Author
Assoc Prof Wei-Chung Lin
Organisation/Institution
National Chung Cheng University
Country
TAIWAN (ROC)
Panel
International Law
Title
Holding the Private Sector Accountable in Asia: Lessons from the CAO Investigation in IFC Investments in Rizal Commercial Banking Corporation in the Philippines
Abstract
In recent decades, multilateral development banks (MDBs) have increasingly focused their attention on the social and environmental performance of their supported project finance activities. MDBs have adopted their safeguard policies elaborating on the steps MDBs should follow in managing the negative impacts of their funded projects to borrowing governments and private sector clients. The fulfillment of these requirements is further strengthened by the independent accountability mechanisms (IAMs) within MDBs, which are mandated to examine whether MDBs’ project finance operations have complied with safeguard policies. As an MDB, the International Finance Corporation (IFC) was set up in the World Bank Group to promote investment when the private sector cannot obtain sufficient private capital on reasonable terms. It offers financial support to establish, improve and expand private enterprises in developing member countries without requiring a government guarantee of repayment for private sector clients. To enhance the IFC’s accountability towards the public, the Office of the Compliance Advisor Ombudsman (CAO) was founded to receive private complaints on IFC-funded projects. The CAO thus becomes a crucial avenue to examine the social and environmental performance of IFC-funded projects and to hold the private sector indirectly accountable for its operations. The CAO’s recent investigation in the case concerning IFC Investments in Rizal Commercial Banking Corporation (RCBC) represented a classic example of how an IAM can hold private sector clients accountable for their supported projects through its investigation as the case addressed various social and environmental issues arising from RCBC-financed coal-fired power plants through IFC financial intermediaries (FI) projects, including climate change. This paper systematically studies this case and evaluates lessons from this case for other MDBs in Asia (such as ADB and AIIB) and private commercial banks to hold private sector investments accountable in their future lending operations.
Biography
Wei-Chung Lin is an associate professor of law at National Chung Cheng University (Taiwan). Prior to joining National Chung Cheng University, he worked as an assistant professor of law at Macau University of Science and Technology (Macau SAR, China). Wei-Chung holds his Ph.D. from the University of Nottingham. His research has been published in Cambridge Journal of International and Comparative Law, International Community Law Review, and Transnational Environmental Law. Wei-Chung has also been active on the conference circuit, with submissions for participation being accepted by various universities and societies, including European China Law Studies Association (2024), Academia Sinica (2024, 2023), PluriCourts (2021), International Law Association (2018), Society of International Economic Law (2018, 2014), Asian Law Institute (2017), IUCN Academy of Environmental Law (2016), McGill University (2015), and King’s College London (2014). Wei-Chung’s research mainly lies in international investment law, international financial institutions and sustainable development, and public international law.
