By Robert Doherty
It is widely acknowledged that meaningful engagement with affected communities throughout the project cycle is crucial for effective development, yet achieving it remains a persistent challenge at international financial institutions (IFIs).
Standards are not the problem. They are quite clear.
The World Bank’s Environmental and Social Standard (ESS) 10 on Stakeholder Engagement and Information Disclosure states: “This ESS recognizes the importance of open and transparent engagement between the borrower and project stakeholders as an essential element of good international practice. Effective stakeholder engagement can improve the environmental and social sustainability of projects, enhance project acceptance, and make a significant contribution to successful project design and implementation.”
The International Finance Corporation (IFC) makes a similar point in its Performance Standard 1: “Stakeholder engagement is the basis for building strong, constructive, and responsive relationships that are essential for the successful management of a project's environmental and social impacts.”
The Inter-American Development Bank, in its publication titled “Meaningful Stakeholder Consultation,” writes: “Transparent and meaningful consultation with key stakeholders is a cornerstone of informed decision-making and good governance.”
Despite this unambiguous guidance, the issue of inadequate stakeholder engagement–also known as consultation and disclosure of information–is a recurring one in complaints to independent accountability mechanisms (IAMs) at IFIs. It is the most frequently raised issue in the 2,420 community-driven complaints to IAMs, being explicitly alleged 550 times, according to the Accountability Counsel’s Accountability Toolkit. Looking at the World Bank Inspection Panel as an example, the issue of consultation and disclosure of information occurred 112 times in complaints from 1995 to 2024, behind only the issues of environmental assessment (EA) and investment project financing. From 2020 to 2025 specifically, consultation concerns were raised 24 times in complaints to the Panel, second only to the issue of EA.
“It has been a problem, and it remains a problem,” said Victoria Márquez-Mees, chief accountability officer of the European Bank for Reconstruction and Development's Independent Project Accountability Mechanism, who previously served as director of the Independent Consultation and Investigation Mechanism of the Inter-American Development Bank.
In fact, she and others believe that things have been moving in the wrong direction when it comes to stakeholder engagement at IFIs.
“There was a time, right after the Arab Spring when … the World Bank in the region went further and further and they were really amazing,” said Amy Ekdawi, executive director of Arab Watch Coalition, who tracks World Bank projects in the Middle East and North Africa. “But after the Arab Spring turned to the Arab Fall, there was a regression.”
The stakes of not getting stakeholder engagement right are high.
Said Accountability Counsel Executive Director Margaux Day, “When communities living near or working at project sites are not fairly and fully consulted and made aware of project impacts, other more substantive harms follow–including displacement, biodiversity destruction, gender-based violence, and pollution.”
Márquez-Mees added, “What is the adverse impact of bad stakeholder engagement? It’s conflict, lack of trust and potentially a project might not take place, if you have not done it correctly.”
There is little disagreement on what constitutes good stakeholder engagement. It should be continuous throughout the project cycle, but it starts with early identification of affected stakeholders and their interests.
“Once we have identified the universe of people that need to be consulted, there is a big responsibility on making sure the information that relates to whatever we are consulting on is disclosed, and is disclosed in a manner that is understood,” said Serge Selwan, senior policy adviser at the Inspection Panel, who joined the Panel in 2001 and also worked for the IFC’s Compliance Advisor/Ombudsman for two years starting in late 2016.
“And this engagement needs to be prolonged,” Selwan added. “It needs to be transparent. It needs to be on a basis that allows people to understand but also to contribute. And once they contribute, good consultation would require that you go back to them and show how their contribution was considered.”
Despite the clarity of what is necessary for meaningful engagement, all agree there are substantial challenges to achieving it.
Consultations are “a hard nut to crack,” Maninder Gill, the World Bank Group director of environmental and social policy & operations, told a session at the Civil Society Policy Forum (CSPF) during the recent World Bank Group-International Monetary Fund Spring Meetings. “It’s very easy to commit to meaningful consultations, very difficult to do those.”
