By Jennine Meyer and Rabi Thapa

This issue, we are introducing an occasional series focused on complaints that have been processed by the World Bank Accountability Mechanism. We hope these interviews with those directly involved in cases will help both accountability practitioners and those interested in the development sector to better understand the challenges faced by the Bank and its stakeholders in ensuring that development meets the needs of the communities it is intended for—as well as the solutions that the Inspection Panel and the Dispute Resolution Service (DRS) contribute to.

We begin with an interview with Faris Hadad-Zervos, who served as Country Director for Nepal, Sri Lanka, and Maldives from 2018 until 2024. (He is now the Country Director for Afghanistan.) During his tenure, a Request was lodged with the Inspection Panel by a community affected by the Nepal-India Electricity Transmission and Trade Project (NIETTP). This led to a dispute resolution process, under which an agreement was signed between the community and the Nepal Electricity Authority in 2023. This was the first such agreement facilitated by the DRS. The World Bank Country Office in Nepal was an observer to the mediation process.

Can you talk about the challenges that projects such as NIETTP can face, and how the DRS helped address them?

If you look at Nepal, historically, there has been a series of Inspection Panel cases. That tells you that there is a structural issue that needs to be resolved. And this is something that the World Bank Group is trying to put in place in support of the government: proper systems that would avoid these types of conflicts in the future. So the DRS was very helpful in the sense that it tried to address some of the underlying issues in the process of helping resolve the dispute, or at least providing a platform. As a result, it made it easier to establish precedence, to see if this can be done successfully and peacefully. That itself provided a shot in the arm for the government institutions. It provided a tremendous experience for the World Bank and other development partners. And since then, we’ve received many requests to share the DRS experience with others, and it made the communities feel that they’re part of the development process.

What was your role as observer? Can you describe your experience in that role?

The DRS was new to me, to the World Bank, and to Nepal. So naturally, it was a learning process. But observing the process and the commitment of everyone demonstrated that it was doable. The first step, which I thought was very important, was to build trust, not only with the communities but also with the client, and also a sense of trust in the World Bank. And I think that happened quite quickly. As an observer, I noticed that the things that can be done differently, I think, relate to the success of the DRS in the sense that I think more of it is needed, and it needs to be better baked into the cake of the whole process. What I’d like to see is the DRS not being used only as a remedy, but as a prophylaxis for any conflict that may arise. So I would love to see it being part of the whole formula from day one, to engage in these issues rather than wait for a dispute to bubble up.

What do you think the DRS did well, and could the process have been improved?

I think what went well for the DRS was that it proved that it worked. It proved to a skeptical client, skeptical civil society organizations, skeptical communities, that dispute resolution is possible. This happened in the wake of a long history of constant disputes. It involved a continuum of engagement that was very necessary. This was not something that you could shuttle in and out of and try to address at the margins. You had to go to the root cause of the issues.

Disputes very often are ingrained. They reflect a structural issue that needs to be resolved, and it takes time. However, having a hard stop and having a clear set of milestones and deadlines was really important. The way it happened in Nepal, there was a very clear deadline, but when you felt that there was progress but that you needed more time, the DRS decided to do a small extension that allowed us to actually complete the process. So I think it’s actually well calibrated.

How might such a case and the DR process contribute to accountability within the World Bank? How does it contribute to institutional learning?

As a country director, you basically want to achieve two things. One is you want to help support the country and the client in achieving their development narrative. In most cases, it is very aligned with ours, which is helping eradicate extreme poverty, and shared prosperity on a livable planet. Secondly, you want to make sure that it’s scalable, sustainable, and owned by the client. And clearly part of that is to make sure that as you’re doing that you minimize the amount of conflict, you minimize the amount of pushback. So any country director would want to have a system in place whereby you move ahead, you support the train moving forward, and if there is any derailing of the train, you minimize that. So it’s only natural that you want a system that mitigates the conflict. But instruments like the DRS cannot be just remedial things that you parachute in when you know something has gone belly up.

I think the DRS has shown that it helps us enhance development impact for the client, and that where it is invoked, the earlier it is invoked, the more we maximize the chances of having a positive outcome. Insofar as we’ve learned these things, we need to infuse it into the systems. And we have realized that it is not an issue of just doing financing, development, providing technical assistance, policy support, and then having a system which is external and autonomous to evaluate. These serve very important purposes, not only for the institution, but for the clients, for the people, as voice and accountability are very important. But insofar as there’s a system that helps us preempt and prevent getting to a point that is fundamentally about discomfort for the clients whom we’re ultimately supposed to serve, why not bring it in more? Why not have an ounce of prevention?

What is the impact on people, both in terms of how the project might serve the country as a whole and in terms of the impact on the local community?

I think in the case of Nepal, it impacted communities, first and foremost, very clearly as it provided them with some degree of remedy. This was a solution where both sides felt they perhaps didn’t get everything they wanted, but both felt that the decision was an equilibrium, the decision was equitable, and they could both live with it. So that, in and of itself, is success.

Going beyond that, the true impact is that the communities feel that they have a voice, seeing the government as not necessarily a contestable entity, but one with whom you can talk and try to find solutions that are win-win for the country and for the communities that as a collective, are the country itself. It seems like a self-evident thing, but as somebody who’s been working in development for so many years, it’s often easier said than done.

You can have contestability, and that’s healthy in a development process. What it showed in Nepal is that the communities have voice, and that they have a channel through which their voice can lead to positive results. Beyond that, and beyond the specific transaction, is the sense that there is a way out. You may have different views. You may have grievances, and very rightly so. But if there’s a mechanism by which these could be expressed peacefully in a structured way, through a platform, they feel that there’s more voice, and their voice is much more arranged in the sense that they can control how they act.

What are the lessons learned?

It is necessary but insufficient to provide services, provide extensions, provide infrastructure. People have to feel like they’re part of the story. To develop the narrative of the country, they have to feel heard. Secondly, without talking to the communities early on and taking their voice into account, a solution will always be suboptimal, and sometimes you will face pushback and you will not deliver even on your most basic results. This is not something you can kick down the road. You need to resolve it upstream. Thirdly, it’s never too late and it’s never too early to engage in dispute resolution. First, consult, second, talk, third, negotiate, but fourth, come back and consult and talk and negotiate until you arrive at a solution. And I think fifth is we’ve established that dispute resolution services in the Bank work. How do we scale it up, and how do we bring it to fire prevention, rather than putting out fires later? And I think this is where we need to look at the formula and how we can inject the DRS system into the product of the institution, which, by the way, in the case of Nepal, is very important because the World Bank is one of the larger development partners. The World Bank and the Asian Development Bank represent 70 percent of development assistance to Nepal. But both of us provide leadership to all development partners, including bilaterals, on how to conduct development financing. So the lesson learned from the DRS allowed other development partners who are keenly interested in hearing the story to try to replicate it for the benefit of the country. So that scaling component is very important. This goes to the heart of our mission—to scale for impact.