Do communities affected by internationally financed projects have access to remedies?

By: Kristin Beharry

Traditional justice is expensive and difficult to attain. The cost of litigation in time and money, judicial corruption, fear of retribution, and other barriers push the most marginalized out of the sphere of national courts. Among the most marginalized are those harmed by internationally financed projects. From herders in Mongolia to farmers in Liberia, communities affected by projects financed by international financial institutions have little judicial recourse for violations of their environmental and human rights by large corporations; however, that does not necessarily mean that they have no recourse.

International financial institutions (such as the World Bank, International Financial Corporation (IFC), and Asian Development Bank), and many export credit agencies and private corporations have their own accountability offices, mandated to hear complaints from affected communities. In the last 20 years, these accountability mechanisms have grown exponentially, from only the World Bank Inspection Panel in 1994 to 52 different accountability offices in 2014. Accountability offices provide communities with an outlet to voice their complaints through various pathways: (1) by entering a mediated problem-solving process with the project company, or (2) by initiating a compliance review where the financial institution’s investigators evaluate the environmental and social due diligence and impacts of a project, or (3) both.


These non-judicial grievance mechanisms have the potential to provide affected communities with an inexpensive, accessible, and innovative alternative to traditional court systems that can lead to the change or outcomes that communities desire. Still, there is a looming question of whether accountability offices are really being used to provide justice to those who have had their environmental and social rights trampled on or if they are just another means for financial institutions and corporations to skirt around human rights abuses.


As a Law Fellow with Accountability Counsel, a nonprofit organization defending the environmental and human rights of marginalized communities around the world, I have had the opportunity to research the success of these various mechanisms at the macro-level in actually providing communities with a forum to lodge their complaints. Since 1994, 46 percent of the complaints filed with the accountability offices of the World Bank, IFC, Inter-American Development Bank, and Overseas Private Investment Corporation have been found eligible for assessment of whether the complaint can begin a substantive stage. Only 16 percent of complaints have reached problem-solving and only 15 percent have reached compliance review. Of the communities that make it to substantive stages of a complaint process, the chances are low that the community will actually receive any type of remedy.


Encouragingly, however, complainants assisted by Accountability Counsel have had greater success navigating the accountability system. A full 80 percent of Accountability Counsel complaints have been deemed eligible. Of the complaints Accountability Counsel has supported, so far 40 percent have reached problem-solving and 40 percent have reached compliance review (note that these are not mutually exclusive as complaints can reach both problem solving and compliance review). Based on Accountability Counsel’s success, it appears that the difference for affected communities in realizing positive outcomes may be a matter of attaining advocates educated in navigating the accountability office process. Although the general statistics show that whether or not affected communities have access to remedies through accountability offices is an open question, the importance of advocates, missing in most cases, leaves open the potential of these offices to deliver access to remedy so long as innovative advocates are willing to participate in the process.

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