IFIs Faulted for Exemptions in Disclosure Policies

6 January 2012

International financial institutions (IFIs) have “overbroad regimes of exceptions” in their  transparency policies, according to a report issued by the Centre for Law and Democracy.

Particularly troublesome are the exceptions relating to internal deliberations and third-party commercial information, according to the CLD report, prepared as a member of the Global Transparency Initiative, an international coalition advocating  more transparency at IFIs.

The report contrasts exceptions in national laws with the “much more secretive approach of the IFIs.”


The report concludes:

It is now widely acknowledged that the IFIs have come a long way in terms of developing their information disclosure policies since these first appeared in the early 1990s. A significant development in several IFIs, which has largely taken place over the last five years, has been the shift from the positive list approach – whereby only information on a positive list was subject to disclosure – to a so-called negative list approach – whereby all information except information on the negative list (or list of exceptions) is subject to disclosure. Despite the somewhat confusing terminology, the negative list approach represents a move to a real presumption of disclosure, thereby bringing the IFI policies more into conformity with international standards in this areas, as well as established practice at the national level. 

Despite these positive developments, serious problems still remain in IFI openness policies. The most significant remaining barrier to full implementation of the internationally recognised right to information is the overbroad negative lists, or regimes of exceptions, that are still in place in most IFI policies. Many of these policies are particularly problematical in relation to exceptions protecting two types of interests, namely the commercial interests of third parties and internal deliberations. 

The reluctance of IFIs to open up in both areas is somewhat understandable. They believe they need to respect the confidentiality claims of third parties with whom they do business. And they also see a need to protect their internal processes from close public scrutiny. There is a kernel of legitimacy in both claims.  

At the same time, extensive practice at the national level – supported by international standards and decisions of courts and other oversight bodies – demonstrates that a balancing of the public interest in openness and these other interests cannot support the broad exceptions claimed in the IFI policies. Instead, a far more careful calibration of the scope of these exceptions is appropriate. 

In both cases, a requirement of harm needs to be imposed. Third parties have a legitimate stake in protecting their commercial interests, and it is this to which the harm test should be attached. As a result, instead of allowing these parties freely to exert claims of confidentiality, the exception should apply only where disclosure of the information would in fact harm their commercial interests. These parties have a right to be consulted, so that decision makers can be sure to take their claims into account, but in the end the test is an objective one.  

Longstanding practice at the national level in line with these standards – i.e. of using an objective test of harm to legitimate commercial interests, along with a right to be consulted – puts paid to claims by the IFIs that they need to give third parties an effective veto over the disclosure of information provided by them. In other words, this national experience clearly demonstrates that third parties will continue to engage and do business with the public sector even if the information they provide will be disclosed subject only to narrow protections for commercially sensitive information.  

The situation is similar for internal deliberative information. Public bodies do have an interest in preserving the candour of internal deliberations, or the free and frank provision of advice for purposes of decision making. But the exception in favour of such deliberative information should be limited to what is necessary to protect this interest. This means, among other things, that there needs to be a decision making process for which advice is needed, and that it can be shown that disclosure of the information would indeed impact negatively on that decision making process. 

Once again, national experience demonstrates that the practice at several IFIs of throwing a cloak of secrecy over all internal information is simply not legitimate. In particular, this experience demonstrates conclusively that limiting the internal deliberative exception in the way described above does not impede the effective operations of public bodies. Indeed, it improves their operations, among other things by making them more accountable.  

Experience at the national level also demonstrates the importance of applying a strong public interest override to both of these exceptions. In other words, even where harm to a legitimate interest is likely to result, the information should still be disclosed where this would serve the larger public interest. The limited and public interest overrides that are found in most IFI disclosure policies, which are discretionary and impose unrealistically high standards for application, do not conform to national practice and cannot be justified.  

Many IFIs should be commended for the significant advances they have made in recent years in terms of their policy on openness. At the same time, progress remains stunted by excessively broad regimes of exceptions. In other words, although the IFIs have moved to a negative list, they have not yet managed to trim that list down to an appropriate size. This is particularly true in relation to third party commercial information and internal deliberative information Experience at the national level clearly demonstrates that while in each case there is a core of information that needs to be kept confidential, it is possible to protect the relevant interests while defining this core of information narrowly, based on the idea of preventing harm and recognising a strong public interest override. The IFIs need to recognise this and narrow the exceptions in their information disclosure policies accordingly.

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Filed under: 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).
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