Evaluation of the Independent Consultation and Investigation Mechanism (MICI)
The MICI was established in 2010 as a last-resort mechanism enabling parties potentially affected by IDB Group-financed operations to file complaints regarding the Group’s alleged noncompliance with its environmental and social safeguards policies and standards. This evaluation is in response to a request from the Boards of Executive Directors of the IDB and IDB Invest for OVE to independently examine the MICI policy and its implementation.
Seeks to inform the Boards of Executive Directors of the IDB and IDB Invest on the extent to which, under its current policy framework, the MICI has been effective and efficient in
- resolving the complaints it receives concerning environmental and social impacts of projects due to alleged noncompliance with the IDB Group’s environmental and social safeguards policies and standards; and
- promoting institutional learning with regard to environmental and social safeguards and standards and their implementation in IDB Group projects.
The evaluation also seeks to report on the mechanism’s accessibility to requesters and the extent to which the MICI has performed its duties independently, objectively, impartially, and transparently.
The current policy corrected important problems identified by OVE in its 2012 evaluation which impeded the MICI from functioning properly. However, one key issue that remained pending is the legal exclusion that continues to be grounds for differing interpretations and a major factor limiting the effective operation of the MICI. Other limitations have arisen in the implementation of the policy over the last years, but they have largely been resolved by the MICI in a manner consistent with the intervention logic of the accountability mechanisms. This is evidence that there is sufficient room for the MICI to manage the limitations of the current policy, provided it is done within the parameters of the intervention logic for this type of mechanism. Accordingly, a new comprehensive policy review is not required at this point.
Between December 2014 and June 2020:
- 72 complaints or requests originating in 17 countries.
- 15 (21%) were declared eligible and became cases of the Consultation Phase and/or the Compliance Review Phase.
The MICI is not well known
Despite the MICI’s efforts in promoting and facilitating access, the integration of these efforts at the institutional level remains a major challenge. Publicizing the mechanism is a task not only for the MICI but also for IDB Group Management. However, a consensus at the institutional level on the importance of making the mechanism known and how to accomplish this remains unclear.
Difficulty to meet the requirement of establishing prior contact with Management
This difficulty was largely due to the lack of a grievance management system within the IDB Group during the evaluation period. OVE found major inconsistencies in the way in which Management addressed contacts initiated by requesters before they turned to the MICI. The new environmental and social policies of the IDB Group seek to remedy this shortcoming by laying the groundwork for a complaint management system.
The legal exclusion
The application of the exclusion removed from consideration core issues raised in the complaints, such as resettlement, economic displacement, and public consultations, which are of great importance for the IDB Group in terms of implementing its environmental and social safeguards policies and standards. The exclusion of these issues eliminates the possibility of addressing cases of noncompliance and adverse impacts on the requesters, leaving potential environmental and social liabilities unaddressed, possibly resulting in a reputational risk for the IDB Group. Moreover, the legal exclusion has been invoked on multiple occasions without ground , primarily by Management, generating inefficiencies in the process.
In general, MICI is operating in accordance with the principles set forth in its policy: independence, objectivity, impartiality, transparency, and efficiency. The handling of cases in the compliance review phase highlights the more formidable challenges involved in a process that is by nature contentious and has been subject to practices compromising the independence of the MICI. The MICI has been subject to decisions by the Board of Executive Directors on issues that have affected its ability to act independently. In addition, despite improvements in the relationship between Management and the MICI, which is contentious by nature, certain practices by Management hinder the MICI’s work, restricting its ability to act independently. In certain specific situations, the MICI also acted in a way that undermined its own independence.
For the requesters
In recent years, the MICI has facilitated several agreements, while also demonstrating an ability to facilitate more complex agreements than in the past. The agreements have encompassed measures aimed at addressing problems raised by the requesters, and despite some delays, there are already concrete results.
Compliance Review Phase:
The investigation has not yet yielded concrete results for the requesters, despite the findings of noncompliance and associated harm. The MICI recommendations have not always been formulated so as to require the project’s compliance with the operational policies, and the Board has not always requested the development and monitoring of action plans. There are also other systemic factors that limit the capacity of the accountability mechanism to ensure the adoption of corrective measures, for example, when the project ends up not being financing by the MDB or the client makes early repayment of the loan despite the environmental and social liabilities unaddressed and the reputational risk for the MDB.
At the institutional level
The MICI has helped to extract relevant lessons from the cases it handles regarding important issues for the environmental and social sustainability of the projects financed by the IDB Group, such as disclosure of information, public consultations, and economic displacement. Management has taken corrective steps on these issues and has incorporated lessons learned into the development of the new environmental and social policy frameworks. Nevertheless, there is room for the MICI to further analyze recurrent and systemic issues based on its 10 years of experience.
The evaluation found major progress in the MICI’s functioning as a result of the restructuring of the mechanism and the MICI’s process of institutional learning and consolidation since the approval of its policy in 2014. The MICI has acted independently from IDB Group Management in being able to define its work plan and manage its resources. Furthermore, there has been a significant change in its operations regarding the monitoring and observance of the Bank’s procedures and regulations. There are important opportunities for continuing to strengthen the internal capacities of the mechanism. To date, there is no plan for continuous training of MICI staff. While the MICI has built significant capacities in recent years, in a context of more complex cases, the MICI does not have staff with experience in the practical implementation of the environmental and social safeguards policies and standards.
|MICI||IDB and IDB Invest management||IDB and IDB Invest Boards of Directors|
|Implement the IDB Group Management system for managing environmental and social grievances so that it is coordinated with the MICI|
|Repeal the legal exclusion|
|Reinforce the independence of the MICI|
|Ensure that corrective action is taken when there are findings of noncompliance with the policies and associated harm|
|Strengthen MICI’s internal capacity|