples, OP/BP 4.36 on Forestry, OP/BP 8.50 on Emergency Recovery Assistance, OPN 11.03 on Cultural Property, OP/BP 13.05 on Project Supervision, and BP 17.50 on Disclosure of Information. MANAGEMENT RESPONSE On January 13, 2005, Management submitted its Response to the Request for Inspec- tion. Management states in its Response that it believes that the Bank made every effort to apply its policies and procedures. With regard to the environmental categorization of the Project, Management asserted that the EESRSP was classified correctly as Cate- 24 The Inspection Panel Annual Report D gory B and that the "Institutional Strengthening" component of the Project could have E been classified as Category C, because it was a technical assistance operation for insti- MOCRA tutional strengthening. Management stated that Category A would not have been ap- propriate for this component. Management challenged the Requesters' claims regarding the lending instrument (OP 8.50 on Emergency Recovery Assistance) and the direct effect of the delay in im- TI plementing OP 4.01 on Environmental Assessment. Management explained that the C policy allows the Bank to exempt the Project from its requirements when compliance REPUBLI with any of its provisions would prevent the effective and timely achievement of the ob- jectives of an emergency recovery project. Management emphasized that it did not de- cide not to implement safeguard policies and that completion of the environmental as- sessment and Environmental and Social Management Framework was delayed because of procurement issues. Management admitted that in this respect it did not comply with C OP 4.01 but stated that it intends to be in compliance by February 2006. O Management further explained that OD 4.20 was not triggered because the design F of the project as reviewed at concept stage did not reveal the existence of Pygmy com- CONGO munities in project-affected areas. However, with respect to the EESRSP, Management recognized that it was not in full compliance with certain processing provisions of OP 4.01, and that OD 4.20 should have been triggered during project preparation when the pilot forest zoning plan was added (even if the zoning element was subsequently dropped from the Project). Management underscored the fact that the pilot forest zon- ing plan was dropped from the EESRSP in July 2005. With regard to the infrastructure component of the Project, Management confirmed the existence of Pygmies in the affected area and stated that an Indigenous Peoples De- velopment Plan will be prepared. Management also noted that the moratorium on al- locating new concessions was established to avoid having concessions allocated too quickly and in an inappropriate way. Management claimed that the Bank is trying to introduce good governance in a system that has suffered from corruption and where the Impact of logging majority of the production forests were under some form of logging contract. Management claimed that its efforts have led to an unprecedented decrease of the areas that are under concessions. Man- agement is of the opinion that the Forest Code, which introduces innovations such as traditional users' rights, serves as a good basis for improving forest manage- ment. Management was mainly con- cerned with the government's capacity to develop and enforce the implementing regulations and states that many of these regulations are still lacking. Management finally asserted that the pilot zoning plan does not threaten physical cultural prop- erty, that four to five forest technical mis- Requests Received in Fiscal Year 2006 25 sions have taken place annually since 2002, and that these missions have fo- cused on deepening the Bank's under- standing of forest management in DRC. With regard to outreach to indigenous peoples, Management claimed that it un- derstood the importance of reaching out to Pygmy groups but stated that its efforts were restricted to policy dialogue and to contacts with stakeholders in Kinshasa because the forest areas were still inacces- sible. According to Management, Bank ef- forts were hampered by the difficulty in eliciting a unified response from the vari- ous interlocutors who claimed to repre- sent the Pygmies. Management stated that it will consid- er activities to strengthen institutions for other Bank-supported forest activities in DRC. It will establish a proactive forest information and outreach program and direct lines of communication with indigenous communities, including the Pygmies, ensuring that in future Bank operations they receive social and economic benefits that are culturally ap- propriate. Additionally, it will ensure that future Bank lending in the forest sector and other initiatives such as the zoning plan include measures that strengthen legal and cus- tomary rights and preserve the cultural heritage of indigenous communities, including the Pygmies. THE PANEL ELIGIBILITY REPORT/BOARD DECISION The Panel submitted its Report and Recommendation to the Board on February 16, 2006. In this Report, the Panel states that the "Requesters and the Request meet the eligibility criteria set forth in the Resolution that established the Inspection Panel and the 1999 Clarifications." The Panel adds that the "Request and Management Response contain conflicting assertions and interpretations about the issues, the facts, and compliance with Bank policies and procedures." During the Panel's visit, Requesters and other affected people highlighted their great concern regarding the destruction of their livelihoods, which depend on the forests. Most Requesters claim to be indigenous people with centuries-old ties to the forests. They fear that the Project will destroy their culture and way of life, which rely on the forests. The Panel noted the importance of the forestry sector for economic development in the DRC. The Panel also noted the importance and difficulties of providing financing for activities in a postconflict reconstruction context. During its visit, the Panel was impressed that the Requesters welcomed World Bank involvement in the forest sector. However, the Requesters were very concerned about the issues raised in the Request and Bank compliance with relevant policies and procedures. 26 The Inspection Panel Annual Report D The Board approved the Panel's recommendation to conduct an investigation into E claims made by the Requesters on a no-objection basis on February 28, 2006. The Re- MOCRA quest, Management's Response, and the Panel's Eligibility Report were made public and are available on the Inspection Panel's Web site at http://www.inspectionpanel.org. TI THE INVESTIGATION PROCESS C As authorized by the Board, the Panel started to investigate the matters alleged in the REPUBLI Requests. As of the end of June 2006, the investigation was ongoing. C O F CONGO Panel and local community Requests Received in Fiscal Year 2006 27 HONDURAS REQUEST NO. 38 Land Administration Project (IDA CREDIT NO. 3858-HO) THE REQUEST BOX 2. HONDURAS PROJECT INFORMATION AT A GLANCE On January 3, 2006, the Inspection Panel Project Name: Land Administration Project (IDA Credit No. 3858-HO) received a Request for Inspection (the Re- Region: Latin America and Caribbean quest) related to the Honduras: Land Ad- ministration Project (the Project)--in Sector: Rural Development Spanish, Programa de Administración de Environmental Category: B Tierras de Honduras, PATH.1 The Re- IDA Credit Amount: US$25 million quest was submitted by the Organización Board Approval Date: February 26, 2004 Fraternal Negra Honduras (OFRANEH) Effective Date: December 2, 2004 on behalf of the indigenous Garífuna pop- Closing Date: April 30, 2008 ulation of Honduras. OFRANEH stated that it is a federation whose members are elected every three years by the Garífuna communities as their representatives. The Request claimed that the Project, as a result of violations of Bank policies and procedures, is harming the Garífuna people and their land claims and will endanger their survival. The Panel registered the Request on Janu- ary 10, 2006. The Request presented an overview of the history of the Garífuna people, which the Requesters believed was useful to understand the magnitude of the damage that the PATH implementation may cause to them. The Requesters noted that, under PATH, an- cestral lands are to be regularized in favor of indigenous and Afro-Honduran popula- tions by recognizing communal or individual land rights, based on the preference of each community, and by registering such rights in the land registry. They also observed that 1 The Project aims to develop a policy framework and strengthened institutional basis to create and operate a Na- tional Property Administration System for the regularization, titling, and registration of lands, including in areas in- habited and claimed by Garífuna communities of Honduras. The Project includes surveys of urban and rural areas to demarcate property boundaries and property rights. It also calls for pilot actions and carrying out monitoring and evaluation activities. 28 The Inspection Panel Annual Report H properties and possessions supported by ancestral title or certification can be registered O as private property and enjoy full ownership rights. NDURA The Requesters feared, however, that the land titling and procedures provided under the Project ultimately would cause the demise of collective property in favor of individ- ual property, which is contrary to the land tenure system they prefer, and could give their land, which they consider as their functional habitat, to people outside the Garífuna S communities. They feared that the new titling program under the Bank-financed project would cause "severe damage to the Garífuna people and a serious violation of their rights," because these arrangements do not reflect the special legal situation of the Garí- funa people or their preferred land tenure options. They stated that the demise of their collective titles would result in the loss of their ancestral lands, culture, and traditions. The Requesters claimed that, in designing and implementing the Project, the Bank did not take into account the rights and interests of the Garífuna communities and, as a result, violated a number of its policies and procedures, such as OD 4.20 on Indigenous Peoples, OP/BP 4.01 on Environmental Assessment, and OP/BP 4.04 on Natural Habi- tats. The Request also referred to the International Labour Organization (ILO) Conven- tion Concerning Indigenous and Tribal Peoples in Independent Countries Convention C169, and stated that the Convention, ratified by Honduras in 1994, recognized the rights of the peoples with respect to the ownership and tenure of the lands they tradi- tionally occupy, as well as the special protection of the natural resources of these lands. The Requesters did not oppose actions to recognize collective rights to their ancestral lands. They had significant concerns, however, about the design and implementation of this Project in the way it affects their claims to their these lands. The Requesters claimed that the Garífuna communities were not properly consulted in the design and planning of PATH, including in the development of the Indigenous Peoples Development Plan (IPDP) and in the selection of the pilot communities where the Project would be imple- mented first. According to the Request, Bank staff did not consult with affected people prior to preparing the Indigenous Peoples Development Plan (IPDP), and did not distribute Pro- ject background material. The Requesters stated that the conflict resolution method pro- vided for in the IPDP arbitration not only is unconstitutional but also is different from the one called for in the Property Law. In either case, the Requesters claimed that both sets of procedures are inadequate because they do not respond to their social and polit- ical reality. The Requesters feared that under the Project their collective rights will not be recog- nized. They claimed that, in preparing the IPDP, the Bank did not consider the legal sta- tus of the indigenous populations as well as the procedures to issue collective legal titles, as defined in the country's Constitution and legislation. The Requesters claimed that the IPDP provides for the issuance of regulations to delimit and demarcate indigenous peo- ples' lands, but these were never issued. The Requesters indicated that the Project led to or supported the creation of the Mesa Regional, which is an institution not recognized by OFRANEH because it "has been cre- ated in spite of the disagreement of the communities, was not elected by the communi- ties, [and] is not an organization that represents them." The Requesters believed that the Mesa is composed of people who cannot be considered "other Garífuna representa- Requests Received in Fiscal Year 2006 29 tives," as claimed by the Bank, and is alien to their own institutions. In their view, con- flicts that are decades old cannot be solved through mechanisms such as the Mesa Re- gional, or conciliation, settlement, and mediation procedures "where the disparities of the interests represented, power elites on the one hand and indigenous peoples on the other, cannot but lead to completely unfavorable decisions for the indigenous peoples." MANAGEMENT RESPONSE On February 9, 2006, Management submitted its Response to the Request. Manage- ment claimed that, as of the date of the Response, no implementation activities involv- ing surveying, demarcation, conflict resolution and titling have taken place in any Garí- funa lands. Management added that, when these activities do occur, appropriate safeguards are built into the Project to protect indigenous people's lands. Management maintained that "community participation in the Project is voluntary and broad participatory mechanisms are operational." The Management Response stat- ed that the Project complied with national legislation, including the 2004 Property Law, as well as with Bank policies. Management also claimed that it has responded to the Re- questers' concerns and "remains committed to ongoing meaningful consultations that include all interested Garífuna stakeholders." The Management response presented an overview of the history, socioeconomic con- ditions, representative organizations, and issues involving the Garífuna people. Manage- ment stated that the "Garífuna communities currently face multiple and long-standing unresolved land conflicts" among community members, with third parties, and with na- tional and local authorities, because, according to Management, different types of own- ership coexist in the region and the titling programs that the National Agrarian Institute carried out in the past decades have not been satisfactory to the Garífuna people. The Response also stated that the Bank has supported research in land issues of in- digenous and Afro-Honduran people, among which is a land tenure study that mapped the territorial claims of 25 communities that is used by "many Garífuna organizations . . . as one of the empirical sources for their land claims." In addition, the Response stat- ed that the Bank has supported institutional building of Afro-descendant people, includ- ing Garífuna, in Latina America and a specific study on indigenous and Afro-Honduran people in Honduras. Management emphasized that community participation in the Project is voluntary and thus land demarcation and titling will occur only in those communities willing to participate in the Project. According to Management, the Mesa Regional is a consulta- tion board that "includes a broad range of Garífuna stakeholders." This Mesa was formed in 2005 following invitations sent by the government to "representatives of a wide range of Garífuna communities and organizations, including Ofraneh, to partici- pate in a meeting to establish an inter-institutional commission to organize the Mesa Re- gional." Management claims that there is "broad support for the Project," although there is also "diversity of opinions among various Garífuna stakeholders regarding the role of the Project in addressing their land claims." Management also emphasized that the government passed the Property Law after the Bank Board of Directors had approved the Project. Management stated that Property 30 The Inspection Panel Annual Report H Law is not discussed in the Project documents because at the time of Project appraisal O and approval it was still uncertain whether the law would be passed, Management fur- NDURA ther stated that the Project design took it into consideration and provided "mechanisms for the continuous flexible adaptation of the Project to the new law." In response to the claim that the Project's conflict resolution method, arbitration, is against the new Property Law and generates confusion among the people, Management S stated that the arbitration procedures included in the IPDP are consistent with national law in force at the time of Project preparation and are in compliance with OD 4.20. In addition, the Response noted that the Mesa Regional was established as a "participato- ry consultation framework" to "discuss and provide inputs into the development of land regularization procedures and conflict resolution mechanisms under the Project." The Response stated that the Project was assigned environmental Category B and that the Environmental Assessment identified among the potential impacts "the possible overlap between existing communities (both indigenous and non-indigenous) and pro- tected areas." As a result, communities may be restricted in their access to resources in demarcated areas. For this reason a Process Framework and Environmental Manage- ment Plan was developed. According to Management, to protect indigenous peoples and in compliance with OP 4.04 on Natural Habitats and OD 4.20, the Project establishes the following: (1) only legally established protected areas are eligible for demarcation; (2) no Project field activities will take place in or near a proposed protected area; and (3) procedures to protect the interests of the people must be in place before demarcation or titling occurs on lands adjacent ethnic lands. Panel meets with Requesters Requests Received in Fiscal Year 2006 31 Management believed that it "took ac- tion to address the Project-specific con- cerns expressed by the Requesters and no- tified Ofraneh of these promptly," for example, by the agreement reached with the government that the communities themselves must decide whether to be part of the Project. THE PANEL'S ELIGIBILITY REPORT/BOARD DECISION The Panel conducted an on-site visit in Honduras to assess the eligibility of the Request for an investigation. In its Eligi- bility Report, submitted to the Board of Panel meets with local community at Sambo Creek Directors on March 14, 2006, the Panel noted that there is disagreement as to whether the consultation process established under the Project is bypassing the struc- tures developed over time by the Garífuna communities to represent the interests of their people. Of particular concern to the Inspection Panel is the Requesters' assertion that the Project has a high potential to undermine their claims to ancestral lands before national and international bodies. The Panel also noted that the Requesters claimed that the ar- bitration proposed to settle land disputes for indigenous people conflicts with the con- stitution and laws of Honduras, and therefore lacks legitimacy. Management, as indicated in its Response, believed that the consultation process was open and conducted in accordance with Bank policies. It also contended that the dispute settlement mechanisms envisaged under the Project are consistent with local legislation and enable proper consideration of the views of the Garífuna people. The Panel found that the Request met the relevant eligibility requirements for an in- vestigation set forth in paragraph 9 of the 1999 Clarification of the Board's Second Re- view of the Inspection Panel. The Panel noted the need for factual inquiry into the Re- questers' claims that the Bank violated its own operational policies and procedures. The Board of Executive Directors approved the Panel's recommendation to conduct an investigation on a no-objection basis on March 30, 2006. The Request, Manage- ment's Response, and the Panel's Eligibility Report were made public and are available on the Inspection Panel's Web site at http://www.inspectionpanel.org. THE INVESTIGATION PROCESS As authorized by the Board, the Panel started to investigate the matters alleged in the Re- quests. As of the end of fiscal year 2006, the investigation was ongoing. 32 The Inspection Panel Annual Report ROMANIA REQUEST NO. 39 Mine Closure and Social Mitigation Project (IBRD LOAN NO. 4509-RO) THE REQUEST BOX 3. ROMANIA PROJECT INFORMATION AT A GLANCE On January 6, 2006, the Inspection Panel Project Name: Mine Closure and Social Mitigation Project received a Request for Inspection related Region: Europe Central Asia (ECA) to the Romania: Mine Closure and Social Sector: Energy and Mining Mitigation Project (the Project). The com- Environmental Category: B pany SC Ergio Prod SRL (Ergio Prod) sub- IBRD Loan Amount: US$44.5 million mitted the Request on its own behalf and on behalf of 30 inhabitants that live in the Board Approval Date: August 31, 1999 area known as Vermesti, Comanesti City Effective Date: January 27, 2000 in Bacau County, Romania. Ergio Prod Closing Date: October 31, 2006 specializes in wood processing and is situ- ated at the Vermesti Mine's road in Ver- mesti. In their Request, the Requesters claimed that they had been harmed by the Pro- ject. They asserted that the works related to the environmental reconstruction of the Vermesti Mine area failed to adequately protect the land surrounding the mine area. They identified two major issues: the flooding of their land and problems related to the Vermesti Mine's road. The Requesters claimed that their land had been filled with water because of insuffi- cient provisions for water drainage channels. They stated that as a consequence of fail- ures related to the closure of the Vermesti Mine their land had been flooded and that massive rains in 2004 and 2005 have aggravated the situation. According to the Re- questers, sterile material from the waste dump had been carried by the rainwater onto the Requesters' area and clogged the Vrânceanu brook, thus reducing the brook's ca- pacity to absorb the rainwater. According to the Requesters, the water from the waste dump of the Vermesti Mine had reached their area and damaged the production ma- chines of Ergio Prod and the timber needed for production. They feared that the com- pany would have to close and dismiss its 105 employees. The Requesters believed that the situation caused by the mine closure operations had exposed them to great risk of be- ing flooded again. Requests Received in Fiscal Year 2006 33 The Requesters also claimed that many of the affected landowners are poor and that the flooding had made it impossible for people to cultivate their land. They as- serted that as a consequence of the above mentioned problems, the authorities de- cided not to continue the existing permit for water management for Ergio Prod. The Requesters feared that if they carried on their activities without the necessary per- mit, they might be subject to legal action. Furthermore, the Requesters claimed that the mine closure operations--in particular, massive ground transportation by heavy Panel meets with Requesters cars and trucks used for Project works-- severely damaged the Vermesti Mine's road used by the Requesters. This required them to repair the road at their own cost. They added that their own cars have suffered damage from the deteriorated condition of the road. The Panel stated that the claims describe actions or omissions that may constitute violations by the Bank of various provisions of the following operational policies and procedures: OD 4.01 on Environmental Assessment, OD/OP/BP 13.05 on Project Su- pervision, and the World Bank Policy on Disclosure of Information. MANAGEMENT RESPONSE On February 14, 2006, Management submitted its Response to the Request. In its re- sponse, Management indicated that the Vermesti Mine is one of several brown coal mines near the city of Comanesti. Production in the Vermesti Mine ended in 1997 be- cause the mine was no longer commercially viable. According to Management, the mine is located on a hillside with flat areas below. Management stated that the site contained an old waste dump on the slope above the mine buildings and a newer waste dump in the flat area toward the river. Management believed that it had complied with Bank policies and that the Re- questers' rights or interests had not been harmed. More specifically, Management claimed that it had complied with OD 4.01 and stated that the Project had been assigned Category B correctly, because Management expected that, overall, the Project would have a positive impact on the environment. Regarding the Requesters' claims related to the flooding of their area, Management acknowledged that mining activities had changed the hydrology of the area but claimed that the mine closure activities had not aggravated the situation. Management explained that the Ergio Prod Factory is situated in a low-lying area with restricted drainage and had experienced several floods in the past that were not related to mine closure activi- ties. Management indicated that the rainfall in the years 2004 and 2005 had occurred on an unprecedented scale, resulting in flood events with approximate return rates of 150 34 The Inspection Panel Annual Report ROM and 500 years, respectively, and that the drainage channels between the mine site and the river were not designed for such an event. Management confirmed that runoff from the mine site entered the flood waters, but stated that the runoff came primarily from wa- ANIA tersheds outside the site. According to Management, there was no evidence of significant transport of waste from the waste dumps to the flooded area; instead, Management be- lieved that this was most likely sediment. Moreover, Management believed that in this regard the drainage channels prevented the failure of the waste dump and thus worked appropriately. Regarding problems raised by the Requesters with respect to the water permit, Man- agement stated that under Romanian law it is the responsibility of the landholder to maintain watercourses. With regard to the stretch of the Vrânceanu brook between the mine site and the railroad, Management stated that "[n]onetheless, recognizing the im- portance for the community and in order to bring the drainage works up to a standard consistent with European Union (EU) regulations..., the Project management decided to remove sediment from and reprofile the channel." According to Management, this work was carried out in December 2005 and in a meeting with the stakeholders on December 21, 2005, all parties noted that the sediment had already been removed from this part of the Vrânceanu brook and that additional work was envisaged. After the Request was registered by the Panel, Management said that another stake- holder meeting was held on January 26, 2006, at which the December 21 agreement was extended to include (1) the removal of sediment from the remaining course of the Vrânceanu brook to its confluence with the Trotus River and (2) the reprofiling of the channel. Management asserted that Ergio Prod agreed to the actions and that the new course of action was then formalized in an Action Plan approved by the Ministry of Economy and Commerce on February 1, 2006. Management noted that in the future the Municipality would be responsible for channel maintenance. In response to the Re- questers' statements regarding the deterioration of the mine site's access road, Manage- ment claimed that the road had already deteriorated in 2002 but believed the road to be in a reasonable condition. Furthermore, Management believed that any deterioration of the road was caused not only by mine closure traffic but also by heavy logging traffic from trucks to the Ergio Prod Factory. Management stated that upon completion of the mine closure works, the contractor was required by law to return the road to at least the condition in which it was when the work started. Regarding disclosure of information, Management claimed that it had complied with Bank policies. Management also stated that consultations had been held. As to supervi- sion, Management believed that it had supervised the Project regularly and in a manner consistent with Bank policies. The Response acknowledged that, with regard to the Ver- mesti Mine, Management was aware of problems arising from instability of the waste dump, sewage disposal, a collapsed shaft, and a gas leak, but it claimed that the Bank followed up on these problems appropriately. THE PANEL'S ELIGIBILITY REPORT/BOARD DECISION In February and March 2006, the Panel visited Romania and met with the signatories of the Request for Inspection; national, regional, and local government officials; technical Requests Received in Fiscal Year 2006 35 Panel visiting project site experts; and World Bank staff. The Panel visited Bucharest, Bacau, Comanesti, and the area of the Vermesti Mine. The Panel submitted its Report and Recommendation to the Board on March 15, 2006. In its Report, the Panel noted that there were special circumstances that shaped the Panel's views on handling the Request. In particular, these included a meeting on Jan- uary 26, 2006, at the Vermesti Mine, to which the Management Response referred and in which national, local, and Project authorities, the Bank, a representative of Ergio Prod, and other stakeholders participated. The Panel noted that, according to the minutes of the meeting, several issues were discussed and agreed on, such as the new alignment of the channel on the west side of the old waste dump to be done on the property of Ergio Prod as well as construction and financing under the Project of a new drainage from the old waste dump to the Trotus River. According to the minutes, agreement was also reached that the costs for these works would be shared among the local government, local community, landowners, and the Project. Furthermore, it was noted that the modification of the channel would be subject to approval from landowners and authorities. During its visit, the Panel noted divergent views about the meeting on January 26, 2006. Despite these differences, all parties agreed that these actions will take place as set forth in the document. The Requesters expressed to the Panel that, in their view, the measures set forth in the minutes of the January 26 meeting would address their con- cerns in a satisfactory manner. 