Tag Archive for: IFIs

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IDB: the president was dismissed and the possibility opens for a Latin American woman

On Monday, September 26, following the recommendations of the IDB’s Board of Executive Directors, the Board of Governors decreed the termination of Claver-Carone’s functions as President of the Bank after the violation of various ethical standards of the institution, which marked the opening of a period of 45 days for the countries to propose their candidatures. During this period, the executive vice president, Reina Irene Mejía Chacón, will act as president under the direction of the Executive Board.

“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”.

Two years ago, in October 2020, Donald Trump promoted the American Mauricio Claver-Carone to the presidency of the IDB. The context was advantageous for Washington as it was the first American presidency since the organization’s creation.

It should be remembered that although the IDB Constitutive Agreement does not establish any conditions in relation to the nationality of the person who should hold the presidency, there is an unwritten rule since its very creation by which the organization must be directed by a person from the region. It was even one of the conditions for which it was finally accepted that the Bank’s headquarters be in Washington DC.

In terms of geopolitics, this strategy constituted the IDB as a vehicle through which the United States could increase its influence in the Latin American region and achieve a balance of institutional power: it could discern regarding the granting and destination of credits by the institution and thus dissipate the presence of other powers in the region, as is the case of the Chinese giant.

The origins of the Claver-Carone impeachment

The Board of Governors’ decision dates back to an anonymous misconduct complaint filed against Claver-Carone. From this, the board hired the legal firm Davis Polk to investigate the facts. As a result of the results of the investigation, the decision was made to dismiss the leader of the institution. Claver-Carone is accused of having maintained a romantic relationship with an employee and of having benefited her financially, which implies the violation of several internal ethical standards of the agency, while the IDB prohibits intimate relationships of superior personnel with direct dependents. The complaint was aggravated by Claver-Carone’s refusal to cooperate fully with the investigation and by creating a climate of fear of retaliation among Bank staff.

In this way, the deficit of legitimacy that accompanied the origins of the Claver-Carone presidency, was combined with a deficit of legitimacy, and today they lead to a crisis of leadership.

In this context, while waiting for the candidacy proposals for the presidency of the IDB, it is worth asking what are the alternatives at the regional and institutional level?

In terms of regionalism, this is an excellent opportunity to renew the (deteriorated) intra-regional dialogue in Latin America and the Caribbean and deepen consensus-building practices. In order for the region to obtain an advantage in the presidential elections of the international organization, it should achieve consensus and convergence when choosing candidates. In this way, it would prevent a repetition of the 2020 scenario where having offered several candidacies eroded the chances of winning the elections.

In particular, Brazil could take advantage of this scenario to renew its regional leadership role, as it is one of the Bank’s largest shareholders along with Argentina and the United States, together with almost 53% of the voting power. In any case, the country is currently immersed in the campaign for the presidential elections, the result of which may influence the position it adopts regarding the transition in the IDB.

In institutional terms, it is an opportunity to renew the strategies through which the institution promotes its main objective: to achieve the development of Latin America and the Caribbean by improving the quality of life, reducing poverty and inequality. In this sense, participation in the IDB should encourage regional integration in Latin America and the Caribbean and allow the development of the Bank as a bridge between the region and the world. Increasing regionalism and the participation of the countries that make up the region would strengthen the development paths and the insertion of Latin America and the Caribbean in the international context. In addition, it would allow the IDB to stand out as a Bank, not pro-American or pro-Chinese, but pro-Latin American, allowing a convergence between globalization and regionalization when it comes to pursuing development.

Finally, in terms of the qualities that the person designated for the presidency of the IDB should have, this is a great opportunity for a Latin American woman to take charge of the leadership of the institution.

In fact, the names of three Latin American women are beginning to resonate as potential candidates. Among them: Michelle Bachelet, former president of Chile, Laura Chinchilla, former president of Costa Rica; and Alicia Bárcena, head of the Economic Commission for Latin America and the Caribbean (ECLAC).

In this sense, some aspects are key: 1) that the person has outstanding training and experience and an effective modernization proposal for the Bank with an emphasis on social and environmental issues; 2) to adopt a clear and express commitment to multilateralism and the vindication of the legitimacy of the presidential position; and 3) that it complies with transparency, accountability and the participation of civil society in the actions of the Institution.

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Author

Victoria Marquez

Contact

Gonzalo Roza – gon.roza@fundeps.org

 

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Argentina getting closer to the BRICS?

After receiving the support of the Chinese and Indian foreign ministers, Argentina is getting closer to becoming a member of the BRICS group – made up of Brazil, Russia, India, China, and South Africa. For Argentina it could represent an opportunity taking into account the current situation in which our country finds itself in terms of external restrictions and financing deficit. However, it is also worth questioning what other implications this union could bring about.

