September 1, 2023

By Hillary Tendai Mugota-Bertha Justice Fellow

Independent accountability mechanisms (IAMs) are emerging platforms or  forums for communities whose human rights and environment are harmed by investments, to raise their concerns and have them addressed.^[1] They are simply systems put in place to address complaints by people who are affected by the conduct of a company or development project implementers, and they ensure accountability and transparency on the part of companies in the conduct of their work. These mechanisms are essentially created to hold the institutions accountable to their own policies and to provide access to remedy for individuals and communities that are adversely affected by their projects.^[2] These IAMs are an important form of protection for communities as they provide  a vital channel to have their concerns investigated.^[3] When implemented effectively they can be transformative tools for justice, by way of convening dialogues, conducting investigations in a timely, fair and independent manner which therefore enhances the objective of IAMs to ensure that affected communities get redress through a cost-effective, non-judicial method for reporting complaints and a structure for accessing a fair hearing and appropriate remedies.^[4] IAMs are often industry-driven to ensure that communities impacted by operations of members of an association/chamber of private entities have a mechanism to seek redress. They may also be developed by financial institutions that provide funding to project implementers. In this blog, I discuss some of the key IAMs that have been developed, their benefits to communities and how they can be accessed in the context of communities impacted by mining or infrastructure development projects. Before discussing the objectives of IAMs, it is important to emphasise that the basic principles encircling an adequate and effective IAM are independence and transparency of the mechanism, accessibility of the mechanism, transparency during and after the conclusion of the complaint, usability of the mechanism, and predictability of the process.^[5]

Aims and Objectives of IAMs.

 IAMs  aim to address complaints from people who believe that they are negatively affected by specific projects in their communities, providing recourse to affected people in a way that is fair, effective, transparent and enhances the performance of the project implementers.^[6] These mechanisms  enable companies to be faithful and accountable to their policies and procedures especially those dealing with environmental and social safeguards, gender and respecting the rights of indigenous peoples. Practise has shown that most IAMs are founded with similar mandates, to provide a direct channel of recourse for project-affected communities with the goal of improving environmental and social outcomes on the ground and fostering greater public accountability of the development institutions involved. IAMs provide a more accessible, flexible and collaborative approach to dispute resolution than formal courts proceedings. Moreover, these IAMs are less costly and have the potential to deliver more timely resolutions to community grievances that may otherwise lead to litigation.[7] There are various IAMs that have emerged which are worth discussing and these are:

1. World Bank IAM – the World bank created the first IAM in 1993in response to political and public pressure from civil society seeking to ensure that projects funded by World Bank that affect people’s rights could be held accountable and ensure that communities could seek remedy. Since then, many other development finance institutions (DFIs), development agencies, and other financial institutions have followed suit.[8] These financial institutions include the likes of:
2.  Asian Infrastructure Investment Bank– established its accountability mechanism for project affected people in 2018, which aims at ensuring that the environment and local people are not harmed by projects financed by the institution.
3. Independent Project Accountability Mechanisms (IPAM) of the European Bank for Reconstruction and Development– was also set up to deal with complaints about environmental, social and disclosure matters related to the bank’s investments raised by project affected people and civil society organisations.
4. Green Climate Fund – the Green Climate Fund established an Independent Redress Mechanism whose objectives include to: (a) increase the effectiveness of the GCF’s operations; (b) be responsive to the concerns of people adversely affected by GCF funded projects or programmes; (c) be fair and equitable to all stakeholders; (d) be independent and transparent; (e) be cost-effective and expeditious in the delivery of just redress; (f) be complementary to other supervision, audit, quality control and evaluation systems of the GCF; and (g) follow international best practices that allow the proper redress of complaints by project affected communities.^[9]
5. Mining Industry led IAMs- there are also industry led IAMs meant to address complaints related to their operations. In Zimbabwe the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (CCCMC), a major industry association responsible for coordinating and formulating industry corporate social responsibility initiatives, recently launched guidelines and procedure on Mediation and Consultation mechanism for stakeholders in the mining sector that are affected by Chinese investments.[10]

All these mechanisms are set up in response to increased public pressure for greater accountability, transparency, and participation of civil society, especially marginalized and vulnerable groups, in development projects that affect their lives.^[11] Trends have shown how IAMs are evolving and proliferating , as different institutions have started to acknowledge and address the local impacts of development projects they support or implement, by way of adopting a series of social and environmental policies and procedure, in the form of independent accountability bodies. These bodies have the power to investigate complaints, thus creating a path between financial institutions and the ultimate beneficiaries of their projects.^[12]The IAMs of development finance institutions (DFIs) are often referred to as a model for non-judicial grievance mechanisms[13] that meet the effectiveness criteria in Principle 31 of the UN Guiding Principles.[14]

What are the common complaints addressed by these policies and the role of CSOs in accessing IAMs.