36 The Inspection Panel Annual Report ROM On March 8, 2006, the Panel received a letter from the Requesters, dated March 6, 2006, sent by Ergio Prod on its own behalf and on behalf of the other Requesters. In this letter, the Requesters referred to the minutes signed in the meeting on January 26, 2006. ANIA They state "[c]onsidering that the claimed negative situation can be avoided, we ask to the Panel Inspection [sic] not to initiate a recommendation regarding our request for in- spection for a period of 6 months." In the Panel's view, this was an unusual request that the Panel procedures did not di- rectly address. The Panel noted the constructive way in which the Requesters' concerns were addressed at the January 26, 2006, meeting and the Requesters' willingness to avoid an investigation if their problems were dealt with in a satisfactory manner. In this con- text, the Panel recommended to the Board of Executive Directors in its Eligibility Report that the Panel refrain from issuing a recommendation, at that time, on whether an inves- tigation was warranted, but rather await further developments on the matters raised in the Request. The Panel noted that because it was not making a recommendation on this issue, the Requesters would still have recourse to the Panel later if they consider there are serious violations of Bank policies and procedures causing material adverse effect, which are based on specific acts or omissions of the Bank relating to the Project. On April 14, 2005, the World Bank's Board of Directors approved on a no-objection basis the Panel's recommendation to defer making a decision for six months as to whether to conduct an investigation into claims made by the Requesters. The Request, Management's Response, and the Panel's Eligibility Report are available on the Inspec- tion Panel's Web site at http://www.inspectionpanel.org Requests Received in Fiscal Year 2006 37 Nigeria REQUEST NO. 40 Ghana: West African Gas Pipeline Project (IDA GUARANTEE NO. B-006-0-GH) THE REQUEST BOX 4. GHANA PROJECT INFORMATION AT A GLANCE On April 27, 2006, the Panel received a Project Name: Ghana: West African Gas Pipeline Project Request for Inspection related to the Region: Africa Ghana: West African Gas Pipeline Project Sector: Oil and Gas (the Project). The Request was submitted Environmental Category: A by the Ifesowapo Host Communities Fo- IDA Credit Amount: US$50 million rum of the West African Gas Pipeline Pro- Board Approval Date: November 23, 2004 ject through their representatives from the Effective Date: December 31, 2004 Olorunda Local Government Area of La- Closing Date: June 30, 2009 gos State, Nigeria. The Request was sub- mitted on behalf of 12 communities that will be affected by the Project around the Badagry axis, in Lagos State, South-West Nigeria. These communities are Ajido, Imeke Agemowo, Araromi Ale, Idaghe Iyesi, Ilogbo Eremi and Igbesa, Okoomi, Itori, Oloya/Abiola, Arobieye, Igboliye, and Egushi Benja. The Request included four annex- es, including 44 signatures, and two letters of consent from families who support the Re- quest. On June 9, 2006, the Panel received a letter from Friends of the Earth-Ghana (FoE-Ghana) expressing its support for the above Request and asking to be added to the Request for Inspection. The Requesters believed that the Project, as it now stands, will cause irreparable damage to their land and destroy the livelihoods of their communities. According to the Requesters, the Bank failed to follow its policies and procedures in the preparation of the Environmental Impact Assessment (EIA). They stated that although West African Gas Pipeline Company (WAPCo) periodically consulted landowners, other "stakehold- ers" were wrongly excluded and "the overwhelming majority of our people were not consulted during the preparation of the Environmental Impact Assessment." The Re- questers also asserted that they could not comment on the EIA because it was not avail- able. They added that "it would have been helpful if relevant portions of the large doc- 38 The Inspection Panel Annual Report Ni uments [including the EIA and Resettlement Action Plan (RAP)] had been reproduced geria in Yoruba. . . and distributed to impacted communities." The Requesters claimed that the scope of the EIA was too narrow and should have included the existing Escravos-Lagos Pipeline to which the West African Gas Pipeline will be linked. They considered the Pipeline to be unsafe because of its history of poor maintenance and accidents. In addition, they stated that they were unaware of the con- tent and adequacy of the emergency response and contingency plan. The Requesters also claimed that the Bank has not complied with its policy on invol- untary resettlement (OP/BP 4.12). They believed that the Project would negatively im- pact their livelihoods and provide inadequate compensation, despite repeated com- plaints to the government, WAPCo, and the Bank. They claimed that "when the compensations were eventually paid, the rates were in most cases less than 4% of the market rate." The Requesters indicated that there were no "binding contractual rela- tions between individual landowners and WAPCo." They asserted that the payment of compensation was left to the discretion of the Project sponsors, resulting in compensa- tion paid only for the actual crops on the affected land and not for the land or loss of fu- ture profits from their activities on the land. The Requesters feared that not only would they lose their lands, which are their only means of livelihood, but also that they would have no prospect of alternative long-term employment, only temporary employment during pipeline construction. The Requesters claimed that many of the stakeholders did not have access to infor- mation about the Project and that the members of the communities could not under- stand the information that was provided. The Requesters believed that relevant infor- mation was withheld deliberately to garner community support for the Project. They indicated that the Project and the insufficient information about the amount of compen- sation paid caused serious social conflicts within families. Pipeline right-of-way Requests Received in Fiscal Year 2006 39 Panel meets with Requesters The Requesters also questioned the economic evaluation of the Project and asserted that while the Project proponents claim that associated gas (which is normally being flared) will be the source for the pipeline, they have obtained information demonstrating that this assertion is false. The Requesters claimed that without assurance that the Pro- ject will only use associated (otherwise flared) gas, rather than less-costly nonassociated gas, the Bank will "set a precedent of looking solely at profit margins, rather than the best development interest of the people of this country." Moreover, the Requesters claimed that Management failed to comply with the Bank's policies on supervision. They stated that they "consider the problems with the project sponsors . . . a result of the World Bank's failure to adequately supervise the project's preparation and implementation." The Requesters asserted that the Bank did not com- ply with a number of its policies and procedures, including OP/BP 4.12 on Involuntary Resettlement, OP/BP 4.01 on Environmental Assessment, OP/BP 10.04 on Economic Evaluation of Investment Operations, OP/BP 13.05 on Project Supervision, OP/BP 4.15 on Poverty Reduction, and the World Bank Policy on Disclosure of Information. 40 The Inspection Panel Annual Report Ni MANAGEMENT RESPONSE AND ELIGIBILITY REPORT geria Management submitted its Response on June 6, 2006. It only addressed the issues raised by the Ifesowapo Host Communities Forum of the West African Gas Pipeline Project. The Panel stated that it intends to add the submission of FoE-Ghana to the processing of the first Request. On June 22, 2006, Management submitted its Clarifications to the Panel on the concerns raised by FoE-Ghana. The Panel is in the process of completing an Eligibility Report, which will be submitted to the Board in July 2006 and will be made public subsequently. Requests Received in Fiscal Year 2006 41 Investigations Completed COLOMBIA REQUEST NO. 31 Cartagena Water Supply, Sewerage, and Environmental Management Project (LOAN NO. 4507-CO) THE REQUEST BOX 5. COLOMBIA PROJECT INFORMATION AT A GLANCE On April 20, 2004, the Inspection Panel Project Name: Cartagena Water Supply, Sewerage, and Environmental Management Project received a Request for Inspection dated Region: Latin America and Caribbean April 19, 2004, from members of a Colombian nongovernmental organiza- Sector: Sewerage, Sanitation, Water Supply, Subnational Government Administration tion (NGO), Corporación Cartagena Environmental Category: A Honesta. The Request was filed on behalf of the NGO and 125 Punta Canoa resi- IBRD Loan Amount: US$85 million dents, 139 Arroyo de Piedra residents, 41 Board Approval Date: July 20, 1999 Manzanillo residents, and 119 Cartagena Effective Date: January 19, 2000 residents. The Panel registered the Request Closing Date: June 29, 2007 on April 22, 2004. The Requesters claimed that they and the communities they represented had been harmed and were likely to suffer further harm from certain components of this Pro- ject, which was partially financed by a World Bank loan of US$85 million. According to the Request, the Project involved the upgrading and expansion of Cartagena's water and sewerage system, including construction of a 23.85-kilometer pipeline and submarine outfall that would carry the untreated wastewater from the city and discharge it into the Caribbean Sea at a point about 2.5 kilometers from the coastal fishing villages of Punta Canoa, Arroyo de Piedra, and Manzanillo. The Requesters raised concerns about the impact of the Project on their culture and way of life, as well as the impact of pollution on their health. They noted that "the po- tential for this constant deluge of untreated urban wastewater to cause pathogenic and chemical contamination of the coastal waters is very high." The Requesters claimed that the Bank failed to identify affected communities as indigenous and to safeguard their livelihood, which relied on fishing and farming for a subsistence living. They were con- 44 The Inspection Panel Annual Report CO cerned about a possible sudden rupture of the pipeline caused by a geological condition that may exist in the outfall site. Known as diapirism, the condition is characterized by LOMBIA the sudden and violent expulsion of mud and gases. The Request further raised concerns about Project's environmental assessment and the Bank's consultation of locally affected people; about the Bank's scrutiny of the economic investment, and about the Bank's supervision of the Project. The Requesters finally con- sidered that the Project would place undue fiscal strain on the city of Cartagena. MANAGEMENT RESPONSE On May 21, 2004, Management submitted its response to the Request. Management claimed that the Bank correctly applied its policies and procedures and that the Project will not cause any harm to the marine environment or to human health. As a result, ac- cording to Management, the Requesters' rights have not been, and are not likely to be, adversely affected by a failure of the Bank to follow its own policies and procedures. Management contended that the Environmental Assessment (EA)--as well as the process of preparing the EA--for the wastewater treatment plant, the land conveyance system, and the submarine outfall complies with OD 4.01. Management also noted that the EA was based on a Feasibility Study for Wastewater Treatment and Disposal, which addressed issues of human health and the marine environment, and assessed the impacts of the Project on the coastal zones, including those near Punta Canoa, Arroyo de Piedra and Manzanillo del Mar, and those near Cartagena. This Feasibility Study also analyzed, from the technical, economic, environmental, and social perspectives, a comprehensive set of alternatives combining different treatment and final disposal sites including all but one of the options proposed by the Requesters. Management added that a set of precautionary measures was designed to mitigate potential negative impacts. Furthermore, not only did the Feasibility Study and EA ana- lyze the geological conditions of the area, but additional studies confirmed that the risk of diapirism, or mud volcanism, in the area is low. As to the issue of inadequate consul- tations raised by the Requesters, Management claimed that consultations were conduct- ed in compliance with OD 4.01 and that a participatory approach was used during proj- ect preparation. In response to the claim that the communities living in the north zone of Cartagena are indigenous peoples, Management claimed that these communities do not meet the criteria set forth in OD 4.20, and thus, there was no need to develop an Indigenous Peo- ples Development Plan (IPDP) during Project preparation. Nonetheless, Management claimed that consultations with these communities were conducted as part of the Social Assessment process and to prepare the Social Impact Mitigation and Community Devel- opment Program, and that the concerns expressed by the affected people were reflected in the Project design. Regarding Project financial management, Management stated that "the work carried out in project preparation and supervision [was] in line with good practice on financial analysis," and this work has demonstrated that "the risk that the District of Cartagena would default on its debt service obligations for the project is small." Management also stated that "the supervision of the project has been thorough and in compliance with Investigations Completed 45 OD 13.05 and OP/BP 13.05." The Response added that the Bank has conducted 13 missions to the Project area, has reviewed quarterly Project Management Reports pre- pared and submitted by Aguas de Cartagena (ACUACAR), and has participated in sev- eral consultations. THE PANEL'S ELIGIBILITY REPORT/BOARD DECISION The Panel completed and submitted its report and recommendation to the Board on June 22, 2004, recommending that an investigation be conducted. On July 13, 2004, the World Bank's Board of Executive Directors approved on a no-objection basis the Panel's recommendation to conduct an investigation into the claims made by the Requesters about certain aspects of the Project. The Request, Management's Response, and the Pan- el's Eligibility Report are available on the Inspection Panel's Web site at http://www. inspectionpanel.org. THE PANEL'S INVESTIGATION REPORT As authorized by the Board, the Panel conducted its investigation of the issues alleged in the Request for Inspection. On June 24, 2005, the Panel submitted the Investigation Re- port to the Board of Executive Directors. The purpose of the investigation was to establish whether the Bank complied with its own policies and procedures in the design, appraisal, and implementation of the Colom- bia: Cartagena Water Supply, Sewerage, and Environmental Management Project, and whether, if instances of non-compliance were found, they caused, or were likely to cause, harm to the Requesters and the people they represent. To assist in its investigation, the Panel hired six consultants, who are internationally recognized specialists in environmen- tal assessment, hydrology, marine outfalls, indigenous peoples, and economic analysis and financial issues. In October 2004 the Panel team visited the Project area and met a number of Project stakeholders, including the Requesters and other citizens of Cartagena, national and local government officials, and ACUACAR officials. The Panel also con- ducted interviews with the Bank's management and staff in Washington, D.C. before and after visiting the Project-affected area and identified and carefully reviewed all relevant Project documents. In its report, the Panel noted the urgent need for Cartagena to have in place a sus- tainable system for disposing of its wastes and considered the very significant efforts by Management and staff in the preparation and initial supervision to ensure that the Pro- ject was appropriately designed and implemented. Nevertheless, the Panel found that, while the analysis of alternatives covered most of the alternatives for this type of project, the diligence with which alternatives other than the preferred submarine outfall were studied did not demonstrate a systematic comparative study of all the alternatives as re- quired by OD 4.01 on EA. With respect to the selected option, the submarine outfall, the Panel noted that it is a proven technology offering an acceptable method for the disposal of human wastes un- der suitable conditions. The Panel also found that the location chosen for the outfall, Punta Canoa, could be a suitable site for an outfall, if necessary precautionary measures 46 The Inspection Panel Annual Report CO were taken in the outfall design to ensure proper dilution of the effluent so that nutrients were at an acceptable level, and to ensure decay of pathogens to a level safe for human LOMBIA contact. However, in the Panel's judgment, the two-dimensional model on which the outfall design was based to assess the risk of contamination did not address the influence of the wind on near surface currents in a stratified water column. This influence could affect the assessments of the dilution of effluent and hence could risk contaminating the ma- rine and coastal environments. The Panel also found that if a three-dimensional model were used to assess risk, greater certainty regarding the risk could be secured. This may also affect the distance from shore and the depth required for the safe disposal of the Cartagena wastes. With respect to diapirism, the Panel found that the potential for the pipeline to be ruptured or otherwise significantly disturbed by diapirism appears to be low, but it noted that a scan sonar survey of the area would reduce remaining uncer- tainty. The Panel further found that a study of alternatives for the disposal of solids re- covered during the preliminary treatment of the sewage had not been carried out. The Panel also found that while the Project sufficiently documented and analyzed the condition of the biophysical environment in compliance with OP 4.04 on Natural Habi- tats and OD 4.07 on Water Resources Management, the Project's potential impacts on the local population's lives and livelihood (for example, impacts of discharges on fishing conditions) were not adequately addressed. With respect to the social issues raised in the Request for Inspection, the Panel found that in the case of the Afro-Colombians who submitted the Request, the affected com- munity met most criteria of OD 4.20 on Indigenous Peoples, except for an "indigenous language" and arguably a predominant "primarily-oriented subsistence production." The Panel found that Afro-Colombians could reasonably have been regarded as indige- nous peoples under Bank policies. Because of the absence of two of the policy criteria, however, the failure to consider the Afro-Columbians as indigenous persons is in com- pliance with the standard of "judgment" established in OD 4.20. However, because Afro-Colombian may be regarded as indigenous peoples, the Panel found that the Bank Fishermen in would have been well advised to require an IPDP providing mitigation measures for risks Punta Canoa and potential harm. The Panel found that the full Social Impact Assessment did not adequately address the issue of compensation for the affected Afro-Colombian communities in the North Zone for bearing most of the risk of negative impacts of the sewerage component for the Project. Management erred in concluding that fishing in the area of influence of the outfall was negli- gible or unimportant in the affected com- munities without more detailed studies about the issue. The Panel noted that some compensation for the potential im- pacts was provided under the Project (for Investigations Completed 47 example, water and sanitation services in accord with OD 4.01), and that this com- pensation was a significant benefit for the community. However, it also noted that the implementation of the beneficial measures seemed to be lagging behind and information about these compensa- tory measures was inadequately dissemi- nated to the villages. With respect to consultation of affect- ed people, the Panel found that during Project preparation there were extensive consultation efforts with the people in Cartagena, while the people in Punta Canoa, Arroyo de Piedra, and Manzanillo Panel Team Member with children of affected community Punta Canoa del Mar had only been informed about the Project rather than consulted on their op- tions and rights. The Panel also observed that the communications strategy failed to reach most members of the affected communities in the North Zone. The Panel analyzed the economic evaluation of alternatives for the Project and found that when the environmental license was issued for the submarine outfall requiring pri- mary treatment in 10 years, the Bank should have recalculated the costs of the alterna- tive and reviewed the economic analysis in light of this new licensing requirement to be consistent with OP 10.04 (Economic Evaluation of Investment Operations). Further- more, in the Panel's judgment, because Management acknowledged uncertainty about land prices, the analysis in the Project's feasibility study should have provided a clear jus- tification for the prices used in the cost estimation of the project alternatives. The Panel also noted that a substantial number of poor people in the city of Cartagena seemed like- ly to experience significant benefits from the Project. However, it found that effects on the poverty in affected communities near Punta Canoa were less clear, and the risks to these poor communities were not explicitly addressed in the appraisal of the Project. As to the financial issues raised in the Request for Inspection, the Panel found that the Bank should have paid more attention to the District's internal control and manage- ment problems and should have carried out an in-depth financial management assess- ment of the District. It also found that, at the time of Project preparation, the Bank car- ried out detailed financial analyses and projections, including sensitivity tests, on the revenue and cost statements for the District of Cartagena and ACUACAR and reached satisfactory institutional arrangements to ensure proper Project financing and loan re- payment in line with OP/BP 10.02 (Financial Management). MANAGEMENT REPORT AND RECOMMENDATIONS IN RESPONSE TO THE PANEL'S FINDINGS On July 29, 2005, Management submitted its Report and Recommendations in response to the Panel's investigation report. In its report, Management emphasized that the sub- 48 The Inspection Panel Annual Report CO marine outfall is the most cost-effective solution to Cartagena's wastewater problems and will significantly benefit the city of Cartagena by improving the poor people's unac- LOMBIA ceptable sanitation conditions. According to Management, the environmental, social, economic, technical, and financial studies showed that the outfall will achieve public benefits and will not have significant adverse effects on the environment or the affected population. Management also appreciated the Panel's findings and prepared an Action Plan to address them. According to the Action Plan, with respect to the Panel's concerns regarding the de- sign of the outfall and the risk of contamination, the Bank requested its expert to pre- pare a second two-dimensional validation model and rerun the model to incorporate the influence of wind patterns, and that ACUACAR hire an international expert to pro- vide a third and independent opinion on the two-dimensional models contracted under the Project. Management also recommended that ACUACAR undertake a side sonar scan survey to strengthen the assessment of risk of diapirism. Management committed to update the results of the economic analysis, to consider the additional investments required by the environmental license that would need to be operational in 2015, and to adjust land values. With respect to the social issues identified by the Panel, Management asserted that ACUACAR agreed to support a program to strengthen fishing activities and to work with the communities to identify specific activities for optimized fishing opportunities in Pun- ta Canoa. The Bank would monitor this work during Project supervision. Management further stated that piped water would be delivered to the North Zone community in the last quarter of 2005, and in-house sanitation and a community center would be delivered in Punta Canoa by April 2006. With respect to the communication strategy, Management committed to review the quality of the outreach strategy and activities with ACUACAR, to work with it to support the maintenance of the outreach program to the end of the Pro- ject, and to extend the communications program to Arroyo de Piedra. BOARD MEETING On November 8, 2005, the World Bank Board of Executive Directors discussed the find- ings of the Panel investigation and Management Report and Action Plan. The Board commended the Inspection Panel's Report and the Action Plan developed by Manage- ment. World Bank President and Chairman of the Board Paul Wolfowitz emphasized the importance of the Inspection Panel's independence and noted that the Panel led to im- proved Project design and increased credibility with the communities. The Executive Directors approved the Management Action Plan, but with the caveat that Management and the Panel meet to discuss the modeling approach for assessment of the risks of the submarine outfall and to ensure that the most appropriate project design is considered. It was also agreed that Management would submit a progress report to the Board on the execution of the Project and Action Plan within six months. As of June 30, 2006, the Inspection Panel was not aware that such a report had been submitted. Investigations Completed 49 India REQUEST NO. 32 AND REQUEST NO. 33 Mumbai Urban Transport Project (LOAN NO. 4665-IN; CREDIT NO. 3662-IN) THE REQUESTS BOX 6. INDIA PROJECT INFORMATION AT A GLANCE The Inspection Panel received a first Re- Project Name: Mumbai Urban Transport Project quest for Inspection (the First Request, Region: South Asia No. 32) for Inspection related to the