Comments on the Draft "Procedures to Submit Objections Concerning the Japan Bank for International Cooperation's Guidelines for Confirmation of Environmental and Social Considerations"

 

Submitted by the Center for International Environmental Law
and Pacific Environment

 

March 15, 2003

Thank you for the opportunity to provide comments on the draft Procedures to Submit Operations Concerning the Japan Bank for International Cooperation's Guidelines for Confirmation of Environmental and Social Considerations (the "Draft Procedures"). The Japan Bank for International Cooperation's ("JBIC's") decision to create an Office of Examiners to review compliance with JBIC's environmental policies is a welcome and important step toward increased accountability and improved development effectiveness. JBIC's efforts will set important precedents for export credit and development agencies around the world.

The Center for International Environmental Law (CIEL) and Pacific Environment have long been involved in the development and implementation of accountability mechanisms and the adoption of environmental and social standards at export credit agencies. We have, for example, monitored closely activities at the World Bank Inspection Panel, the International Financial Corporation's (IFC's) Compliance Advisor/Ombudsman, the Asia Development Bank's (AsDB's) Inspection Function and the InterAmerican Development Bank's (IDB's) Independent Investigation Mechanism. We believe these accountability mechanisms provide important opportunities for ensuring that international development activities are responsive to the interests and voices of affected communities. Although we believe that the Draft Procedures demonstrate JBIC's willingness to adopt an effective and independent process, we believes that several revisions are needed to strengthen the procedure further and make it more effective in serving the needs and interests of affected communities. Our comments are presented in the same order as corresponding sections of the Draft Procedures.

Preamble

Expanding the Applicable Standards. The current procedures only allow a review of compliance with JBIC's environmental guidelines. We believe that the Examiner should also be empowered to review compliance with other JBIC guidelines or policies that exist currently or are established in the future, as well as certain international standards to which Japan has agreed. For example, the Examiner should be able to review complaints regarding alleged violations of international human rights, environmental or labor standards in projects that it is supporting. JBIC has a substantial interest in ensuring that the projects it finances comply with those international standards accepted by Japan. Expanding the scope of the Examiner's review is also consistent with the practice of the IFC's Ombudsman office, which has the authority to take into account international standards other than the IFC's own guidelines.

Powers and Duties of Examiner

Public Outreach and Assistance. The Examiners should also be given the explicit authority to inform the public generally about the Office of the Examiner and to provide specific support to affected communities who request help in filing a Request. The Examiners' budget should include funding for outreach efforts and for enabling the Examiner to meet with affected communities to inform them of their rights under the Draft Procedures.

Site Visits. In most cases, the Examiner will need to visit the site of the proposed project and to verify and evaluate the facts presented to him either by the Requester, the Project Proponent or the Bank's operational staff. The Examiner should have the authority to request permission for a site visit from the host government and Project Proponent. Site visits are a critical part of an effective factual investigation. Although they can raise sensitive issues of sovereignty, without site visits any accountability mechanism is severely weakened. All similar accountability mechanisms (for example, at the World Bank, IFC, AsDB and IDB) allow for site visits with the approval of the host country. In only a few cases has that approval been difficult to obtain. We strongly urge JBIC to clarify throughout its procedures that the Examiner will have the option (with the approval of the host government) to conduct reasonable site visits during both the preliminary investigation and the full investigation phases.

Requirements to Commence on the Procedures

Timing for Requests. JBIC's Draft Procedures unnecessarily restrict the time period within which a Request can be filed. By the time the Bank has completed its appraisal or executed a loan agreement, the project may be too far in development to change significantly in light of issues raised during the evaluation of compliance. Indeed, the purpose of much of JBIC's environmental guidelines is to ensure proper procedures are followed during the project preparation phase. Making revisions to a project after appraisal and particularly after a loan agreement is executed unnecessarily restricts the potential remedies that may be available in response to any violations of the JBIC guidelines found during the examination. JBIC, the project proponent and the Requester all have an interest in learning about any potential violations earlier rather than later in the project cycle. We thus suggests that Requests should be eligible as soon as it becomes clear that JBIC is considering financial support for a project.

Under the Draft Procedures, JBIC will forward to the Operations Department any "comments" received prior to the period allowed for submitting a Request. The Examiner should gain the permission of the Requester to forward any Request before doing so and should actively monitor the Operational Department's response to ensure that it is addressed in a timely and constructive way. By taking an active role in monitoring any response to comments sent to the Examiner's office, the Examiner will maintain its credibility in the eyes of the affected communities.

Contents of the Request

Requests in Other Languages. We support JBIC's proposal to accept Requests in languages other than Japanese and English. As suggested by the Procedures, translating claims can take substantial additional time. In such cases, we suggest that JBIC provide an immediate response to the Requester saying that the claim has been received and estimating how long it will take until they receive a more formal notice of acceptance of the claim. In this way, the Requesters will know that their request is being processed.

Confidentiality of Requests. JBIC's Draft Procedures allow for the identity of Requesters to be kept confidential "unless otherwise required by law". It is absolutely critical that Requesters who feel their security is threatened are assured that their identities can be kept confidential. If some other law in Japan could lead to the release of the names of specific Requesters, then the Requesters should be informed in advance and allowed to withdraw their requests or take other action to protect themselves.

Identifying Violations of the Guidelines. JBIC's Draft Procedures require that the Requester identify which provisions of the Guidelines they believe have been violated. This provision can be particularly difficult for affected communities who may not have easy access to the Guidelines in a language that they understand. Similar requirements in other accountability mechanisms have proven to be unnecessary and overly burdensome for affected communities. The new AsDB proposed accountability mechanism (now available on their website) eliminates this requirement and allows for claims to be filed without any specific policy violation identified. Similarly, the IFC Ombudsman does not require the identification of a policy violation and the World Bank Inspection Panel actively helps claimants to identify relevant policies. JBIC should not require that the Requester identify specific policy violations.