For the mechanisms to function effectively, it must be trusted by all stakeholders, including local communities, the financial institution’s management, the institution’s clients, and interested civil society organizations (CSOs). Project affected people must have confidence that the mechanism is empowered to address their problems and concerns. To foster such trust, the mechanism must be structured in a manner that maximizes its impartiality, credibility, legitimacy, and independence from the financial institution’s management, if not the institution.[15]

Most complaints forwarded by people are concerns relating to project due diligence and supervision, complaints related to environmental impact assessment, mitigation, and management, impacts to natural resources specifically land predominantly related to resettlement, compensation, acquisition, and management of land. Grievances that are also addressed by these IAMs might be based on the premise that valuable commodities have been removed from a locality or benefits are realized downstream of the project site, lack of awareness, understanding, or information about the project and how its anticipated upsides and downsides for a community will be managed.^[16] However, it has been noted that many individuals who experience harm resulting from financial institutions supported projects are not initially aware that there are non-judicial complaints mechanisms in place to address their concerns.[17]

What is notable in complaints to the different mechanisms is the predominant involvement of local civil society organizations (CSOs) and community-based organizations (CBOs) in helping connect affected people to the mechanisms, either alone or in partnership with larger national or international CSOs.[18]Accessibility of the independent accountability mechanisms to potential complainants considering these obstacles is one of the biggest challenges to their effectiveness. To improve project-affected communities’ awareness, understanding, and access. CSOs can work with financial institutions in disseminating information about the available mechanisms, procedures, operations, and cases. CSOs could also work with financial institutions in conducting public outreach that are well-resourced, that proactively and directly shares information about the complaint mechanism with communities, not only those impacted by current or expected projects, but those in the regions where the financial institution tends to operate in general.[19] To achieve accessibility of independent accountability mechanisms, these public outreach programmes must be undertaken in languages that the communities understand, in a manner that accommodate their cultural backgrounds, literacy, and technological constraints. These public outreach programmes should be inclusive of the most vulnerable populations such as women, youth, children, and those with impairments to ensure that information reaches all those who may be impacted by an internationally financed project.

Recommendations

Having discussed the objectives and principles of IAMs, the issue of accessibility and effectiveness remains a major drawback especially on the part of the affected communities. Institutions with established IAMs should try and work with CSOs and CBOs who work with the grassroot communities that are affected by projects that they fund, to disseminate information about these IAMs put in place for communities to raise their complaints.

---

[1] Good policy paper: Guiding practice from the policies of independent accountability mechanisms,’ 2021

[2] ‘Transparency and Accountability Series Discussion Paper2: Why the need for an Independent Accountability Mechanism at the New Development Bank?’, 2022 by OXFAM; South Africa Centre for Human Rights and Civil Society Forum on the New Development Bank.

[3] IBID 2

[4] ‘Independent Redress Mechanisms-2022 Annual Report: Expanding Accountability’, 2022 Green Climate Fund

[5] IBID 2

[6] ‘Independent Redress Mechanisms-2022 Annual Report: Expanding Accountability’, 2022 Green Climate Fund

[7]Accountability counsel ‘Accountability Mechanisms: Benefits and Best Practices for Impact Investors,’ p3

[8] Ibid 1

[9] Green Climate Fund IRM Procedures Paragraph 3

[10] ‘Commentary on the Mediation and Consultation Mechanism for the Mining Industry and Mineral Value Chain: Strengths, Weaknesses and Recommendations,’2023 by Mutuso Dhliwayo, Obert Bore, Josephine Chiname, Farai Mutondoro.

[11] ‘Civil society engagement with the independent accountability mechanisms: Analysis of environmental and social issues and trends.’

[12] ‘The proliferation of independent accountability mechanisms in the field of development finance,’ 2019 Elena Mitzman

[13] ‘Improving effectiveness of non-judicial mechanisms: focus on NCPs and independent accountability mechanisms,’ 2017 United Nations Forum on Business and Human Rights.

[14] Principle 31 of the UN Guiding Principles on Business and Human Rights highlights that; for non-judicial grievance mechanisms to be effective they should be legitimate, accessible, predictable, equitable, transparent, rights-compatible and based on engagement and dialogue.

[15] Ibid 1

[16] Ibid 10

[17] Ibid 1

[18] Ibid 12

[19] Ibid 1