“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”.

On July 8, Argentina took another step towards its rapprochement as a full member of the BRICS group; The event took place after Chinese Foreign Minister Wang Yi confirmed China’s support for Argentina to join the bloc. The meeting between the representatives of both countries took place in Bali, Indonesia, where the G20 Foreign Ministers meeting took place. In it, Foreign Minister Santiago Cafiero showed his interest in approaching the BRICS, highlighting the need to deepen multilateralism to accelerate the conclusion of agreements that are beneficial both for the region and for our country. Currently, the rotating presidency of the group is in charge of China, so its support and commitment to those countries that intend to join the bloc is essential. More recently, during his visit to Argentina, the Indian foreign minister, Subrahmanyam Jaishankar, ratified his support for Argentina’s advance towards the bloc. For Argentina, the incorporation into a group of such magnitudes represents a very tempting opportunity in view of the search for new commercial partners. But, what are the BRICS, and what would joining them mean for Argentina?

The term refers to the block made up of Brazil, Russia, India, China and South Africa. Headquartered in Brasilia, these countries have been advocating common development for eighteen years, consolidating themselves as a relevant multilateral and strategic space that represents approximately half of the planet’s population and almost a quarter of the global economy. With a prominent role on the world stage, they seek to promote a new financial, economic and commercial architecture through different instruments such as, for example, international investment banks, among which we can highlight the New Development Bank (BDN) and the Contingency Reserves Agreement (ARC).

As an alternative to the conditionalities imposed by the Bretton Woods institutions, the New Development Bank offers better financing conditions for key infrastructure projects based on the principles of non-interference. In this sense, the BRICS countries reflect the growing influence of emerging economies worldwide, proposing themselves as an increasingly influential and alternative space to Western forces. However, we cannot fail to point out that each alternative and form of financing has its own advantages and complications. While the traditional Western proposals have greater restrictions, they are also characterized by being relatively more transparent and having relatively more robust regulatory and accountability frameworks. On the contrary, new alternatives can represent good sources of financing with fewer restrictions but with a great lack of transparency and accountability. As a consequence, the options should not be conceived as mutually exclusive, but rather as complementary.

Argentina sees the possibility of joining the BRICS as an opportunity to promote development and well-being, in addition to functioning as a channel for growing multilateralism and the reconfiguration of the world order. As it is a South-South cooperation platform made up of emerging economies, it could mean for our country a more equitable space for cooperation with greater margins of autonomy.

It is also important to highlight the role played by Argentina’s main trading partners: China and Brazil. During the last twenty years, China has gained an economic presence in the region, showing increasing interest in establishing new strategic associations with countries such as Brazil, Peru or Venezuela. Although it is not the first time that our country has turned its gaze towards new alternatives, it is essential to consider the consequences that could be triggered by such an association. They could be of an economic nature, since a reprimarization of the Argentine economy would be encouraged, or else, of a geopolitical nature, by generating greater tensions with Western partners such as the United States. For its part, the bloc is willing to work to open a path towards an international community characterized by dialogue, for which systemic rupture would be kept away.

In terms of foreign trade, the BRICS bring together 30% of Argentine exports, and provide 45% of our imports, so if the incorporation materializes, it would mean the possibility of obtaining financing and assistance for key projects. On the other hand, the transfer of knowledge in technology and innovation could also be encouraged, which would guarantee a shared cooperation that guarantees inclusion and similar visions.

In this way, it can be argued that being parte of the BRICS could represent a great opportunity for Argentina to strengthen ties with one of the blocks that has been gaining relevance at the international level and that, in addition, brings together two of the greatest powers in the world and with whom it maintains a bond of strategic character. However, the possible implications of such an association should not be overlooked, as well as the consideration that Argentina’s accession process to the BRICS must have the approval of all its member states, for which it may give rise to a procedure slow and extensive. In short, will Argentina be able to consolidate its entry into one of the groups with the greatest economic and geopolitical weight? And in that case, what will be in store for the country to be part of said bloc?

 

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Authors

Camila Busso

Candela Jauregui

Contact

Gonzalo Roza, gon.roza@fundeps.org

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Projects financed by the IDB during the pandemic in Latin America: risks and benefits for whom?

On June 16, we participated in the WEBINAR in which the document was presented: “Investments of the Inter-American Development Bank for the response and recovery to COVID-19 in Latin America. Risks and benefits for whom?”, created in collaboration with more than 10 civil society organizations, including Fundeps.

“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”.

