The Inter-American Development Bank (IDB) was established in 1959 and is “the main source of multilateral financing and expertise for sustainable development” in Latin America and in the Caribbean. The IDB is owned by 48 sovereign states, which are its shareholders and members. Among these 48 shareholders, 26 are eligible to receive loans from the IDB (Latin American and Caribbean countries) and 22 are not (Western Europe, United States, Canada, South Korea and Japan) 1 .
The IDB Group is composed of the Inter-American Development Bank, the Inter-American Investment Corporation (IIC) and the Multilateral Investment Fund (MIF). According to its mandate, the IDB is meant to promote environmental sustainability through the process of environmental Impact Assessments (eIAs) that are prepared by the borrower/client for projects with potentially substantial environmental impacts 2 . In February 2010, the Board of the Bank approved the policy establishing the independent consultation and investigation mechanism (mici under its Spanish acronym), which replaced the former Independent Investigation Mechanism (IIM) 3 and covers all operations financed by the IDB, from the date of their approval up to 24 months after the last disbursement by the Bank. On December 17, 2014, the IDB’s Board approved the new Policy of the MICI 4 .The MICI provides for two different procedures : a consultation phase and a compliance review phase.
Although it will not be looked at in this guide, the Bank has other specialized offices that can address other issues:
- Fraud, Corruption, and Prohibited Practices (Office of institutional Integrity)
- Fraud and Prohibited Practices involving Bank staff (Office of Ethics)
- Process for the procurement and hiring of consultants (Office of Procurement and Financial Management for IDB-Financed Projects)
- Requests for information unrelated to the mandate of the MICI (Public Information Center)
The independent consultation and investigation mechanism (MICI)
What are the issues that can be dealt with?
The MICI applies to all “Relevant Operational Policies” of the Bank, including the following: 5
- Access to information (OP-102);
- environment and Safeguards Compliance (OP-703,including environmental assessment requirements, consultation with affected parties, supervision and compliance, natural habitats and cultural sites protection, pollution prevention);
- Disaster Risk Management Policy (OP-704);
- Public Utilities (OP-708)
- Involuntary Resettlement (OP-710)
- Gender equality in Development (OP-761)
- Indigenous Peoples (OP-765)
The MICI will be applicable to other Relevant Operational Policies approved following the entry into effect of the 2014 Policy and explicitly designated by the Board as falling within the purview of the MICI.
Who can file a request?
A request may be filed by 6 :
- Any group of two or more people residing in the country where a Bank-Financed Operation is implemented who are or anticipate being affected by such Operation;
- A representative residing in the country where the Bank-Financed Operation is implemented or in another country, provided he or she indicates the persons on whose behalf he or she is acting and provides written evidence of the authority to represent them.
Under what conditions?
There is no particular format to follow to file a request. However, anonymous requests will not be accepted; although confidentiality will be respected if requested. 7
The Bank will not consider a request eligible if 8 :
- the matter has already been reviewed by the MICI, unless justified by new evidence or circumstances not available at the time of the initial request,
- the matter relates to procurement decisions or processes, internal finance or administration, complaints of corrupt practices, considerations of ethics or fraud, and specific actions by Bank employees. (Requests relating to these issues will be forwarded to the relevant IDB office),
- the request raises issues that are under arbitral or judicial review in an IDB member country,
- the request related to operations that have not yet been approved by the Board or the President,
- the request was filed more than 24 months after the last disbursement of the bank.
The fact that a Consultation phase or a Compliance review phase is initiated or ongoing will not halt the processing, execution of or disbursements for a project funded by the IDB. 9 If the MICI Director determines that serious irreparable harm may result from the execution of a project, he may recommend to the Board that execution be suspended.
Process and Outcome
MICI Process Flowchart
After receiving the request, the MICI will verify that the request contains all required information and is not ineligible in maximum 5 working days. If the request can be moved forward with, the MICI will issue a notice of registration and request a response from Management, which has 21 business days to do so. Upon reception of the Management’s response, the MICI will have 21 working days to determine the request’s eligibility.
The mechanism then provides for two distinct phases:
- Consultation phase
- Compliance review phase
Requesters may choose the Consultation phase, the Compliance review phase, or both. If both phases are requested, processing will begin with the Consultation phase.