Sector: Railways, Roads and Highways, Mumbai Urban Transport Project Other Social Services (MUTP) on April 28, 2004, and registered Environmental Category: A it on April 29, 2004. The Request was sub- IBRD Loan Amount: US$463 million mitted by members of the United Shop IDA Credit Amount: US$79 million Owners Association (USOA), a non- Board Approval Date: June 18, 2002 governmental organization (NGO) in the Effective Date: November 6, 2002 city of Mumbai, India, on its own behalf Closing Date: June 30, 2008 and on behalf of 118 residents of Mumbai who claimed to be adversely affected by the Project. The Requesters were small shop owners whose commercial premises were located in the Kismat Nagar area, Kurla West, in the city of Mumbai. On June 24, 2004, the Panel received a second Request for Inspection (the Second Request, No. 33), related to the same Project. The Panel registered it on June 29, 2004. This Second Request was submitted by three NGOs located in the city of Mumbai--the Hanuman Welfare Society, the Gazi Nagar Sudhar Samiti, and the Jai Hanuman Rahi- wasi Sewa Sangh--on their own behalf and on behalf of approximately 350 residents living in the Gazi Nagar area in the Kurla West District of Mumbai. On June 29, 2004, the Panel sent a recommendation to approve the Panel submitting a single Report and Recommendation to the Executive Directors on whether an investigation of the issues raised in either the First or Second Requests was warranted. The Board approved the Panel's recommendation on a non-objection basis on July 13, 2004. On November 1, 2004, the Panel received a letter from the Aman Chawl Welfare As- sociation asking that they be added to the second group of Requesters. On February 19, 2005, 21 additional residents asked to be added to the Request. On November 29, 2004, 50 The Inspection Panel Annual Report Ind the Panel received another Request for Inspection (the Third Request), related to the Project. This Request was submitted by a local NGO, the Bharathi Nagar Association, ia on their own behalf and on behalf of the residents living in the area known as Bharathi Nagar in Mumbai. Shortly after, on December 23, 2004, the Panel received another Request for Inspec- tion (the Fourth Request) related to the MUTP. This Fourth Request was submitted by a local NGO, Ekta Wyapari Jan Seva Sangh, acting on its own behalf and on behalf of res- idents and shopkeepers of the area of Bandrekar Wadi, Bhavbani Chowk in the Jogesh- wari District of Mumbai. The Request was signed by 58 members of this organization who lived in this area. On December 29, 2004, the Panel notified the Executive Directors, the President, and Management that it had received the Third and Fourth Requests. On December 29, 2004, after careful review of the Third and Fourth Requests, the Panel recommended that, for reasons of economy and efficiency, these two Requests should be processed jointly with the two previous Requests because they all related to the same component of the Project. The Board approved the Panel's recommendation on a no-objection basis on January 11, 2005. On January 24, 2005, the Inspection Panel received a letter from the Pratap Nagar Welfare Association, a NGO located in the area called Pratap Nagar, representing 41 residents and shopkeepers asking to be added to the Fourth Request. Among other things, the Project provides for the construction of two major east-west road links in Mumbai and for the resettlement of persons affected by the construction of this road-based transport component. The east-west road link, the 6-kilometer Santa Cruz-Chembur Link Road (SCLR), was the subject of the first three Requests, and the Jogeshwari-Vikhroli Link Road (JVLR) was the subject of the fourth Request. The Re- quests similarly alleged that Bank Operational Policies and Procedures were violated and, as a result, the Requesters claimed that they would suffer adverse effects as a result of the Bank's failure to follow its Operational Policies and Procedures with respect to their being relocated and rehabilitated. More specifically, the Requesters claimed that the failure to provide income restora- tion would result in harm that would destroy their livelihoods, cause them to dismantle their productive sources, and disperse their supporting networks and kin groups. Partic- ularly, the shopkeepers among the Requesters feared that they would suffer irreparable damage to their well-established businesses. The Requesters argued that their structures had not been surveyed properly. Furthermore, they expressed disagreement with the Pro- ject Resettlement and Rehabilitation (R&R) scheme that entitled them to an area of 225 square feet regardless of the actual area of their current premises consumed by the Pro- ject. Some of the Requesters objected to the classification of their current area as a slum and the application of the Slum Rehabilitation Scheme. Under the Project, the people represented in the first three Requests were to be moved to a resettlement site called Mankhurd. In their Requests, they argued that the site would be unsuitable and too far away from their current location. They also com- plained about the environmental condition of the resettlement site in Mankhurd, alleg- ing that it is considered among the most polluted areas in Mumbai and is located near the main municipal dump. Additionally, the Requesters described the construction and design of the buildings at the proposed resettlement site as being of very bad quality Investigations Completed 51 MUTP resettlement site in Mankhurd leading to health-related problems, hazards, and social troubles. They also challenged the affordability of the maintenance charges of the new buildings. With regard to the JVLR component, the Fourth Requesters alleged that thousands of trees had been cut unlawfully in the Project and had not been replaced or replanted. Furthermore, the Requesters asserted that they were never consulted or given an oppor- tunity to participate at any stage of project planning or R&R and that their attempts to raise their concerns and grievances were unsuccessful. They claimed that the Bank had failed to disclose information to them and that the Public Information Centers (PICs) were not properly working. They also expressed concerns about the adequacy of Bank supervision. MANAGEMENT RESPONSE Management submitted two responses and claimed compliance with Bank policies and procedures. It sent its Response to the First Request (the First Response) to the Panel on May 27, 2004. On July 28, 2004, Management submitted its response to the Second 52 The Inspection Panel Annual Report Ind Request (the Second Response). In both Responses, Management expressed its satisfac- tion with the general implementation of the R&R component of the Project. However, ia Management also rated safeguard management performance as unsatisfactory, substan- tially because of reporting deficiencies and untimely handling of grievances. The Re- sponse also noted that the R&R component of the Project estimated the number of af- fected houses at 23,000 and the number of affected shops at 3,000, or approximately 120,000 people. Previously, the number of affected households and businesses included in the R&R component was only 19,200. In its Responses, Management acknowledged that, unlike the relocation of small, household-based shops, middle-sized business relocation posed more complex prob- lems. With regard to the Requesters' allegations concerning the Bank's violation of its policies and procedures on involuntary resettlement, Management stated that the meas- ures for economic rehabilitation described in the Resettlement Action Plan (RAP) are consistent with the provisions of the R&R Policy. Management contended that an on- the-ground survey to measure the size of affected shops had been conducted. It also maintained that the maximum size of 225 square feet, regardless of the actual area of the affected person's current premises, was necessary because of limited space availability and high land costs in Mumbai. On income restoration, Management did not anticipate a significant impact on the residents with regard to loss of jobs and houses and assumed that opportunities for supplemental income would be replaced by similar ones in the re- settlement area. As to the Requesters' objection to the choice of Mankhurd as a relocation area, Man- agement explained that other sites were either not suitable or not available. In Manage- ment's view, the Mankhurd site constituted one of the best options available, mainly be- cause of its infrastructure. Management claimed that it expected the living conditions at the new site to be considerably better than at present. Management said that mainte- nance charges and taxes could be paid with the interest rate earned from a one-time grant. It stated that it was not aware of any information showing that the Mankhurd site was excessively polluted or at risk of becoming polluted. Management stated that documents were available at the PIC on site, but agreed with the Requesters' critique of the poor condition of the PIC. It emphasized that consulta- tions were held on an ongoing basis but recognized the lack of specific consultations to discuss alternatives for alignment or structural design, except consultations for R&R purposes. Overall, Management acknowledged that consultations, as well as communi- cation of the grievance procedures, have likely been inadequate and that the grievance mechanism itself needs to be improved. According to Management, supervision has been carried out adequately. However, Management identified several issues that needed ur- gent attention and required follow-up: establishing cooperatives and completing of oth- er postresettlement activities in the housing areas, strengthening implementation capac- ity in the Mumbai Metropolitan Regional Development Authority (MMRDA), improving the dialogue and focusing on problem solving with shopkeepers, and strengthening the grievance redress procedures. Investigations Completed 53 THE PANEL'S ELIGIBILITY REPORT/BOARD DECISION The Panel found both the first two Requests and Requesters eligible, and as previously approved by the Board, submitted one single report recommending an investigation to the Board on September 3, 2004. On September 24, 2004, the Board approved the Pan- el's recommendation to conduct an investigation into the matters alleged in the Requests for Inspection. The Requests, Management's Responses, and the Panel's Eligibility Re- port are available on the Inspection Panel's Web site at http://www.inspectionpanel.org. During its visit to Mumbai in February 2005, the Panel verified the eligibility of the Third and Fourth Requests. THE PANEL'S INVESTIGATION REPORT As authorized by the Board, the Panel investigated the matters alleged in the Request, conducted a site visit and interviews, and reviewed extensive Project documentation. The Panel sent its Investigation Report to the Board on December 21, 2005, revealing several instances of noncompliance by the Bank, particularly with the policy on Invol- untary Resettlement--OD 4.30. The Panel found that this noncompliance was especial- ly serious during the preparation and early implementation phases of the Project, but ac- knowledged Management's effort after the Requests were filed to find a solution to several of the problems. The Panel's investigation revealed that the shopkeepers, a number of whom had spe- cific requirements for their timber, metal, textile, blacksmith, and automotive enterpris- es, had valid and significant concerns that required full attention. The Panel found that the Bank did not comply with a number of requirements under its own policies. Among other things, the Panel found that the Bank overlooked the needs of low- and middle-in- come shopkeepers, failed to consult with them in the selection of resettlement sites, and did not ensure that suitable arrangements were provided for their resettlement. The pro- posed resettlement sites posed difficulties for many shopkeepers in restoring their busi- nesses and maintaining incomes, as confirmed in a recent Business Needs Study launched under the Project. Furthermore, the Project failed to give adequate attention to the em- ployees of the displaced shops, who faced risks of income loss. In addition, the Panel found that many other affected people, including the most vul- nerable, faced adverse impacts as a result of noncompliance with Bank policies. Serious problems were identified relating to environmental and living conditions at the resettle- ment sites and income restoration. The Panel noted that the Bank assumed that employment would not be problematic in Mumbai and thus did not anticipate major income losses. While many of the affected people suffered from reduced income or job loss at the resettlement sites, they simulta- neously faced very high costs at the resettlement sites (for example, maintenance and transportation costs). Environmental and social support services at the sites were neither ready nor adequate when people were resettled, and many lacked adequate access to wa- ter and sewerage. Housing cooperatives had not been established and schools and med- ical facilities were lacking at the resettlement sites. The Panel also identified flaws in the Project's environmental assessment and found that the resettlement site Mankhurd was close to the city's major waste dump. Moreover, the Panel noted that the Project did not 54 The Inspection Panel Annual Report Ind ia Environmental problems at resettlement site establish an effective and independent grievance system to enable Project-affected people to find recourse in the event of disagreements. The Panel found that certain actions were at the root of many of these problems, which provided guidance for future projects. One action was the decision to disband a free-standing project on resettlement and make the resettlement action a subcomponent of the transport Project. This diverted attention away from the institutional capacity re- quired to effectively address resettlement issues. In addition, the Panel expressed its concern that the Bank failed to ensure that base- line surveys had been carried out adequately. In the view of the Panel, this failure result- ed, among other things, in highly conflicting demographic discrepancies in the estimates of affected people, including shopkeepers, and problems in assessing the costs and feasi- bility of resettlement. The Bank also failed to identify major resettlement risks at the out- set of the Project, and overestimated the capacity of the MMRDA and the NGO con- tracted to support project implementation. The Panel found that almost all direct responsibility for resettlement had been dele- gated outside the government to NGOs. These NGOs had insufficient institutional ca- pacity and were not able to deal with the nature and magnitude of the task. With regard to supervision, the Panel observed that, after the Requests were filed, the Bank's attention to resettlement problems had increased significantly. The Panel noted that a Business Needs Study was launched in August 2005 to address the shopkeepers' needs. However, the Panel found that the Bank had failed to identify or undertake adequate corrective ac- tions on these issues in a timely manner. Investigations Completed 55 MANAGEMENT REPORT AND RECOMMENDATION IN RESPONSE TO THE PANEL'S FINDINGS On February 27, 2006, Management pre- sented to the Board of Executive Directors its Report and Recommendation in re- sponse to the Panel's findings. In the re- port, it acknowledged the Panel's findings in most instances. Management acknowl- edged that it failed to recognize substan- tial differences between the rail and the road component of the Project, and thus failed to identify the Project's effects on middle-income shopkeepers. Management also agreed with the Panel's findings that Panel presents investigation findings to local communities MMRDA and the NGOs lacked institu- tional capacity to carry out the resettle- ment. In response to the Panel's findings regarding the absence of meaningful consulta- tions, Management conceded that "[g]iven the limited options available for resettlement sites, advance consultation with PAHs [Project affected households] was not possible." Management also confirmed the Panel's determination that the surveys conducted were inadequate and that the underlying methodologies had caused inaccuracies. While it acknowledged the Panel's finding regarding the conflicting estimates of affected peo- ple, Management attributed these discrepancies to changes in multipliers for family size. Additionally, Management agreed with the Panel's findings that an independent and ef- fective grievance mechanism was absent. Management also confirmed many of the Pan- el findings related to the problems of shopkeepers. Among other issues, Management agreed that special attention to the specific needs of the shopkeepers was necessary, in- cluding concerns regarding the suitable space allocation for shops with more than 225 square feet, as well about the location of the new shops. The Bank confirmed the short- comings regarding employees identified by the Panel. Management did not fully share the Panel's concerns about income restoration. In- stead, Management indicated that it had considered the issue of housing more impor- tant than the issues of employment because "[i]n the context of Mumbai, the problem of housing is more severe than unemployment, and Management did indeed devote more attention to housing needs." Management confirmed that there were significant delays in establishing functioning housing cooperatives and transferring maintenance funds and community revolving funds. Moreover, Management acknowledged the ma- jority of the Panel's findings regarding the social and environmental conditions at the resettlement sites, such as the inadequate water supply and the absence of schools. Management recognized that it could have been more effective in a number of areas of supervision and should have provided more support to MMRDA on how to fix, rather than merely identify, problems. 56 The Inspection Panel Annual Report Management agreed that a range of actions would be necessary to bring the Project into compliance and proposed an Action Plan consisting of actions to be undertaken by MMRDA and Management. Management proposed to expand the options of resettle- ment sites for the shopkeepers and to commence negotiations with each of the eligible shopkeepers. Moreover, the Action Plan provided for improvement in social and envi- ronmental services to the resettlement sites by enhancing transport connectivity and the water supply and by establishing housing cooperatives. Additionally, Management in- cluded the improvement of databases by MMRDA and the improvement of the mecha- nism to redress grievances. Management proposed to strengthen the implementation ca- pacity for resettlement and Bank supervision. THE BOARD DECISION In the course of Management's preparation of its response to the Panel's Investigation Report, on March 1, 2006, the Bank suspended disbursements on the road and resettle- ment components of the MUTP and the State of Maharashtra agreed to a ten condition strategy for lifting the suspension of disbursements. On March 28, 2006, the Board of Executive Directors met to discuss the Panel's In- vestigation Report and Management's Report and Recommendations and Action Plan. The Board endorsed the Action Plan. It was agreed that Management would submit a progress report to the Board in no more than six months and that the Panel would report on progress to the Board. The Panel's Investigation Report and Management's Report and Recommendations were made public a few days later and are available on the In- spection Panel's Web site at http://www.inspectionpanel.org. From May 4 through May 11, 2006, the Panel visited Delhi and Mumbai and met with the Requesters, government authorities, and Bank staff to discuss and convey the findings of the Investigation Report. On June 29, 2006, the Bank lifted the suspension of disbursements based on the fact that the State of Maharashtra had substantially met the conditions set by IBRD/IDA for lifting the suspension. Bank Management reported to the Board of Executive Directors that out of the ten action points which the State of Maharashtra, through MMRDA, had agreed to undertake, eight had been completed or substantially completed and sat- isfactory progress had been achieved for the remaining two, namely, appointment of an agent to manage the post-resettlement program and completion of negotiation with shopkeepers. Management added that the need to comply fully with these two condi- tions prior to lifting suspension had been waived. Investigations Completed 57 CAMBODIA REQUEST NO. 36 Forest Concession Management and Control Pilot Project (CREDIT NO. 3365-KH AND TRUST FUND NO. 26419-JPN) THE REQUEST BOX 7. CAMBODIA PROJECT INFORMATION AT A GLANCE On January 28, 2005, the Inspection Pan- Project Name: Forest Concession Management and Control Pilot Project el received a Request for Inspection, dated Region: East Asia and Pacific (EAP) January 21, 2005, relating to the Cambo- dia: Forest Concession Management and Sector: Forestry, Central Government Administration Control Pilot Project (FCMCPP). The Environmental Category: B Nongovernmental Organizaton (NGO) IDA Credit Amount: US$4.8 million Forum on Cambodia submitted the Re- Board Approval Date: June 5, 2000 quest on its own behalf and on behalf of Effective Date: October 20, 2000 affected local communities living in the Closing Date: December 31, 2005 districts of Tbeng Meanchey in Preah Vi- hear Province; Siem Bok and Sesan in Stung Treng Province; and Anlong Veng in Oddar Meanchey Province, Cambodia. These four districts are located respectively in the concession areas of the companies Chendar Plywood, Samraong Wood, Everbright, and Pheapimex. The Request included two signed letters from representatives of affect- ed communities and a report prepared for the affected communities by the NGO Glob- al Witness at the request of their representative, the NGO Forum of Cambodia. The Requesters claimed that "in its commissioning and supervision of the FCMCPP, the Bank has violated a number of its operational policies leading to harm or potential future harm to people living in the project-affected areas." The Requesters alleged that "through flawed project design and poor implementation the World Bank has promot- ed the interests of the logging concession system and concessionaires," and that "the companies have already caused harm to the forest-dependent communities and will con- tinue to do so." They added that by assisting the companies in preparing Sustainable Forest Management Plans (SFMPs) and Environmental and Social Impact Assessments (ESIAs), the Bank was "using loan money to benefit logging companies that have a track record of timber theft, tax evasion and human rights abuses." This strengthened the 58 The Inspection Panel Annual Report C companies' position, "making it even more difficult for adversely affected communities A to hold them to account." According to the Requesters, both the design and the execu- MBO tion of the Project contravened World Bank operational policies. With respect to the Project's Environmental Assessment, the Requesters claimed that D the Bank should have categorized the FCMCPP project as Category A instead of cate- I gorizing it as Category B. Moreover, they complained that the "the level of assessment A was so low that it did not even conform to Category B standards." They criticized the Bank's choice "not to address environmental impacts at the pre-project planning stage" but to instead deal with them during the implementation phase. They concluded that, if a proper assessment had been carried out, it is unlikely that the Bank would have decid- ed to support the activities of the companies. The Requesters claimed that "it is not clear what consultation, if any, took place be- fore the project began" and that they were not invited to participate in any preproject consultation process. According to the Requesters, when companies consulted affected people in late 2002 and early 2003, such consultations, "were of a poor standard, with instances in which participants were subject to intimidation by guards and officials ac- companying company representatives." Furthermore, the Request argued that the Bank did not ensure that the SFMPs and ESIAs were disclosed to community representatives in November 2002. Additionally, the Request claimed that the Bank violated OP 4.36 on Forests as it provided technical assistance to "undeserving" logging companies "to facil- itate their future logging operations." They argued that the Bank did not try to challenge the problematic features of the concession system. The Requesters further maintained that no development plan outlining a clear definition of roles for the government, the private sector, and the local people for forestry conservation had been elaborated. In the Requesters' view, the FCMCPP had no institutional capacity. The Request also complained that the Bank did not undertake an assessment that could have identified the Cambodian forests as "forests of high ecological value." They believed that the promotion of forest concessions in the context of the FCMCPP would lead to degradation of natural habitats, in violation of OP 4.04. Moreover, they asserted that indigenous people, notably the Kouy minority, would be directly affected by the log- ging concessionaires. The Requesters argued that an Indigenous Peoples Development Plan (IPDP) was necessary and criticized the Bank's determination that no indigenous peoples plan was required. According to the Requesters, the Bank also violated its policy on Cultural Property, because the six logging concessions areas approved under the Pro- ject "contain both spirit forests and sites of archeological importance that undoubtedly constitute cultural property," and no survey of these sites was carried out during Project preparation. They also alleged that the Bank failed to comply with OP/BP 8.40 on Tech- nical Assistance (TA), because of deficiencies in the work of the TA consultants, such as assisting and advising logging companies that "should have been excluded" from the consultants' terms of reference and refusing to take into account the prohibition under Cambodian Law on cutting resin-producing trees. These failures, according to the Re- quests, also violated the policy on supervision. In the Requesters' view, lack of supervi- sion has accounted for many of the FCMCPP's damaging acts and omissions. These claims may have constituted violations by the Bank of various provisions of the following operational policies and procedures: OP/BP 4.01 Environmental Assess- Investigations Completed 59 ment (EA), OP/BP 4.04 Natural Habitats (September 1995), OPN 11.03 Cultural Property, OD 4.20 Indigenous Peoples, OP/BP 4.36 Forestry, OP/BP 8.40 TA, OD/OP/BP 13.05 Project Supervision, and BP 17.50 Disclosure of Information. MANAGEMENT RESPONSE On March 8, 2005, Management submit- ted its response to the Request. The Re- sponse discussed a number of challenges encountered during implementation, such as issues related to the logging concession system and poor logging practices; log transport permits; a weak national forest Panel meets with affected people in Preah Vihear Province revenue management system; and ten- sions among various stakeholders. Man- agement emphasized that the Bank addressed "a focused and prioritized set of issues," such as concession management, forest crime, and community forestry, but recognized that in retrospect the Bank could have "played a more proactive role" in ensuring the involvement of local communities since the Project design phase. It also stated that the Bank could have been more aggressive in voicing its concerns. Management challenged the allegations that the Bank promoted the interest of the logging concessions and the concessionaires and stated that the FCMCPP Project tried to assist the Government of Cambodia to regulate the forestry sector in a "more effective and equitable" way. Man- agement further rejected the allegation that the Bank ignored evidence of the conces- sionaires' illegal logging and claimed that the Bank has supported studies and propos- als to strengthen controls on illegal logging and log transport. Management stated that it made every effort to comply with its policies and proce- dures but recognized not being "in full compliance with