Our Last and Only Resort: What happens when development finance goes wrong in the Middle East and North Africa

International development projects are intended to benefit local communities by reducing poverty, providing social support, and strengthening livelihoods. For many of these projects, however, the risks of harm to those same communities can be severe, particularly when the people designing and investing in projects are remote from the project site, and when local people cannot meaningfully participate in the design and operation of investments. When harm does occur, accessing remedy also presents significant barriers. Communities face technical and logistical barriers, governments that prioritize corporate interests over those of their citizens, and security threats.

Independent Accountability Mechanisms (IAMs) tied to international financial institutions (IFIs) offer an opportunity for communities to raise grievances related to projects funded by the IFI in an effort to reach remedy. Around the world, over 1,600 complaints have been filed with IAMs about internationally financed development projects. IAMs are often the last and only resort available to communities in the face of harm from development projects. They play an important role in ensuring that communities have a voice in development decisions that impact them. Addressing community concerns in development decisions impacting their lands, resources, cultural identities, heritage, and environments requires that independent accountability mechanisms be independent, fair, transparent, professional, accessible, and effective. This report focuses on complaints filed to IAMs about harm from internationally financed development projects in the Middle East and North Africa (MENA) region.

The MENA has the fewest absolute number of complaints out of any region globally and the second lowest rate of complaints addressed through a compliance review or dispute resolution. In an effort to understand why this trend persists, we conducted an analysis of all complaints filed to IAMs and projects financed by IFIs. We also consulted with groups who have filed complaints and with representatives from IAMs that have handled complaints in the MENA.

This research shows that communities and advocates in the MENA face similar limitations to those faced by communities and advocates in other regions globally. These limitations include language and translation requirements, limited knowledge of IAMs and the complaints process, and the substantial time and resources required to engage in IAM processes. Communities and advocates also face issues relating to the extent to which supporting groups are involved, the limited capacity of local groups, IAM decision making authority and operational independence, and power imbalances that impact the dynamics of complaint processes. However, the MENA also faces a weakened civil society, political instability, and a high risk of retaliation by the state, further compounding these broader limitations of the IAM process and exacerbating their effects. Our report finds that these compounded issues have contributed to the relatively low number of complaints filed and the extremely low rate of complaints being addressed through compliance review or dispute resolution in the MENA

.In order to address the findings in this report, we recommend that IAMs and IFIs adopt broadly accepted best practices and policies. More specifically, we suggest addressing reprisals and retaliation to address underutilization, providing direct funding to communities involved in IAM processes to ensure effectiveness and equitability, and incorporating a remedy fund into IFI budgets when taking on projects to ensure communities can receive material remedy from harm.