Consultation with the Project Proponent and Operational Department. We agree that problems with compliance should first be raised with the Project Proponent and Operational Department. To maintain confidentiality and to make the system less burdensome, however, all that should be necessary is that the subject-matter of the Request has been raised with the Project Proponent and Operational Department. This will ensure that they have had an opportunity to fix any problems with noncompliance. The Draft Procedures suggest that the specific Requesters have to show that they communicated directly with the Project Proponent and Operational Department. This can add substantially to the burden facing the communities because it adds two additional steps of consultation to the process. At the World Bank, in practice it has been sufficient to show that the Project Proponent and Operational Department have been provided an opportunity to address the issues raised in the Request, regardless of who brought those issues to their attention. Often by the time a Requester has decided to appeal to the Examiner, substantial dialogue will already have occurred between the Project Proponent and the community-but the dialogue may not have been with the specific Requestor. As long as the subject-matter of the Request has been raised, then the Project Proponent and Operational Department would have had adequate opportunity to address any problems.

Process of Submitting a Request.

Confidentiality of Requesters from the Operational Department. In paragraph 1 of this section, JBIC should also clarify that where the Requester asks that their identity be kept confidential, the Examiner will not provide any information to the Operational Department, as well as the Project Proponent.

Suspending a Decision to Commence the Procedures. JBIC's Draft Procedures allow the Examiner to suspend a decision to commence the procedures, if the same issues are being raised regarding the project at another international organization's accountability mechanism. Although CIEL understands the value of hamonization and coherence between these different accountability mechanisms, we believe that JBIC has an independent responsibility and interest in ensuring that their guidelines are not violated. Other international institutions are typically not going to evaluate compliance with JBIC's guidelines and thus JBIC should not defer to those procedures. JBIC may look for ways to work cooperatively with accountability mechanisms from other international institutions, including by sharing information or conducting joint site visits-but should not defer completely to those other institutions.

Investigating the Facts of Compliance. The Draft Procedures should provide broad discretion to the Examiner to take whatever steps are necessary to conduct a thorough investigation. For this reason, the authority to conduct site visits should be explicit (as mentioned above). In addition, the Draft Procedures should not specify the subject matter of the interviews the Examiner can have with the Operational Department. The following sentence should be rewritten as follows:

The Examiner shall interview relevant persons in the Operational Department and ascertain the facts relating to the Request. concerning (i ) the environmental assessments conducted on or before the execution of the relevant loan agreement and (ii) monitoring.

Monitoring and Follow-up. The Examiner should be given the explicit authority to monitor implementation of any instructions issued by the Governor in light of a Request. The Examiner should have full authority to make an independent evaluation of the status of implementation, including by conducting a site visit if necessary. As suggested by the Draft Procedures, the Examiner should report on the status of implementation in its Annual Report.

Disclosure of Information. As suggested by the Draft Procedures, the Examiner must operate in a transparent manner, consistent with the law and concerns over confidentiality and the protection of the Requester's identity. The Draft Procedures suggest that a public register will allow the public to follow the progress of any Request through the different procedural milestones set forth in the Procedures. We also understand that the final report will be made public, which is a critical requirement for the effectiveness of the Procedures.

Sample Request. As suggested by the comments above, we would eliminate Paragraph (E) on the sample request, which requires identification of the specific provisions of the Guidelines that have been violated. Alternatively, the Sample Request could indicate that providing information about violations is helpful and optional but not mandatory.

Sample Notice of Acceptance and Sample Notice to Commence Procedures. According to the English translation provided, the language used in the Sample Notice of Acceptance and Sample Notice to Commence Procedures is too complex and formal. It does not need to be so legalistic and should be written so that it can be easily translated and understood by locally affected communities.

Also, according to the English translation of the Draft Procedures both the Sample Notice of Acceptance and Sample Notice to Commence Procedures state that the Examiner will "inform the Requester of the date and time of any interview." This language is heavy-handed and does not suggest a cooperative or open relationship with the Requesters-many of whom will not easily be able to travel from their affected communities to Japan. This language should be modified to indicate that the Examiner will work cooperatively with the Requester in identifying a time and place of mutual convenience for an interview.

Sample Results of Examination. As suggested by the comments above, we would eliminate the requirement that a Requester identify the specific provisions of the guidelines that are violated. Paragraph (e) of the Sample Results of Examination would thus be written to show that the Examiner has reason to believe that there may be a violation and not that the Requester has shown a violation.

We also recommend that the language be changed in paragraphs (g) and (h) of the Sample Results of Examination. The existing language in the Draft Procedures (according to the English translation) suggests that if the Project proponent has responded "faithfully" or if the Operational Department has "already been consulting with the Requester", the Examiner can reject the Request. The Sample Form thus seems to have changed the standard for a Request. In the Draft Procedures, the Requester is only required to bring their Request to the Project Proponent and Operational Department, but after doing so it is the Requester's choice to file a Request if they are dissatisfied with the consultation-regardless of whether the Project Proponent or Operational Department are making a good faith effort at dialogue. The Sample Form should reflect the fact that the Requester can bring a Request if they are unhappy with the response or consultation.

Thank you for this opportunity to comment on JBIC's Draft Procedures. We look forward to the release of the final version and the establishment of the Office of Examiners. Should you have any questions, please do not hestitate to contact us.

CIEL:
Anne Perrault, aperrault@ciel.org

Pacific Environment:
Douglas Norlen, doug@pacificenvironment.org