processing and documentation provisions of OP 4.01 and OD 4.20 during project preparation." Management be- lieved, however, that the "lack of full compliance" with the policies did not have a ma- terial effect on the Project and did not cause, and would not cause, harm to Project-af- fected people. In addition, according to the Response, any harm the Requesters may have suffered was not caused by the Bank-financed FCMCPP. According to the Management Response, the decision to classify this project as Cat- egory B was correct, because the Project does not involve plantation activities or pro- duction forestry, but capacity strengthening and forest crime monitoring and reporting. Management also stated that no EA was carried out before the appraisal because "no A- level EA process was required." However, according to the Response, the Project design incorporated measures to address the Project's environmental and social problems. Management recognized that the only EA work undertaken during the Project's first four years were the ESIAs that each concessionaire was required to prepare under Cam- bodian law. It acknowledged that there are still no "satisfactory standards" for the 60 The Inspection Panel Annual Report C preparation of the ESIAs and that the 16 standards developed so far by the concession- A aires "have been poor." As to the disclosure of the SFMPs and the ESIAs, Management MBO responded that expectations of disclosure had not been managed properly. With respect to the claim that affected communities were not consulted, Management stated that D "there were no consultations specific to the EA process." As for a lack of consultations I during the preparation of the ESIAs, the Response recognized that the process of con- A sultations was flawed but stated that the Bank "monitored the consultation process" and pointed out its weaknesses to the government. Management reiterated that the Project did not finance logging operations and that concessionaires have not received any Bank funds. Management emphasized that it com- plied with OP 4.04 because "[n]o degradation of critical habitats has occurred due to the project." As to the Kouy indigenous peoples, Management acknowledged that the Bank was not in full compliance with OD 4.20. No IPDPs were prepared under the Project, be- cause "Indigenous Peoples issues were to have been embedded in the SFMPs and ESIAs prepared by the concessionaires." According to Management, criteria and guidelines for community engagement in concession areas with local people were developed under the Project as part of the general consultation process. A social forestry consultant is prepar- ing revised consultation guidelines to address indigenous peoples and protection of cul- tural and spiritual resources. Management further believed it complied with the Bank policy on project supervi- sion. Management emphasized that it supervised the project intensively. Management Response included a "next step" section with proposals to be taken before project clo- sure and over the longer term. Among these steps, Management included the supervision of the ongoing work and facilitation of a transition from oversight provided by an in- ternational monitor to a participatory system of forest crime monitoring. THE PANEL'S ELIGIBILITY REPORT/BOARD DECISION The Panel found that the Request and Management Response contained conflicting as- sertions and interpretations about the issues, facts, and compliance with Bank policies and procedures. The Panel submitted its eligibility report to the Board on April 4, 2005. On April 14, 2005, the World Bank's Board of Directors approved on a no-objection ba- sis the Panel's recommendation to conduct an investigation into claims made by the Re- questers. The Request, Management's response, and the Panel's eligibility report are available on the Inspection Panel's Web site at http://www.inspectionpanel.org. THE INVESTIGATION REPORT As authorized by the Board, the Panel carried out its investigation of the issues raised in the Request for Inspection to establish whether the Bank complied with its own policies and procedures in the design, appraisal, and implementation of the Project, and, if in- stances of noncompliance were found, whether they caused, or were likely to cause, harm to the Requesters and the people they represent. The Panel visited Cambodia in October 2005 and interviewed Bank Management and staff in Washington, D.C., and in Investigations Completed 61 the Bank offices in Phnom Penh and Bangkok. It also identified and carefully reviewed all documents relevant to the case and analyzed other evidence gathered during the field visits or otherwise in its re- search, including scholarly literature. The Panel completed the investigation and submitted its report to the Board of Executive Directors on March 30, 2006. In its investigation, the Panel found that the Project's exclusive focus on technical reform of the concession system failed to Panel meets with affected local community in Stung Treng Province address a key policy objective of using forestry resources to reduce poverty. Fur- thermore, in the planning and implementation of the Project, the Panel found that the Bank did not comply with various provisions of the applicable Bank policies, including the safeguard policies pertaining to the protection of indigenous peoples and the environment. The Panel found that, given Cambodia's poor policy framework as well as weak borrower commitment and ownership, the Learning and Innovation Loan (LIL) that financed the Project was not designed for the kind of forestry Project under review. In addition, the "learning and hypothesis-testing" exercise that LILs were meant to sup- port did not apply to the FCMCPP, whose purpose was to support a legal and regula- tory program on the basis of which long-term concessions were granted. Although the Panel noted that the Bank did not finance logging or logging equip- ment, it found that the Bank's formulation of the Project may have been based on in- correct assumptions. According to the Panel, given the rampant forest destruction and abuses already occurring, greater caution and pains on the part of the Bank would have been required to comply with OP 4.36 on Forestry. The Panel found that the Bank did not comply with OP 4.01 because it failed to clas- sify the Project as Category A and to carry out a full EA. The Panel noted that, if it had done so, as OP 4.01 requires, the Bank may have avoided serious errors in Project design and implementation. The Panel's investigation also revealed that the Prey Long Forest should have been explicitly identified as a "forest of high ecological value" and that in Project design the Bank failed to recognize that the forests subject to concessions are rec- ognized as critical natural habitats under OP/BP 4.04, meriting great protection. The Panel found that a social assessment specific to this Project should have been un- dertaken to enable the Bank to comply with operational policies on environmental as- sessment (OP 4.01) and indigenous peoples (OD 4.20). By following a "process-oriented approach," which permitted concessionaires to develop their own Environment and So- cial Impact Assessments (ESIAs), the Project's social impacts were significantly under- stated and the Bank's safeguards were not applied. The Panel found that this was in non- compliance with OP 4.01 and OD 4.20. The Panel also found that the Bank failed to investigate the impact of illegal harvesting of resin on local communities. Furthermore, the decision to postpone consultations until the preparation of the ESIAs by the conces- sionaires, which were to log the forests used by indigenous populations and local com- 62 The Inspection Panel Annual Report C munities, was inconsistent with OP 4.01, OP 4.04, and OD 4.20, which require early A consultations and/or surveys in the Project preparation phase. The absence of adequate MBO early consultation reduced Management's capacity to account for critical community concerns, including the Project's effect on indigenous peoples, resin tapping, local com- D munity ownership of trees, and community forestry initiatives. I Because the highland minority populations of northern and northeastern Cambodia A are indigenous peoples who live in the heart of the lands subject to concessions, the Pan- el found that an IPDP should have been prepared. The Panel found that, in addition to this violation of OD 4.20, the Bank also did not comply with OPN 11.03 by delegating determinations about the protection and enhancement of Cultural Property, including spirit forests, to concessionaires for inclusion in self-prepared ESIAs. This failure may cause serious damage to cultural properties not yet discovered. The Panel did not find evidence that the Bank provided technical assistance to con- cessionaires; rather, the Project was consistent with OP 13.05 in its focus on technical as- sistance to build the capacity of the Forest Administration. However, concessionaires' preparation of draft SFMPs and ESIAs was deficient in almost all regards, from process to content. The Bank's supervision of the planning and development of the SFMPs and ESIAs was inadequate to address the magnitude of the problems caused by the conces- sionaires' noncompliance coupled with the government's poor oversight. The Panel ob- served that Management took steps to improve this process; however, the Bank's super- vision was not always consistent with OP/BP 13.05. Furthermore, the Panel found a noncompliance with OP/BP 13.05 in the inadequacy of the forest cover survey, which provided a distorted picture of forest quality and cover. The Panel believed that concession logging has contributed to the degradation of Cambodia's natural forests and hastened the conversion of forests to other forms of land use. It found that the Bank's supervision of the borrower's actions related to the log trans- port ban, although consistent with Bank policy, it could have been better performed to ensure that the Project was implemented with due diligence by the government. Provi- sions of the terms of reference for monitoring of the Project prevented the monitor from independently initiating field investigations and issuing reports not subject to govern- ment verification. The absence of formal evaluation of the monitor's independence was inconsistent with OP 13.05. Supervision should have aimed at ensuring that the Project had the capacity to develop a broad-based constituency; embrace donors, the govern- ment, and NGOs; and advance forest sector reform. The Panel acknowledged that the environment in Cambodia was extremely difficult. The Panel stated that it was particularly impressed that there may now be an important opportunity for Bank involvement in the forestry sector with a different and more di- verse range of activities. MANAGEMENT REPORT AND RECOMMENDATIONS IN RESPONSE TO THE PANEL'S FINDINGS On May 16, 2006, Management submitted to the Executive Directors its Report and Rec- ommendation in response to the Panel's Investigation Report. Management stated that the Project was aimed at helping the government regulate the forest sector and promote Investigations Completed 63 equitable and sustainable use of forest resources. However, Management recognized that the project did not adequately address the concerns of local communities and could have done more to involve them in project preparation. The Report claimed that the LIL was an appropriate financing instrument because a prescriptive approach would not have worked well in a difficult environment such as Cambodia. While stating that it believed that the government was committed to reform, Management asserted that it will try to en- sure that broader public consultations are built into future projects. Management maintained that the EA classification of Category B was consistent with Bank practices because additional upfront analysis would have had a questionable im- pact since the specific planning decisions at each location could not be known in ad- vance. Management also asserted that, to provide greater protection for natural habitats, it will promote the use of Strategic Environmental Assessments (SEAs) on future Natur- al Resource Management (NRM) projects. Management stated that although it did not adequately compile relevant information about social issues before Project implementa- tion, it is addressing these concerns in their continued dialogue with Cambodian Gov- ernment. Management agreed that a categorical ban on cutting resin trees would have been appropriate and will address this in the continuing dialogue with the government. Management asserted that the Panel's assessment of the concessionaires' community consultation efforts will inform the development of the finalized Community Consulta- tion Guidelines and the Implementation Completion Report. It maintained, however, that, contrary to the Panel's findings, site-specific assessments are best completed during Project implementation and not Project planning. Regarding issues with indigenous pop- ulations, Management stated that a framework IPDP and screening studies would have been most appropriate. Management insisted that they will continue to press the gov- ernment to review adequately SFMPs and ESIAs and stated that it is important to pro- vide better support to the government in implementing legislation. Management dis- agreed with the Panel's appraisal of the forest cover survey; however, it agreed that Resin trees viewed from the Mekong River independent monitor arrangements were problematic and stated that it will continue to work to ensure the independence of the monitoring body. The Management Action Plan pro- posed two sets of actions to be imple- mented across the Bank and across the East Asia and Pacific (EAP) Region. Part of the former set of actions are the review and update of the Guidelines for Environ- mental Screening and Classification to provide guidance to Bank staff on the en- vironmental classification of a project and analytical approaches and procedures for consultations, and the proposed wider use of the SEAs. Support for the finalization of the Community Consultation Guide- lines and of the legal and implementing procedures for the Land Law, essential for 64 The Inspection Panel Annual Report C indigenous peoples in Cambodia, are part of the actions to be undertaken within the A EAP Region. MBO Management also proposed a Natural Resource Management (NRM) framework approach for moving forward. The NMR framework focuses on transparency; decen- D tralization and local empowerment; and partnerships with donors, private sector, the I media, civil society, and local and international NGOs. The framework will be imple- A mented in two phases: the first is aimed at continuing the dialogue with the government to build consensus, and the second, which would depend on the result of the first, would identify the principle for Bank reengagement in the Cambodia forest sector. THE BOARD MEETING On June 29, 2006, the Board of Executive Directors met to discuss the Panel's Investi- gation Report and Management Report and Action Plan in response to the Panel's find- ings. World Bank President Paul Wolfowitz opened the meeting by stating that improved management of forests and other natural resources is essential for Cambodia and that the Bank should stay engaged "to promote further dialogue and information disclosure" at both local and national levels. In her speech, Panel Chairperson Edith Brown Weiss, also recognized the importance for the Bank to take risks in the forest sector and stated that the Panel is "glad that the Bank will incorporate the insights from the Panel's Re- port into its future forest work in Cambodia and elsewhere." The Country Director for Panel team traveling on the Mekong River Cambodia further stated that the Bank has "to work harder to build consensus" and to to meet communities ensure that local communities are able to share in the commercial benefits of natural re- in Stung Treng Province sources. Because the Project is closed, the Board discussion focused on the way for- ward for the Bank in the forest sector. The Executive Directors thanked the Panel and Management for their thorough work, and endorsed the Management Action Plan. They also supported the Bank's con- tinued engagement in the Cambodia forestry sector. It was further agreed dur- ing the meeting that Management will re- port back in six months on progress in the implementation of the Action Plan. The Panel's Investigation Report, Man- agement Report and Recommendations, and the content of the Board decision are available on the Inspection Panel's Web site at http://www.inspectionpanel.org. Investigations Completed 65 Investigations in Process Pakistan REQUEST NO. 34 National Drainage Program Project (CREDIT NO. 2999-PAK) THE REQUEST BOX 8. PAKISTAN PROJECT INFORMATION AT A GLANCE On September 10, 2004, the Inspection Project Name: National Drainage Program Project Panel received a Request for Inspection re- Region: South Asia lated to the Pakistan: National Drainage Sector: Irrigation and Drainage, Central Government Program (NDP) Project, which was partly Administration, Subnational Government Administration financed by the International Develop- Environmental Category: B ment Association (IDA). The Request was submitted by Khadim Talpur, Mohammad IDA Credit Amount: US$285 million Ali Shah, Mustafa Talpur, Munawar Has- Board Approval Date: November 4, 1997 san Memon, Iqbal Hyder, Mir Moham- Effective Date: February 25, 1998 mad Buledi, and Najma Junejo on their Closing Date: December 31, 2004 own behalf and on behalf of "others who live in the area known as district Badin, Sindh, Pakistan" in the Indus River Basin. On September 17, 2004, the Panel registered the Request for Inspection. The Request raised issues related to the NDP and, in particular, to the disposal of saline effluent and the proposed construction of the National Surface Drainage System (NSDS), a northward extension of the existing Left Bank Outfall Drain (LBOD) system in Sindh Province. On December 13, 1984, IDA approved the LBOD Project to address flooding and salinity problems. By December 31, 1997, the closing date of the LBOD Project, some work was yet to be completed and was transferred to the NDP. The IDA approved the NDP on November 4, 1997, to address waterlogging and salinity, which are the principal threats to the sustainability of irrigated agriculture in Pakistan. The NDP Project, as described in the Development Credit Agreement, includes assistance to the Borrower and the Provinces "in implementing the first phase of the National Drainage Program, which is designed to restore environmentally-sound irrigated agri- culture, inter alia, through the minimization of saline drainable surplus and the eventu- al evacuation of all saline drainable surplus to the sea, and to that end: (a) to promote the carrying out of policy and institutional reforms in the water sector; (b) to strengthen 68 The Inspection Panel Annual Report P drainage and irrigation research and sector planning capabilities; and (c) to finance in- akist vestments in drainage and irrigation infrastructure." According to the Requesters, the northward extension of drains under the NDP and the use of the disposal system through a Tidal Link were not sustainable. The Requesters an noted that the "alternate project options or disposal systems, which are historical natu- ral disposal systems, have been ignored." The Requesters also added that this expansion of drains would entail the "forceful acquisition of land." The Requesters asserted that more than 50 villages in the district of Badin, Sindh Province, would suffer a permanent threat of flooding from the disposal of upstream saline effluents. They claimed that the "overflowing, breaches and sea intrusion during [the] 2003 rains" had already caused 30 people to die, damaged thousands of houses, and destroyed thousands of acres of agricultural crops. The Requesters further claimed that the proposed drainage network, the resulting absence of fresh water, and the disposal of saline subsoil water and residual traces of pesticides, fertilizer, and industrial waste accumulated along the way would adversely affect the already degraded environment of the Indus Delta and "will destroy the re- maining resources of marine fisheries and mangrove forests." The Requesters alleged that the Project would cause the destruction of two Dhands (coastal wetlands)--the Narreri and Jubho lagoons, which they claimed were protected by the Ramsar Con- vention on Wetlands of International Importance, to which Pakistan is party--and that, hence, the Project disregarded Pakistan's "requirements under international environ- mental treaties and agreements." The Requesters also considered that the majority of the coastal communities are Mal- lahs, a community they classify as "indigenous people." The Requesters stated that these people, who live in more than 60 villages and reach 25,000 in number, are "marginalized and vulnerable." They further stated that the Mallahs are "engaged in fishing at both sea and contiguous wetlands" and will be adversely affected by the Project; furthermore, "the worst affected will be women due to gender inequality in society." The Requesters claimed that the Project is affecting cultural sites such as "the monuments of saint Shaikh Kirhiyo Fishermen on tidal link Bhandari [and] the historical site of Roopa Mari and thari." The Requesters feared that, as a result of the Project, remaining portions of important historical sites "will be destroyed." The Requesters finally al- leged that the Project's planning process "remained non-transparent and hence failed to obtain informed consent or mean- ingful participation since the inception." The Requesters' allegations of Bank actions and omissions in the design, ap- praisal, and implementation of the Pro- ject, may have constituted violations of various provisions of Bank Policies and Procedures, including the following: OD 4.01 on Environmental Assessment; OP Investigations in Process 69 4.04 on Natural Habitats; OD 4.20 on Indigenous Peoples; OD 4.30 on Involun- tary Resettlement; OPN 11.03 on Man- agement of Cultural Property; OD/OP/BP 13.05 on Project Supervision; and BP 17.50 on Disclosure of Information. MANAGEMENT RESPONSE On October 19, 2004, Management sub- mitted its Response to the Request. Man- agement stated that the NDP Project was driven by the thought that the lack of an effective drainage system was a threat to Affected people at drainage site the sustainability of agriculture in the In- dus River Basin. Management added that the NDP Project, "which marked a new concept in project design, was deliberately `frontloaded' with an institutional and policy reform agenda and `backloaded' with an investment program." Also, according to Management, the investment program's sub- projects "are focused on rehabilitation, construction and improvement of on- and off- farm drainage; rehabilitation and modernization of irrigation systems; and operation and maintenance through performance-based contracts awarded to the private sector, including completion of some carry over projects from LBOD Stage I." Management stated that it believed that the NDP Project is in compliance with many of the requirements for OD 4.01 (Environmental Assessment). Nevertheless, Manage- ment acknowledged that the Project failed to comply with the disclosure requirements for BP 17.50 (Disclosure of Operational Information) "since the DSEA [Drainage Sec- tor Environmental Assessment] was not disclosed prior to appraisal at the Infoshop and no records of disclosure in country could be located." Management further stated that OP 4.04 (Natural Habitats), OD 4.20 (Indigenous Peoples), and OPN 11.03 (Cultural Property) are not applicable to the Project, adding that because of disagreement with the Government of Pakistan (GoP) over the resettlement Policy, the IDA did not finance any subprojects involving resettlement and therefore OD 4.30 (Involuntary Resettlement) is not applicable. Management added that a Bank-fielded Panel of Experts reviewed the 2001­02 prefeasibility study of the NSDS and recommended its deferral. The Bank and the GoP endorsed these recommendations. Management also added in its response that the Bank will take three specific actions regarding the Project: (1) assemble a Panel of Experts to review ecological, hydrological, and water quality monitoring data in the LBOD outfall area and propose a course of action; (2) conduct a diagnostic study of livelihood im- provements in the area to determine the losses suffered and formulate an assistance pro- gram; and (3) assist the GoP with a Country Water Resources Assistance Strategy and a Strategic Country Environmental Assessment. 70 The Inspection Panel Annual Report P THE PANEL'S ELIGIBILITY REPORT/BOARD DECISION akist The Panel submitted its Report and Recommendation to the Board on November 17, 2004. In this Report, the Panel stated that "the Request and the Requesters meet the el- an igibility criteria set forth in the Resolution that established the Inspection Panel and the 1999 Clarifications." The Panel also stated that "the contradictions in the assertions of the Requesters and Management are substantial and bear close relation to the sources and extent of the harm alleged by the Requesters." On December 8, 2004, the Board approved on a no-objection basis the Panel's rec- ommendation to conduct an investigation into claims made by the Requesters. The Request, Management's Response, and the Panel's Eligibility Report were made pub- lic a few days later and are available on the Inspection Panel's Web site at http://www. inspectionpanel.org. As part of its investigation, the Panel has been reviewing relevant Project documents and other materials from the Requesters, Bank staff, the national and local authorities of Pakistan, individuals and communities living in the areas affected by the Project, non- governmental organizations (NGOs), and other sources. The Panel has interviewed Bank staff in Washington, D.C., and in the Bank office in Islamabad. In May 2005, the Panel visited the areas affected by the Project. During its visits, the Panel met with Re- questers and other individuals and communities; national, provincial, and local author- ities; representatives of NGOs; relevant experts; and other stakeholders. The Panel also gathered considerable data with which to evaluate the Requesters' claims. By the time of this Annual Report's writing, the Panel was in the process of submit- ting its Investigation Report to the Board of Executive Directors. Women in affected village Investigations in Process 71 DEMOCRATIC REPUBLIC OF CONGO REQUEST NO. 37 Transitional Support for Economic Recovery Credit Operation (TSERO) (IDA Grant No. H 192-DRC) and Emergency Economic and Social Reunification Support Project (EESRSP) (IDA CREDIT NO. 3824-DRC AND IDA GRANT NO. H 064-DRC) As described elsewhere in this Report, the BOX 9. DEMOCRATIC REPUBLIC OF CONGO PROJECT INFORMATION Panel received a Request for Inspection on AT A GLANCE the above mentioned TSERO and EESRSP Project Name: Transitional Support for Economic Recovery Projects on November 19, 2005. The Re- Country Project (TSERO)/Emergency Economic quest was submitted by the "Organisations and Social Reunification Support Project (EESRSP) Autochtones Pygmées et Accompagnant les Autochtones Pygmées en République TSERO EESRSP Démocratique du Congo" on their own be- Region: Africa Africa half and on behalf of affected local com- Sector: General Finance Central Government munities living in the Democratic Republic Administration of Congo (see "Requests Received in Fiscal Environmental Category: Not Categorized B Year 2006" in this report). IDA Credit Amount: US$90 million US$214 million The Board of Executive Directors ap- (equivalent) (equivalent) proved the Panel's recommendation to Board Approval Date: December 8, 2005 September 11, 2003 conduct an investigation into claims made Effective Date: December 27, 2005 December 5, 2003 by the Requesters on a no-objection basis Closing Date: December 31, 2006 September 30, 2008 on February 28, 2006. The Request, Management's Response, and the Panel's Eligibility Report were made public and are available on the Inspection Panel's Web site at http://www.inspectionpanel.org. The Panel started to investigate the matters alleged in the Requests. As of the end of June 2006, the investigation was ongoing. 