It is widely known that the Multilateral Development Banks have a fundamental role in the response and recovery to COVID – 19, this is due to their ability to rapidly mobilize financing to support and help countries respond to the impacts it has generated. this unforeseen situation. Within Latin America, the Inter-American Development Bank (IDB) plays a key role in this regard, since, in 2020, it approved 7.9 billion dollars and, as of June 2021, it had approved 597.6 billion dollars.

There is a tendency on the part of the Multilateral Development Banks to consider projects related to health issues, as having a lower risk of environmental and social damage, so the application of safeguards to these projects tends to be less rigorous. Added to this is the fact that many of the projects were approved with a rapid disbursement or fast track modality, that is, with shorter preparation times and environmental and social due diligence.

However, the findings of the presented report show that the implementation of this type of health projects and others in the context of the pandemic, have a significant risk of harm, especially when the groups most susceptible to contracting COVID-19 are excluded. of access to the benefits of the project. The context of crisis is worrying due to the tendency of the Multilateral Development Banks to make environmental and social parameters more flexible in pursuit of rapid responses.

The document presents six recommendations resulting from the analysis of the post-pandemic Latin American situation. They emphasize the importance of taking into account marginalized groups, such as those most likely to be affected and relegated in a crisis situation, and highlight the need for transparency and risk assessment to prevent extraordinary measures that restrict space from being perpetuated. public.

Within this framework, the webinar aimed to generate a space for discussion on the main findings in relation to the social and environmental due diligence processes of IDB investments, approved during the COVID-19 pandemic.

At Fundeps we promote the application of socio-environmental regulatory frameworks, accountability mechanisms and access to information in projects linked to financing for development, even (and even more so) when they occur in an extraordinary context of pandemic.

 

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Authors

  • Lourdes Alvarez Romagnoli
  • Valentina Rasso

Contact

Gonzalo Roza – gon.roza@fundeps.org

Agua Negra International Tunnel: Benefits and concerns of a strategic work in the integration between Argentina and Chile

This report aims to carry out a comprehensive and in-depth approach to the Agua Negra International Tunnel (TIAN) project between Argentina and Chile, including its technical, strategic, political, economic, social and environmental dimensions.

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Argentina in the AIIB

Since 2021, Argentina officially integrates the Asian Infrastructure Investment Bank. For our country, the AIIB represents a new multilateral source of financing for strategic sectors such as infrastructure, energy, telecommunications and transportation, among others. However, the AIIB is a little-known bank. How does it work and what are the implications for the country of joining this institution promoted mainly by China? We present a new report with the analysis.

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What does joining the Asian Infrastructure Investment Bank imply for Argentina?

Since 2021, Argentina officially integrates the Asian Infrastructure Investment Bank. For our country, the AIIB represents a new multilateral source of financing for strategic sectors such as infrastructure, energy, telecommunications and transportation, among others. However, the AIIB is a little-known bank. How does it work and what are the implications for the country of joining this institution promoted mainly by China? We present a new report with the analysis.

Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic.

On March 30, 2021, Argentina’s membership of the Asian Infrastructure Investment Bank (AIIB) was made official. The AIIB officially began its activity in October 2014. It is a new multilateral development bank promoted mainly by China with a focus on investments in infrastructure, especially aimed at emerging countries. Its Asian origin does not limit its actions to a single region, since the Bank has a large number of member countries in other continents and projects financed in South America, Africa and Europe.

The model proposed by China has distinctive features. The dominant feature is that the investments are focused on infrastructure, connectivity and industrialization, marking an important difference with Western development financing entities that, in recent times, have oriented their loans mainly to institutional reforms, health projects, education or fighting against poverty, among others.
In this way, it postulates an interesting alternative for the financing of an infrastructure that is largely in deficit in Latin America and, particularly, in Argentina. For our country, the AIIB represents a new multilateral source of financing for strategic sectors and opens an opportunity to help solve its historical deficits in terms of infrastructure and connectivity. For its part, with still little participation from Latin America, the Asian Bank is consolidating itself as a viable option for the region in light of development goals. To date, five effective Latin American members are reported: Argentina, Brazil, Uruguay, Ecuador and Chile.

From its origins, the AIIB was presented as a different option to the historical Western multilateral development institutions such as the World Bank, the IDB or the International Finance Corporation (IFC). However, the AIIB has implemented a regulatory and operational framework very similar to that of those institutions, including policies for access to information, accountability, and environmental and social regulation to authorize disbursements. In turn, it contemplates cooperation and co-financing with other multilateral banks, such as the World Bank and the Asian Development Bank, adhering to their regulatory frameworks.

Despite this, since its entry into operations the Bank has received criticism from various sectors of civil society and affected communities that have questioned its actions in different development projects and even certain weaknesses in its regulatory framework.

