Accountability and remedy in public finance
Too often, development finance can end up causing harm to communities or the environment, ignoring people’s rights and blocking accountability. This is especially critical at a time when civil society space is closing and repression against human rights defenders is on the rise in many parts of the world.
Development banks should respect the rights of those who their investments impact and should be fully accountable – both to affected communities and to tax-paying publics – for their actions.
Promoting a race to the top in accountability
Recourse works to hold international financial institutions (IFIs) to account: to help prevent harm from occurring, to remedy harms, and to ensure IFIs learn lessons and avoid repeating the same mistakes.
Pressuring IFIs to change the way they respond to harms caused raises the profile of environmental and social (E&S) risks within the institution, leading to better protections for people and the planet. Strengthening E&S protections and improving disclosure in turn helps to prevent future harms, closing the feedback loop on accountability.
Environmental and social safeguards are only useful if banks can be held accountable to them publicly. Recourse also campaigns to strengthen the IFIs’ accountability mechanisms themselves, benchmarking them against one another to create a race to the top.
We promote a rights-based development vision: where women and girls fully realise their potential, where communities can claim and exercise their rights to drive the development process, and where the rights of marginalised and vulnerable communities are protected and promoted.
In 2024-2025, the Asian Infrastructure Investment Bank (AIIB) is set to review its accountability mechanism, which is in dire need of reform. Despite the AIIB having invested over $50 billion in 230 projects since its inception in 2016, it has yet to accept a single complaint. This is due to overly high barriers to accessibility, as well as nearly half of AIIB’s portfolio being excluded from eligibility, as documented in our report, Roadblocks to Accountability, featuring case studies from India and Bangladesh.
Supporting communities to claim remedy and rights
A core part of our work is to support the struggles of communities affected by damaging projects, to hold financial institutions accountable for the harms suffered.
This might involve working with local communities and organisations to prevent a harmful road, dam or power plant being constructed, helping to expose the role of development finance institutions in these damaging projects, or supporting communities’ claims for remedy.
For example, Recourse has:
- Helped to amplify local concerns about expansion of an AIIB-backed cement plant and construction of a public-private-partnership gas power plant in Myanmar
- Supported communities opposing the construction of gas plants in Bangladesh
- Called for the human rights of indigenous peoples to be respected in an IFC-funded hydropower dam project in Guatemala
- Stood in solidarity with affected communities in India against public funding for dirty coal projects, risky financial intermediaries and infrastructure investment trusts.
Sometimes, this work involves supporting communities to take formal complaints to independent accountability mechanisms of each multilateral development bank. Click to read more about the current cases:
Complaint against the IFC funding a coal boom in the Philippines
In 2017, Recourse and Inclusive Development International supported the Philippines Movement for Climate Justice to file a historic complaint to the International Finance Corporation (IFC)’s ombudsman, the CAO, for backing 19 coal power plants via a financial intermediary, Rizal Commercial Banking Corporation (RCBC).
Since then:
- RCBC has committed to stop funding new coal power plants.
- The CAO has conducted a compliance investigation into 11 of the power plants, concluding that the IFC contributed to harms and should contribute to remedy.
- The IFC has published a Management Action Plan to assess and address the harms it contributed to.
- In 2024, with PMCJ and other partners, we submitted a complaint to the UK National Contact Point regarding Standard Chartered bank’s financing of four of the same coal power plants.
We continue to support PMCJ and affected communities through this ongoing process to push IFC closer to contributing to tangible remedy.
Complaint against the IFC funding Java 9 & 10 coal plants in Indonesia
In 2020, Recourse, Trend Asia and Inclusive Development International discovered that, despite being subject to the IFC’s Green Equity Approach, Hana Bank Indonesia (a financial intermediary of the IFC) had financed two new huge coal power plants in the Suralaya coal complex in Banten, Indonesia. The Green Equity Approach commits the IFC to end equity investments in financial institutions that do not have a plan to phase out coal-related investments by 2030.
Since then:
- Recourse has supported Trend Asia to attend international meetings with World Bank staff and shareholders to expose the case.
- In September 2023, Recourse and partners worked with local organisation Pena Masyarakat to submit a formal complaint to the IFC’s Compliance Advisor Ombudsman (CAO).
In July 2024, the CAO confirmed that it would be conducting a full compliance investigation into the IFC’s investment in Hana Bank Indonesia.
Browse below for news and resources related to Recourse’s campaigns for accountability and remedy from public financiers.