72 The Inspection Panel Annual Report HONDURAS REQUEST NO. 38 Land Administration Project (IDA CREDIT NO. 3858-HO) As described elsewhere in this Report, the Inspection Panel received a Request for In- BOX 10. HONDURAS PROJECT INFORMATION AT A GLANCE spection related to the Honduras: Land Project Name: Land Administration Project Administration Project on January 3, (IDA Credit No. 3858-HO) 2006--in Spanish, Programa de Adminis- Region: Latin America and Caribbean tración de Tierras de Honduras, PATH. Sector: Rural Development The Request claimed that the Project, as a Environmental Category: B result of violations of Bank policies and IDA Credit Amount: US$25 million procedures, is harming the Garífuna peo- Board Approval Date: February 26, 2004 ple and their land claims and will endanger Effective Date: December 2, 2004 their survival. The Request was submitted Closing Date: April 30, 2008 by the Organización Fraternal Negra Hon- duras (OFRANEH) on behalf of the in- digenous Garífuna population of Hon- duras. The Panel submitted its Report and Recommendation regarding eligibility of the Request to the Board of Executive Directors on March 14, 2006 (see "Requests Received in Fiscal Year 2006" in this report). The Board approved the Panel's recommendation to conduct an investigation on a no-objection basis on March 30, 2006. The Request, Management's response, and the Panel's eligibility report were made public and are available on the Inspection Panel's Web site at http://www.inspectionpanel.org. The Panel began its investigation in fiscal year 2006 and visited Honduras from June 19 through June 25. As of June 30, 2006, the investigation was ongoing. Investigations in Process 73 Actions on Earlier Investigations Paraguay and Argentina REQUEST NO. 26 Yacyretá Hydroelectric Project--Follow-up and Progress Report on Implementation of Management Recommendations and Action Plan On May 17, 2002, the Inspection Panel re- BOX 11. PARAGUAY AND ARGENTINA PROJECT INFORMATION ceived a Request for Inspection related to AT A GLANCE the Yacyretá Hydroelectric Project (the Project Name: Paraguay: Reform Project for the Water Project). Upon the Executive Directors' and Telecommunication Sectors (both partially authorization, the Inspection Panel carried financed the Yacyretá Hydroelectric Project); out the investigation and on February 24, Argentina: SEGBA V Power Distribution Project 2004, issued its Investigation Report. On Region: Latin America and Caribbean April 6, 2004, Management submitted to Sector: Electric Power and Other Energy/Hydro the Board its Report in Response to the Environmental Category: A Panel's findings. On May 6, 2004, the IBRD Loan Amount: US$46.5 million equivalent (Paraguay); Board of Executive Directors reviewed the US$276 million equivalent (Argentina) Inspection Panel Investigation Report and Board Approval Date: February 14, 1995 (Paraguay); Management's Report and Recommenda- June 23, 1987 (Loan Agreement tions in Response to the Inspection Panel signed on June 30, 1988) (Argentina) Investigation Report. During the Board Effective Date: October 13, 1995 (Paraguay); meeting, the Executive Directors approved September 30, 1988 (Argentina) the Management Action Plan and request- Closing Date: December 31, 2003 (Paraguay); October 30, 2002 (Argentina) ed that Management submit a Progress Report in 90 working days from the Board meeting, that would also detail additional remedial measures for the outstanding problems. The Executive Directors also request- ed the Panel to review and assess Management's Action Plan and the Additional Imple- mentation Measures on behalf of the Board. After the Board meeting, the Panel returned to the Project area to explain and discuss the Panel's findings with the Requesters and the people they represented. Management submitted its first Progress Report on August 6, 2004. Management stated that many pending Project activities would take a year or more to complete and 76 The Inspection Panel Annual Report P that the Bank could not control many of them. However, Management indicated that the aragu Bank would continue to supervise the Project intensively. On February 7, 2005, the Inspection Panel submitted to the Board its Review of Man- agement Progress Report on Implementation of the Management Recommendations and Action Plan, and Additional Implementation Measures. In its review, the Panel found that a y many social and environmental activities had yet to be completed before the water level and of the Yacyretá reservoir could be raised further. Among these pending activities were the construction of the sewerage system for the whole city of Encarnación, the financing of the house connections to the sewage system, and the creation of an independent grievance Argentina procedure. The Panel also welcomed the Bank's engagement of the Argentinean Universi- ty to carry out the independent monitoring of the reservoir's water level but found that the results of such monitoring were incomplete and could not be easily understood on the university's Web site. More importantly, the Panel also noted that, as of January 2005, there was no independent monitoring follow-up in place. The Panel further observed that the Bank's support and close supervision was still needed to address other problems, such as the drainage issues in Arroyo Pora, the situation of the brick makers, and the develop- ment of an effective social communication program. The second Progress Report was dated October 25, 2005. According to this second Progress Report, the implementation of the Project Completion Plan was progressing more slowly than anticipated with delays of about three to six months for the agreed- upon actions, such as the resettlement of the business district of Encarnación. The water level at the Yacyretá Dam was still at 76 meters above sea level (masl). The Report stat- ed that because not all the conditions laid out in the legal agreements between the Bank and the Government of Argentina had been fulfilled, the Bank was not able to give its no- objection approval to the raising of the water level. As of October 2005, the sewerage system for Encarnación was more than a year away from completion, and other meas- ures, such as compensation to all brick makers, completion of the municipal market, and relocation of the slaughterhouse of Encarnación were still pending. Management also Pacu Cúa Creek, stated that overall progress on solving social issues, for example, a communication pro- Encarnación gram and dispute resolution mechanism, was still lagging. The Inspection Panel In- vestigation Report, the Management Re- port and Recommendation in Response to the Inspection Panel Investigation Report, the Progress Report on Implementation of the Management Recommendations and Action Plan, the Inspection Panel Review of Management Progress Report on Imple- mentation of the Management Recom- mendations and Action Plan, Additional Implementation Measures, and the Second Progress Report are available on the In- spection Panel's Web site: http://www. inspectionpanel.org. Actions on Earlier Inspection Panel Investigations 77 India REQUEST NO. 23 Coal Sector Environmental and Social Mitigation Project--Management Report on Status of Outstanding Issues following the Inspection Panel Investigation Report and Management's Response The Request for Inspection was submitted BOX 12. INDIA PROJECT INFORMATION AT A GLANCE to the Panel on June 21, 2001. Upon au- Project Name: Coal Sector Environmental and thorization of the Board of Executive Di- Social Mitigation Project rectors, the Panel conducted an investiga- Region: South Asia tion and issued its Investigation Report on Sector: Energy and Mining, Other Social Services November 25, 2002. The Executive Direc- Environmental Category: A tors met on July 22, 2003, to discuss the IDA Credit Amount: US$63 million Panel's report and Management Action Board Approval Date: May 16, 1996 Plan to address the Panel's findings. The Board agreed that the Bank continue to su- Effective Date: July 23, 1996 pervise the Project as long as it is necessary Closing Date: June 30, 2002 to ensure the resolution of the outstanding issues and to safeguard the interests of the affected people. The Board also asked that Management periodically brief the Board and the Inspection Panel on progress. Management submitted its first Progress Report on February 24, 2004, and a second one on April 5, 2005. These Progress Reports are available on the Panel's website at www.inspectionpanel.org. A third Progress Report, dated December 21, 2005, included updates on the status of the issues and also presented Management's views on the extent and nature of the Bank's further involvement in light of the progress made. According to the Report, the resolution of some issues--for example, claims of people cultivating land under traditional tenure and provision of long-term leases for the resettlement plots-- was proceeding at a slow pace because of the complexity of the legal context. In the re- port, Management stated that the Bank had already completed its supervision for a few 78 The Inspection Panel Annual Report Ind ia Open pit coal mines in area from which people were resettled issues (for example, the creation of an Independent Monitoring Panel) and it also pro- posed to discontinue supervision for others, such as the delivery of compensation and re- location entitlements. Management also proposed to continue its supervision activities for an additional six months and to intervene only if this would help further progress. The Bank will be making this Report available to the public in July 2006. Actions on Earlier Inspection Panel Investigations 79 OUTREACH AND OTHER ACTIVITIES MEETINGS WITH CIVIL SOCIETY REPRESENTATIVES To maintain an open and frank dialogue with civil society, the Panel regularly meets with nongovernmental organization (NGO) representatives to update them on Requests for Inspection and other Panel activities, and to hear their concerns. The Panel met with NGO representatives on September 23, 2005 and April 24, 2006. Both events were held at the Center for International Environmental Law (CIEL) in Washington, D.C, and were facilitated by the Bank Information Center (BIC). Repre- sentatives of Washington-based as well as international NGOs--for example, represen- tatives of NGOs from Nigeria, Pakistan, Sweden, and Germany--participated in the meetings. The Panel Chairperson, Edith Brown Weiss, gave an overview of the ongoing and completed investigations, and of activities and issues the Panel dealt with in the past fiscal year. OUTREACH TO WORLD BANK MANAGEMENT AND STAFF East Asia Region Town Hall Meeting, Bangkok, Thailand On October 19, 2005, the Inspection Panel held a Town Hall Meeting in Bangkok, Thai- land, with regional staff of the East Asia and Pacific Region. Ian Porter, Country Direc- tor of the Southeast Asia Headquarters Unit, hosted the event, which was attended by a significant number of staff from the World Bank Bangkok Office. The Country Offices of Cambodia, Indonesia, the Philippines, Timor-Leste, and Vietnam participated via a video link. Mr. Porter introduced the Panel delegation, which included Chairperson Edith Brown Weiss, Members Tongroj Onchan and Werner Kiene, Executive Secretary Eduardo Abbott, and Operations Officer Tatiana Tassoni. He thanked them for travel- ing to Bangkok to help regional staff gain a greater comprehension of the Panel's work. Ms. Brown Weiss delivered a presentation and described insights gained from the Pan- el's investigation of Bank-financed projects. She then opened the floor for questions and comments from the regional staff. The Panel responded to staff members' questions about the procedures for handling requests received and for conducting investigations. 80 The Inspection Panel Annual Report Latin America and Caribbean Region (LCR) Brown Bag Lunch, World Bank, Washington, D.C. On April 18, 2006, the Inspection Panel met with staff of the LCR to discuss the Panel's work, in particular in the Latin America and Caribbean area. The meeting, in the form of a brown bag lunch, was part of the LCR Safeguard Advisory Team's biweekly clinic series on environmental issues, social risk management, and quality enhancement. Pamela Cox, LCR Vice President, convened the meeting. She thanked the Panel for par- ticipating in a positive and constructive dialogue with the LCR. Panel Chairperson Edith Brown Weiss addressed the gathering, and the Panel responded to staff members' ques- tions. Among the issues raised and discussed were the following: Do Inspection Panel complaints lead to risk aversion? How can units' costs in dealing with Panel complaints be compensated? How does the Panel remain impartial, and how does it avoid being manipulated for local political purposes? How much supervision is sufficient in diffi- cult situations? Country staffs from Mexico, Argentina, and Brazil participated through videoconference. Africa Weekly Regional Leadership Team, World Bank, Washington, D.C. On May 24, 2006, the Inspection Panel met with staff of the Africa Region during their weekly Regional Leadership Meeting to discuss the Panel's process and interaction with staff. Panel Chairperson Edith Brown Weiss gave a presentation on the Panel's process and structure, as well as an overview of past cases and an update on the status of current cases. Ms. Brown Weiss, assisted by Panel Members Tongroj Onchan and Werner Kiene, as well as Panel Executive Secretary Eduardo Abbott, responded to questions raised by staff. Among the issues discussed were the following: the appropriate balance between risk-taking and compliance with Bank Policies, remedying harm caused by a project in compliance with Bank Policies, the need for an inspection panel when other evaluation mechanisms are already in place at the Bank, and weighing supervision and budgetary constraints. Infrastructure Town Hall Meeting, World Bank, Washington, D.C. On November 29, 2005, the Inspection Panel held a Town Hall Meeting with approxi- mately 100 staff from the World Bank's Infrastructure Network at the Bank's headquar- ters to discuss the Panel's mandate and operation. Panel Chairperson Edith Brown Weiss, Members Tongroj Onchan and Werner Kiene, and Executive Secretary Eduardo Abbott participated in the event. In her opening remarks, Katherine Sierra, Vice President of the Infrastructure Network, expressed her hope that the meeting would promote better un- derstanding of the Panel's process of investigation and related issues. Following Chairperson Edith Brown Weiss's presentation on the Panel process, staff from the Infrastructure Network freely questioned the Panel members and Executive Secretary for more than an hour. Some expressed concern that the Panel discourages Outreach and Other Activities 81 risk-taking. The Panel members responded to these concerns by stating that develop- ment involves taking risks and suggesting that the existence of the Panel as an account- ability mechanism is especially important to civil society and affected peoples for risky projects. Also, Panel members commented that the more carefully projects are executed, the more costs will be saved through avoided harms. OTHER MEETINGS Legal Forum 2005, World Bank, Washington, D.C. On December 1 and 2, 2005, Panel Chairperson Edith Brown Weiss participated in the World Bank Legal Forum 2005 organized by the World Bank Legal Vice Presidency. Ms. Brown Weiss delivered a speech titled "Legitimacy, Accountability, and Equity" for a panel on the topic "Institutions and Policies for Greater Global Equity." The Legal Forum 2005 took place at the International Finance Corporation (IFC) headquarters in Washington, D.C. It was attended by a diverse group of lawyers, policy makers and their advisers, and professionals in the field of international development. The sessions were videotaped to create a record for the World Bank Library. International Labour Organization, Geneva, Switzerland The Panel Chairperson spoke on "Participatory Governance and the Law" at the Work- shop on "Participatory Governance: A New Regulatory Framework?" held by the In- ternational Institute for Labour Studies of the International Labour Organization in Geneva, Switzerland, December 9­10, 2005. A book will be published with discussions from the workshop. Participants included scholars from universities such as the Univer- sity of Witwatersrand, University of Brasilia, European University Institute, MIT, and the University of Toronto, as well as various international officials. VENRO, GEXSI, and GTZ Meetings, Berlin, Germany On January 11 and 12, 2006, Panel Member Werner Kiene gave a presentation on the Panel's approach to investigations of Bank-funded projects and its working principles to development organizations that are based in Berlin, Germany. He discussed the potential for further outreach initiatives with the managing director of VENRO (Verband En- twicklungspolitik Deutscher Nichtregierungsorganisationen e.V.), Germany's leading nongovernmental organization (NGO) umbrella organization. He also met with GEXSI (Global Exchange for Social Investment) and with representatives of GTZ (Deutsche Gesellschaft fuer Technische Zusammenarbeit), the German Agency for Development Cooperation. 82 The Inspection Panel Annual Report German Development Service and German Agro Action Meetings, Bonn, Germany On January 17, 2006, representatives of the German Development Service, DED (Deutscher Entwicklungsdienst), hosted a meeting with Panel Member Werner Kiene in Bonn, Germany, to explore DED's interest in strengthening accountability structures in its activities. A key concern was how information on the Panel's work could contribute to the development of communities, which are beneficiaries of DED projects. Similar is- sues were discussed at the Bonn Headquarters of German Agro Action (Deutsche Welthungerhilfe), Germany's leading development NGO. The Secretary General and his team expressed an interest in receiving frequent updates about the Panel's work. There exists a strong interest in disseminating more of the Panel's work to project staff active in the field. Panel Discussion on Infrastructure Lessons Learned, World Bank, Washington, D.C. On March 14, 2006, Inspection Panel Chairperson Edith Brown Weiss joined a Panel Discussion organized by the Infrastructure Network to share lessons learned from the last 20 years of World Bank engagement in infrastructure. The other panelists were Katherine Sierra, vice president and head of Infrastructure Vice-Presidency (INFVP); Nancy Zucker Boswell, Transparency International; Frank Lysy, Economics and Policy Group, Multilateral Investment Guarantee Agency (MIGA); Witold Henisz, Associate Professor of Management, Wharton School; and Vinod Thomas, Director General of Internal Evaluation Group Director-General (IEGDG). Katherine Sierra opened the dis- cussion with a brief introduction of the paper "Infrastructure: Lessons from the Last Two Decades of World Bank Engagement." Each panelist then provided comments on the underlying principles and conclusions reached by the paper, after which the floor was opened for comments and questions by the audience. The event was attended by about 150 infrastructure specialists and managers from the Bank. University of Mumbai Seminar, Mumbai, India On May 10, 2006, Panel Chairperson Edith Brown Weiss deliv- ered a special lecture at the University of Mumbai on "Account- ability, Compliance and International Financial Institutions" Dr. Snehalata Deshmuku, former Vice-Chancellor of the University of Mumbai, introduced the session, which was sponsored by the Department of African Studies. In her presentation, Professor Brown Weiss presented theoretical work on accountability and compliance and then presented the work of the Inspection Panel as a specific case study. The audience included faculty, students, and representatives of civil society organizations. Outreach and Other Activities 83 Third Accountability and Recourse Mechanisms Meeting, Montreal, Canada On May 18 and 19, 2006, the Inspection Panel participated in the third Meeting of Principals of Accountability and Recourse Mechanisms of International Financial Institutions (IFIs) and Other Institutions hosted by the Commission for Environmental Cooperation in Montreal, Canada. The yearly event is an infor- mal meeting of principals of accountability mechanisms of IFIs and related institutions. The Inspection Panel hosted the inaugu- ral gathering in 2004. The Panel, represented by Chairperson Edith Brown Weiss, Members Tongroj Onchan and Werner Kiene, Executive Secretary Eduardo Abbott, and Deputy Executive Secretary Peter L. Lallas, presented the results of the Panel's investigation of the Mumbai Urban Transport Project. Representatives from the following organizations attended the meeting: Euro- pean Bank for Reconstruction and Development, Inter-American Development Bank, International Financial Corporation (IFC), Japan Bank for International Cooperation, Nippon Export and Investment Insurance (NEXI), Export Development Canada, Over- seas Private Investment Corporation (OPIC), Asian Development Bank, and the North American Commission for Environmental Cooperation. The meeting offers an opportu- nity for principals of the different mechanisms to discuss informally issues of common concern. Meeting with the American University Academy on Human Rights and Humanitarian Law, Washington, D.C. On June 13, 2006, the Panel met with approximately 40 international students from the American University Academy on Human Rights and Humanitarian Law. Panel opera- tions officer, Tatiana Tassoni, introduced the Panel, its role, operations, procedures, and experiences with respect to a Request for Inspection that raised human rights issues. Fol- lowing the presentation, several students asked questions, in particular about the Panel's role in protection and respect of human rights in World Bank-financed projects. 84 The Inspection Panel Annual Report Annexes Annex 1 PANEL MEMBERS' AND EXECUTIVE SECRETARY'S BIOGRAPHIES Ms. Edith Brown Weiss was appointed to the Panel in September 2002. She has taught and published widely on issues of international law and global policies, including environmental and compliance issues. She is the Francis Cabell Brown Professor of International Law at Georgetown University Law Center, where she has been on the faculty since 1978 and has directed inter- national multi-disciplinary research projects. Before Georgetown, she was a professor at Princeton University. Ms. Brown Weiss has won many prizes for her work, including the Elizabeth Haub prize from the Free University of Brussels and the International Union for the Conservation of Nature (IUCN) for international environmental law, and the 2003 American Bar Associa- tion Award in recognition of distinguished achievements in Environmental Law and Policy. She has also received many awards for her books and articles. She served as President of the American Society of International Law and as Associate General Counsel for the U.S. Environmental Protection Agency, where she established the Divi- sion of International Law. Ms. Brown Weiss is a member of 10 editorial boards, includ- ing those of the American Journal of International Law and the Journal of International Economic Law. She has been a board member, trustee, or advisor for the Japanese Insti- tute for Global Environmental Strategies, the Cousteau Society, the Center for Interna- tional Environmental Law, and the National Center for Atmospheric Research, among others. Ms. Brown Weiss has been a Special Legal Advisor to the North American Com- mission on Environmental Cooperation. She has been a member of the U.S. National Academy of Sciences' Commission on Geosciences, Environment, and Resources; the Water Science and Technology Board; and the Committee on Sustainable Water Supplies in the Middle East. She is an elected member of the American Law Institute, the Council on Foreign Relations, and the IUCN Commission on Environmental Law. Ms. Brown Weiss received a bachelor's of arts degree from Stanford University with Great Distinc- tion, an LL.B. (J.D.) from Harvard Law School, a Ph.D. in political science from the Uni- versity of California at Berkeley, and an Honorary Doctor of Laws from Chicago-Kent College of Law. Mr. Tongroj Onchan was appointed to the Panel in September 2003. He has a Ph.D. in agricultural economics from the University of Illinois. Professor Onchan taught in the Faculty of Economics at Kasetsart University in Thailand for 26 years, including a term as dean. He later served as vice president of Huachiew Chalermprakiat University; then joined the Thailand Environment Institute (TEI) as vice president. In 1998, Mr. Onchan 86 The Inspection Panel Annual Report was appointed president of TEI. He helped establish and was appointed president of the Mekong Environment and Resource Institute (MERI) in 2000. He has served as advisor to the Prime Minister and to the Minister of Science, Technology, and Environment, as member of the National Envi- ronmental Board, chairman of the National EIA Committee, chairman of the Committee on the Preparation of State of the Environment Report for Thailand, member of the National Audit Committee, and member of the National Research Council for economics. Mr. Onchan was on many edito- rial boards, among them the Asian Journal of Agricultural Economics and the International Review for Environmental Strategies. He has consulted for a number of international organizations, including the Asian Productivity Organization, ESCAP, the World Bank, the Asian Development Bank, the Food and Agri- culture Organization, the International Labor Organization, USAID, and the Ford Foun- dation. He has been project director of many research projects and author or co-author of numerous technical and research papers on rural development, natural resources, and environmental management. Currently, he serves in several capacities: chairman of the Board of Directors of the MERI, and director of the International Global Environment Strategy (IGES) based in Japan. In 2002 Mr. Onchan was appointed as eminent person to serve as a member of the Asia and Pacific Forum for Environment and Development (APFED), where he continues to serve. Mr. Werner Kiene was appointed to the Panel in November 2004. He holds a Masters of Science degree and a Ph.D. in Agricultural Economics from Michigan State University. He has held leadership positions with the Ford Foundation and German Development Assistance. In 1994 Mr. Kiene became the founding Director of the Office of Evaluation of the United Nations World Food Programme (UN WFP). He was the World Food Programme Country Director for Bangladesh from 1998 through 2000 and also served as UN Resident Coordinator during this period. From 2000 to 2004 he was a Representative of the UN WFP in Washing- ton, D.C. Mr. Kiene's focus has been on the design, implementation, and assessment of sustainable development initiatives. His professional writings have dealt with issues of rural poverty and social services delivery; food security, agricultural, and regional development; emergency support and humanitarian assistance; international trade; and international relations. Mr. Kiene is involved in professional organizations such as the American Evaluation Association, the Society for International Develop- ment, the American Association for the Advancement of Science, and the International Agriculture Economics Association. Mr. Eduardo G. Abbott, a Chilean national, serves as the Inspection Panel's Executive Secretary. Pursuant to paragraph 11 of the Resolution, the World Bank's President ap- pointed him as Executive Secretary to the Panel on April 4, 1994, after consultation with the Executive Directors. Being head of the Secretariat since the Panel's establishment, Mr. Abbott has been instrumental in the development of the Panel as an institution. He has chaired several conferences related to the Panel's work and has served as an adviser to Annexes 87 other institutions during the establishment and review of similar inspection functions. Preceding his assignment with the Inspection Panel, he was Senior Counsel, Operational Policy, a position that was re-designated as Principal Counsel, Operational Policy in 1993. In this position, Mr. Abbott collabo- rated with the Central Operations Department (now Operational Policy and Country Services Department) in preparing new Operational Directives and in revising older Policy Statements. In addition to his Operational Policy re- sponsibilities, Mr. Abbott has also worked in the Latin America and Europe and Central Asia Divisions of the World Bank's Legal Department. Mr. Ab- bott joined the Bank in July 1978 as Assistant Counsel and was assigned to the Division in charge of Latin America, the Caribbean, and West Africa. A year later, he was promoted to Counsel, and in the following year to Senior Counsel. Pri- or to his career at the World Bank, Mr. Abbott worked at the U.S. Library of Congress as Legal Specialist in foreign law. In Chile, he had an active legal practice providing legal advice to a number of trade unions, as well as to industrial and financial institutions. He was assistant professor in the Law School of the University of Chile in Valparaiso; Mr. Abbott also served as a lecturer in the School of Social work of the Catholic University of Valparaiso, Chile, where he had earlier graduated from the Law School. After leaving Chile, he pursued his graduate studies at the University of Wisconsin at Madison, where he obtained his Masters of Science Degree in Legal Institutions. 