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JBIC's Compliance Mechanism
The new JBIC Environmental Guidelines stipulate that JBIC must accept complaints regarding non-compliance from third parties. JBIC is therefore now preparing a complaints mechanism to put into effect together with the Environmental Guidelines on 1 October 2002.
Public consultations in which NGOs are also participating began in June
2002. Through this process, NGOs have put forward a recommended outline
for a compliance mechanism. The NGO proposal includes both a mechanism
for affected parties to file for an inspection for violation of the Environmental
Guidelines (similar to the inspection functions of the ADB or World Bank),
as well as an ombudsperson function, which would facilitate resolution
of conflicts that may or may not be a direct result of violation of the
Guidelines. JBIC, however, has released its own outline for a complaints
JBIC's proposed mechanism is extremely weak and illustrates the lack of
political will at JBIC to strictly implement its own guidelines. It could
also be an indication of the powerful corporate lobby which has hit the
public consultations for the complaints mechanism. The private sector did
not actively participate in the actual drafting of the Environmental Guidelines,
but once they were adopted, the corporate sector has come out in force.
Some have gone so far as to say that JBIC is capable of dealing with complaints
regarding projects, and a complaints procedure is therefore not necessary.
Main Points proposed for a Compliance Mechanism: NGO Proposal
The main points of the compliance mechanism proposed by NGOs are as follows:
Basic Principles--The mechanism must be:
- Fair: Complaints should be received by a body independent of JBIC's finance
divisions, and there should be guarantees of a transparent process, with
the participation of fully informed stakeholders.
- Objective and Transparent: In order to guarantee that decisions are based
on objective information, the independence of the inspectors and staff
must be guaranteed, and a transparent process is essential.
- Efficient: Procedures must be carried out in a timely manner.
- To inspect whether or not environmental impacts from JBIC financed projects
are a result of failure to comply with JBIC's Environmental Guidelines.
- To respect to the spirit of the new Environmental Guidelines: the complaints
procedure should strive to resolve problems relating to environmental and
social impacts, regardless of whether or not problems are a direct result
of failure to comply with the Guidelines or not.
- To link to policy reform of JBIC
- To increase accountability of JBIC.
- Establishment of Inspection Panel-- For the fulfillment of Objective a,
an inspection panel should be established. This Panel should report directly
to the JBIC president and have a permanent secretariat with full and part-time
Panel members, researchers, and administrative staff. It should also be
independent from JBIC's finance departments. Based on the complaints brought
forward, the Panel should conduct an investigation to determine whether
damages were a result of failure to comply with the Guidelines. Results
should be taken to the President, and the President should respect this
- Ombudsperson -- To fulfill Objective b, an Ombudsperson will be established.
The Ombudsperson must be independent of JBIC's investment and finance divisions,
and report directly to the President. It should have a permanent secretariat
with full and part-time members, researchers, and administrative staff.
Regardless of whether problems are a direct result of failure to comply
with the Guidelines or not, the Ombudsperson will work to resolve the problems
which arise by working with relevant parties, and call for responsibility
to be taken by the President.
- Joint meetings for the Environmental Guidelines-- To fulfill Objective
c, the Inspection Panel and Ombudsperson should meet together once a year.
They will review lessons learned from the complaints raised through the
year and make recommendations for policy change/improvement to the President.
Main Concerns regarding JBIC's Proposed Complaints Mechanism (as of early October 2002):
There are several serious concerns regarding the complaints procedure first proposed by JBIC. These concerns include:
- Potential Lack of Independence: An "Environmental Inspector"
will be responsible for investigating complaints, but the criteria for
this position do not ensure the Inspector's independence. In order to ensure
neutrality, it is specified that the Inspector must be independent of JBIC's
investing and lending units and cannot belong to those implementing the
project or the parties filing complaints. Other than this, there are no
criteria to ensure that the Inspector would not face a conflict of interest
due to her/his role in the project under investigation. For example, with
the current draft procedure, the Inspector could come from JBIC's Environment
Analysis Division, which is responsible for reviewing environmental impact
- Intimidation of Those who File Complaints: It is mentioned several times
in the draft procedures that those who file complaints may be held liable
for covering the cost of preliminary investigations or the inspection if
any false statements are found in their submitted documentation.
- Timing of Complaints: Complaints can be filed only after serious damages
due to non-compliance have occurred and after loan agreements have been
signed. This means that complaints cannot be raised regarding foreseeable
negative impacts. It is very difficult for investment and project plans
to be changed after loan agreements are signed. These requirements show
a disturbing lack of political will on the part of JBIC to address problems
early and prevent serious damage.
- Underlying suspicions: The tone of the procedure shows a strong underlying
suspicion that those who will file complaints are not to be trusted. Multiple
references are made to the need to ensure the procedure is not abused for
ulterior political or economic motives. Transparency is demanded of those
who file complaints, while confidentiality of borrowers is to be taken
A tentative and unofficial English translation of JBIC's proposed complaints
procedure can be seen at: