Annual Report Suggests Gaps in Routine Disclosure

17 July 2008


As its Public Communications Policy nears its third anniversary, the Asian Development Bank is coming up short of its own targets for routinely disclosing information and has frustrated civil society groups by denying several access requests.

The ADB’s second report on the policy shows progress toward disclosure goals, but also indicates some gaps.  For example, almost two-thirds of the key documents describing potential public sector projects were posted late, and 17 percent of the time no documents were posted. Required summaries of Board meetings were not issued almost one-third of the time.

And the first experiences with the ADB’s appeals process have not satisfied information requesters who feel the bank is not showing flexibility congruent with its stated goal of having a presumption of disclosure.

Most recently, the Bank declined to release a document describing its proposal for a lending mechanism which introduces new Bank procedures for approving and financing projects. The refusal to disclose it came despite a commitment in the communications policy to release draft documents and seek public comments when the Bank contemplates making broad policy changes.

In this case, the R-Paper (“R” stands for “Restricted”) about “Mainstreaming the Multitranche Financing Facility” was not considered by the Bank to be equivalent the “safeguard policies and sector or thematic strategies” that are subject to more participatory procedures. Several groups who closely follow the ADB disagreed, considering it a sweeping change, but their initial requests were turned down.

The Bank Information Center, the NGO Forum on the ADB and four other groups appealed the denials, arguing that the evaluation of the three-year pilot project and the recommendations on expanding the program were of sufficient importance to merit release before the Board meeting.  The request was denied, the ADB noting that the paper would be disclosed after the Board acted.

It was the third unsuccessful test of the ADB’s appeal mechanism, overseen by the Public Disclosure Advisory Committee, a body made up of Bank officials. Earlier in 2008, the committee rejected access to documents requested by Central Asian NGOs to documents about the Bishkek Heating Plant (Loan 1443-KGZ (SF): Power and District Heating Rehabilitation Project.

In particular, civil society groups sought aide memoires and Back-to-Office reports prepared in recent years by Bank staff members about the controversial project begun in 1996 and completed in December 2007. Zulfia Marat, with the Bureau of Human Rights and Rule of Law in Bishkek City, Krygyz Republic, wrote on April 28 requesting the information, noting that “after unusual cold winter 2007-2008 we have received many claims from our citizens on problem with heat…”

‘Wide Fissure of Distrust’

Following the appeals body’s denial , the Central Asia and Caucasus Network of the NGO Forum on the ADB on June 19 issued a statement lamenting  that the Bank has created a wide fissure of distrust between the ADB and civil society groups. “Civil society has a central role to play in monitoring and stopping possible wrongdoing masquerading as development.” said Marat.

http://www.forum-adb.org/Press-Releases/20080619-CA.htm

The press release further states: “According to the project design, at the end of the implementation, the capital of Kyrgyz Republic should have been equipped with a modern, fully functional heating plant. Instead by the end of June 2007, the government adopted a law that allowed the privatization of the Bishkek Heating Power Plant (HPP). The government has also failed to provide any project-related documents, including the final outcome of the project, to public.”

Access to such project oversight documents has long been a goal of ADB observers, but was not included in the ADB’s 2005 Public Communications Policy.

The bank denied the request for the information under Paragraph 126.3 (“Information obtained in confidence from a government or international organization that, if disclosed, would or would be likely to materially prejudice ADB’s relations with that party.”). The appeals body opined further that the information also would be protected under provisions 126.1 and 126.2 concerning the protection of ADB internal deliberations. Some of the information requested, the ADB noted, was included in a Project Completion Report.

The first request to the appeal committee also was turned down, this one by the Bank Information Center. BIC asked that the PCP be amended so that the disclosure of policy and strategy paper not be linked to the disclosure of the chairman’s summary, which usually is finalized weeks after Board action, thus delaying release of the policy or strategy paper.

A bank official replied that the ADB was willing to informally accept the idea, but would not formally alter the communications policy until its formal review, scheduled for 2010. This rejection of interim alterations came notwithstanding that the Bank in 2007 amended its policy to allow for the disclosure of project procurement-related audit reports. The latest report indicates that some operational manual instructions have been instituted with regard to new procedures for country strategy documents.

106 Requests Per Month

A little to the ADB’s surprise,  the number of requests for information is actually on the rise, up to 1,703 for the period of September 2006 to December 2007, 106 per month, according to the latest assessment report. Bank officials had expected proactive disclosure to reduce the number of requests. The 26-page report was issued in March and provides a candid view of the PCP. It is the second such report.

About six percent of the requests are denied, according to the report, mostly to protect private sector information. Fulfilling a request took an average of seven days.

Most of the requests (58 percent) are for general project-related information, with the next most common category being for information in the “employment, consulting and procurement category (11 percent).

The largest single category of denials is for “pricing supplements for bond deals,” but not all requests for these documents are denied. According to information supplied by Bank officials to Freedominfo.org, the call on this is left to the lead arranger or underwriter of the bonds. “Some dealers of more structured bonds would object to disclosing especially if they feel that the pricing supplement contains proprietary information, but other dealers are fine with disclosing the document, especially if its just plain vanilla bonds,” an official said.

The ADB, unlike other international financial institutions, maintains an online log of requests and their disposition.

Routine Disclosures Lag

The report also provides numerous examples of ways in which the Bank has not met its deadlines for releasing materials, and in some cases has not released information at all.

The report concludes that implementation has “improved and strengthened,” but also that “timeliness must be improved.”

The Bank reported that it has posted “summary project information documents” (PIDS for 87 percent of projects “under administration” by Dec.31, 2007, up from previous posting levels, but below the 100 percent goal.

The posting of initial PIDs often was tardy. The initial PIDs are to be posted to the web not later than 30 days after approval of the concept paper for public sector projects and not later than 30 days before the date of Board consideration for private sector projects. Overall for the reporting period, 174 PIDS were posted, 85 percent of those that were due, the report says. Just 39 percent were posted on time according to the report. For public sector projects, 83 percent of those due were posted, and 36 percent were posted on time. For private sector projects 906 percent got posted, and 59 percent were on time.

The Bank also did not meet its objectives when it comes to releasing the “draft design and monitoring framework” (DMF) before a project appraisal mission. For public sector projects, 31 percent of MDFs were posted as drafts before appraisal.

The Bank says it complied with disclosure requirements for environmental assessments, but didn’t do so well with resettlement planning and indigenous people planning documents. Also, the Bank said it was well short of its goals for publishing social and environmental monitoring reports.

“Reports and Recommendations of the President,” due out after Board approval of loans, were generally released within the prescribed time period.

However, the report said improvement is necessary on the release of final reports about technical assistance projects, noting that it lacked precise data.

For the time period studied, 48 reports by the Operations Evaluation Department were posted, all about public sector projects. “No evaluation reports on private sector projects were posted,” the report says without further explanation.

The report also says that the Bank is out of compliance with its policies for posting chairman’s summaries of board discussions. Out of 21 meetings requiring such summaries, only 15 summaries were posted.

Overall, the report commented, “Progress in compliance in certain areas is still mixed but better than previously reported.”

By Toby McIntosh

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ABOUT IFTI WATCH

In this column, Washington, D.C.-based journalist Toby J. McIntosh reports on the latest developments in information disclosure in International Financial and Trade Institutions (IFTI).
Contact: freeinfo@gwu.edu or
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