New Independent Complaints Mechanism Policy Provides Helpful Guidance for Shared Accountability Models

Development cooperation is undergoing a big rethink that is prompting finance institutions to consider new possibilities through mutually beneficial partnerships and alignment on shared principles and goals. For example, more than 450 public development banks have been working to implement the “Finance in Common” initiative, appreciating that the influence they have over economic and social fabrics can be leveraged to support a healthier planet and a sustainable future. Anchoring to a hopeful vision of the future is important; but, no matter the intention, development financiers must also consider how to achieve cohesive accountability for collective ambitions.

Recently, three Finance in Common signatories in particular have vastly improved a model for delivering on their common goal of responsible and sustainable investment in developing economies. The March 2026 policy of the shared Independent Complaints Mechanism (ICM) has updated the accountability framework for three private sector development finance institutions (DFIs); Germany’s DEG, the Netherlands’ FMO, and France’s Proparco. 

Although each institution operates according to their respective mandates, they have agreed in principle that it is wise and good to offer a legitimate and trusted way for investment-impacted communities to express environmental and social concerns to help prevent or mitigate harm, and to facilitate remedy for adverse impacts. Building upon more than a decade of learning and case experience since the ICM was first established, the updated policy not only offers greater transparency and predictability, but it also positions the three banks to deliver on their environmental and social commitments more efficiently. Although the new ICM policy is not perfect, it does provide a model for shared accountability mechanisms that institutions should consider as they are working to improve their human rights and environmental accountability. 

How good policy for shared mechanisms has been embraced through the ICM updates

The assessment below focuses on ways the ICM has been equipped to be effective in accordance with core criteria for non-judicial grievance mechanisms articulated by the UN Guiding Principles on Business and Human Rights. 

Independence

‍On a fundamental level, the ICM has been vastly improved with respect to its independence. By centralizing and positioning the ICM to be structurally independent from DFI management, the ICM is equipped to offer a more predictable and equitable process, no matter which DFI is implicated in a complaint. Further, the ICM has been empowered with decision-making agency, not only with respect to internal matters like budget, personnel, and governance, but also with respect to case-handling. These responsibilities are managed by the ICM’s Independent Expert Panel (IEP), which consists of a Panel Chair and two independent experts with complementary expertise in environmental, social, human rights, legal, and financial matters.

The policy grants the ICM full ownership over eligibility determinations, while also requiring that it act transparently by providing clear reasons for any determination of ineligibility. The policy also affords the IEP discretion over decisions to defer complaints to management for a period of time outside of the ICM process. Importantly, that discretion is constrained by a requirement that complainants consent to deferral, thus safeguarding the agency of complainants. Deference is also afforded to the ICM with respect to its ability to recommend an investigation absent an eligible complaint in exceptional cases when it observes that severe harm connected to a DFI project has occurred and retaliation concerns might prevent people from speaking out, or when there is an indication of systemic non-compliance related to issues raised in a previous complaint.

Further, the IEP crafts the terms of reference that determine the scope of compliance reviews, which is critical to prevent the perception that the DFIs may try to constrain scrutiny of actions or omissions leading to harm. The ICM will hold itself accountable to its duties and responsibilities by reporting all of its decisions and actions to the Supervisory Boards of the DFIs, providing regular updates to Management Boards, and keeping complainants and the public apprised through regularly updated case registries on a website maintained by the ICM’s operational staff. By trusting the ICM and empowering its independence, the DFIs have created a more trustable accountability process. 

Legitimacy

‍The ICM’s legitimacy has been improved with the policy now articulating that part of its core mandate is to provide access to remedy. After all, what good would it serve communities to  engage with an accountability mechanism if the process does not offer a way to address the harm that prompted them to speak out? According to this new remedy mandate, whenever the IEP finds that non-compliance with policy intended to safeguard against environmental and social harm contributed to harm experienced by complainants, it will provide DFI Management with human rights-aligned recommendations to provide redress and to prevent recurrence of harm.

