MICI (IDB)

The Independent Consultation and Investigation Mechanism of the Interamerican Development Bank

On this page you will find:
– a brief history
– an overview of some key mandate and procedure points of the current version of the MICI:

1- The complaint
– Who can submit a complaint?
– Are there some kinds of complaints which are excluded?
– How must complaints be submitted?
2- Choice of the procedure and articulation between the consultation and compliance review procedures
3- Registration and eligibility
4- The Consultation Phase
Purpose of the procedure
Principles and methods
– Procedure and outcome
– Monitoring
5- The Compliance Review
– Purpose of the procedure
– Rules which violation you can complain about
– Procedure
– Outcome
– Monitoring

– direct links to the relevant MICI webpages

 

« The MICI’s objectives are to:
a. Provide a mechanism and process independent of Management in order to investigate allegations by Requesters of Harm produced by the Bank’s failure to comply with its Relevant Operational Policies in Bank-Financed Operations;
b. Provide information to the Board regarding such investigations; and
c. Be a last-resort mechanism for addressing the concerns of Requesters, after reasonable attempts to bring such allegations to the attention of Management have been made. » (*)

A brief history of IDB’s grievance mechanism

In December 1994, following the example of the World Bank’s Inspection Panel, the Interamerican Bank’s Board of Directors created an Independent Investigation Mechanism which could « apply in cases of
complaints that the Bank has failed in the design, analysis or implementation of proposed or ongoing operations to follow its own established operational policies, or norms formally adopted for the execution of those policies (including enforcement of compliance with borrower’s obligations required by such policies and/or norms), when material adverse effects have or might reasonably be expected to occur as a result of such failure by the Bank. » (1) Between 1994 and 2010, only a few requests reached the stage of a compliance investigation, including the infamous Yacyretá case (see the database of cases). Access to the IIM was indeed very difficult and the Board not really willing to have an effective mechanism.
The IIM was revised in 2010 and transformed into the MICI, for Mecanismo Independiente de Consulta e Investigación – Independent Consultation and Investigation Mechanism (2). Compared with other international accountability mechanisms of other multilateral development bank, the MICI was, under the 2010 Policy, the most restrictive and has an history of mutual mistrust with the Board, resulting in the Board not authorizing recommended investigations or not approving the final investigation report (3).

The latest version to date: the 2015 MICI policies

The 2010 Policy was revised in 2014 and amended in 2015:  since 1st January 2016, within the IDB Group, the IDB focuses on sovereign-guaranteed projects while private project are entrusted to a consolidated Interamerican Investment Corporation (ICC), recently renamed IDB Invest. The effective commencement of the ICC’s operations on 1st January 2016 has resulted in increased complexity as regards the MICI rules or procedure.
The MICI IDB Policy of 17 December 2014 replaced the 2010 MICI Policy. Because of the take-off of the ICC, the Board adopted a second MICI Policy on 15 December 2015, that applies to the ICC’s operations, and amended the 2014 MICI IDB Policy. Thus, the MICI is bound by two sets of rules of procedure, depending on whether the case is related to a project supported by the IDB Invest or the IDB. A preamble was added in the MICI IDB Policy to organize how the cases related to private projects that were managed by IDB should be handled. The provisions of the two policies mirror each other and the procedure is the same whether the case is related to a sovereign-guaranteed project or a private project.
The MICI remains the grievance mechanism with the most restrictive access conditions, in particular because no matter what kind of procedure the requesters seek (problem-solving or compliance review), complaints must allege that the Bank has breached applicable standards. Moreover, the Para. 37i) clause of the 2010 MICI Policy, under which were excluded « Requests that raise issues under arbitral or judicial review by national, supranational or similar bodies », has been partly maintained in Para. 19d) of the 2015 IDB and ICC Policies: are excluded « Particular issues or matters raised in a Request that are under arbitral or judicial review in an IDB member country. If, after determination of eligibility, the MICI becomes aware of the existence of arbitral or judicial proceedings, the MICI Director will be responsible for assessing the implications and submitting a recommendation on whether or not to move forward with the process to the Board for consideration by Short Procedure ». This clause had generated considerable difficulties as regards the 2010 MICI Policy and NGOs and experts advised to remove it in the 2014 review. This advice was not followed.