In this sense, the implications that admission to the AIIB may have for Argentina depend largely on the type of relationship that the country establishes with the institution and the way in which it manages to take advantage of the potential financing resources for infrastructure that the Bank can provide. . Likewise, it is necessary to avoid repeating the problems related to public participation, access to information and socio-environmental impacts that have historically been associated with development projects financed by multilateral banks.

Given the general ignorance that exists in the country about this institution, it is important to analyze in depth what the Bank consists of, how it works and what the true implications of Argentine membership may be. To contribute to this objective, from Fundeps we present a report that analyzes part of these questions.

Read full review

 

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The incorporation of Argentina to the Asian Infrastructure Investment Bank – Fundeps was approved
Argentina, one step away from becoming a member of the Asian Infrastructure Investment Bank – Fundeps
Are the brothers united? Profiling of the Sino-Argentine relationship in the government of Alberto Fernández – Fundeps
The role of the AIIB in the New Green Silk Road – Fundeps

Author

Camila Victoria Bocco

Contact

Gonzalo Roza, gon.roza@fundeps.org

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We send observations to the IDB to strengthen its link with civil society

In the framework of the review process of the second Action Plan of the IDB Group-Civil Society (2022-2024), more than 20 civil society organizations sent a letter to the President of the IDB, Claver-Carone, with observations and recommendations to strengthen the IDB’s relationship with civil society and affected communities.

“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”.

While we welcome the fact that the IDB is reviewing the Action Plan to strengthen the relationship with civil society and affected communities, we believe that the way the review is being structured inhibits civil society participation in the process. For this reason, the recommendations sent to the President and his Executive Secretary are oriented in two ways:

  • On the one hand, the Bank is asked to provide specific spaces and complete and accessible information so that civil society, including indigenous peoples, local communities, people affected by IDB Group projects (including MICI applicants), and organizations critical to the IDB can participate and get involved effectively. In this sense, it is essential that agendas begin to be built in a participatory way, that invitations to consultations are at least 30 days in advance and that they include a wide range of stakeholders. The optimization and adjustment of public consultation processes is also necessary, since they are currently excessively rigid and do not promote a meaningful or direct discussion between the parties, ultimately generating low-productive inputs that continue to weaken transparency and accountability in the Bank.
  • On the other hand, it is emphasized that after the consultation or dialogue, the IDB must guarantee continuous communication that keeps the interested parties informed and provide information on how their contributions influenced the decisions taken.

We believe that the IDB Group’s commitment to civil society and communities affected has been and continues to be worryingly weak compared to other peer institutions. The IDB president has the opportunity to lead the change towards a more responsible bank and must foster an institutional culture in which it is accepted that the Bank makes mistakes and is more responsive not only to interactions and constructive criticism from external actors, including civil society and affected communities, but also to their internal accountability mechanisms.

To access the complete letter sent to the IDB, access here.

More information

How can the IDB Group strenghthen engagement with civil society and projects affected communities? – Bank Information Center (BIC)

Carta Grupo BID-Relacionamiento con Sociedad Civil

Recommendations to strengthen the IDB Group’s relationship with civil society and affected communities – Coalición para los Derechos Humanos en el Desarrollo

Author

Camila Victoria Bocco

Contact

Gonzalo Roza – gon.roza@fundeps.org

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Civil society responds to the MICI evaluation

Last April 2021, the Office of Evaluation and Oversight (OVE) of the Inter-American Development Bank (IDB Group) published the Evaluation of the Independent Consultation and Investigation Mechanism (MICI). After the evaluation, the MICI has modified its policy, excluding the clause that prevents the registration of complaints that are part of open national judicial processes.

“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”.

The evaluation carried out tried to determine if the MICI is effective and efficient in three areas: (1) the resolution of complaints, (2) the promotion of institutional learning, (3) accessibility, objective independence, impartiality and transparency. Finally, OVE made 5 general recommendations on how the Board, the Bank, and the MICI can improve the application of the IDB’s social and environmental safeguards.

In general, the document identified elements that impede the effective functioning of the MICI, including accessibility barriers, unnecessary limitations to its independence, and a systemic lack of remediation by the IDB Group when projects do not comply with safeguards. Fundeps, together with other civil society organizations, decided to publish a response and send recommendations / comments to the MICI.

Below, we summarize our points of discussion and concern for each of the recommendations made by OVE:

Recommendation # 1 – Implement and improve the Bank’s management system for environmental and social claims: We agree with OVE’s findings that show that the requirement for communities to make prior contact efforts with the Administration is a problematic barrier for access to the MICI. Affected persons who present complaints to the MICI have experienced first-hand the ineffectiveness of presenting certain complaints to the Administration. However, OVE’s proposal to establish a Bank’s own management mechanism is a measure that we consider incomplete. To ensure the effectiveness of the mechanism and the Bank, it would be best to remove the requirement that the communities first contact the Administration.

