Post by David Pred

There’s an accountability crisis at the The World Bank Group. In an unprecedented move, the Board of Directors has overruled its own independent accountability mechanism, the Office of the Compliance Advisor Ombudsman (CAO), to let the IFC - International Finance Corporation off the hook for its due diligence failures that have contributed to the microfinance debt crisis in Cambodia.                                                                                                                                                                 A CAO investigation published last week found that the IFC violated its Sustainability Policy in its investments in six banks providing microfinance in Cambodia, which contributed to predatory lending practices that have led to the loss of land and livelihoods, hunger, suicides, and threats of retaliation against the very communities that are supposed to benefit from microfinance programs. But for the first time in history, the Board rejected the CAO's findings and recommendations for how to address the harms, declaring without evidence that there had been no non-compliance.  The CAO Director General Janine Ferretti has resigned in response. This is all the more worrying in light of last month's decision by the Board to disband the The World Bank Inspection Panel and collapse the Bank Group's three independent complaint mechanisms, which hold to account its public and private sector arms, into one new integrated mechanism with a pyramid structure that can easily be captured by Management. Inclusive Development International joined over 60 organizations and individuals in condemning the Board’s decision. We are calling upon the Board and the U.S. Department of the Treasury to answer for its actions and explain how it will uphold the integrity of the World Bank Group accountability system going forward.  Read our statement here: https://lnkd.in/eghWUGGb