Though the MICI IDB Policy and MICI ICC Policy’s procedures are the same, applicable standards are not:

– The IDB must inter alia apply the Access to Information Policy, the Environment and Safeguards Compliance Policy, the Natural Disaster Risk Management Policy, the Public Utilities Policy, the Operational Policy on Involuntary Resettlement, the Operational Policy on Gender Equality in Development and the Operational Policy on Indigenous Peoples. Other sectoral policies can be found here.

– IDB Invest (MICI ICC Policy) must apply the Disclosure of Information Policy and the ICC Environmental and Social Policy.

1- the Complaint

• Who can submit a complaint?

You can submit a complaint if:
– you belong to any group of two or more people in a borrowing country residing in the country where a Bank-Financed Operation is implemented and who are – or anticipate being – affected by such Operation;
– or, you are a representative of affected people residing in the country where the Bank [or ICC]-Financed Operation is implemented or in another country.
If a complaint is made through a representative, it must clearly identify on whose behalf the complaint is made and provide written evidence of the authority to represent such people.
The identity of complainants will be kept confidential if requested, but anonymous complaints are not accepted. (paras. 14c), 15 and 19b))

• Are there some kinds of complaints which are excluded?

Yes.
Para. 19 of the MICI IDB and ICC Policies provide that:
« Neither the Consultation Phase nor the Compliance Review Phase will be applied to:
a. Considerations of ethics or fraud, specific actions by Bank [or ICC] employees, nonoperational matters such as internal finance or administration, complaints of corrupt practices, and procurement decisions or processes.
[→ Complaints about specific acts of employees of the IDB Group must be submitted to the Ethics Office; about prohibited practices or corruption to the Institutional Integrity Office; about Procurement and consultant contracting issues to the Procurement Office IDB for sovereign-guaranteed projects or to IDB Invest for private projects.]
b. Any Request that is anonymous, or on its face is without substance;
c. Particular issues or matters that have already been reviewed by the MICI, unless justified by new evidence or circumstances not available at the time of the initial Request;
d. Particular issues or matters raised in a Request that are under arbitral or judicial review in an IDB member country. If, after determination of eligibility, the MICI becomes aware of the existence of arbitral or judicial proceedings, the MICI Director will be responsible for assessing the implications and submitting a recommendation on whether or not to move forward with the process to the Board for consideration by Short Procedure;
e. Requests related to operations that have not yet been approved by the Board, the President, (or the Donors Committee). When receiving Requests related to this exclusion, the MICI Director will forward the Request to Management, and record the referral in the Public Registry. During the operation’s preparation, Management will take the Request into account and inform the MICI Director of its response. In the event that the operation is subsequently submitted for consideration, the project document will include a summary of the Request, with Management’s response and any action taken in regard to it; or
f. Requests that are filed more than 24 months after the last disbursement of the relevant Bank [or ICC]-Financed Operation. »

Whether the complaint might be excluded on these grounds may be quite difficult to assess, in particular the para 19 d) and e) exclusions.

One must also note that although not mentioned in Para. 19, in order to be eligible the complaint must describe the way the requesters « have made [efforts] to address the issues in the Request with Management (…) or [provide] an explanation of why contacting Management was not possible. » (para. 22d))

• How must complaints be submitted?

Requests are submitted in writing, in any language. The IDB’s official languages are Spanish, English, Portuguese, and French so the processing of the request may take more time because of translation considerations.

It can be sent by postal mail to:
Independent Consultation and Investigation Mechanism
1300 New York Av., NW
Washington, D.C. 20577, USA
or by e-mail at: mecanismo@iadb.org
or by Fax at +1 (202) 312 4057

Requests can also be sent by mail to any of the IDB Group’s country offices in the region: IDB Country Offices, addressed “To the attention of the MICI Office”.

