World Bank Inspection Panel’s Report and Recommendation

Uzbekistan - Rural Enterprise Support Project Phase II and Additional Financing for the 

Second Rural Enterprise Support Project 

January 23, 2015

U.S. Position

The United States strongly supports the Inspection Panel and its role as an independent forum to 

provide accountability and recourse for people affected by Bank-funded projects. The Panel is a 

“fact-finding body on behalf of the Board,” and the United States looks to the Panel to establish 

whether the Bank has followed its operational policies and procedures in response to claims by 

people and communities that may have been adversely affected by a Bank-funded project. 

The United States appreciates the Panel’s scrutiny of Uzbekistan – Rural Enterprise Support 

Project Phase II and Additional Financing for the Second Rural Enterprise Support Project –

because forced and child labor are serious issues that warrant the highest level of attention. 

When the Panel recommends not to investigate claims that it has determined raise “significant 

issues of policy compliance” and where “a plausible link exist[s] between the Project and the 

alleged harms,” however, the United States necessarily takes a close look at the basis upon 

which the Panel arrived at its recommendation.

While the United States will not oppose the Panel’s recommendation in this case, the 

United States would have preferred that the Panel defer its recommendation on a full

investigation. The United States notes the critical aspects of Management’s action plan, such as 

independent third-party monitoring (TPM), have not yet taken effect. The success of such TPM 

relies on actions that are not entirely under Management’s control, such as agreement between 

the Government of Uzbekistan (GoU) and the International Labor Organization (ILO) on what 

amounts to forced labor in the Uzbekistan context, the completion of a baseline survey, and the 

establishment of a funding mechanism to support the TPM beyond its first year. In addition, the 

strength of the feedback mechanism (FBM) proposed by Management is still untested, which is 

all the more concerning given fears of reprisal when reporting on labor conditions in 

Uzbekistan’s cotton sector. While the United States hopes that these measures will be fully 

successful, the United States believes their implementation bears careful attention by 

Management. 

That said, the United States welcomes Management’s proactive effort to put forward a 

serious action plan aimed at mitigating the risk of child and/or forced labor in Bankfunded projects in Uzbekistan’s agricultural sector, and the positive commitments made by 

the GoU in this regard. Going forward, the United States expects Management’s action plan to 

be fully implemented, and the Board to be fully and regularly apprised of any and all progress 

and/or setbacks. The United States expects Management to continue to build on its positive 

engagement with the ILO, and to deepen its dialogue with civil society organizations on these 

labor concerns. The United States urges Management to pursue all available funding options for 

the implementation of independent TPM. The United States also would like to see further 

progress on the implementation, and not just design, of a credible project-level FBM. Moreover, 
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the United States would very much like to see continued agricultural policy dialogue between the 

Bank and the GoU. The United States would encourage Management to explore broadening this 

dialogue to include improving the transparency of public financial management. During 2015, 

the United States expects regular updates from Management on these dialogues, its engagement 

with civil society organizations, and its action plan, including during the Board discussions of 

Uzbekistan’s Systematic Country Diagnostic and Country Partnership Framework and in 

Management’s post-2015 harvest update. Beyond 2015, the United States expects periodic 

updates on whether the action plan is on track and evidencing positive results.

This case highlights the need for the Board to consider modernizing and updating the 

Inspection Panel process itself. The Panel is the oldest of the MDB accountability 

mechanisms, and is operating under rules established over two decades ago. While 

groundbreaking at the time, the Panel lacks critical features present in other MDB accountability 

mechanisms. Among these are: (1) a formal dispute resolution function, whereby the Panel 

oversees and guides an elective, level, and informed process for the requesters, the Bank, and the 

government borrower to work together towards an agreed solution; and (2) a role in monitoring 

remedial measures proposed by Management in response to an agreed solution or a Panel 

investigation. The United States thinks such features would benefit borrowers, Management, 

and requesters. With the ongoing safeguards review, which seeks to modernize and strengthen 

the safeguards system, now is also the time to modernize and strengthen the Inspection Panel.