Recommendation # 2 – Repeal the legal exclusion: The report’s findings on the impropriety of the legal exclusion, and its severe restriction on accessibility, are clear. We applaud the report for mentioning that the legal exclusion should be removed. The role of an accountability mechanism within an institution is unique and different from judicial procedures. A mechanism should examine compliance with the institution’s own standards, a mandate that does not overlap with the courts or tribunals. With the approval of the OVE Evaluation by the Board, the decision to remove the legal exclusion becomes effective as of July 1, 2021. However, the resolution approving the removal of the legal exclusion should be publicized or published. to ensure that the decision to remove this requirement is widely known.

Recommendation # 3 – Strengthen the independence of the MICI: The importance of the independence of the MICI, as well as other accountability mechanisms, cannot be stressed enough. Independence is an essential condition for other attributes such as objectivity, impartiality, and transparency. The report finds the need for the MICI to ensure the approval of the Bank’s Board of Directors before starting the investigations, as a major problem that has generated “situations that compromise the independence of the mechanism.” From civil society we believe that to ensure its independence, the MICI should have the authority to determine when to initiate an investigation without approval from the Board. This is a good practice that, as noted by the report, is adhered to by many other mechanisms. As an alternative to the current policy, to mitigate the detrimental effect on the independence of the MICI, the policy should be updated by specifically and closely outlining the technical reasons for the Board to review the MICI’s decision to initiate an investigation.

Recommendation # 4 – Ensure corrective action when there are findings of non-compliance and associated damage: The Evaluation clearly stated the lack of remedy for cases of verification of compliance being that “they have not had concrete results for the applicants, despite the findings of non-compliance and related damages established by the MICI ”. We have seen this in our case work. The recommendation of the Evaluation so that all the actors – the Board of Directors, the Administration and the MICI – adhere to the practice of consistently providing corrective actions, is a step in the right direction. However, this result would be best achieved with a clear change in the policy that includes points such as: (a) Consultations during the development of corrective action plans, (b) approval of action plans based on their sufficiency, (c) monitoring compliance with action plans, and (d) alerting the Board of Directors in cases of non-compliance with the plans. Finally, while OVE’s assessment documents multiple instances in which communities have been left without remedy, despite compliance verification reports finding a cause of harm in the Bank’s non-compliance, unfortunately no recommendation is provided for these communities.

Recommendation # 5 – Strengthen the internal capacity of the MICI: One of the focuses of the MICI Evaluation of its internal functioning is the dependence on the model of consultants for the staff. The importance of MICI staff in relation to their effectiveness in resolving complaints is evident. The Bank should commit to providing the human and financial resources necessary to implement this change and avoid that the lack of human resources translates into delays during the complaint processes. The Bank should also ensure the increase of its capacity in terms of resources as necessary.

Now, from civil society we consider that public and inclusive consultations are required for the implementation of all the recommendations. Likewise, we believe that the implementation of these recommendations will require changes to the MICI policy. The steps taken to ensure compliance with social and environmental safeguards and accountability in cases of non-compliance should be reported by those affected by the projects (who live and work in the implementation sites). To hear from those affected and their representatives, the IDB and the MICI should consult publicly about their plans to implement the
OVE recommendations.

The MICI plays a fundamental role within the IDB, providing a channel for the people affected by the projects, beneficiaries of the Bank’s work, to file their claims in search of remediation. However, as OVE’s Evaluation makes clear, there are gaps in the current practices of the MICI – and related practices of the Board and Management – that prevent the effectiveness of the mechanism. To ensure the legitimacy of the MICI, the Bank has to act to address these issues fully.

More information:

Internal IDB evaluation raises the need for reforms in the operation of the MICI

Autora: 

Agustina Palencia

Contacto:

Gonzalo Roza – gon.roza@fundeps.org

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Sergio Díaz-Granados was elected the new Executive President of CAF

On July 5, the Board of Directors of CAF – Development Bank of Latin America – elected Sergio Díaz-Granados as the new Executive President of the institution by majority, in a blended meeting held at the National Palace of Mexico. Colombian Díaz-Granados will take office on September 1, 2021 for a period of 5 years.

“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”

The Development Bank of Latin America, formerly known as Corporación Andina de Fomento (CAF), is a leading multilateral financial institution in Latin America whose mission, according to its website, is to support the sustainable development of shareholder countries and integration regional. Since 1970, the institution has served the public and private sectors, supplying multiple financial products and services to a wide portfolio of clients, made up of the governments of the shareholder states, financial institutions, and public and private companies.

