BRIEF October 8, 2019

Review Team Conducting the External Review of IFC/MIGA E&S Accountability, including CAO’s Role and Effectiveness

As IFC and MIGA seek to scale up private investment and create markets in the most challenging environments, the Boards of Executive Directors for IFC and MIGA have decided to launch and oversee an external review (the “Review”) of IFC and MIGA’s environmental and social (E&S) accountability, including the role and effectiveness of the Office of the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA.

Given two decades of operational experience by the CAO and IFC/MIGA, and a context that has evolved significantly in the years since CAO was created, it is an opportune time to review and reflect on the institutions’ E&S accountability.

This decision reflects the Boards’ continuing focus on effective and efficient accountability functions. The Review will be independent and include engagement with a broad range of stakeholders.

The review will consider the respective roles of the Board, management and CAO, including the governance and effectiveness of the CAO comprising the CAO’s three functions (Dispute Resolution, Compliance, and Advisory), the role of IFC and MIGA and their clients in identifying, mitigating and responding to concerns regarding adverse environmental and social impacts of the business activities each finances or insures, and the oversight function of the Board.

The objectives of the Review are to evaluate, provide high-level recommendations, while taking into consideration benefits and risks to all stakeholders, and enable the IFC and MIGA Boards to make decisions with respect to:

1.      The optimal governance arrangement for the CAO in light of the purpose of each of its functions (Dispute Resolution, Compliance and Advisory);

2.      (a) The role and effectiveness of CAO, including its Operational Guidelines (2013), against the requirements of its mandate and Terms of Reference (TOR), and Operational Guidelines (2013); (b) IFC and MIGA’s responsiveness to concerns regarding adverse E&S impacts of the business activities of their clients; (c) Impacts that current CAO processes have on stakeholders, including communities, clients and governments, as well as on IFC and MIGA operations, policies, and risk profile; and (d) uptake of learning from CAO’s work at the level of IFC and MIGA’s policies, standards and practices;

3.      Any needed calibrations to CAO’s complaints handling processes or operational guidelines to fulfil its role and improve overall effectiveness and efficiency;

4.      Any needed calibrations to IFC/MIGA’s complaints response including ways in which IFC and MIGA respond to CAO processes as well as to other complaints or concerns not related to CAO; and;

5.      Any need to develop complaint/grievance mechanisms through which project-affected people and communities may raise concerns directly with IFC/MIGA Management.

The Review will be led by a team comprised of experts in private sector development in emerging markets, environmental and social sustainability, independent accountability mechanisms (IAMs), and IFC and MIGA operations. In assessing these issues, the Review Team will seek input from a multi-stakeholder group including representatives from the CAO, IFC and MIGA, civil society, IFC and MIGA clients, independent accountability mechanisms and government officials.

Information about membership of the Review Team is available here.

The Review Team is expected to conclude its work by May 2020.

Feedback and suggestions about the Review may be sent to the Review Team

About the Office of the Compliance Advisor Ombudsman (CAO)

The Office of the Compliance Advisor Ombudsman (CAO) was established in 1999 and is the independent accountability mechanism for IFC and MIGA, reporting to the President of the World Bank Group. CAO’s mandate is to address complaints from people affected by IFC and MIGA projects in a manner that is fair, objective and constructive, and to enhance the environmental and social outcomes of IFC and MIGA projects on the ground. Through three complementary roles—dispute resolution, compliance, and advisory—CAO helps resolve issues collaboratively between affected communities and IFC/MIGA project sponsors, independently verify IFC/MIGA due diligence and compliance against their environmental and social policies and deliver advice on broader environmental and social concerns to improve institutional performance. More information about CAO is available at www.cao-ombudsman.org

About IFC

IFC seeks to contribute to sustainable development and economic growth in emerging markets by helping private sector firms adopt good environmental and social practices that are implementable for a wide range of companies around the world. The Sustainability Framework articulates IFC’s strategic commitment to sustainable development and is an integral part of its approach to risk management. At its core are eight Performance Standards, addressing a range of environmental and social issues faced by the private sector. The Performance Standards are designed to help clients avoid, mitigate, and manage risk as a way of doing business in a sustainable way. More information can be found at www.ifc.org/sustainability

About MIGA

MIGA strives for positive development outcomes in the investment projects it insures. An important component of positive development outcomes is the environmental and social sustainability of projects. MIGA seeks to achieve these positive outcomes by working with its project partners to apply a comprehensive set of environmental and social performance standards.

MIGA’s environmental and social sustainability policies are derived from the Agency's extensive experience insuring investments around the world. They are a powerful tool for identifying risks, reducing development costs, and improving project sustainability—benefiting affected communities and preserving the environment. More information can be found at www.miga.org/environmental-social-sustainability.