The Asian Development Bank (ADB) has a noble goal: it intends to reduce the number of poor people in the region.
To this end, it lends money for roads, bridges, and schools and provides grants to help poor communities secure access to potable water, cheap electricity, and affordable housing, among others.
But things can go wrong — and they have — in more ways than one.
A number of ADB-funded projects have reportedly uprooted poor communities from their lands in Sri Lanka, destroyed people’s sources of livelihood in Kyrgyzstan, and placed 26 villages in Bangladesh under water for nine months every year.
And that’s just for this decade alone.
Since the 1990s, an estimated 1.77 million people in Asia have been displaced by other ADB projects, not counting thousands who got sick and/or died after inhaling toxic fumes from ADB-funded coal plants.
To prevent these from ever happening again, the ADB has approved an Accountability Mechanism in 2003.
Under the mechanism, communities affected by ADB-funded projects can file complaints in two ways: at the Office of the Special Project Facilitator (OSPF), where the matter is discussed at the project level, and at the Compliance Review Panel (CRP), if the dispute becomes a policy issue.
However, some projects rendered ineligible for review continued to proceed, reportedly causing harm to communities and the environment, with hardly anyone ever being held liable.
Of the 32 complaints filed at the OSPF since 2003 up to November 2010 (which is the the latest data on ADB’s website), 20 have been rendered ineligible because these were unable to comply with the bank’s processes and/or failed to meet deadlines.
Meanwhile, of the 19 CRP recommendations, 16 were considered to be in compliance, two partially met, and one could no longer be met, the ADB said in an emailed reply dated December 2, 2010. The message came from Dr. Robert May, ADB’s Special Project Facilitator, Bruce Purdue, CRP Secretary, and Krishnadas Narayanan, ADB’s Media Relations Specialist.
The CRP is now preparing for its fifth and final monitoring mission scheduled in February 2011.
This is why the NGO Forum on the ADB, the bank’s watchdog, has scored the Manila-based multilateral lender for its much-vaunted Accountability Mechanism.
It’s not difficult to see why.
1) Some ADB-funded projects lack transparency.
In December 2003, the ADB extended a $7.5 million loan — later expanded to $10 million — to improve education and rehabilitate six school buildings in Roshtkala District Gorno-Badakhshan Autonomous Region in Tajikistan.
However, only the Bank and the government reportedly knew about it, said the NGO Forum on the ADB which has more than 250 partners all across Asia and Europe, Australia, and North America.
In 2008, parents and schoolchildren — the beneficiaries — were supposedly neither informed nor consulted about the Education Reform Sector Project, an allegation that the OSPF has denied.
“The complaint letter is posted in its complaints registry and it is currently working on the case,” the OSPF said.
But this much is known about the project so far: one winter, chunks of plaster fell from a classroom ceiling, leading them to discover that the overall rehabilitation work on the 60-year-old schoolbuildings — which was part of the project — were substandard.
Later, it was also learned that a computer, a printer, and a service vehicle that was supposed to be part of the project were missing.
Alarmed, residents wrote letters addressed to the Tajikistan President and education department officials.
But these remained unanswered.
Fortunately, members of the NGO Forum on ADB helped the community document the project’s glaring oversights and draft and file a complaint.
Good thing that the ADB considered it eligible for its Accountability Mechanism in September 2010.
But then again, the Tajikistan education project emphasizes how the reported lack of transparency turns the situation into the classic chicken or egg conundrum. How can you file a complaint against a project when — technically — you’re not even supposed to know about it?
It’s an issue that the ADB — which claims to be big on transparency — should be taking up.
For its part, the Bank’s media relations department said that “the particular complaint will be addressed accordingly.”
2) The Accountability Mechanism has reportedly restrictive deadlines.
Once a project is completed, the Bank releases a Project Completion Report (PCR) after a year or two.
After the report is released on the Bank’s website, any complaint regarding the project will be rendered ineligible for the Accountability Mechanism.
But what about projects that may fail in the future, years after the PCR has been submitted?
Project beneficiaries may just have to grin and bear it.
Just ask any one of those affected by the botched Khulna Jessore Drainage Rehabilitation Project in Bangladesh.
Completed in 2004, the project — intended to increase farm production and create farming jobs — submerged 26 villages, including government buildings and schools.