If you want additional information, you can either visit the MICI website or phone +1 (202) 623 3952

Requests must include (para. 14):
« a. The name, address, and other contact information of the Requesters;
b. When a Request is made through a representative, it must clearly identify the people on whose behalf the Request is made and provide written evidence of the authority to represent the Requesters;
c. An indication of whether the Requesters wish to maintain their identity confidential and the reasons why;
d. A description of the Bank [or ICC]-Financed Operation and the country where it is implemented;
e. An allegation that the Bank failed to correctly apply one or more of its Relevant Operational Policies;
f. A clear explanation of the alleged Harm and its relation to the noncompliance of the Relevant Operational Policy in a Bank [or ICC]-Financed Operation, if known;
g. A description of the efforts made by or on behalf of the Requesters to address the issues in the Request with Management, and the results of those efforts; and
h. A statement as to whether the Requesters wish to use the Consultation Phase, the Compliance Review Phase, or both, or to request further information. »

2- Choice of the procedure and articulation between the consultation and compliance review procedures

Para. 17 of the MICI IDB and ICC Policies provides that:
« a. Requesters may choose: (i) the Consultation Phase; (ii) the Compliance Review Phase; or (iii) both. When Requesters choose both phases, processing will be sequential and will begin with the Consultation Phase.
b. Requesters may opt out of the Consultation Phase at any time during the process. If they had also chosen the Compliance Review Phase, it will then be initiated.
[→ this does mean that when requesters have opted for a consultation phase only, if it is unsuccessful there will be no compliance review, even in cases where there are serious hints of breaches of applicable standards]
It will not be possible to reopen the Consultation Phase once the Compliance Review Phase has begun.
Requesters may opt out of the Compliance Review Phase, but it will be the responsibility of the MICI Director to assess the relevance of continuing and to submit a recommendation on whether or not to continue with the process to the Board for consideration by Short Procedure. »

3- Registration and eligibility

Within 5 business days of the receipt of the request, the MICI Director checks whether the compliant includes all required information and does not fall at first glance into a category of Para. 19 exclusions.
Please note that « The fact that a Consultation Phase or Compliance Review Phase is initiated and ongoing does not halt the processing, execution, or disbursements of an ongoing Bank [or ICC]-Financed Operation » (para. 18.) If there is not enough information, the MICI Director asks the requesters for additional information, that must be provided within 10 business days. If the request clearly fall into an exclusion of Para. 19, the request is not registered. If the request has all necessary information and does not prima facie (at first glance) enter an exclusion clause, it is registered.
When a notice of registration is issued, the MICI communicates the request to Management and Management provides a written response within 21 business days. Management can request a temporary suspension of the eligibility determination process in order to make corrections to the Bank-Financed Operation (para. 23 c).)

The MICI then assesses the eligibility of the request within 21 business days of the receipt of Management Response. It first checks whether there is a cause for exclusion with regard to the criteria of Para. 19. If Management has requested a suspension of the eligibility determination, « the MICI Director may grant a term of suspension of up to 45 Business Days as of the date of receipt of the Response by Management if, and only if, there is a specific plan to make corrections and a proposed timeline for carrying out the activities. The MICI will notify the Requesters as soon as it decides to grant the suspension » (para. 23 c), emphasis added.)
The MICI considers « all relevant information available at that time, including Management’s Response, project documentation, and the information provided by the Requesters. It may also require an onsite visit to the country where the Bank-Financed Operation is being implemented. »

At the end of the eligibility process, the MICI issues an Eligibility Memorandum which states whether the Request is eligible for the Consultation Phase, Compliance Review Phase, both, or neither. If the request is eligible, the Consultation phase begins, unless the requesters only asked for a compliance review, in which case the compliance review begins. If the complaint is ineligible, the procedure is closed.

4- The CONSULTATION phase

• Purpose of the procedure

« The objective of the Consultation Phase is to provide an opportunity to the Parties to address the issues raised by the Requesters related to Harm caused by the failure of the Bank to comply with one or more of its Relevant Operational Policies in the context of a Bank [or ICC]-Financed Operation. The Consultation Phase provides an approach that ensures unbiased, equitable treatment for all the Parties. There is no guarantee that a Consultation Phase process will resolve all the concerns to the satisfaction of the Parties » (para. 24.)

• Principles and methods

The consultation phase is a voluntary process « tailored to the specific issues raised in the Request related to policy noncompliance » (para. 25.) It may consist in information gathering, joint fact-finding, facilitation, consultation, negotiation, and mediation. Any party to the consultation phase can withdraw at any time and the withdrawal ends the consultation phase.