CAF’s Board of Directors appointed Sergio Díaz-Granados as the institution’s new Executive President on July 5 at a blended meeting that took place at the National Palace of Mexico. In the election, the Colombian Díaz-Granados surpassed the Argentine candidate Christian Asinelli, current undersecretary of International Financial Relations for Development of the Secretariat of Strategic Affairs of the Presidency, who will occupy one of the vice-presidencies of the entity.

The election of the new president comes after the resignation of the previous Executive President, the Peruvian Luis Carranza, who retired from the entity a year before the end of his term amid allegations of abuse of power, forced resignations and strong internal in the multilateral credit organization.

Sergio Díaz-Granados, is a prominent lawyer who currently serves as Executive Director for Colombia in the IDB Group. He has an extensive career in public and private service, both nationally and internationally, with special emphasis on issues of development and regional integration. Throughout his career, Diaz-Granados has served as Minister of Commerce, Industry and Tourism of Colombia, Vice Minister of Business Development and President of the Boards of Directors of Bancóldex and ProColombia. He has also been a congressman and chairman of the Economic Affairs Committee of the House of Representatives.

More information:

Author:
Juliet Boretti

Contact:
Gonzalo Roza – Coordinator of the Global Governance Area
gon.roza@fundeps.org

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Internal IDB evaluation raises the need for reforms in the operation of the MICI

On April 1, the Office of Evaluation and Oversight (OVE) presented an evaluation report of the Independent Consultation and Investigation Mechanism (MICI) corresponding to the period 2015-2020. The evaluation examined the Mechanism’s policy and its application, with the aim of informing the Boards of the IDB and IDB Invest on the extent to which the MICI has been an effective and efficient mechanism in the resolution of claims associated with environmental and social impacts of projects financed by the Bank.

“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”

In its report, the Office of Evaluation and Oversight (OVE) determined that the current MICI policy corrected important issues identified in its last evaluation of 2012. Among the main advances, it highlighted the solution to the problems of accountability and associated conflicts of interest. to the previous organizational structure, as well as the duplication problems of the eligibility instance; the establishment of deadlines for the management of requests; and the creation of instances for the participation of the administration. Likewise, he highlighted a greater consistency between the policy, the guidelines developed, and the associated processes.

The evaluation also highlighted the progress made in the internal functioning of the MICI, as a result of the restructuring of the mechanism, as well as the process of consolidation and institutional learning. The mechanism has been able to define its work plan and manage its human and budgetary resources independently of the IDB Group administration.

However, judicial exclusion, a key issue, remained pending. It is one of the exceptions of the internal policy to the eligibility of applications and establishes that those matters raised in an application that are being the subject of arbitration or judicial processes in a member country of the IDB Group are not eligible.

Although judicial exclusion was identified by OVE in 2012 as a limiting factor for the effective and independent functioning of the MICI, it was maintained in the reformulated policy in 2014. Likewise, there are other limitations that have emerged in the application of the policy in recent years. 5 years but that, to a large extent, have been paid for by the MICI. This shows that there is sufficient margin for the mechanism to manage the limitations of the current policy.

Access to the MICI

Regarding access to the mechanism, OVE identified that the MICI is not yet well known among applicants. Realizing that between the different institutional levels there is a lack of consensus on the importance of publicizing the mechanism and the way to achieve it. An issue that should not be overlooked, since access to the MICI depends on the knowledge that people have about the existence of the mechanism.
For their part, those who were able to access the MICI found that their applications were not registered due to the difficulty in complying with some requirements. In this regard, the IDB Group does not have a claims management system, which makes it impossible to know the number of concerns that the administration receives.

Case management

Regarding case management, although the MICI is operating in accordance with the principles established in its policy: independence, objectivity, impartiality, transparency and efficiency; Their ability to act independently is affected by being subject to the decisions of the Board of Executive Directors.

In accordance with its policy, the Board controls the possibility of initiating an investigation in the Compliance Verification Phase (FVO) and decides whether or not to approve the recommendations of an MICI investigation. Originally, the approval of the Board of Directors to continue with an investigation was thought as a short procedure but it has come to be conformed as a contentious procedure affecting the independence of the MICI.

Finally, many ongoing investigations have presented delays related to the complexity of the projects and themes. Complaints were also filed by the applicants about the length and slowness of the processes in the Compliance Verification Phase (FVO), which reduces the possibilities of effective redress.

Recommendations

After identifying the main difficulties in the current operation of the mechanism, OVE proposed a series of recommendations to be adopted by the MICI. Among the main ones, in the first place, the elimination of judicial exclusion and the strengthening of its internal capacities stand out. In turn, OVE highlighted the need to reinforce the independence of the mechanism and ensure the adoption of corrective measures when there are findings of non-compliance with the policies and related damages.

