Last week, the World Bank Group’s (WBG) Board of Directors took the unprecedented step of overruling the Compliance Advisor Ombudsman’s (CAO) finding that the International Finance Corporation (IFC) violated its own policies in its microfinance investments in Cambodia. By rejecting CAO’s investigation report, the Board absolved IFC management of any obligation to develop an action plan to address harms caused by its investment, including loss of land and livelihoods, hunger, increased suicide risks, and threats of retaliation. We commend the CAO Director General Janine Ferretti for her principled decision to resign in response to the Board’s illegitimate interference with the WBG’s accountability system.
At the same time, the Board recently announced its plans to integrate the WBG’s accountability mechanisms, the CAO, the Inspection Panel, and the Dispute Resolution Service. We have supported modernizing the WBG’s accountability system, which too often fails to deliver remedy, but only if the strongest policies and governance practices are preserved. The Board’s decision to undermine CAO’s findings does the opposite and leaves us deeply concerned about the future of accountability at the WBG.
Read BIC’s full statement here.