• Procedure and outcome

As soon as the request is declared eligible, the MICI makes an assessment within 40 business days, « with the objective of understanding the Harm related to potential policy noncompliance raised by the Request, identifying and gathering information from the Requesters, Management, and other stakeholders, determining whether the Parties would agree to seek a resolution using consultation methods, and if so, the best process for addressing any policy noncompliance » (para. 27.) Such assessment may consist in desk review of IDB/ICC documents;site visits; and meetings with the requesters, Management, the executing agency of the project, the private client, NGOs and other stakeholders.
« Based on the results of the assessment, the MICI will:
a. 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; or
b. Determine that a collaborative resolution is not possible, in which case the Request will be forwarded to the Compliance Review Phase, if the Requesters have asked to pursue that phase. If they have not, the MICI process will be declared concluded » (para. 29).
At the end of the assessment stage, the MICI issues an Assessment Report.

When a consultation phase can proceed, it is supposed to be completed within 12 month after the issuance of the Assessment Report. It is important to note that under para. 32: « The Consultation Phase will not support agreements that are contrary to Bank policies or its code of ethics, or that would violate domestic laws of the Parties, or international law. The Consultation Phase itself does not result in award of compensation or similar benefits. »
When the consultation phase is completed, the MICI drafts a Consultation Phase Report, distributed to the Board « for consideration by Short Procedure and to Management for information » (para. 33.) and is then made publicly available. The short procedure is an abbreviated Board approval procedure, as defined by the Regulations of the Board, under which the MICI may submit matters for the Board’s consideration on a non-objection basis.

• Monitoring

When relevant, the MICI develops in consultation with the parties a monitoring plan and a time-frame. « The monitoring plan will be considered by the Board (…) under Short Procedure, and its duration, not to exceed five years from the date the agreement was signed, will be determined on a case-by-case basis consistent with the terms of the agreement (…) The MICI will submit a monitoring report to the Board (…) for information at least annually (…). The monitoring plan will include:
a. That there is direct or outside monitoring of any agreement reached by the Parties;
b. That there are adequate measures to determine whether such agreement is being implemented appropriately » (para. 35.)

5- The Compliance Review

• Purpose of the compliance review

« 36. The purpose of the Compliance Review Phase is to impartially and objectively investigate allegations by Requesters that the Bank has failed to comply with its Relevant Operational Policies and has caused Harm to the Requesters.
37. The Compliance Review process is fact-finding in nature. It is not a judicial process and is not designed to establish guilt or innocence, or to adjudicate fault or apportion blame among the various Parties involved. The MICI only has a mandate to investigate allegations of noncompliance with Relevant Operational Policies in Bank [or ICC]-Financed Operations. It 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 [or ICC]-Financed Operation » (paras 36-37.)

• Rules which violation you can complain about

Though the MICI IDB Policy and MICI ICC Policy’s procedures are the same, applicable standards are not.

The IDB must inter alia apply the Access to Information Policy, the Environment and Safeguards Compliance Policy, the Natural Disaster Risk Management Policy, the Public Utilities Policy, the Operational Policy on Involuntary Resettlement, the Operational Policy on Gender Equality in Development and the Operational Policy on Indigenous Peoples. Other sectoral policies can be found here.

 IDB Invest (MICI ICC Policy) must apply the Disclosure of Information Policy and the ICC Environmental and Social Policy.

In fact, in the current version of applicable texts, the discrepancy between standards applicable to IDB-supported projects and ICC-supported projects is not as large as it may seem: under para. 2 of the ICC Environmental and Social Sustainability Policy:  “The IIC assesses potential environmental and social risks and impacts of all proposed investments for compliance with host country laws and regulations and this Sustainability Policy and associated standards and guidelines prior to final approval thereof. These standards (see section VI, paragraph 1) include the IDB Environment and Safeguards Compliance Policy, other IDB safeguard policies and sector guidelines, the Performance Standards (PS) on Environmental and Social Sustainability of the International Finance Corporation (IFC), and the World Bank Group/IFC Environmental Health and Safety (EHS) Guidelines (including both General EHS guidelines and Industry Sector EHS Guidelines). Any subsequent revisions to those standards, policies and guidelines will likewise be incorporated into this Sustainability Policy, unless otherwise provided for by the IIC’s Board of Executive Directors.”

