U. S. Position on the World Bank’s Inspection Panel Investigation Report and the 

Management Report and Recommendation for the Ethiopia: Promoting Basic Services 

Phase III Project

February 26, 2015

The United States welcomes discussion of the Management Report and Recommendation (MRR) 

in response to the Inspection Panel Investigation Report for the Ethiopia: Promoting Basic 

Services Phase III Project (PBS III), a project that was implemented concurrently with the 

Government of Ethiopia’s Commune Development Program (CDP) that congregated dispersed 

populations around village centers. The United States appreciates the Panel’s thorough 

investigation of the risks of this concurrent implementation and whether harms raised by the 

Requesters – Anuak people from the Gambella region in Ethiopia – resulted from serious Bank 

failure to comply with its policies and procedures.

The United States concurs with the Panel’s finding that the Bank should have better taken 

into account the potential impact of CDP in the design and implementation of PBS III. 

Concurrent implementation of a block grant basic services project in a region where close to 70 

percent of all households, including indigenous peoples, were to be resettled under a government 

program should have been viewed as an operational risk to PBS III. As such, it should have been 

more explicitly factored into project design, appraisal, implementation, and supervision. 

The United States is increasingly concerned that the World Bank Group focuses too much 

on “reputational risks” in projects, instead of actual operational risks to communities and 

the environment. All members of the World Bank Group – including the Board – need to take 

care in how and when “reputational risk” is invoked so as not to overlook actual risks to 

communities and the environment that a WBG project may create, and to ensure that the Bank 

has fully deployed the appropriate safeguards response.

The United States welcomes many of the features of Management’s Action Plan, most of 

which are already part of PBS III, and urges that it be implemented swiftly and monitored 

carefully. The United States agrees with the efforts to expand social accountability programs, 

increase citizen participation in budget decisions, and strengthen the Gambella Ombudsman’s 

Office as a key independent institution to protect rights and guard against corruption. The 

United States also finds it important that a key lesson learned from PBS III is the importance of 

improving citizen voice and accountability. The United States strongly encourages the Bank to 

advance these issues and institutions and maintain vigilance for their successful implementation. 

Successful implementation of an Action Plan requires clear metrics for success, and the 

United States would like to see more precise timelines for the set of actions outlined in the 

MRR and Management’s statement of February 25, and a commitment to report back to 

the Board. Such clarity and specificity will enable the Board to adequately monitor the 

implementation of the Action Plan.

The United States welcomes Management’s commitment in its February 25 statement to 

discuss with the Government of Ethiopia expanding the scope of the Ethiopia Agriculture 
Growth Project further, or developing a separate operation tailored to the specific 

conditions in Gambella, in order to provide strong support to the livelihoods of vulnerable 

people in Gambella, including the Anuaks. The United States encourages Management to 

accelerate these discussions and report back to the Board once Management knows whether or 

not this operation will come to fruition.

Finally, the United States wants to raise an important process point. The United States 

understands from discussions with the Panel that the Panel has found that the Bank’s noncompliance with policies governing project design, appraisal, supervision, and Indigenous 

Peoples contributed to harms of (1) lack of public services and assistance at the relocation sites 

and (2) deterioration of livelihoods due to less fertile land and lack of other income generating 

opportunities at the relocation sites. Unfortunately, this conclusion was not clearly conveyed 

in the Panel’s report. Instead, the report notes that the Bank’s non-compliance has not enabled 

PBS to mitigate or manage these harms. In the future, the United States urges the Panel to avoid 

any ambiguity in its findings.

With these comments, the United States looks forward to robust implementation of the Action 

Plan, as augmented by Management’s statement of February 25, for the continual improvement

of livelihoods and basic services in the Gambella region and beyond, and to future reports to the 

Board.