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Implementing Environmental Treaty Obligations in Project Finance Activities through an Accountability Mechanism: An Analysis of the World Bank Inspection Panel

Wei-Chung Lin

Keywords: World Bank Inspection Panel; Project Finance Activities; Multilateral Environmental Agreements

The establishment of the World Bank Inspection Panel is a crucial development in handling the negative social and environmental impacts of Bank-financed projects. It allows affected people to seek redress for the harms resulting from projects, by questioning the legitimacy of the Bank's lending decisions. The Panel has the mandate to examine whether the Bank has complied with its own safeguard policies in specific projects. Even though the substantive rules applicable in the Panel's investigation process (ie, the World Bank's Operational Policies and Bank Procedures) refer to multilateral environmental agreements (MEAs); the Panel has considered the borrowers' environmental treaty commitments extensively in its investigations on a few occasions. This paper examines the extent to which the World Bank Inspection Panel—as an accountability mechanism—has employed different MEAs to address environmental issues resulting from Bank-funded projects, thereby ensuring compliance with environmental treaty obligations in project finance activities.

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