• Procedure

Within 21 business days of the transfer of the case to the compliance review procedure, the Compliance Review Phase Coordinator drafts a recommendation to proceed with a compliance review and the Terms of Reference (TOR) of the review, in consultation with the requesters and Management. The TOR includes a a description of the project at issue, time-frame, a budget, the purpose of the investigation and which issues are going to be investigated (paras. 38-39.) The MICI then sends the TOR to Management and the requesters, who can comment it within 15 business days.

When the MICI receives the comments of the requesters and Management, or when the 15 day time-span has expired, is submits to the Board its recommendation to on whether or not to conduct a Compliance Review investigation (para. 41.) This means that even if the requesters have requested only a compliance review and the complaint is eligible, the MICI may decide that it won’t investigate the case. The recommendation is considered by the Board by short procedure (non-objection basis.)

When the investigations has the Boards’ green lights, the MICI sets up a team composed of the Compliance Review Phase Coordinator and two hired independent experts chosen among the Roster of experts of the MICI.

The investigation is  supposed to be completed within 6 month after the compliance review team is created.  The MICI IDB and ICC Policies do not specify which elements a compliance review must include, bu the wording suggest it includes site visits (para 43 b), and desk review and interviews of Management’s staff (para. 43 d.) The compliance review team must communicate regularly wit the requesters and Management.

Outcome

In the compliance review phase, the MICI has both a fact-finding mandate and a recommendation mandate, which means it proposes remedial actions to the breaches of applicable standards it may find.

When the investigation is completed, the MICI issues a draft report which is sent for comment to Management and the requesters, within 21 business days. « The MICI (…) consider[s] the comments for its final report, but the contents of the final report are the exclusive decision of the MICI, and the report should remain strictly impartial and objective » (para. 44.)

The Compliance Review Report is sent to the Board within 21 business days of the receipt of Management’s and the requesters’ comments. It includes « the Panel’s findings as to whether (and if so, how and why) an action or omission by the Bank [or ICC] relating to a Bank [or ICC]-Financed Operation resulted in the failure to comply with one or more Relevant Operational Policies (indicating the Policy in question and a description of the noncompliance), and in Harm to the Requesters. The report should also include a description of the Compliance Review Phase methodology used for determining findings of Harm and how it is linked to the noncompliance of one or more Relevant Operational Policies. The MICI may also provide its recommendations, views, or observations on findings or systemic issues relating to Relevant Operational Policy noncompliance (para. 45.) The Final Report, to which are attached the requesters’ and Managements’ comments, is considered by the Board under the Standard Procedure. It is the Board who decides on the necessary remedial actions. If relevant, the Board instructs Management to develop an action plan, in consultation with the MICI (para. 47.)
The Final Report and Management action plan if there is one are communicated to the requesters and made publicly available on the MICI’s website.

• Monitoring

The MICI is responsible for the monitoring of any remedial action or Management action plan approved by the Board (para. 48.) The duration of the monitoring is decided by the Board on a case-by-case basis and lasts 5 years at most.The MICI writes at least annually a monitoring report, which is available to the public.

Links to MICI-related pages

The MICI website
The 2015 Policy of the Independent Consultation and Investigation Mechanism of the IDB
The  2015 Policy of the Independent Consultation and Investigation Mechanism of ICC (IDB-Invest)
IDB Operational Policies
IDB-Invest Operational Policies

 


Notes

 (*) Para. 5 of the 2015 Policy of the Independent Consultation and Investigation Mechanism of the IDB; the same wording is used in the 2015 Policy of the Independent Consultation and Investigation Mechanism of ICC (IDB-Invest), except that the MICI "Provide[s] a mechanism and process independent of Management in order to investigate allegations by Requesters of Harm produced by the IIC’s failure to comply with its Relevant Operational Policies in IIC-Financed Operation."

 (1) Para. 1.1 of the 1994 Policy of the The Independent Investigation Mechanism. 

 (2) 2010 Policy Establishing the Independent Consultation and Investigation Mechanism, 17 February 2010.

 (3) On this, see Walter Leal, Angel René Rios, Accountability Issues in International Development Projects, Frankfurt am Main: Peter Lang (2007).