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New report on the track record and challenges of the European Investment Bank's Complaint Mechanism

The report by Counter Balance assesses the European Investment Bank's (EIB) Complaints Mechanism during its first five year of existence.

According to Counter Balance:

"The report takes a close look at the track record of the EIB’s Complaints Mechanism during its first five years of existence. Based on our experience and case studies, the report suggests that the CM so far struggled to operate effectively because of a lack of capacity, a lack of cooperation from within the bank, a lack of independence and a lack of binding powers. As a consequence the report explores potential solutions such as the improvement of the Complaints Mechanism itself and the setup of a fully independent grievance mechanism on EU level covering the European Commission and EU public banks.

The EIB impacts the lives of millions of people around the world. That is no surprise for an institution spending between 50 and 80 billion euros per year. Its orientation towards financing large infrastructure projects such as motorways, dams or urban development projects makes its impact even more concrete and tangible for local communities living nearby those projects.

However when a project’s impact is negative because people need to be displaced or vulnerable ecosystems are destroyed for example, it can be a long struggle for impacted people and communities to hold the EIB to account.

Since 2008 the bank has its own complaints mechanism office but its work has been compromised in many ways. First, the office has so far been understaffed. Then, other EIB staff proved not to be cooperative. In addition, the CM is part of the administration of the EIB and cannot function fully independently. Finally, its advice and recommendations are non-binding which means the bank can decide not to follow them or even not make them public. All these constraints can delay cases for years, even if in theory the maximum deadline is 100 days. In the case of the Bujagali complaint, it took the CM three years to come up with conclusions.

Complainants have other mechanisms at their disposal to hold the EIB to account – mainly through other EU institutions – but these prove very hard to access or ineffective. As a second layer, the European Ombudsman can be addressed after a complaint to the CM, but this European body is so far not proactive enough as far as the EIB is concerned. Moreover, it can only rule on EIB “maladministration” and its recommendations are equally non-binding.

All citizens in and outside of the EU that are affected by projects financed by EU public money and public banks should have access to an independent and empowered grievance mechanism that deals with their complaints. In the report we highlight a number of suggestions to improve the situation.

One important step for the bank would be to engage in a  genuine  and  inclusive  public  consultation process which is planned for 2015 in order to review and reform the policies and  procedures  guiding  the  work  of  the  EIB  complaints mechanism, including the memorandum of understanding with the EU Ombudsman.

At the same time we deem it necessary to consider the creation of a fully independent grievance mechanism which would overview all projects funded by EU public money and financial institutions. To improve its accountability and the democratic character such a body could be supervised by the European Parliament – a needed step towards greater independence. By fully equipping it and providing it with binding powers its effectiveness would be enhanced.

This report is a first step in our effort to step up the accountability of EU public bodies and to make sure that their projects are beneficial to all. We will continue developing our analysis and flagging our proposals in the coming months and years. Therefore, we invite all interested citizens and stakeholders to share their views on the issue".

For the report, please click here.