88 The Inspection Panel Annual Report Annex 2 JOINT STATEMENT ON THE USE OF COUNTRY SYSTEMS Mexico Decentralized Infrastructure Reform and Development Project (R2004-0077, 0077/3) CHAIRPERSON OF THE INSPECTION PANEL AND SENIOR VICE PRESIDENT AND GENERAL COUNSEL We are in agreement that the country systems strategy would not change the role of the Inspection Panel as set forth in the 1993 Resolutions establishing the Panel. The Inspec- tion Panel will continue to investigate whether Management is in compliance with its policies and procedures in the design, appraisal and implementation of projects and pro- grams. This means that if a request were filed with the Inspection Panel in the context of the Mexico Decentralized Infrastructure Reform and Development Loan Project, the In- spection Panel could, with regard to the issues raised, examine Management's assessment of the equivalence of the relevant Bank policies and procedures with the country system (and any additional measures agreed upon to achieve equivalence) in materially achiev- ing the objectives of Bank policies and procedures, as well as Management's supervision of the project. The operational framework for the specific project or program agreed upon with the borrower would be the frame of reference for the borrower's performance and the Bank's supervision.1 Edith Brown Weiss Roberto Danino Chairperson Senior Vice President and General Counsel The Inspection Panel The World Bank June 8, 2004 1The Bank would continue to be bound by OP/BP 13.05 on Supervision and the Inspection Panel would review Bank compliance with OP/BP 13.05. The Borrower will be supervised by the Bank, based on its implementation of the contractual arrangements reflected in the legal agreements. Annexes 89 Annex 3 September 22, 1993 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Resolution No. IBRD 93-10 Resolution No. IDA 93-6 "THE WORLD BANK INSPECTION PANEL" The Executive Directors: Hereby resolve: 1. There is established an independent Inspection Panel (hereinafter called the Panel), which shall have the powers and shall function as stated in this resolution. COMPOSITION OF THE PANEL 2. The Panel shall consist of three members of different nationalities from Bank mem- ber countries. The President, after consultation with the Executive Directors, shall nominate the members of the Panel to be appointed by the Executive Directors. 3. The first members of the Panel shall be appointed as follows: one for three years, one for four years and one for five years. Each vacancy thereafter shall be filled for a period of five years, provided that no member may serve for more than one term. The term of appointment of each member of the Panel shall be subject to the conti- nuity of the inspection function established by this Resolution. 4. Members of the Panel shall be selected on the basis of their ability to deal thor- oughly and fairly with the requests brought to them, their integrity and their inde- pendence from the Bank's Management, and their exposure to developmental issues and to living conditions in developing countries. Knowledge and experience of the Bank's operations will also be desirable. 90 The Inspection Panel Annual Report 5. Executive Directors, Alternates, Advisors and staff members of the Bank Group may not serve on the Panel until two years have elapsed since the end of their serv- ice in the Bank Group. For purposes of this Resolution, the term "staff" shall mean all persons holding Bank Group appointments as defined in Staff Rule 4.01 includ- ing persons holding consultant and local consultant appointments. 6. A Panel member shall be disqualified from participation in the hearing and investi- gation of any request related to a matter in which he/she has a personal interest or had significant involvement in any capacity. 7. The Panel member initially appointed for five years shall be the first Chairperson of the Panel, and shall hold such office for one year. Thereafter, the members of the Panel shall elect a Chairperson for a period of one year. 8. Members of the Panel may be removed from office only by decision of the Execu- tive Directors, for cause. 9. With the exception of the Chairperson who shall work on a full-time basis at Bank headquarters, members of the Panel shall be expected to work on a full-time basis only when their workload justifies such an arrangement, as will be decided by the Executive Directors on the recommendation of the Panel. 10. In the performance of their functions, members of the Panel shall be officials of the Bank enjoying the privileges and immunities accorded to Bank officials, and shall be subject to the requirements of the Bank's Articles of Agreement concerning their ex- clusive loyalty to the Bank and to the obligations of subparagraphs (c) and (d) of paragraph 3.1 and paragraph 3.2 of the Principles of Staff Employment concerning their conduct as officials of the Bank. Once they begin to work on a full-time basis, they shall receive remuneration at a level to be determined by the Executive Direc- tors upon a recommendation of the President, plus normal benefits available to Bank fixed-term staff. Prior to that time, they shall be remunerated on a per diem basis and shall be reimbursed for their expenses on the same basis as the members of the Bank's Administrative Tribunal. Members of the Panel may not be employed by the Bank Group, following the end of their service on the Panel. 11. The President, after consultation with the Executive Directors, shall assign a staff member to the Panel as Executive Secretary, who need not act on a full-time basis until the workload so justifies. The Panel shall be given such budgetary resources as shall be sufficient to carry out its activities. POWERS OF THE PANEL 12. The Panel shall receive requests for inspection presented to it by an affected party in the territory of the borrower which is not a single individual (i.e., a community of persons such as an organization, association, society or other grouping of individu- als), or by the local representative of such party or by another representative in the exceptional cases where the party submitting the request contends that appropriate Annexes 91 representation is not locally available and the Executive Directors so agree at the time they consider the request for inspection. Any such representative shall present to the Panel written evidence that he is acting as agent of the party on behalf of which the request is made. The affected party must demonstrate that its rights or in- terests have been or are likely to be directly affected by an action or omission of the Bank as a result of a failure of the Bank to follow its operational policies and pro- cedures with respect to the design, appraisal and/or implementation of a project fi- nanced by the Bank (including situations where the Bank is alleged to have failed in its follow-up on the borrower's obligations under loan agreements with respect to such policies and procedures) provided in all cases that such failure has had, or threatens to have, a material adverse effect. In view of the institutional responsibil- ities of Executive Directors in the observance by the Bank of its operational policies and procedures, an Executive Director may in special cases of serious alleged viola- tions of such policies and procedures ask the Panel for an investigation, subject to the requirements of paragraphs 13 and 14 below. The Executive Directors, acting as a Board, may at any time instruct the Panel to conduct an investigation. For pur- poses of this Resolution, "operational policies and procedures" consist of the Bank's Operational Policies, Bank Procedures and Operational Directives, and similar doc- uments issued before these series were started, and does not include Guidelines and Best Practices and similar documents or statements. 13. The Panel shall satisfy itself before a request for inspection is heard that the subject matter of the request has been dealt with by the Management of the Bank and Man- agement has failed to demonstrate that it has followed, or is taking adequate steps to follow the Bank's policies and procedures. The Panel shall also satisfy itself that the alleged violation of the Bank's policies and procedures is of a serious character. 14. In considering requests under paragraph 12 above, the following requests shall not be heard by the Panel: (a) Complaints with respect to actions which are the responsibility of other par- ties, such as a borrower, or potential borrower, and which do not involve any action or omission on the part of the Bank. (b) Complaints against procurement decisions by Bank borrowers from suppliers of goods and services financed or expected to be financed by the Bank under a loan agreement, or from losing tenderers for the supply of any such goods and services, which will continue to be addressed by staff under existing procedures. (c) Requests filed after the Closing Date of the loan financing the project with re- spect to which the request is filed or after the loan financing the project has been substantially disbursed.2 (d) Requests related to a particular matter or matters over which the Panel has al- ready made its recommendation upon having received a prior request, unless justified by new evidence or circumstances not known at the time of the prior request. 2This will be deemed to be the case when at least ninety five percent of the loan proceeds have been disbursed. 92 The Inspection Panel Annual Report 15. The Panel shall seek the advice of the Bank's Legal Department on matters related to the Bank's rights and obligations with respect to the request under consideration. PROCEDURES 16. Requests for inspection shall be in writing and shall state all relevant facts, includ- ing, in the case of a request by an affected party, the harm suffered by or threat- ened to such party or parties by the alleged action or omission of the Bank. All re- quests shall explain the steps already taken to deal with the issue, as well as the nature of the alleged actions or omissions and shall specify the actions taken to bring the issue to the attention of Management, and Management's response to such action. 17. The Chairperson of the Panel shall inform the Executive Directors and the Presi- dent of the Bank promptly upon receiving a request for inspection. 18. Within 21 days of being notified of a request for inspection, the Management of the Bank shall provide the Panel with evidence that it has complied, or intends to comply with the Bank's relevant policies and procedures. 19. Within 21 days of receiving the response of the Management as provided in the preceding paragraph, the Panel shall determine whether the request meets the eligi- bility criteria set out in paragraphs 12 to 14 above and shall make a recommenda- tion to the Executive Directors as to whether the matter should be investigated. The recommendation of the Panel shall be circulated to the Executive Directors for decision within the normal distribution period. In case the request was initiated by an affected party, such party shall be informed of the decision of the Executive Di- rectors within two weeks of the date of such decision. 20. If a decision is made by the Executive Directors to investigate the request, the Chairperson of the Panel shall designate one or more of the Panel's members (In- spectors) who shall have primary responsibility for conducting the inspection. The Inspector(s) shall report his/her (their) findings to the Panel within a period to be determined by the Panel taking into account the nature of each request. 21. In the discharge of their functions, the members of the Panel shall have access to all staff who may contribute information and to all pertinent Bank records and shall consult as needed with the Director General, Operations Evaluation Department and the Internal Auditor. The borrower and the Executive Director representing the borrowing (or guaranteeing) country shall be consulted on the subject matter both before the Panel's recommendation on whether to proceed with the investigation and during the investigation. Inspection in the territory of such country shall be carried out with its prior consent. 22. The Panel shall submit its report to the Executive Directors and the President. The report of the Panel shall consider all relevant facts, and shall conclude with the Panel's findings on whether the Bank has complied with all relevant Bank policies and procedures. Annexes 93 23. Within six weeks from receiving the Panel's findings, Management will submit to the Executive Directors for their consideration a report indicating its recommenda- tions in response to such findings. The findings of the Panel and the actions com- pleted during project preparation also will be discussed in the Staff Appraisal Re- port when the project is submitted to the Executive Directors for financing. In all cases of a request made by an affected party, the Bank shall, within two weeks of the Executive Directors' consideration of the matter, inform such party of the re- sults of the investigation and the action taken in its respect, if any. DECISIONS OF THE PANEL 24. All decisions of the Panel on procedural matters, its recommendations to the Exec- utive Directors on whether to proceed with the investigation of a request, and its reports pursuant to paragraph 22, shall be reached by consensus and, in the ab- sence of a consensus, the majority and minority views shall be stated. REPORTS 25. After the Executive Directors have considered a request for an inspection as set out in paragraph 19, the Bank shall make such request publicly available together with the recommendation of the Panel on whether to proceed with the inspection and the decision of the Executive Directors in this respect. The Bank shall make pub- licly available the report submitted by the Panel pursuant to paragraph 22 and the Bank's response thereon within two weeks after consideration by the Executive Di- rectors of the report. 26. In addition to the material referred to in paragraph 25, the Panel shall furnish an annual report to the President and the Executive Directors concerning its activities. The annual report shall be published by the Bank. REVIEW 27. The Executive Directors shall review the experience of the inspection function estab- lished by this Resolution after two years from the date of the appointment of the first members of the Panel. APPLICATION TO IDA PROJECTS 28. In this resolution, references to the Bank and to loans include references to the Asso- ciation and to development credits. 94 The Inspection Panel Annual Report Annex 4 REVIEW OF THE RESOLUTION ESTABLISHING THE INSPECTION PANEL 1996 CLARIFICATION OF CERTAIN ASPECTS OF THE RESOLUTION The Resolution establishing the Inspection Panel calls for a review after two years from the date of appointment of the first panel members. On October 17, 1996, the Executive Directors of the Bank and IDA completed the review process (except for the question of inspection of World Bank Group private sector projects) by considering and endorsing the clarifications recommended by Management on the basis of the discussions of the Executive Directors' Committee on Development Effectiveness (CODE). The Inspection Panel and Management are requested by the Executive Directors to observe the clarifi- cations in their application of the Resolution. The clarifications are set out below. THE PANEL'S FUNCTION Since the Resolution limits the first phase of the inspection process to ascertaining the eligibility of the request, this phase should normally be completed within the 21 days stated in the Resolution. However, in cases where the Inspection Panel believes that it would be appropriate to undertake a "preliminary assessment" of the damages alleged by the requester (in particular when such preliminary assessment could lead to a reso- lution of the matter without the need for a full investigation), the Panel may undertake the preliminary assessment and indicate to the Board the date on which it would pres- ent its findings and recommendations as to the need, if any, for a full investigation. If such a date is expected by the Panel to exceed eight weeks from the date of receipt of Management's comments, the Panel should seek Board approval for the extension, pos- sibly on a "no-objection" basis. What is needed at this preliminary stage is not to es- tablish that a serious violation of the Bank's policy has actually resulted in damages suf- fered by the affected party, but rather to establish whether the complaint is prima facie justified and warrants a full investigation because it is eligible under the Resolution. Panel investigations will continue to result in "findings" and the Board will continue to act on investigations on the basis of recommendations of Management with respect to such remedial action as may be needed. Annexes 95 ELIGIBILITY AND ACCESS It is understood that the "affected party" which the Resolution describes as "a com- munity of persons such as an organization, association, society or other grouping of individuals" includes any two or more persons who share some common interests or concerns. The word "project" as used in the Resolution has the same meaning as it generally has in the Bank's practice, and includes projects under consideration by Bank manage- ment as well as projects already approved by the Executive Directors. The Panel's mandate does not extend to reviewing the consistency of the Bank's practice with any of its policies and procedures, but, as stated in the Resolution, is lim- ited to cases of alleged failure by the Bank to follow its operational policies and proce- dures with respect to the design, appraisal and/or implementation of projects, including cases of alleged failure by the bank to follow-up on the borrowers' obligations under loan agreements, with respect to such policies and procedures. No procurement action is subject to inspection by the Panel, whether taken by the Bank or by a borrower. A separate mechanism is available for addressing procurement- related complaints. OUTREACH Management will make its response to requests for inspection available to the public within three days after the Board has decided on whether to authorize the inspection. Management will also make available to the public opinions of the General Counsel re- lated to Inspection Panel matters promptly after the Executive Directors have dealt with the issues involved, unless the Board decides otherwise in a specific case. Management will make significant efforts to make the Inspection Panel better known in borrowing countries, but will not provide technical assistance or funding to potential requesters. COMPOSITION OF THE PANEL No change in the composition of the Panel is being made at this time. ROLE OF THE BOARD The Board will continue to have authority to (i) interpret the Resolution; and (ii) au- thorize inspections. In applying the Resolution to specific cases, the Panel will apply it as it understands it, subject to the Board's review. As stated in the Resolution, "[t]he Panel shall seek the advice of the Bank's Legal Department on matters related to the Bank's rights and obligations with respect to the request under consideration." October 17, 1996 96 The Inspection Panel Annual Report Annex 5 1999 CLARIFICATION OF THE BOARD'S SECOND REVIEW OF THE INSPECTION PANEL The Executive Directors approved today, April 20, 1999, with immediate effect, the re- port of the Working Group on the Second Review of the Inspection Panel, as revised in light of the extensive consultations that took place after the report was first circulated. The report confirms the soundness of the Resolution establishing the Inspection Pan- el (IBRD Resolution No. 93-10, IDA Resolution No. 93-6 of September 22, 1993, here- inafter "the Resolution") and provides clarifications for its application. These clarifica- tions supplement the clarifications issued by the Board on October 17, 1996 and prevail over them in case of conflict. The report's recommendations approved by the Board are as follows: 1. The Board reaffirms the Resolution, the importance of the Panel's function, its independence and integrity. 2. Management will follow the Resolution. It will not communicate with the Board on matters associated with the request for inspection, except as provided for in the Resolution. It will thus direct its response to the request, including any steps it in- tends to take to address its failures, if any, to the Panel. Management will report to the Board any recommendations it may have, after the Panel completes its inspec- tion and submits its findings, as envisaged in paragraph 23 of the Resolution. 3. In its initial response to the request for inspection, Management will provide evi- dence that i. it has complied with the relevant Bank operational policies and procedures; or that ii. there are serious failures attributable exclusively to its own actions or omis- sions in complying, but that it intends to comply with the relevant policies and procedures; or that iii. the serious failures that may exist are exclusively attributable to the borrower or to other factors external to the Bank; or that iv. the serious failures that may exist are attributable both to the Bank's non-com- pliance with the relevant operational policies and procedures and to the bor- rower or other external factors. Annexes 97 The Inspection Panel may independently agree or disagree, totally or partially, with Management's position and will proceed accordingly. 4. When Management responds, admitting serious failures that are attributable exclu- sively or partly to the Bank, it will provide evidence that it has complied or intends to comply with the relevant operating policies and procedures. This response will contain only those actions that the Bank has implemented or can implement by it- self. 5. The Inspection Panel will satisfy itself as to whether the Bank's compliance or evi- dence of intention to comply is adequate, and reflect this assessment in its reporting to the Board. 6. The Panel will determine the eligibility of a request for inspection independently of any views that may be expressed by Management. With respect to matters relating to the Bank's rights and obligations with respect to the request under considera- tion, the Panel will seek the advice of the Bank's Legal Department as required by the Resolution. 7. For its recommendation on whether an investigation should be carried out, the Panel will satisfy itself that all the eligibility criteria provided for in the Resolution have been met. It will base its recommendation on the information presented in the request, in the Management response, and on other documentary evidence. The Panel may decide to visit the project country if it believes that this is neces- sary to establish the eligibility of the request. In respect of such field visits, the Panel will not report on the Bank's failure to comply with its policies and proce- dures or its resulting material adverse effect; any definitive assessment of a serious failure of the Bank that has caused material adverse effect will be done after the Panel has completed its investigation. 8. The original time limit, set forth in the Resolution for both Management's response to the request and the Panel's recommendation, will be strictly observed except for reasons of force majeure, i.e. reasons that are clearly beyond Management's or the Panel's control, respectively, as may be approved by the Board on a no objection basis. 9. If the Panel so recommends, the Board will authorize an investigation without making a judgment on the merits of the claimants' request, and without discussion except with respect to the following technical eligibility criteria: a. The affected party consists of any two or more persons with common interests or concerns and who are in the borrower's territory (Resolution para.12). b. The request does assert in substance that a serious violation by the Bank of its operational policies and procedures has or is likely to have a material adverse effect on the requester (Resolution paras. 12 and 14a). c. The request does assert that its subject matter has been brought to Manage- ment's attention and that, in the requester's view, Management has failed to 98 The Inspection Panel Annual Report respond adequately demonstrating that it has followed or is taking steps to follow the Bank's policies and procedures (Resolution para. 13). d. The matter is not related to procurement (Resolution para. 14b). e. The related loan has not been closed or substantially disbursed (Resolution para. 14c). f. The Panel has not previously made a recommendation on the subject matter or, if it has, that the request does assert that there is new evidence or circum- stances not known at the time of the prior request (Resolution para. 14d). 10. Issues of interpretation of the Resolution will be cleared with the Board. 11. The "preliminary assessment" concept, as described in the October 1996 Clarifi- cation, is no longer needed. The paragraph entitled "The Panel's Function" in the October 1996 "Clarifications" is thus deleted. 12. The profile of Panel activities, in-country, during the course of an investigation, should be kept as low as possible in keeping with its role as a fact-finding body on behalf of the Board. The Panel's methods of investigation should not create the im- pression that it is investigating the borrower's performance. However, the Board, acknowledging the important role of the Panel in contacting the requesters and in fact-finding on behalf of the Board, welcomes the Panel's efforts to gather informa- tion through consultations with affected people. Given the need to conduct such work in an independent and low-profile manner, the Panel--and Management-- should decline media contacts while an investigation is pending or underway. Un- der those circumstances in which, in the judgment of the Panel or Management, it is necessary to respond to the media, comments should be limited to the process. They will make it clear that the Panel's role is to investigate the Bank and not the borrower. 13. As required by the Resolution, the Panel's report to the Board will focus on whether there is a serious Bank failure to observe its operational policies and pro- cedures with respect to project design, appraisal and/or implementation. The report will include all relevant facts that are needed to understand fully the context and basis for the panel's findings and conclusions. The Panel will discuss in its written report only those material adverse effects, alleged in the request, that have totally or partially resulted from serious Bank failure of compliance with its policies and procedures. If the request alleges a material adverse effect and the Panel finds that it is not totally or partially caused by Bank failure, the Panel's report will so state without entering into analysis of the material adverse effect itself or its causes. 14. For assessing material adverse effect, the without-project situation should be used as the base case for comparison, taking into account what baseline information may be available. Non-accomplishments and unfulfilled expectations that do not generate a material deterioration compared to the without-project situation will not be considered as a material adverse effect for this purpose. As the assessment of material adverse effect in the context of the complex reality of a specific project can Annexes 99 be difficult, the Panel will have to exercise carefully its judgment on these matters, and be guided by Bank policies and procedures where relevant. 