European Bank for Reconstruction and Development (EBRD) | Project Complaint Mechanism (PCM)
The European Bank for Reconstruction and Development (EBRD) finances development projects and is the single largest investor in Central Europe and Central Asia. The EBRD invests mainly in the private sector, but often with public partnerships.
European Bank for Reconstruction and Development (EBRD)
Created In: 1991
Headquarters: London, United Kingdom
Member Countries: 66
Largest Shareholder: United States
Mission: To develop open and sustainable market economies in countries committed to, and applying, democratic principles.
The Accountability Office: Project Complaint Mechanism (PCM)
Established in: 2010
Functions: Compliance Review, Problem Solving
The Accountability Office
The EBRD’s accountability office is the Project Complaint Mechanism (PCM). The PCM provides people and civil society organizations affected by EBRD-financed projects a means to raise complaints with the bank. The PCM has two functions:
- Problem Solving – this function of the PCM is designed to create dialogue between the parties using methods of fact-finding, mediation, conciliation, dialogue facilitation, investigation, or reporting.
- Compliance Review– this function of the PCM reviews complaints to determine whether the EBRD has complied with its own environmental, social, and information disclosure policies.
Submit a complaint to the PCM if:
- You are an individual, group, or civil society organization,
- You are located in an EBRD project area, or
- Your livelihood may be impacted by an EBRD project (for requests for Problem Solving).
For a compliance review, any person or organization may submit a complaint. In both cases, you must have information that a project supported by the EBRD has caused, or is likely to cause, harm. The PCM determines eligibility and proceeds with problem solving, a compliance review, or both. The PCM issues public reports of findings, EBRD management responds, then the PCM monitors and publicly reports on any approved actions to correct noncompliance until there is compliance.
In May 2019, the EBRD board of directors approved a new Project Accountability Policy. Under the new policy, the PCM will be replaced with a new mechanism, the Independent Project Accountability Mechanism (IPAM). This transition will be effective upon the hiring of a new head officer to lead IPAM, which is expected to occur in early 2020.
Continuing from the 2013-2014 review of the Project Complaint Mechanism’s (PCM) Rules of Procedure, Accountability Counsel has advocated for structural and procedural improvements to the PCM’s operations. Our Global Communities and Policy teams have coordinated closely to integrate lessons learned from our case experience in Mongolia into our policy advocacy in order to strengthen the PCM’s effectiveness and independence.
The PCM currently sits under the Office of the Chief Compliance Officer (OCCO), and this remoteness from the EBRD board of directors has raised serious concerns about the mechanism’s ability to deliver its findings free of undue influence. Moreover, the PCM officer does not sit at the senior management level within the EBRD. This placement of the PCM within the institution has implications for the both the PCM’s perceived and actual independence and the weight with which the EBRD treats accountability issues.
The PCM uses a roster of independent experts in various functions at the mechanism, including conducting compliance reviews of projects. The PCM’s use of external experts, while potentially contributing to the independence of the mechanism, often leads to inconsistency across the experts in their approaches to evidentiary standards, site visits, and other compliance review procedures.
Transparency and Legitimacy
The PCM currently lacks a stakeholder advisory group, which undermines its transparency and legitimacy. Such a group can provide expertise and advice on best practice to the PCM, allowing it to continually improve its operations. Restructuring the PCM would address these and other gaps and ensure that the PCM is able to effectively address complaints concerning harms caused by EBRD investments.
The EBRD has taken interim measures to mitigate some of these concerns, giving the PCM a reporting line to a board committee and adjusting how it selects external experts. The EBRD has also approved a new mechanism policy that addresses many of these issues. However, the new policy is not expected to go into effect until 2020, making continued advocacy during the transition period key.
Accountability Counsel and our partners have been engaging in advocacy concerning the current challenges that the PCM faces in delivering meaningful remedy.