Further, if the IEP determines that DFI Management has not proposed an action plan that would facilitate remedy for harm caused by noncompliance, then it may assert itself as a way to compel additional actions toward remedy. To assure the delivery of remedy, the IEP will independently monitor the implementation of management action plans, conduct site visits as it deems necessary, and issue public monitoring reports at a frequency of at least once a year. 

Fairness

Undergirding the ICM’s independence are measures in place to ensure that IEP acts and is perceived to act as a neutral party as it exercises its quasi-judicial duties. First, candidates for the IEP must not have worked in the past four years in any capacity, including as consultants, for any of the three DFIs. Second, they are not permitted to work for the three DFIs in any capacity for a period of five years after serving as an IEP member. Third, any ICM Panel member or staff member that has a conflict of interest regarding an individual case must not participate in that case.

These proscriptions help to address potential personal incentives that can compromise an accountability process and trust in the process. These steps alone appear sufficient because the ICM is not structured as a fee-for-service mechanism, self-interested in maintaining a contractual relationship with the DFIs. There are numerous other shared mechanism models that do rely on a contractual relationship to provide accountability and grievance redress services; within those systems, more must be done to develop bright-line rules prioritizing trust and integrity above the maintenance of transactional relationships. 

One step to balance the interests of maintaining client relationships and delivering strong accountability is articulated by the new ICM policy. It expressly requires the DFIs to only work with clients who contractually agree to allow the ICM to have access to all records relating to a DFI Finance Operation, and allow the ICM to conduct site visits as needed. Similarly, contracts between third-party grievance and accountability mechanism services and their corporate clients should protect the mechanism’s ability to investigate and provide transparent reporting under penalty of breach. 

The ICM’s integrity is also bolstered by recognizing that a fair process is only actually achievable by addressing imbalances of power that hinder communities from participating and advocating for their interests to the same extent as well-resourced institutional parties. For example, if parties agree to engage in dispute resolution, then the IEP may provide or facilitate capacity-building activities at the preferred locations of Complainants to help them better engage in the process. The IEP must also work to understand cultural contexts and potential language barriers to ensure that communities are not coerced into agreements. Further, communities are not preempted from also pursuing compliance review through the ICM if dispute resolution efforts result in no agreement or only partial agreement on material issues. 

Accessibility

Whereas the previous ICM policies required that complaints may only be brought concerning projects supported by an “active financial relationship” with one of the DFIs, the new policy has broadened accessibility to better support prevention of harm and redress for harm that occurred before the financial relationship ended. While complaints concerning projects not yet approved by the DFIs for financing will still be determined to be ineligible for the ICM process, the IEP may still relay the complaint, with the consent of complainants, to relevant DFI Management teams, and it will allow complaints to be resubmitted should an active financial relationship manifest.

Complaints concerning projects of which the DFIs are no longer involved will be deemed eligible if the complaint is brought within 12 months after exit, there are compelling explanations for not bringing the complaint before exit, and the cause of harm alleged occurred before exit. While this particular policy improvement should be celebrated as a broadening of accountability in the service of improved access, it has fallen short in providing full accountability for responsible exit commitments that require DFIs to consider the sustainability impacts caused by the timing, structure, and process of exit. To provide accountability in this regard would have necessitated that the ICM hinge eligibility determinations not only on whether harm occurred during the time of the active financial relationship, but also for a period after exit. 

Safety

The ICM policy has also been updated to better account for the potential safety concerns of complainants speaking out against a project to assert their rights or interests. Better assurance of safety equally supports improved trust and access. The policy now requires the ICM to perform contextual assessments of retaliation risks throughout a case in order to identify and implement tailored preventive measures. The ICM must work in close coordination with persons subject to retaliation to develop appropriate measures in response to retaliation, and it must obtain the informed consent of those persons before taking actions against retaliation. 

Building trust with complainants is essential to protect them, and here the policy facilitates trust by deferring to the concerns and interests of those who may be subject to retaliation. Further, the ICM will hold itself accountable to appreciating safety concerns by publishing an annual report containing anonymized data on instances of retaliation and measures taken in response. These reports will not only be in the service of institutional learning, but it will also help potential complainants better appreciate risks to help them deliberate whether to engage with the mechanism. 