15. A distinction has to be made between Management's report to the Board (Resolu- tion para. 23), which addresses Bank failure and possible Bank remedial efforts and "action plans," agreed between the borrower and the Bank, in consultation with the requesters, that seek to improve project implementation. The latter "action plans" are outside the purview of the Resolution, its 1996 clarification, and these clarifications. In the event of agreement by the Bank and borrower on an action plan for the project, Management will communicate to the Panel the nature and outcomes of consultations with affected parties on the action plan. Such an action plan, if warranted, will normally be considered by the Board in conjunction with the Management's report, submitted under Resolution para. 23. 16. The Panel may submit to the Executive Directors for their consideration a report on their view of the adequacy of consultations with affected parties in the prepara- tion of the action plans. The Board should not ask the Panel for its view on other aspects of the action plans nor would it ask the Panel to monitor the implementa- tion of the action plans. The Panel's view on consultation with affected parties will be based on the information available to it by all means, but additional country vis- its will take place only by government invitation. 17. The Board underlines the need for Management to make significant efforts to make the Inspection Panel better known in borrowing countries, as specified in the 1996 "Clarifications." 18. The Board emphasizes the importance of prompt disclosure of information to claimants and the public, as stipulated in the Resolution (paras. 23 and 25) and in its 1996 Clarifications. The Board requires that such information be provided by Management to claimants in their language, to the extent possible. 19. The Board recognizes that enhancing the effectiveness of the Inspection Panel process through the above clarifications assumes adherence to them by all parties in good faith. It also assumes the borrowers' consent for field visits envisaged in the Resolution. If these assumptions prove to be incorrect, the Board will revisit the above conclusions. 100 The Inspection Panel Annual Report Annex 6 OPERATING PROCEDURES AS ADOPTED BY THE PANEL ON AUGUST 19, 1994 CONTENTS INTRODUCTION 103 Composition 103 Purpose 103 Functions 103 Participants 104 Administration 104 SUBJECT MATTER OF REQUESTS 104 Scope 104 Limitations 104 PREPARATION OF A REQUEST 105 A. Who Can File a Request 105 B. Contents of a Request 105 C. Form of a Request 106 Written 106 Format 106 Language 106 Representatives 106 Documents 106 D. Delivery of Request 106 E. Advice on Preparation 107 PROCEDURES ON RECEIPT OF A REQUEST 107 A. Register 107 Contents of Notice 107 B. Request Additional Information 107 C. Outside Scope 108 Records 108 D. Need for Review 108 E. Revised Request 108 Annexes 101 MANAGEMENT'S RESPONSE 108 Clarification 109 PANEL RECOMMENDATION 109 A. Basis 109 B. Required Criteria 109 Criteria for Satisfactory Response 109 Preliminary Review 110 Initial Study 110 C. Contents 110 D. Submission 111 BOARD DECISION AND PUBLIC RELEASE 111 Notification 111 Public Information 111 AN INVESTIGATION 111 A. Initial Procedures 111 B. Methods of Investigation 112 Consent Required 112 C. Participation of Requester 112 D. Participation of Third Parties 112 PANEL REPORT 113 Contents 113 Submission 113 MANAGEMENT'S RECOMMENDATIONS 113 BOARD DECISION AND PUBLIC RELEASE 113 GENERAL 114 Business Days 114 Copies 114 Consultations 114 Access to Bank Staff and Information 114 Legal Advice 114 Confidentiality 114 Information to Requester and Public 114 GUIDANCE ON HOW TO PREPARE A REQUEST FOR INSPECTION 115 Model Form 116 102 The Inspection Panel Annual Report INTRODUCTION The Inspection Panel (the "Panel") is an independent forum established by the Executive Directors of the International Bank for Reconstruction and Development ("IBRD") and the International Development Association ("IDA") by IBRD Resolution No. 93-10 and the identical IDA Resolution No. 93-6 both adopted by the Executive Directors of the respective institutions on September 22, 1993 (collectively the "Resolution"). The text of the Resolution is in Annex 1. References in these procedures to the "Bank" include the IBRD and IDA. The Panel's authority is dictated by the Resolution: within that framework, these Op- erating Procedures are adopted by the Panel to provide detail to the operational provi- sions. The text is based on the Resolution and takes into account suggestions from out- side sources. In view of the unprecedented nature of the new inspection function the current pro- cedures are provisional: the Panel will review them within 12 months and, in light of ex- perience and comments received, will revise them if necessary; and will recommend to the Executive Directors ("Executive Directors") amendments to the Resolution that would allow a more effective role for the Panel. Composition The Panel consists of three Inspectors. At the outset, one Inspector, the Chairperson, will work on a full-time basis: the other two will work part-time. This arrangement is provi- sional. The Panel's workload will be dictated by the number and nature of requests re- ceived. If necessary, the Panel will recommend alternative arrangements to the Executive Directors. Purpose The Panel has been established for the purpose of providing people directly and ad- versely affected by a Bank-financed project with an independent forum through which they can request the Bank to act in accordance with its own policies and procedures. It follows that this forum is available when adversely affected people believe the Bank it- self has failed, or has failed to require others, to comply with its policies and procedures, and only after efforts have been made to ask the Bank Management ("Management") it- self to deal with the problem. Functions The role of the Panel is to carry out independent investigations. Its function, which will be triggered when it receives a request for inspection, is to inquire and recommend: it will make a preliminary review of a request for inspection and the response of Manage- ment, independently assess the information and then recommend to the Board of Exec- utive Directors whether or not the matters complained of should be investigated. If the Board decides that a request shall be investigated, the Panel will collect information and provide its findings, independent assessment and conclusions to the Board. On the basis of the Panel's findings and Management's recommendations, the Executive Directors will consider the actions, if any, to be taken by the Bank. Annexes 103 Participants During the preliminary review period--up to the time the Panel makes a recommendation to the Board on whether or not the matter should be investigated--the Panel will accept statements or evidence from (a) the Requester, i.e., either the affected people and/or their duly appointed representative, or an Executive Director; (b) Management; and, (c) any other individual or entity invited by the Panel to present information or comments. During an investigation, any person who is either a party to the investigation or who provides the designated Inspector(s) with satisfactory evidence that he/she has an inter- est, apart from any interest in common with the public, will be entitled to submit infor- mation or evidence relevant to the investigation. Administration The Panel has approved separate Administrative Procedures which are available from the Office of The Inspection Panel. Please note that all headings are for ease of reference only. They do not form part of these procedures and do not constitute an interpretation thereof. SUBJECT MATTER OF REQUESTS Scope 1. The Panel is authorized to accept requests for inspection ("Request(s)") which claim that an actual or threatened material adverse effect on the affected party's rights or in- terests arises directly out of an action or omission of the Bank as a result of a failure by the Bank to follow its own operational policies and procedures during the design, appraisal and/or implementation of a Bank financed project. Before submitting a Re- quest steps must have already been taken (or efforts made) to bring the matter to the attention of Management with a result unsatisfactory to the Requester. Limitations 2. The Panel is not authorized to deal with the following: (a) complaints with respect to actions which are the responsibility of other parties, such as the borrower, or potential borrower, and which do not involve any action or omission on the part of the Bank; (b) complaints against procurement decisions by Bank borrowers from suppliers of goods and services financed or expected to be financed by the Bank under a loan/credit agreement, or from losing tenderers for the supply of any such goods and services, which will continue to be addressed by Bank staff under existing procedures; (c) Requests filed after the Closing Date of the loan/credit financing the project with respect to which the Request is filed or when 95% or more of the loan/credit pro- ceeds have been disbursed; or 104 The Inspection Panel Annual Report (d) Requests related to a particular matter or matters over which the Panel has already made its recommendation after having received a prior Request, unless justified by new evidence or circumstances not known at the time of the prior Request. PREPARATION OF A REQUEST 3. The Panel's operational proceedings begin when a Request is received. This section of the procedures is primarily designed to give further guidance to potential Requesters on what facts and explanations they should provide. A. Who Can File a Request 4. The Panel has authority to receive Requests which complain of a violation of the Bank's policies and procedures from the following people or entities: (a) any group of two or more people in the country where the Bank financed project is located who believe that as a result of the Bank's violation their rights or inter- ests have been, or are likely to be adversely affected in a direct and material way. They may be an organization, association, society or other grouping of individu- als; or (b) a duly appointed local representative acting on explicit instructions as the agent of adversely affected people; or (c) in exceptional cases, referred to in paragraph 11 below, a foreign representative acting as agent of adversely affected people; or (d) an Executive Director of the Bank in special cases of serious alleged violations of the Bank's policies and procedures. B. Contents of a Request 5. In accordance with the Resolution, Requests should contain the following information: (a) a description of the project, stating all the relevant facts including the harm suf- fered by or threatened to the affected party; (b) an explanation of how Bank policies, procedures or contractual documents were seriously violated; (c) a description of how the act or omission on the part of the Bank has led or may lead to a violation of the specific provision; (d) a description of how the party was, or is likely to be, materially and adversely af- fected by the Bank's act or omission and what rights or interests of the claimant were directly affected; (e) a description of the steps taken by the affected party to resolve the violations with Bank staff, and explanation of why the Bank's response was inadequate; (f) in Requests relating to matters previously submitted to the Panel, a statement specifying what new evidence or changed circumstances justify the Panel revisit- ing the issue; and (g) if some of the information cannot be provided, an explanation should be included. Annexes 105 C. Form of Request Written 6. All Requests must be submitted in writing, dated and signed by the Requester, and contain his/her name and contact address. Format 7. No specific form is necessary: a letter will suffice. A Requester may wish to refer to the guidance and use the model form specifying required information. (Included at the end of this annex, "Guidance on How to Prepare a Request for Inspection.") Language 8. The working language of the Panel is English. Requests submitted directly by affected people themselves may be in their local language if they are unable to obtain a trans- lation. If requests are not in English, the time needed to translate and ensure an accu- rate and agreed translation may delay acceptance and consideration by the Panel. Representatives 9. If the Requester is a directly affected person or entity representing affected people, written signed proof that the representative has authority to act on their behalf must be attached. 10. If the Request is submitted by a non-affected representative, he/she must provide ev- idence of representational authority and the names and contact address of the party must be provided. Proof of representational authority, which shall consist of the original signed copy of the affected party's explicit instructions and authorization, must be attached. 11. In addition, in the cases of non-local representation, the Panel will require clear evi- dence that there is no adequate or appropriate representation in the country where the project is located. Documents 12. The following documents should be attached: (a) all correspondence with Bank staff; (b) notes of meetings with Bank staff; (c) a map or diagram, if relevant, showing the location of the affected party or area affected by the project; and (d) any other evidence supporting the complaint. 13. If all the information listed cannot be provided an explanation should be included. D. Delivery of Request 14. Requests must be sent by registered or certified mail or delivered by hand in a sealed envelope against receipt to the Office of The Inspection Panel at 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. or to the Bank's resident representative in the country where the project is located. In the latter case, the resident representative 106 The Inspection Panel Annual Report shall, after issuing a receipt to the Requester, forward the Request to the Panel through the next pouch. E. Advice on Preparation 15. People or entities seeking advice on how to prepare and submit a Request may con- tact the Office of The Inspection Panel, which will provide information or may meet and discuss the requirements with potential requesters. PROCEDURES ON RECEIPT OF A REQUEST 16. When the Panel receives a Request the Chairperson, on the basis of the information contained in the Request, shall either promptly register the Request, or ask for addi- tional information, or find the Request outside the Panel's mandate. A. Register 17. If the request, appears to contain sufficient required information the chairperson shall register the Request in the Panel Register; promptly notify the Requester, the Executive Directors and the Bank President ("President") of the registration; and transmit to the President a copy of the Request with the accompanying documenta- tion, if any. Contents of Notice 18. The notice of registration shall: (a) record that the Request is registered and indicate the date of the registration and dispatch of that notice; (b) the notice will include the name of the project, the country where the project is located, the name of the Requester unless anonymity is requested, and a brief de- scription of the Request; (c) notify the Requester that all communications in connection with the Request will be sent to the address stated in the Request, unless another address is indi- cated to the Panel Secretariat; and (d) request Management to provide the Panel, within 21 days after receipt of the no- tice and Request, with written evidence that it has complied, or intends to com- ply with the Bank's relevant policies and procedures. The notice shall specify the due date of the response. B. Request Additional Information 19. If the chairperson finds the contents of the Request or documentation on represen- tation insufficient, he/she may ask the Requester to supply further information. 20. Upon receipt of a Request, the chairperson shall send a written acknowledgement to the Requester, and will specify what additional information is required. 21. The Chairperson may refuse to register a Request until all necessary information and documentation is filed. Annexes 107 C. Outside Scope 22. If the chairperson finds, that the matter is without doubt manifestly outside the Panel's mandate, he/she will notify the Requesters, of his/her refusal to register the Request and of the reasons therefore; this will include but not be limited to the fol- lowing types of communications: (a) Requests which are clearly outside the Panel's mandate including those listed above at paragraph 2; (b) Requests which do not show the steps taken or effort made to resolve the mat- ter with Management; (c) Requests from an individual or from a non-authorized representative of an af- fected party; (d) any correspondence, including but not limited to letters, memoranda, opinions, submissions or requests on any matter within the Panel's mandate which are not requests for an inspection; and (e) Requests that are manifestly frivolous, absurd or anonymous. Records 23. The number of such Requests and communications received shall be noted in the Register on a quarterly basis and the yearly total included in the Annual Report. D. Need for Review 24. In cases where additional information is required, or where it is not clear whether a Request is manifestly outside the Panel's mandate, the Chairperson shall designate a Panel member to review the Request. E. Revised Request 25. If the Requester receives significant new evidence or information at any time after the initial Request was submitted, he/she may consider whether or not it is serious enough to justify the submission of a revised Request. 26. If a revised Request is submitted, the time periods for Management's response and the Panel recommendation will begin again from the time such Request is registered. MANAGEMENT'S RESPONSE 27. Within 21 days after being notified of a Request, Management shall provide the Pan- el with evidence that it has complied, or intends to comply with the Bank's relevant policies and procedures. After the Panel receives Management's response, it shall promptly enter the date of receipt in the Panel Register. 28. If there is no response from Management within 21 days, the Panel shall notify the President and the Executive Directors and send a copy to the Requester. 108 The Inspection Panel Annual Report Clarification 29. In order to make an informed recommendation, the Panel may request clarification from Management; in the light of Management's response, request more informa- tion from the Requester; and provide relevant portions of Management's response for comment. A time limit for receipt of the information requested shall be specified; and (a) whether or not such clarification or information is received within the time limit, make its recommendation to the Executive Directors within 21 days after receipt of Management's response; or (b) in the event it is not possible for the Requester to provide the information quick- ly, the Panel may advise the Requester to submit an amended Request; the Exec- utive Directors and Bank management will be notified that the process will begin again when the amended Request is received. PANEL RECOMMENDATION 30. Within 21 days after receiving Management's response, the Panel shall make a rec- ommendation to the Executive Directors as to whether the matter should be investi- gated. A. Basis 31. The Panel shall prepare its recommendation to the Board on the basis of the infor- mation contained in: (a) the Request; (b) Management's response; (c) any further information the Panel may have requested and received from the Re- quester and/or Management and/or third parties; and (d) any findings of the Panel during this stage. B. Required Criteria 32. If, on the basis of the information contained in the Request, it has not already been established that the Request meets the following three conditions required by the Resolution, the Chairperson, in consultation with the other Panel members may, if necessary, designate a Panel member to conduct a preliminary review to determine whether the Request: (a) was filed by an eligible party; (b) is not timebarred; and (c) relates to a matter falling within the Panel's mandate. Criteria for Satisfactory Response 33. The Panel may proceed to recommend that there should not be an investigation, if, on the basis of the information contained in the Request and Management's response, the Panel is satisfied that Management has done the following: Annexes 109 (a) dealt appropriately with the subject matter of the Request; and (b) demonstrated clearly that it has followed the required policies and procedures; or (c) admitted that it has failed to follow the required policies and procedures but has provided a statement of specific remedial actions and a timetable for imple- menting them, which will, in the judgment of the Panel, adequately correct the failure and any adverse effects such failure has already caused. Preliminary Review 34. If, on the basis of the information contained in Management's response and any clar- ifications provided, the Panel is satisfied that Management has failed to demonstrate that it has followed, or is taking adequate steps to follow the Bank's policies and procedures, the Panel will conduct a preliminary review in order to determine whether conditions required by provisions of the Resolution exist. 35. Although it may not investigate Management's actions in depth at this stage, it will determine whether Management's failure to comply with the Bank's policies and procedures meets the following three conditions: (a) whether such failure has had, or threatens to have, a material adverse effect; (b) whether, the alleged violation of the Bank's policies and procedures are, in the judgment of the Panel, of a serious character; and (c) whether remedial actions proposed by Management do not appear adequate to meet the concerns of the Requester as to the application of the Bank's policies and procedures. Initial Study 36. If the Chairperson considers, after the preliminary review and consultation with the other Panel members, that more factual data not already provided by the Requester, Management or any other source is required to make an informed recommendation to the Executive Directors, he/she may designate a Panel member to undertake a pre- liminary study. The study may include, but need not be limited to, a desk study and/or a visit to the project site. C. Contents 37. On the basis of the review, the Panel shall make its recommendation to the Board as to whether the matter should be investigated. Every recommendation shall include a clear explanation setting forth reasons for the recommendation and be accompanied by: (a) the text of the Request and, where applicable, any other relevant information provided by the Requester; (b) the text of Management's response and, where applicable, any clarifications pro- vided; (c) the text of any advice received from the Bank's Legal Department; (d) any other relevant documents or information received; and 110 The Inspection Panel Annual Report (e) statements of the majority and minority views in the absence of a consensus by the Panel. D. Submission 38. The recommendation shall be circulated by the Executive Secretary of the Panel to the Executive Directors for decision. The Panel will notify the Requester that a rec- ommendation has been sent to the Executive Directors. BOARD DECISION AND PUBLIC RELEASE 39. The Board decides whether or not to accept or reject the Panel's recommendation; and, if the Requester is a nonlocal representative, whether exceptional circumstances exist and suitable local representation is not available. Notification 40. The Panel shall promptly inform the Requester of the Board's decision on whether or not to investigate the Request and shall send the Requester a copy of the Panel's recommendation. Public Information 41. After the Executive Directors have considered a Request the Bank shall make such Request publicly available together with the Panel's recommendation on whether to proceed with the inspection and the decision of the Executive Directors in this re- spect. AN INVESTIGATION A. Initial Procedures 42. When a decision to investigate a Request is made by the Board, or the Board itself requests an investigation, the Chairperson shall promptly: (a) designate one or more of the Panel's members (Inspector(s)) to take primary responsibility for the investigation; (b) arrange for the Panel members to consult, taking into account the nature of the particular Request, on: (i) the methods of investigation that at the outset appear the most appropriate; (ii) an initial schedule for the conduct of the investigation; (iii) when the Inspector(s) shall report his/her (their) findings to the Panel, including any interim findings; and (iv) any additional procedures for the conduct of the investigation. 43. The designated Inspector(s) shall, as needed, arrange for a meeting with the Requester and schedule discussions with directly affected people. 44. The name of the Inspector(s) and an initial work plan shall be made public as soon as possible. Annexes 111 B. Methods of Investigation 45. The Panel may, taking into account the nature of the particular Request, use a vari- ety of investigatory methods, including but not limited to: (a) meetings with the Requester, affected people, Bank staff, government officials and project authorities of the country where the project is located, representa- tives of local and international non-governmental organizations; (b) holding public hearings in the project area; (c) visiting project sites; (d) requesting written or oral submissions on specific issues from the Requester, af- fected people, independent experts, government or project officials, Bank staff, or local or international non-governmental organizations; (e) hiring independent consultants to research specific issues relating to a Request; (f) researching Bank files; and (g) any other reasonable methods the Inspector(s) consider appropriate to the spe- cific investigation. Consent Required 46. In accordance with the Resolution, physical inspection in the country where the proj- ect is located will be carried out with prior consent. The Chairperson shall request the Executive Director representing such country to provide written consent. C. Participation of Requester 47. During the course of the investigation, in addition to any information requested by the Inspector(s), the Requester (and affected people if the Requester is a non-affected Representative or an Executive Director) or Bank staff may provide the Inspector(s) either directly or through the Executive Secretary with supplemental information that they believe is relevant to evaluating the Request. 48. The Inspector(s) may notify the Requester of any new material facts provided by Bank staff or by the Executive Director for, or authorities in the country where the project is located. 49. To facilitate understanding of specific points, the Panel may discuss its preliminary findings of fact with the Requester. D. Participation of Third Parties 50. During the course of the investigation, in addition to any information requested by the Inspector(s), any member of the public may provide the Inspector(s), either di- rectly or through the Executive Secretary, with supplemental information that they believe is relevant to evaluating the Request. 51. Information should not exceed ten pages and include a one-page summary. Support- ing documentation may be listed and attached. The Inspector(s) may request more details if necessary. 