In January 2017, we sent a joint letter with SOMO, OT Watch, and CEE Bankwatch Network to the EBRD president and board of directors highlighting the issues at the PCM. The letter followed up on a November 2016 EBRD board and civil society meeting on accountability at the PCM and called for several changes, including:
- An early revision of the PCM Rules of Procedure. The revision is currently underway;
- The creation of a senior management position for the PCM director, similar to that of the vice president of the Compliance Advisor Ombudsman (CAO) of the International Finance Corporation (IFC), which would give the PCM greater legitimacy among its users, more resources to provide remedy and identify problematic projects, and direct access to EBRD’s decision makers;
- The removal of the PCM from OCCO. The PCM should report directly and independently to the board;
- The ability of the PCM officer to provide its quarterly report directly to the board’s audit committee. The briefing should include, for example, the status of its case docket, implementation of management action plans, emerging trends, budget, financial information, etc.;
- The immediate establishment of a stakeholder advisory group, similar to that of the IFC’s CAO; and
- The creation of PCM guidelines for handling complaints in order to improve internal consistency, particularly among its compliance reviews.
In its response to the letter, the EBRD established that the PCM Officer would, from now on, provide a quarterly report directly to the audit committee as a part of OCCO’s report.
In March 2017, we followed up on our earlier advocacy with a letter to the EBRD president and board highlighting issues in recent EBRD complaints, including our Mongolia case. The letter reiterated several recommendations for the PCM, including the development and adoption by the PCM of its own guidelines for handling complaints in order to improve internal consistency and ensure conformance with best practices for independent accountability mechanisms. In response, the EBRD has committed to raising consistency issues in future trainings with PCM experts and staff.
Accountability Counsel’s Policy Director, Kindra Mohr, attended the EBRD Annual Meeting and Business Forum in 2017 (Cyprus) and in 2018 (Jordan) to further advocate for PCM reforms. She and our partners met with bank leadership to raise these issues and work to ensure that the PCM delivers real remedy to affected individuals and communities.
The EBRD officially commenced the review of its three major governance policies, including the PCM Rules of Procedure, in February 2018. This review, which also includes the EBRD’s Environmental and Social Policy and Public Information Policy, began with the first of two phases of public consultations. During the first phase of consultations, occurring from 12 February, 2018 to 10 April, 2018, the EBRD accepted written feedback on the current policies. Our joint submission of comments on the current PCM Rules of Procedure and the functioning of the mechanism can be found here.
In January 2019, the EBRD published its draft Project Accountability Policy. The draft reflected many of our recommendations, especially those on structure and governance, though a number of issues remained. The release of the draft policy marked the beginning of the second phase of public consultations. In London in March 2019, Accountability Counsel and its partners advocated for additional improvements to the draft Project Accountability Policy at an in-person consultation and a roundtable discussion between civil society and the board. Shortly thereafter, Accountability Counsel and 24 CSOs submitted joint comments and recommendations on the draft policy.
The final version of the Project Accountability Policy was approved by the board in May 2019. The final policy built on the improvements in the draft policy, incorporating additional recommendations and further strengthening the accountability framework of the EBRD. The Independent Project Accountability Mechanism (IPAM), the new mechanism created by the policy, will become operational upon the hiring of a new mechanism head, which is expected to occur in early 2020.
Accountability Counsel will continue our advocacy to ensure that IPAM is fully equipped to effectively address harm stemming from EBRD investments.
- Past Advocacy
Documents by Release Date
Apr 2018 – Accountability Counsel submitted joint comments to EBRD on its current PCM Rules of Procedure and the functioning of the mechanism.
Mar 2017 – Accountability Counsel, and our partners, sent a follow up joint letter to EBRD President and Board of Directors highlighting issues in recent EBRD complaints, including Accountability Counsel’s Mongolia case.
Jan 2017 – Accountability Counsel, and our partners SOMO, OT Watch, and CEE Bankwatch Network, sent a joint letter to the EBRD President and Board of Directors highlighting issues at the PCM and providing recommendations.
Mar 2014 – Accountability Counsel submits Joint Civil Society Comments on the 2nd Round of EBRD’s PCM Review
Mar 2014 – Accountability Counsel contributes to the Joint Civil Society Statement on the EBRD’s Draft Environmental and Social Policy
Jan 2014 – EBRD issues Draft Project Complaint Mechanism Rules of Procedure and Draft Environmental and Social Policy for public comment
May 2013 – Accountability Counsel submits Joint Civil Society Comments on the EBRD’s PCM Review and Attached Exhibit
May 2012 – EBRD Project Complaint Mechanism 2012 Annual Report
May 2010 – EBRD’s 2010 Project Complaint Mechanism Rules of Procedure