Remembering that one of the main objectives of the IDB Group is to improve the quality of life in the region, monitoring its policy is a key tool to guarantee compliance with socio-environmental safeguards and transparency in the development of projects. funded. If the recommendations made by OVE are applied, it would imply a declaration of commitment by MICI to the users, who, among other complaints, have systematically insisted on an improvement in the conditions for accessing the mechanism.

Based on this evaluation, one might wonder if the limitations of the current policy can be rectified by incorporating OVE’s recommendations or if these limitations, on the contrary, make a new comprehensive review of the policy necessary, a measure that has been ruled out by OVE until the moment.

At Fundeps, we consider that there are still many obstacles to overcome to guarantee an effective and independent action of the mechanism, especially regarding the need to nullify judicial exclusion. However, we highlight the importance of these types of entities that are beneficial for both the public and private sectors, and especially for the communities affected by IDB Group investments.

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Authors:

Clara Labat 

Julieta Boretti

Contact:

Gonzalo Roza, gon.roza@fundeps.org

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We participated in a discussion with the new MICI director, Andrea Repetto

On April 27, we participated in a discussion with civil society organized by the Independent Consultation and Investigation Mechanism (MICI) of the IDB, on the occasion of the recent inauguration of its new director, Andrea Repetto. Civil society organizations, individuals and people from the public and academic sectors from different countries participated. One of the main points of discussion revolved around the evaluation of the Mechanism’s operation recently carried out by the Office of Evaluation and Oversight (OVE) of the IDB Group.

“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”

The Independent Consultation and Investigation Mechanism (MICI) was established in 2010 as an instance of last resort so that people who consider themselves affected by projects financed by the IDB Group can turn to the mechanism in search of a solution. In this regard, it should be noted that the complaints submitted must relate to non-compliance with the bank’s operating policies and not to other national and / or international regulations.

At the beginning of the discussion, the new director introduced herself personally, conducted a review of the most outstanding events of 2020 and indicated what the priorities of the mechanism will be during 2021.

Case management in times of COVID-19 and management priorities during 2021

In 2020, the MICI took actions to mitigate the impacts of the pandemic on claims management. Managed a total of 21 claims from communities potentially affected by projects financed by the IDB Group in 9 countries: 17 claims refer to IDB projects with the public sector and four to IDB Invest operations with the private sector. In addition, the MICI began, for the first time, a completely remote dispute resolution process in Colombia (Ruta del Cacao).

Similarly, with the recent assumption of Repetto as director, 2 priority areas were identified during 2021: on the one hand, the opening of the mechanism, seeking to make it more accessible to the communities that need it and, on the other, institutional learning, with The objective of adding more value to the IDB Group and reinforcing its accountability and sustainability.

OVE’s evaluation of the MICI

OVE carried out a first evaluation of the MICI in 2012 and identified significant problems in terms of its policy, structure and operation, recommending ending the pilot phase of the MICI and reformulating its policy and structure. Thus, in December 2014, the Bank’s Board of Directors approved a new policy and structure for the mechanism and, since the beginning of 2016, the MICI is also responsible for managing requests related to IDB Invest operations, that is, the private sector.

In the following evaluation (2015-2020), 19 cases were analyzed (between December 2014 – June 2020) and it was concluded that the MICI, in general, is operating in accordance with the principles established in its policy: independence, objectivity, impartiality, transparency and efficiency and that the current policy corrected important issues identified by OVE in its 2012 evaluation as limiting the proper functioning of the MICI. Similarly, there was greater consistency between the policy, the guidelines developed, and the associated processes. OVE also highlighted the consolidation of capacities in conflict resolution within the MICI.

However, there is still room for the MICI to deepen its efforts to maximize its contribution to the IDB Group’s system of safeguards and environmental and social standards.

A key issue that remained pending is judicial exclusion, which continues to be an important factor limiting the effective and efficient functioning of the MICI.

OVE also found that some requirements to access the mechanism are difficult for applicants to meet, such as the need to present their concerns to management before resorting to the MICI. In this regard, it should be mentioned that the difficulty of complying with the requirement of prior contact with the administration had to do, to a large extent, with the lack of a complaints management system within the IDB Group during the period under evaluation (2015 -2020) and one of the OVE evaluation recommendations points towards that goal.

Promotion of access and risk of retaliation

OVE indicated that the mechanism is not yet well known despite the important efforts of the MICI to make it known, including important work in the area of ​​attention to the risk of retaliation that has important implications for safe access to the mechanism. Nor is it clear that at the institutional level there is consensus on the importance of publicizing the mechanism and how to achieve it. Not a minor issue, since access to the MICI depends on the knowledge that people have about the existence of the mechanism.

