Bank Information Center (BIC)

Inter-American Development Bank

Civil society groups have long been concerned about the negative impacts of IDB operations on the environment and on indigenous peoples, as well as on the prospects for genuine economic and democratic reform in the region.

In spite of the recent emergence of more inclusive and responsive governments across Latin America, the experience of too many citizens continues to be that the state is a source of neglect or repression rather than of efficient and effective service delivery. Essential services such as clean drinking water and sanitation, health care, and education are still not available to a large portion of the region’s citizens.

As a public, “regionally owned” development Bank, the IDB regularly issues statements about its commitment to liberalization, expressed initially in economic terms but also in terms of how its financial and technical assistance complements political liberalization in the region. However, IDB officials and project managers continue to negotiate, plan, and implement operations without the informed participation of affected people and their advocate organizations (usually NGOs), and even without the knowledge of elected officials in the borrowing countries.

As part of the region’s deepening democratization, it is urgent that democratic processes such as communication, negotiation, oversight, and accountability be promoted in order to build skills and trust among citizens and the officials authorized to represent them. The presence of a financier which operates with minimal transparency and negotiates deals without public inputs or oversight serves to weaken the region’s ongoing democratic consolidation rather than strengthen it. Democratic reformers throughout LAC, including citizens, parliamentarians, and advocates for human rights (labor and indigenous rights) and the environment, monitor the IDB in an effort to open the Bank, its procedures, and its operations to the light of public scrutiny.

The Bank Information Center (BIC), in collaboration with its partners, works toward democratizing the IDB to ensure “mainstreaming” of social and environmental considerations into the Banks’ decision making processes and operations.

The most pressing focal areas for IDB watchers in Latin America and beyond:

  • Access to information about IDB operations in a timely fashion. Specifically, citizens want to be informed about any project or policy prior to its approval and/or financing by the IDB’s Board of Executive Directors. Increasingly, members of the region’s parliaments are understanding their need to know about IDB operations and to be involved in shaping them in order to fulfill their budgetary oversight role;
  • Public participation in the design, implementation, monitoring, and evaluation of IDB projects;
  • Prevention and mitigation of adverse social and environmental impacts of IDB operations, and strengthened accountability in the IDB for any social and environmental harm that does result from the activities it supports;
  • IDB support for private sector–led operations; and
  • IDB roles in regional and sub-regional economic integration through IDB financing of Plan Puebla Panama and the initiative for Regional Infrastructure Integration in South America.

IDB policies, strategies, and frameworks

The IDB has strategies, policies, and regulations in place to guide its operations. This includes its social and environmental safeguard policies, several of which have been under revision since 2003. The revised version of the first of these policies, on the Disclosure of Information, was approved by the Bank’s Board of Executive Directors in November 2003.

After a drawn-out and often contentious series of back-and-forths with CSOs on the remaining policy revisions, in January 2006 the Board finally approved the IDB’s revised Environment policy. The new policy, actually entitled “Environment and Safeguards Compliance”, became effective in July 2006, eclipsing a two-page version of the policy that had been on the books since 1979 and was among the weakest of all the MDB policies on the environment.   An independent advisory panel of experts has been convened to review the IDB Safeguard Policy in 2009, with recommendations due to the Board of Governors prior to the culmination of the capital increase process in March 2010.

In February 2006, the Board also approved an entirely new policy on Indigenous Peoples. This policy, which came about largely in response to pressure from NGOs, has turned out to be less forceful in substance than it might have been. Yet as a statement of binding policy, at least, it represents a step forward for an institution still struggling to deal with a legacy of support for projects that have caused measurable harm to indigenous cultures and landscapes across the region.

Of similar importance are the changes that both the IDB and civil society actors have been trying to effect in the Bank’s main vehicle for operational accountability, the Independent Consultation and Inspection Mechanism (ICIM).  The ICIM was created as the Independent Inspection Mechanism (IIM) in 1994 to allow people who have been negatively affected by IDB-sponsored projects to seek formal redress from the Bank.  Following public consultations in the spring of 2009, in which CSOs presented their suggestions and comments on the mechanism, the IDB has developed a proposal to modify key aspects of the proposed ICIM. However, the mechanism’s current design is still weaker than that of analogous bodies at the World Bank and the Asian Development Bank.

Civil society organizations have long expressed concerns that the IDB’s policies are not exclusive (in that they do not state operations the IDB will not finance, that is to say, the Bank’s no-go zones). Also, they tend to be vaguely worded, with such general provisions that that it is extremely difficult to prove non-compliance with policies. The strategies and strategic frameworks are not binding and can be changed by Bank management, without a vote by the Board. Because of this there are serious civil society concerns about how to ensure that important points such as the designation of no-go zones are permanently embedded in the binding policies and safeguards that guide Bank operations.

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