The Consultation phase provides an opportunity to address the issues raised in the request in a flexible and consensus-based approach, using methods including but not limited to information gathering, joint fact-finding, facilitation, consultation, negotiation, and mediation. Participation in the Consultation phase is voluntary and requires the consent of all Parties. Any of the Parties may unilaterally withdraw from the Consultation phase at any time.
The Consultation phase begins with the assessment stage, which aims at understanding the harm related to potential policy non-compliance, identifying and gathering information, determining whether the Parties would agree to seek a resolution using consultation methods, and if so, determining the best process for addressing any policy non-compliance. The assessment stage, which may include meetings with relevant stakeholders and visits to the project site, will conclude whether a Consultation phase process should be conducted within 40 business days after the declaration of eligibility. After the assessment, the MICI will either:
- Work with the Parties to reach an explicit agreement to move forward with the Consultation Phase process, establishing a method for addressing the issues raised, which should include an agreed course of action, consultation method and time line; or
- forward the request to the Compliance Review Phase, if it had been requested. If not, the MICI process will be declared concluded.
The results of the assessment will be set forth in an assessment report. The MICI will complete the Consultation Phase process within a maximum period of 12 calendar months from the date of issue of the assessment report, extensible if deemed necessary to reach a consensus-based resolution to the issues raised.
Upon completion of the Consultation Phase process, the MICI will distribute a results report to the Management and to the Board for consideration, after which the report will be made available to the requesters and published on the Public Registry. When applicable, the MICI will develop, in consultation with the Parties, a monitoring plan and time frame for the agreement reached. The monitoring plan may not exceed 5 years of duration.
Compliance review phase
The objective of the Compliance Review Phase is to investigate allegations of non-compliance with a Relevant Operational Policy in operations financed by the IDB and of harm caused to the Requesters.
The Compliance Review process is fact-finding in nature. It is not a judicial or adjudication process. The MICI does not have a mandate to investigate actions of governments, public entities, local authorities, Borrowers, executing Agencies or other lenders, sponsors, or investors in connection with the Bank-Financed Operation.
The Compliance Review process begins with the Compliance Review Phase Coordinator drafting, within 21 business days and in consultation with Management and the Requesters, the recommendation and Terms of Reference (TOR) for the investigation. The TOR will include, but not be limited to, the objectives of the investigation, the items to be investigated, a description of the Bank-Financed Operation, a proposed timeline and budget for the investigation, and anticipated use of consultants. The Management and the Requesters will each have up to 15 business days to comment on the TOR. The Board then considers these comments and the MICI’s recommendation on whether or not to conduct a Compliance Review investigation.
Upon approval of the Compliance Review, the MICI Director, in consultation with the Compliance Review Phase Coordinator, will identify and hire two independent experts to form the Panel that will conduct the Compliance Review. The Panel will be made up of the Compliance Review Phase Coordinator, who will act as Panel Chair, and two additional members who will be selected from the Roster based on the experience required in each case.
The time required to conduct the Compliance Review will depend on the complexity and scope of the Bank-Financed Operation, and on the number of Relevant Operational Policies involved. However, a maximum term will be defined in the TOR, and the MICI will attempt to complete the investigation within a maximum term of six calendar months as of formation of the Panel. Upon completion of its investigation, the MICI will issue a draft report including a review of its main findings of fact and recommendations, which the Management and Requesters will have 21 days to comment on. The contents of the final report are however the exclusive decision of the MICI.
The Compliance Review report will include the Panel’s findings as to whether (and if so, how and why) an action or omission by the Bank relating to a Bank-Financed Operation resulted in the failure to comply with one or more Relevant Operational Policies, and in Harm to the Requesters. It should also include a description of the Compliance Review Phase methodology used, and should provide the factual and technical basis for a decision by the Board on preventative or corrective action. The Board will make the final decision, and can demand that an action plan be prepared by the Management.
When applicable, the MICI will monitor implementation of any action plans or remedial or corrective actions agreed upon as a result of a Compliance Review, for a maximum of 5 years as of the date on which the Board approves the Management’s action plan.
As of March 2021, the MICI had examined 165 requests since 2010 11 .
Civil society organisations continue to work towards democratizing the bank and ensuring it is accountable. In particular, groups are calling for timely access to information on the bank’s operations (including to be informed prior to the approval of the projects), for public participation in the design, implementation, monitoring and implementation of the bank’s projects and for the bank to effectively prevent and mitigate the social and enviromental impacts of the bank’s operations. 12