112 The Inspection Panel Annual Report PANEL REPORT Contents 52. The report of the Panel (the "Report") shall include the following: (a) a summary discussion of the relevant facts and of the steps taken to conduct the investigation; (b) a conclusion showing the Panel's findings on whether the Bank has complied with relevant Bank policies and procedures; (c) a list of supporting documents which will be available on request from the Of- fice of The Inspection Panel; and (d) statements of the majority and minority views in the absence of a consensus by the Panel. Submission 53. Upon completion of the Report, the Panel shall submit it to: (a) the Executive Directors: accompanied by notification that the Report is being submitted to the President on the same date; and (b) the President: accompanied by a notice against receipt that within 6 weeks of re- ceipt of the Report, Management must submit to the Executive Directors for their consideration a report indicating Management's recommendations in re- sponse to the Panel's findings. MANAGEMENT'S RECOMMENDATIONS 54. Within 6 weeks after receiving the Panel's findings, Management will submit to the Executive Directors for their consideration a report indicating its recommendations in response to the Panel's findings. Upon receipt of a copy of the report, the Panel will notify the Requester. BOARD DECISION AND PUBLIC RELEASE 55. Within 2 weeks after the Executive Directors consider the Panel's Report and the Management's response, the Bank shall inform the Requester of the results of the in- vestigation and the action decided by the Board, if any. 56. After the Bank has informed the Requester, the Bank shall make publicly available: (a) the Panel's Report; (b) Management's recommendations; and (c) the Board's decision. These documents will also be available at the Office of The Inspection Panel. 57. The Panel will seek to enhance public awareness of the results of investigations through all available information sources. Annexes 113 GENERAL Business Days 58. "Days" under these procedures means days on which the Bank is open for business in Washington, D.C. Copies 59. Consideration of Requests and other documents submitted throughout the process will be expedited if an original and two copies are filed. When any document con- tains extensive supporting documentation the Panel may ask for additional copies. Consultations 60. The borrower and the Executive Director representing the borrowing (or guarantee- ing) country shall be consulted on the subject matter before the Panel's recommen- dation and during an investigation. Access to Bank Staff and Information 61. Pursuant to the Resolution and in discharge of their functions, the members of the Panel shall have access to all Bank staff who may contribute information and to all pertinent Bank records and shall consult as needed with the Director General, Op- erations Evaluation Department, and the Internal Auditor. Legal Advice 62. The Panel shall seek, through the Vice President and General Counsel of the Bank, the written advice of the Bank's Legal Department on matters related to the Bank's rights and obligations with respect to the Request under consideration. Any such ad- vice will be included as an attachment to the Panel's recommendation and/or Report to the Executive Directors. Confidentiality 63. Documents, or portions of documents of a confidential nature will not be released by the Panel without the express written consent of the party concerned. Information to Requester and Public 64. The Executive Secretary shall record in the Register all actions taken in connection with the processing of the Request, the dates thereof, and the dates on which any document or notification under these procedures is received in or sent from the Of- fice of The Inspection Panel. The Requester shall be informed promptly. The Regis- ter will be publicly available. 65. A notice that a Request has been registered and all other notices or documents issued by the Panel will be available to the public through the Bank's PIC in Washington, D.C.; at the Bank's Resident Mission in the country where the project is located or at the relevant regional office; at the Bank's Paris, London, and Tokyo offices; or on request from the Executive Secretary of the Panel. 114 The Inspection Panel Annual Report GUIDANCE ON HOW TO PREPARE A REQUEST FOR INSPECTION The Inspection Panel needs some basic information in order to process a Request for In- spection: 1. Name, contact address, and telephone number of the group or people making the re- quest. 2. Name and description of the Bank-financed project. 3. Adverse effects of the Bank project. 4. If you are a representative of affected people attach explicit written instructions from them authorizing you to act on their behalf. These key questions must be answered: 1. Can you elaborate on the nature and importance of the damage caused by the project to you or those you represent? 2. What aspect of the project has or may affect you adversely? How did you determine this? 3. Are you familiar with Bank policies and procedures that apply to this type of project? How do you believe the Bank may have violated them? 4. Have you contacted or attempted to contact Bank staff about the project? Please pro- vide information about all contacts, and the responses, if any, you received from the Bank. You must have done this before you can file a request. 5. Have you tried to resolve your problem through any other means? 6. If you know that the Panel has dealt with this matter before, do you have new facts or evidence to submit? Please provide a summary of the information in no more than a few pages. Attach as much other information as you think necessary as separate documents. Please note and identify attachments in your summary. You may wish to use the accompanying model form. Annexes 115 MODEL FORM: REQUEST FOR INSPECTION To: Executive Secretary, The Inspection Panel 1818 H Street NW, MSN 10-1007, Washington, DC 20433, USA Fax No. 202-522-0916; or c/o the appropriate World Bank Country Office 1. We [insert names] live and/or represent others who live in the area known as [insert name of area]. Our addresses are attached. 2. We have suffered, or are likely to suffer, harm as a result of the World Bank's failures or omissions in the [insert name and/or brief description of the project or program] located in [insert location/country]. 3. [Describe the damage or harm you are suffering or are likely to suffer from the project or program] 4. [List (if known) the World Bank's operational polices you believe have not been observed] 5. We have complained to World Bank staff on the following occasions [list dates] by [explain how the complaint was made]. We have received no response, [or] we have received a response and we are not satisfied that the explanations and answers solve our problems for the following reasons: 6. We request the Inspection Panel recommend to the World Bank's Executive Directors that an investi- gation of these matters be carried out. Signatures: Date: Contact address, telephone number, fax number, and email address: List of attachments We [do/do not] authorize you to disclose our identities 116 The Inspection Panel Annual Report Table 1 SUMMARY OF INSPECTION PANEL CASES1 JUNE 30, 2006 REQUEST (SHORT FORM) REQUEST REQUEST INSPECTION RECOMMENDATION RECEIVED REGISTERED PANEL APPROVED BY RECOMMENDATION THE BOARD PANEL'S ACTIVITY 1. Nepal: Arun III Proposed October 24, 1994 Yes Investigation Yes Eligibility Report and Hydroelectric Project and Investigation Report Restructuring of IDA Credit 2. Ethiopia: Compensation May 2, 1995 No -- -- -- for Expropriation and Extension of IDA Credits to Ethiopia 3. Tanzania: May 16, 1995 Yes No investigation Yes Eligibility Report Power VI Project 4. Brazil: Rondônia Natural June 16, 1995 Yes Investigation No Eligibility Report, Additional Resources Management Review Report, and Review Project of Progress in Implementation 5. Chile: Financing of November 17, 1995 No -- -- -- Hydroelectric Dams in the Bío-Bío River 6. Bangladesh: August 23, 1996 Yes No investigation Yes Eligibility Report, and Report Jamuna Multipurpose on Progress on Implementation Bridge Project of Action Plan 7. Paraguay and September 30, 1996 Yes Investigation No Eligibility Report and Review of Argentina: Yacyretá Present Project Problems and Hydroelectric Project Assessment of Action Plans (1996) 8. Bangladesh: Jute Sector November 13, 1996 Yes No investigation Yes Eligibility Report Adjustment Credit continued 1Normally, the Panel advises the Executive Directors and the President when it receives a Request for Inspection that it cannot process (as it did in the Requests regarding Chile: Bio-Bio River; India: NTPC, Second Request; Cameroon: Pipeline Project, Second Request; and Burundi: Public Works and Employment Creation Project). The Inspection Panel received a letter, dated August 27, 1999, also addressed to the President and the Executive Direc- tors of the World Bank, requesting for the second time the "installation of an Inspection Panel" to investigate the Itaparica Resettlement and Irrigation Project in Brazil. Since the Bank's loans for this project were then long closed, the Panel was precluded from processing this Request. Furthermore, as the Request had been already addressed to the President and Executive Directors, no action on the part of the Panel was necessary. However, some regard this extemporaneous request as a formal Request for Inspection that should be added to the Panel's records. Annexes 117 REQUEST (SHORT FORM) REQUEST REQUEST INSPECTION RECOMMENDATION RECEIVED REGISTERED PANEL APPROVED BY RECOMMENDATION THE BOARD PANEL'S ACTIVITY 9. Brazil: Itaparica March 12, 1997 Yes Investigation No Eligibility Report and Resettlement and Action Plan review Irrigation Project 10. India: NTPC Power May 1, 1997 Yes Investigation Yes Eligibility Report and Report Generation Project on Desk Investigation 11. India: April 2, 1998 Yes Investigation No Eligibility Report Ecodevelopment Project 12. Lesotho/South Africa: May 6, 1998 Yes No investigation Yes Eligibility Report Phase 1B of Lesotho Highlands Water Project (1998) 13. Nigeria: Lagos Drainage June 17, 1998 Yes No investigation Yes Eligibility Report and Sanitation Project 14. Brazil: Land Reform December 14, 1998 Yes No investigation Yes Eligibility Report Poverty Alleviation Project 15. Lesotho: Highlands April 26, 1999 Yes No investigation Yes Eligibility Report Water Project (1999) 16. China: Western Poverty June 18, 1999 Yes Investigation Yes Eligibility Report and Reduction Project Investigation Report 17. Argentina: July 26, 1999 Yes No investigation Yes Eligibility Report Special Structural Adjustment Loan 18. Brazil: Land Reform September 14, 1999 Yes No investigation Yes Eligibility Report Poverty Alleviation Project, Second Request 19. Kenya: Lake Victoria October 12, 1999 Yes Investigation Yes Eligibility Report and Environmental Investigation Report Management Project 20. Ecuador: Mining December 13, 1999 Yes Investigation Yes Eligibility Report and Development and Investigation Report Environmental Control Technical Assistance Project 21. India: NTPC Power November 27, 2000 No -- -- -- Generation Project, Second Request 22. Chad: Petroleum March 22, 2001 Yes Investigation Yes Eligibility Report and Development and Investigation Report Pipeline Project, Management of the Petroleum Economy Project, and Petroleum Sector Management Capacity Building Project 23. India: Coal Sector June 21, 2001 Yes Investigation Yes Eligibility Report and Environmental and Investigation Report Social Mitigation Project and Coal Sector Rehabilitation Project continued 118 The Inspection Panel Annual Report REQUEST (SHORT FORM) REQUEST REQUEST INSPECTION RECOMMENDATION RECEIVED REGISTERED PANEL APPROVED BY RECOMMENDATION THE BOARD PANEL'S ACTIVITY 24. Uganda: Third Power July 27, 2001 Yes Investigation Yes Eligibility Report and Project, Fourth Power Investigation Report Project, and proposed Bujagali Hydropower Project 25. Papua New Guinea: December 6, 2001 Yes No investigation Yes Eligibility Report Governance Promotion Adjustment Loan 26. Paraguay and May 17, 2002 Yes Investigation Yes Eligibility Report and Argentina: Reform Investigation Report Project for the Water and Telecommunication Sectors, SEGBA V Power Distribution Project (Yacyretá 2002) 27. Cameroon: Petroleum September 25, 2002 Yes Investigation Yes Eligibility Report and Development and Pipeline Investigation Report Project, and Petroleum Environment Capacity Enhancement Project 28. Philippines: Manila September 26, 2003 Yes No recommendation, Yes Eligibility Report Second Sewerage Project as the Requesters failed (MSSP) to satisfy a procedural criterion, that the Requesters had brought the subject matter to Management's attention and that, in the Requester's view, Management failed to respond adequately. 29. Cameroon: Petroleum November 26, 2003 No -- -- -- Development and Pipeline Project (not registered) 30. Mexico: Indigenous and January 26, 2004 Yes In fairness to all parties Yes Eligibility Report Community Biodiversity concerned, the Panel Project (COINBIO) could not take a position on whether the Request merits an investigation and awaits further developments. 31. Colombia: Cartagena April 20, 2004 Yes Investigation Yes Eligibility Report and Water Supply, Sewerage, Investigation Report and Environmental Management Project 32. India: Mumbai Urban April 28, 2004 Yes Investigation Yes Investigation Report completed Transport Project and submitted to the Board of Executive Directors 33. India: Mumbai Urban June 29, 2004 Yes Investigation as part of Yes Eligibility Report and Transport Project-- case 32, India: Mumbai Investigation Report Gazi Nagar Urban Transport Project completed as part of case 32, India: Mumbai Urban Transport Project continued Annexes 119 REQUEST (SHORT FORM) REQUEST REQUEST INSPECTION RECOMMENDATION RECEIVED REGISTERED PANEL APPROVED BY RECOMMENDATION THE BOARD PANEL'S ACTIVITY 34. Burundi: Public Works September 17, 2004 No -- -- -- and Employment Creation Project 35. Pakistan: National September 10, 2004 Yes Investigation Yes Investigation ongoing Drainage Program Project 36. Cambodia: Forest January 28, 2005 Yes Investigation Yes Investigation Report completed Concession Management and submitted to the Board of and Control Pilot Project Executive Directors 37. Democratic Republic November 19, 2005 Yes Investigation Yes Investigation ongoing of Congo: Transitional Support for Economic Recovery Credit Operation (TSERO) and Emergency Economic and Social Reunification Support Project (EESRSP) 38. Honduras: Land January 3, 2006 Yes Investigation Yes Investigation ongoing Administration Project 39. Romania: Mine Closure January 6, 2006 Yes At urging of Requesters, Yes Eligibility Report and Social Mitigation Panel refrained from Project issuing recommendation and awaits further development on matters raised in Request 40. Nigeria: West African April 27, 2006 Yes -- -- -- Gas Pipeline Project Source: Inspection Panel 120 The Inspection Panel Annual Report Table 2 ALLEGED VIOLATIONS OF POLICIES AND PROCEDURES PER REQUEST JUNE 30, 2006 DATE REQUEST RECEIVED REQUEST POLICIES AND PROCEDURES RAISED IN THE REQUEST FOR INSPECTION 1. 10/24/1994 Nepal: Arun III Proposed Economic evaluation of investment operations (OP/BP 10.04) Hydroelectric Project and Disclosure of operational information (BP 17.50) Restructuring of IDA Credit Outline for a project information document (BP 10.00, Annex A) Environmental assessment (OD 4.01) Involuntary resettlement (OD 4.30) Indigenous peoples (OD 4.20) 2. 5/2/1995 Ethiopia: Compensation for Dispute over defaults on external debt, expropriation, and breach Expropriation and Extension of contract (OMS 1.28) of IDA Credits to Ethiopia (not registered) 3. 5/16/1995 Tanzania: Power VI Project Article V Section 1(c), IDA Articles of Agreement Article V Section 1(d), IDA Articles of Agreement Article V Section 1(g), IDA Articles of Agreement Environmental aspects of Bank work (OMS 236) Environmental assessment (OD 4.01) 4. 6/16/1995 Brazil: Rondônia Natural Project supervision (OD 13.05) Resources Management Project Forestry policy (OP 4.36) Wildlands policy (OP 11.02) Indigenous peoples (OD 4.20) Involvement of NGOs in Bank-supported activities (OD 14.70) Project monitoring and evaluation (OD 10.70) Investment lending--identification to the Board presentation (BP 10.00) Suspension of disbursements (OD 13.40) Accounting, financial reporting, and auditing (OD 10.60) Procurement (OD 11.00) Use of consultants (OD 11.10) Borrower compliance with audit covenants (OD 13.10) 5. 11/17/1995 Chile: Financing of Environmental policy for dam and reservoir project, Hydroelectric Dams Annex B (OD 4.00) in the Bio-Bio River Indigenous peoples (OD 4.20) (not registered) Wildlands (OPN 11.02) Management of cultural property in Bank-financed projects (OPN 11.03) Involuntary resettlement (OD 4.30) Project supervision (OD 13.05) continued Annexes 121 DATE REQUEST RECEIVED REQUEST POLICIES AND PROCEDURES RAISED IN THE REQUEST FOR INSPECTION 6. 8/23/1996 Bangladesh: Jamuna Environmental assessment (OD 4.01) Multipurpose Bridge Project Involuntary resettlement (OD 4.30) Involvement of NGOs in Bank-supported activities (OD 14.70) 7. 9/30/1996 Paraguay and Argentina: Environmental policy for dam and reservoir projects Yacyretá Hydroelectric Project (OD 4.00, Annex B) Environmental assessment (OD 4.01) Indigenous peoples (OD 4.20) Involuntary resettlement (OD 4.30) Project monitoring and evaluation (OD 10.70) Project supervision (OD 13.05) Wildlands (OPN 11.02) Management of cultural property in Bank-financed projects (OPN 11.03) Environmental aspects of Bank work (OMS 2.36) Suspension of disbursements (OD 13.40) 8. 11/13/1996 Bangladesh: Jute Sector Adjustment lending policy (OD 8.60) Adjustment Credit Project supervision (OP 13.05) Suspension of disbursements (OP 13.40) 9. 3/12/1997 Brazil: Itaparica Resettlement Environmental policy for dam and reservoir projects and Irrigation Project (OD 4.00, Annex B) Environmental assessment (OD 4.01) Involuntary resettlement (OD 4.30) Indigenous peoples (OD 4.20) Project supervision (OD 13.05) 10. 5/1/1997 India: NTPC Power Economic evaluation of investment operations (OD 10.04) Generation Project Environmental assessment (OD 4.01) Involuntary resettlement (OD 4.30) Indigenous peoples (OD 4.20) Project supervision (OD 13.05) 11. 4/2/1998 India: Ecodevelopment Project Indigenous peoples (OD 4.20) Involuntary resettlement (OD 4.30) Forestry (OP 4.36) 12. 5/6/1998 Lesotho/South Africa: Environmental policy for dam and reservoir projects Phase 1B of Lesotho Highlands (OD 4.00, Annex B) Water Project Economic evaluation of investment operations (OD 10.04) Poverty alleviation (OD 4.15) Water resources and management (OP 4.07) 13. 6/17/1998 Nigeria: Lagos Drainage Involuntary resettlement (OD 4.30) and Sanitation Project Poverty alleviation (OD 4.15) Gender dimensions of development (OD 4.20) Project monitoring and evaluation (OD 10.70) Economic evaluation of investment operations (OP/BP 10.04) Article V, Section 1(g), IDA Articles of Agreement 14. 12/14/1998 Brazil: Land Reform Poverty Poverty alleviation (OD 4.15) Alleviation Project Disclosure of operational information (BP 17.50) Environmental assessment (OD 4.01) Involving NGOs in Bank operations (GP 14.70) 15. 4/26/1999 Lesotho: Disputes over defaults on external debt, expropriation, and breach Highlands Water Project of contract (OP/BP 7.40) Disclosure of operational information (BP 17.50) continued 122 The Inspection Panel Annual Report DATE REQUEST RECEIVED REQUEST POLICIES AND PROCEDURES RAISED IN THE REQUEST FOR INSPECTION 16. 6/18/1999 China: Western Poverty Disclosure of operational information (BP 17.50) Reduction Project Involuntary resettlement (OD 4.30) Environmental assessment (OD 4.01) Indigenous peoples (OD 4.20) Pest management (OP 4.09) Safety dams (OP/BP 4.37) Retroactive financing (OD 12.10) Investment lending (OD 10.00) 17. 7/26/1999 Argentina: Special Structural Project supervision (OD 13.05) Adjustment Loan Poverty alleviation (OD 4.15) Project monitoring and evaluation (OP/BP 10.70) Suspension of disbursements (OP/BP 13.40) Disclosure of operational information (BP 17.50) 18. 9/14/1999 Brazil: Land Reform Poverty alleviation (OD 4.15) Poverty Alleviation Project, Project supervision (OD 13.50) Second Request Disclosure of operational information (BP 17.50) 19. 10/12/1999 Kenya: Lake Victoria Environmental assessment (OD 4.01) Environmental Management Poverty alleviation (OD 4.15) Project Economic evaluation of investment projects (OP 10.04) Project supervision (OD 13.05) 20. 12/13/1999 Ecuador: Mining Development Environmental assessment (OD 4.01) and Environmental Control Wildlands (OPN 11.02) Technical Assistance Project Indigenous peoples (OD 4.20) Project supervision (OD 13.05) 21. 11/27/2000 India: NTPC Power Generation Involuntary resettlement (OD 4.30) Project, Second Request Project supervision (OD 13.05) (not registered) Environmental assessment (OD 4.01) 22. 3/22/2001 Chad: Petroleum Development Environmental assessment (OD 4.01) and Pipeline Project, Natural habitats (OP/BP 4.04) Management of the Pest management (OP 4.09) Petroleum Economy Project, Poverty alleviation (OD 4.15) and Petroleum Sector Indigenous peoples (OD 4.20) Management Capacity Forestry (OP 4.36) Building Project Disclosure of operational information (BP 17.50) Economic evaluation of investment operations (OP 10.04) Management of cultural property in Bank-financed projects (OPN 11.03) Project supervision (OD 13.05) 23. 6/21/2001 India: Coal Sector Environmental assessment (OD 4.01) Environmental and Social Indigenous peoples (OD 4.20) Mitigation Project and Coal Involuntary resettlement (OD 4.30) Sector Rehabilitation Project Disclosure of operational information (BP 17.50) Management of cultural property in Bank-financed projects (OPN 11.03) Project supervision (OD 13.05) continued Annexes 123 DATE REQUEST RECEIVED REQUEST POLICIES AND PROCEDURES RAISED IN THE REQUEST FOR INSPECTION 24. 7/27/2001 Uganda: Third Power Project, Environmental assessment (OD/OP 4.01) Fourth Power Project, and Natural habitats (OP 4.04) proposed Bujagali Hydropower Indigenous peoples (OD 4.20) Project Involuntary resettlement (OD 4.30) Safety of dams (OP 4.37) Management of cultural property of Bank-financed projects (OPN 11.03) Economic evaluation of investment operations (OP 10.04) Poverty alleviation (OD 4.15) Disclosure of operational information (BP 17.50) Project monitoring and evaluation (OD 10.70) Project supervision (OD 13.05) 25. 12/6/2001 Papua New Guinea: Forestry (OP 4.36) Governance Promotion Adjustment lending policy (OD 8.60) Adjustment Loan Project supervision (OD/OP/BP 13.05) 26. 5/17/2002 Paraguay: Reform Project Environmental policy for dam and reservoir projects for the Water and (OD 4.00, Annex B) Telecommunication Sectors Environmental assessment (OD 4.01) Argentina: SEGBA V Power Involuntary resettlement (OD 4.30) Distribution Project Project supervision (OD/OP/BP 13.05) Project monitoring and evaluation (OD 10.70) Suspension of disbursements (OD 13.40) 27. 9/25/2002 Cameroon: Petroleum Environmental assessment (OD 4.01) Development and Pipeline Natural habitats (OP/BP 4.04) Project, and Petroleum Poverty reduction (OD 4.15) Environment Capacity Indigenous peoples (OD 4.20) Enhancement Project Involuntary resettlement (OD 4.30) Disclosure of operational information (BP 17.50) Project supervision (OD 13.05) 28. 9/26/2003 Philippines: Manila Second Environmental assessment (OD 4.01) Sewerage Project Economic evaluation of investment operations (OP 10.04) Disclosure of operational information (BP 17.50) Project supervision (OD 13.05) 29. 11/26/2003 Cameroon: Petroleum Involuntary resettlement (OD 4.30) Development and Pipeline Project (not registered) 30. 1/26/2004 Mexico: Indigenous and Indigenous peoples (OD 4.20) Community Biodiversity Project Project supervision (OD/OP/BP 13.05) (COINBIO) 31. 4/20/2004 Colombia: Cartagena Environmental assessment (OD 4.01) Water Supply, Sewerage Natural habitats (OP/BP 4.04) and Environmental Water resources management (OD 4.07) Management Project Poverty reduction (OD 4.15) Indigenous peoples (OD 4.20) Financial management (OD 10.02) Economic evaluation of investment operations (OP 10.04) Project supervision (OD/OP/BP 13.05) 32. 4/28/2004 India: Mumbai Urban Environmental assessment (OP/BP 4.01) Transport Project Involuntary resettlement (OD 4.30) Disclosure of operational information (January 2002) Project supervision (OP/BP 13.05) continued 124 The Inspection Panel Annual Report DATE REQUEST RECEIVED REQUEST POLICIES AND PROCEDURES RAISED IN THE REQUEST FOR INSPECTION 33. 6/29/2004 India: Mumbai Urban Environmental assessment (OP/BP 4.01) Transport Project--Gazi Nagar Involuntary resettlement (OD 4.30) Disclosure of information (January 2002) Project supervision (OP/BP 13.05) 34. 9/17/2004 Burundi: Public Works and Project supervision (OP/BP 13.05) Employment Creation Project Procurement (OP/BP 11.00) (not registered) 35. 9/9/2004 Pakistan: National Drainage Environmental assessment (OD 4.01) Program Project Natural habitats (OP 4.04) Indigenous peoples (OD 4.20) Involuntary resettlement (OD 4.30) Management of cultural property in Bank-financed projects (OPN 11.03) 36. 1/28/2005 Cambodia: Forest Concession Environmental assessment (OP/BP 4.01) Management and Control Natural habitats-1995 (OP/BP 4.04) Pilot Project Management of cultural property in Bank-financed projects (OPN 11.03) Indigenous peoples (OD 4.20) Forestry (OP/BP 4.36) Technical assistance (OP/BP 8.40) Project supervision (OP/BP 13.05) Disclosure of operational information (BP 17.50) 37. 11/19/2005 Democratic Republic of Congo: Environmental assessment (OP/BP 4.01) Transitional Support for Poverty reduction (OD 4.15) Economic Recovery Credit Indigenous peoples (OD 4.20) Operation and Emergency Forestry (OP/BP 4.36) Economic and Social Emergency recovery assistance (OP/BP 8.50) Reunification Support Project Management of cultural property in Bank-financed projects (OPN 11.03) Project supervision (OP/BP 13.05) Disclosure of information (January 2002) 38. 1/3/2006 Honduras: Land Environmental assessment (OP/BP 4.01) Administration Project Natural habitats (OP/BP 4.04) Tribal people in Bank financed projects (OMS 2.34) Indigenous peoples (OD 4.20) Indigenous peoples (OP/BP 4.10) Disclosure of operational information (BP 17.50) 39. 1/6/2006 Romania: Mine Closure and Environmental assessment (OD 4.01) Social Mitigation Project Project supervision (OD/OP/BP 13.05) Disclosure of information (January 2002) 40. 4/27/2006 Nigeria: West African Environmental assessment (OP/BP 4.01) Gas Pipeline Project Involuntary resettlement (OP/BP 4.12) Poverty reduction (OD 4.15) Economic evaluation of investment operations (OP/BP 10.04) Project supervision (OP/BP 13.05) Disclosure of information (January 2002) Source: Inspection Panel Note: BP = Bank Procedure; OD = Operational Directive; OMS = Operational Manual Statement; OP = Operational Policy; OPN = Operational Policy Note. Annexes 125 FIGURE 2 POLICIES MOST OFTEN RAISED IN REQUESTS AS OF JUNE 30, 2006 26 24 22 20 18 16 14 12 10 8 6 4 2 0 t of tats ment erty emen estry Dams Peoples mation ities Prop Habi of gement Reduction For Assess Supervision tun Resettl Infor Evaluation tural Mana Safety Project e of Oppor Cul Natural Indigenous Poverty Pest onmental closur Involuntary Ecological stment Envir Dis Inve FIGURE 3 FINANCING FOR PROJECTS SUBJECT TO REQUESTS JUNE 30, 2006 16 IBRD­International Bank for 14 Reconstruction and Development 12 IDA­ International Development Association 10 IFC­International Finance Corporation 8 GEF­Global Environment Facility 6 4 2 0 IDA & IBRD IBRD IDA IBRD, IDA, IDA & IFC IFC* IDA & GEF GEF & IFC Source: Inspection Panel * The Panel's mandate does not cover IFC. However, in November 1995, the Panel received a Request regarding a project financed by IFC, and it forwarded the Request to the Bank's president. Thereafter, in 1999, the Bank established IFC's Compliance Advisor Ombudsman. 126 The Inspection Panel Annual Report FIGURE 4 PERCENTAGE OF REQUESTS RECEIVED PER REGION JUNE 30, 2006 Middle East and North Africa 0 cases: 0% East Asia and the Pacific Europe and Central Asia 4 cases: 10% 1 case: 3% Africa 13 cases: 32% South Asia 10 cases: 25% Latin America and the Caribbean 12 cases: 30% FIGURE 5 PANEL'S REQUEST RECORD AS OF JUNE 30, 2006 40 35 30 25 20 15 10 5 0 Formal Requests Requests Recommendations Investigations Investigations Received Registered Approved Recommended Approved Annexes 127 Geographical Distribution of Requests for INspection 128 The Inspection Panel Annual Report Annexes 129 annex 7 THE INSPECTION PANEL BUDGET JULY 1, 2005­JUNE 30, 2006 (THOUSANDS OF U.S. DOLLARS) Consultants* 646.0 Salaries** 1,006.8 Temporaries 40.9 Publications 75.5 Travel 387.5 Benefits 502.4 Communications & IT Services 100.7 Equipment & Building Services 3.2 Representation & Hospitality 11.4 Contractual Services 32.7 Other Expenses 3.2 Office Occupancy 166.6 Total Expenses 2,976.9 Current Budget 2,928.0 Note: Numbers may not add to totals because of rounding. * Includes Panel Members' fees. ** Includes Chairperson's Salary. 130 The Inspection Panel Annual Report