Proposed IFC/MIGA Inspection Panel

Draft Resolution Creating an Independent Review Panel for IFC and MIGA

The International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), the two private sector arms of the World Bank Group are not covered by the World bank Inspection Panel, have announced their intention to create an inspection mechanism. The IFC/MIGA inspection mechanism will be modeled, in part, on the existing World Bank Inspection Panel. The private sector nature of the IFC and MIGA, however, may require substantial changes from the existing Inspection Panel.

IFC and MIGA management have outlined their proposals for the mechanism in a number of meetings with non-governmental organizations as well as two documents: a June 19, 1996 Proposed Inspection Mechanism for Private Sectors Projects: IFC and MIGA Inspection Panel and a September 10,1996 Concept Paper for Consultation on Inspection Mechanism for IFC and MIGA intended to facilitate consultation with industry and the private sector. 

Claims Regarding the International Finance Corporation

THE BIOBIO CLAIM (CHILE)

In November, 1995, the Grupo Accion del BioBio (GABB), a Chilean organization representing environmentalists and indigenous peoples concerned about construction of the Pangue/Ralco hydroelectric dams on the BioBio River in Chile, filed a claim with the President of the World Bank. The claimants alleged that the International Finance Corporation (IFC), a member of the World Bank group, had violated relevant policies regarding indigenous peoples and environmental assessment and failed to supervise properly the implementation of the project. The claimants recognized that the Panel did not have jurisdictionover IFC-financed projects, but requested that the IFC president authorize the Bank's Inspection Panel to investigate the claim and that the IFC executive directors adopt the inspection panel mechanism. The directors subsequently agreed to launch an internal investigation of the claim and to consider extending the Bank Panel's jurisdiction to the IFC. An independent investigator was appointed to review the Pangue/Ralco project.. Neither this report nor the internal reviews submitted by a Bank consultant in May and September have been released to the public, calling into question the Bank’s policies on transparency and accountability.

In March 1997, ENDESA, SA, the parent company of Pangue prepaid its $150 million loan to the IFC in an attempt to avoid the social and environmental responsibilities associated with the loan. In April 1997, the independent review of Pangue was presented to the President of the World Bank.

For more information, please contact Marcos Orellana or Anne Perrault.