Predictability

A more predictable process is also a more trustable process, insofar as potential complainants should be able to assess for themselves whether the effort and risks of filing a complaint are worth the likelihood of achieving timely response or remediation. The predictability of the ICM process has been substantially improved with respect to clarity over the admissibility of complaints with respect to the relationships that the DFIs have to a given project. 

The policy now explains how eligibility determinations will be made concerning complaints that implicate projects enabled by the financial intermediary lending activities of the DFIs. Essentially, the ICM will consider whether the project at issue was financed through an “asset class approach,” a “portfolio approach,” or as an equity investment: 

• All equity investment projects are subject to the entirety of the ICM process. 
• Subprojects financed through the asset class approach are subject to the ICM process only if they are determined to fit within the specific class or category of assets contractually agreed upon to be subject to the environmental, social and human rights requirements of the DFI, rather than to all assets in the entire portfolio of the Financial Intermediary.
• Subprojects financed through a portfolio approach, which applies environmental, social and human rights requirements on the entirety of a financial intermediaries portfolio, may be eligible for compliance review, but not dispute resolution. 

Articulating clear policy governing the ICM’s disposition on eligibility is a good first step, but for the policy to be of any use, more must be done by way of proactive disclosure to help potential complainants understand DFI lending activities. Several civil society organizations have helped to address these needs by offering financial tracking services, but this really should be a cause taken up by the DFIs themselves. 

A source for continuous learning

We should also celebrate that the ICM has been equipped with two new functions integral to improving the mechanism and the DFI’s engagement on environmental, social, and human rights due diligence, and remedy over time. The ICM’s Advisory function will allow it to provide advice based on case learnings to the DFIs in a multitude of formats. On a case-by-case basis, the IEP and the DFIs may agree to make that advice publicly available for the benefit of other institutions and stakeholders. Its Outreach function will allow it to better communicate its existence and utility to potentially interested persons both internal and external to the DFIs for the purpose of improving responsiveness and engagement on remedy. 

Expanding and replicating the ICM model

The improved policy offers a compelling model for cooperative accountability largely centered in good practice. While many other finance institutions have developed their own bespoke accountability mechanisms, the emergence of shared and centralized accountability mechanisms stands to promote a standard of institutional responsiveness to human rights and sustainability impacts. In this regard, replicating or expanding the ICM model could support a more efficient and systems-wide approach to broad sustainability initiatives like Finance in Common. A shared mechanism could also help fulfill sustainability goals aspired to by the Association of European Development Finance Institutions, of which FMO, DEG, and Proparco join 12 other European bilateral institutions dedicated to financing the private sector in Southern countries. Equally, a shared mechanism could improve adherence to the Equator Principles by reinforcing the framework’s integrity beyond what might be perceived as a scheme to control narrative through self-reporting. 

The new ICM policy can be considered a guidepost toward the right direction for shared mechanisms that may likely proliferate as new forms of development cooperation take shape, and as the duty to have effective grievance redress and remediation mechanisms is enforced through mandatory human rights due diligence laws. Insofar as good practice is informed by experience, it will be important to monitor implementation and assess complainant satisfaction with the process and outcomes over time. 

Conclusion

The ICM policy is now one of the strongest models for shared accountability in this new age of development cooperation, and one that we would support other partnerships and memberships replicating. We commend the strong consultation design to review and develop the mechanism, setting aside our reservations that the external review report informing the draft policy should have been disclosed in the service of more robust and informed consultation with those who are not experts in these mechanism policies but nonetheless depend on strong policies to advocate for their rights and interests. 

Overall, the policy has produced a hopeful design for cooperative accountability. Now it is time to focus on outcomes, as a policy is only as good as its implementation. We urge FMO, DEG, and Proparco to respect and actively engage in the ICM process when called upon to ensure strong accountability for environmental and social due diligence, and meaningful remedy for adverse impacts.