When the OSPF finally received a complaint from residents, it was rendered ineligible because it was submitted after the PCR was released.
Complaints are “excluded” for projects whose PCRs have already been issued, the ADB said.
“Most accountability mechanisms of international finance institutions have cutoff points, and ADB’s provides one of the latest cutoff points,” it added. “If problems arise after the PCR has been issued, complainants can raise their concerns with the concerned ADB operations department or pursue other avenues open to them, like judicial remedies.”
3) The ADB has yet to comply with recommendations of its own Compliance Review Panel.
The reported oversights of the ADB’s Accountability Mechanism can be best explained by the Southern Transport Development Project (STDP) in Sri Lanka.
Worth $295.9 million, the 135-kilometer expressway is intended to connect the capital — Colombo — to another southern city, Matara, while addressing increased traffic volumes, reducing highway accidents, and encouraging increased trade.
But construction — implemented by Sri Lanka’s Road Development Authority — uprooted communities without proper resettlement nor compensation.
Two separate complaints were filed both at the OSPF and the CRP in June and December 2004, respectively, and these were later considered eligible under the Accountability Mechanism.
The OSPF later sent a mediator to settle the dispute “but was unable to resolve the issues,” the ADB’s said in an email message.
Of the 19 recommendations proposed by the CRP, two have not been fulfilled by the Bank as of this writing, the ADB said.
This, more than ten years after the project destroyed 1315 homes, according to community leaders.
4) The Accountability Mechanism may have been unable to address indirect, non-material harm.
The Accountability Mechanism only responds to “direct material and adverse effects” of ADB-funded projects.
But it has been unable to prevent families in Sri Lanka from being uprooted — and eventually separated — by the construction of Southern Transport Development Project (STDP) [See Reason Number 3], the NGO Forum on the ADB said.
Same goes for the burden experienced by river communities in Indonesia, thanks to the ADB-funded Integrated Citarum Water Resources Management Investment Program.
As part of preparations, local authorities evicted some 892 parties, including 89 households, living along the riverbanks even before resettlement plans were established.
Although a Bank’s spokesperson assured that affected residents would be compensated, nothing was mentioned about the costs of their sudden eviction.
Meanwhile, resettlement plans for those who were uprooted were reportedly unimpressive.
A member organization of the NGO Forum on ADB said the plan may increase hunger, especially among women, and violates the Bank’s very own gender policy.
Like all ADB-funded projects, this one offered a host of benefits.
The $500-million initiative will help clean up the Citarum, one of the world’s dirtiest rivers, where Jakarta’s water source pass through.
But the project design reportedly indicates that it may fall prey to corruption and thereby burden Indonesians with bad debt, the same organization said.
5) The Accountability Mechanism is ineffective especially in countries ruled by repressive governments.
Anyone wronged by an ADB-funded project can file a complaint against the Bank.
But not if you live in a country that happens to be ruled by a repressive government and/or one that has insufficient public access to information laws, the NGO Forum on the ADB said.
Both Mongolia and Kazakhstan reportedly have no laws that enable citizens to seek information from government.
Both countries also have no legislation that require officials to reply to formal queries.
As a result, these countries may take as long as a year before they issue a reply, if they even bother to do so at all, the group added.
Take Tajikistan, which received ADB funds to improve its educational system.
After it received reports about project irregularities, the government simply refused to recognize that the problems existed in the first place.
Meanwhile, in Sri Lanka, citizens who were displaced by ADB road project were harassed by government agencies.
Their identities were reportedly left unprotected, making it easier for government agents to harass them, the NGO Forum on the ADB said.
Given these situations, how will ADB’s Accountability Mechanism ensure transparency and eventually prevent harming the very people it intends to protect?
The launch of ADB’s Accountability Mechanism review may provide a clue, the ADB watchdog said.
The review of the mechanism was announced in 2010 during its annual meeting held in Uzbekistan, a police state famous for its lack of transparency.
Does this bode well for the ADB’s Accountability Mechanism?
Let’s take it from the ADB.
“Policies are applied consistently to all its projects and in all countries where the projects are implemented,” officials said in an email message. “As an apolitical organization, ADB is however unable to comment on government policies regarding transparency.”