Inspection Panel Chair Ibrahim Pam said, “The standards are set. The standards are very well defined. It is in implementation that I see a number of challenges.”
Commonly noted reasons for poor stakeholder engagement include a lack of capacity or willingness on the part of borrowers who actually carry out the consultations, ineffective local grievance mechanisms and what many referred to as a “box-ticking” approach to conducting consultations.
“We see that a lot,” said Pam, who made the point that complaints to the Panel represent only a small percentage of all World Bank projects. “The first thing they do is they bring out the register and say, ‘Well, we had four consultations … these are the people who attended.’ And until you try to dig a bit deeper to find out whether … there was feedback, whether there was a proper explanation, whether the language is well understood, whether the responsibilities of the safeguards were properly explained, whether there was description of a complaint system or a mechanism where people could complain and so on. And then you find that’s where … the rubber hits the road.”
Some also cited the unwillingness of implementers to frankly discuss the bad and the ugly alongside the good of the project as a barrier to effective stakeholder engagement.
“Real consultation is when you tell a person the risks fully, but it’s very hard for us,” Gill told the CSPF session. “Just as we feel sometimes CSOs (civil society organizations) are exaggerating the risks, we downplay the risks.”
Additional factors mentioned as working against effective consultations include the shrinking space for civil society to operate in many countries, the very real risk of retaliation against those who raise project concerns, and the current global geopolitical situation where governments in some countries may be increasingly less willing to listen to community concerns.
To address the situation, CSO and IAM representatives say there must be a willingness on the part of development institutions to enforce their stakeholder engagement standards through greater supervision and by building the capacity of the borrower and local grievance mechanisms when it is lacking. It is also vital, they say, to ensure that important project information is communicated in an understandable way–including to those, often women, who may have a diminished voice within the community–and that affected stakeholders are given feedback on the concerns they raise.
“Individuals don’t realize what meaningful consultations mean and how important it is, and how constructive it can be for the project but also how constructive it is for the community and for the stakeholders when you go back to them and close the feedback loop,” Selwan said. “That brings trust in the project …. And the fact you continuously engage with communities builds that trust.”
Speaking to the CSPF session, Gill said he believes the culture of the entire World Bank Group’s environmental and social ecosystem "needs to get better and much more focused on implementation, much more focused on communities and people, what they are saying, listening to them.” He said World Bank Group President Ajay Banga has “challenged us on whether we walk the talk on listening to communities or it’s just talk.”
Gill indicated the World Bank Group’s new “makers and checkers” approach could help in heading off environmental and social problems in projects. That, of course, could include problems with faulty consultation.
The idea, he said, is to have the checkers “just watching and flagging things … catching everything that potentially could be going wrong.”
Larissa Luy, who in her role as the World Bank Group’s director for environmental and social risk serves as “checkers director,” said she expects that the checkers can help the institution address stakeholder engagement lapses, including insufficient or late consultations.
“Since higher-risk projects are allotted higher amounts of oversight and resources, checkers are well positioned to flag when engagement has not occurred at the required stage,” she said. “Checkers can also provide an independent lens as to whether Stakeholder Engagement Plans have credibly identified disadvantaged or excluded groups. I think it’s important to remember that since checkers sit outside the task team incentive structure, they are well positioned to make assessments that are at arm’s length.”
Accountability mechanisms can also help improve the situation through their investigation reports and advisory publications and also, perhaps, through a “data harmonization” initiative by the IAM Network (IAMnet) in which mechanisms would share data to find systemic patterns and common root causes of consultation complaints. That information could allow IFIs, if they are willing, to work collaboratively on improving stakeholder engagement.
“If there are similarities (in the data) that’s when I think IFIs could start looking into it together, not in a blame culture, but say, ‘We all are doing badly. There seems to be all the same causes, so maybe we can join forces there and work (on) specific things all together,’” said Márquez-Mees, who was IAMNet secretary from 2016 to 2019. “That would be, for me, a brilliant thing.”