Finally, another point that the evaluation indicates that should be strengthened is the independence of the mechanism, a fundamental issue since the credibility of the mechanism depends on its ability to work independently. Although the MICI is an arm of the Board of Directors, its added value depends on the extent to which it can present you with frank and honest reports on complaints associated with IDB Group projects.

Based on these and other observations, OVE made 5 recommendations, directed both to the MICI and to the administration and the Boards of the IDB Group. These include: 1) implementing the management system for environmental and social claims of the IDB Group’s administration so that it is articulated with the MICI, 2) nullifying the judicial exclusion, 3) reinforcing the independence of the MICI, 4) ensuring the adoption of corrective measures when there are findings of non-compliance with the policies and related damages and, finally, 5) strengthen the internal capacities of the MICI.

One might wonder, however, if the limitations of the current policy can be remedied by incorporating OVE’s recommendations or if these limitations, on the contrary, necessitate a new comprehensive review of the policy, a measure that OVE has ruled out in its evaluation.

At Fundeps, we believe that this type of instance is essential to exchange opinions and positions in relation to how the Mechanism could be even more efficient and effective in its interventions to the problems that arise in our region. Likewise, we consider that a strengthening of the mechanism translates into an improvement in the accountability system of the IDB Group as a whole.

We hope that these instances will continue to be repeated over time and we celebrate that the MICI is willing to receive feedback from those who position themselves as users of the mechanism, being able to glimpse the shortcomings that the processes may have.

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Author
  • Camila Victoria Bocco
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The 2021 Annual Meeting of Governors of the IDB and IDB Invest was held

Between March 17 and 21, the Annual Meeting of Governors of the Inter-American Development Bank was held virtually. Different economic and financial leaders from member countries and the private sector discussed the pandemic and the economic recovery in Latin America and the Caribbean.

“Below, we offer a google translate version of the original article in Spanish. This translation may not be accurate but serves as a general presentation of the article. For more accurate information, please switch to the Spanish version of the website. In addition, feel free to directly contact in English the person mentioned at the bottom of this article with regards to this topic”

Each year, the IDB holds its Annual Meeting of the Board of Governors in one of the member countries. This year, the Assembly was held in the city of Barranquilla, Colombia, and its agenda was crossed by two central themes: the economic recovery of Latin America and the Caribbean in the face of the crisis caused by the pandemic, and the capitalization of the Bank.

First, the Bank’s president, Mauricio Claver-Carone, affirmed the IDB’s commitment to helping countries recover from the current economic crisis, reaffirming support for the financing needs of governments and assistance for access and negotiation in the purchase of vaccines. Based on this, Claver-Carone is committed to promoting the agenda that the Bank baptized as “Vision 2025”: reinvesting in the Americas, a decade of opportunities ”.

This agenda establishes five areas in which the IDB will focus in our region. These areas are: regional integration, strengthening value chains, supporting small and medium-sized enterprises, promoting the digital economy and prioritizing responses to gender and climate change issues.

On the other hand, Claver-Carone emphasized the work of the IDB Group during 2020, which in response to the COVID-19 emergency, approved loans for almost US $ 24,000 million, both to companies and governments, reaching record levels in the granting of loans. Faced with this, the president referred to the Bank’s capitalization: “I ask you to reinvest in us so that we can decisively reinvest in the region (…) The region will have a committed partner to help countries face these historical challenges and be well equipped with the financial resources necessary to make a big difference ”.

The Assembly then approved a resolution authorizing the work necessary to consider a potential capital increase of around US $ 80 billion. This amount was authorized by the United States Senate and was described by the Bank’s president as “the largest capitalization in its history.” Capitalization is a process that will increase the IDB’s creditworthiness and lending capacity. Through this, the Bank’s capital will be revalued and will allow it to face its need to address the financing problems of the region.

Finally, Claver-Carone referred to the need for the participation of women in the labor market to promote economic growth in Latin America and the Caribbean and made known new contributions for the Amazon region between Colombia and Brazil to promote development sustainable through an environmental approach.

Undoubtedly, this year’s Assembly leaves us with a clear forecast of what the IDB Group will do in our region, crossed by the needs generated by the pandemic, by a new Bank presidency and by new agendas to be implemented, supported by the new capitalization. In this sense, it is worth noting that this capitalization process should be accompanied by a series of necessary internal reforms at the institutional level, which effectively ensure greater transparency and protection of social and environmental rights in projects financed by the Bank or its clients. .

At the same time, the process of citizen participation and relationship with civil society should be strengthened. The way in which spaces such as the Board of Governors are structured and planned, for example, reflect the Bank’s little predisposition to create effective spaces for exchange and dialogue with civil society and affected communities. We hope that these are some of the points to be reviewed by the Bank in view of a possible capitalization.

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  • Sofia Armando

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