Ms. Grainne Ryder
Policy Director
Probe International
225 Brunswick Avenue
Toronto, Ontario
Canada M5S 2M6

Dear Ms Ryder,

Thank you for your fax letter dated 1 December 2000 (received here on 4 December due to the intervening weekend and time difference) concerning the Samut Prakam Wastewater Management Project in Thailand. Your interest in and attention to this ADB project are sincerely appreciated. As the Executive Director for Canada at the ADB, you can be assured that I take very seriously the allegations that you as a Canadian NGO have raised in your letter concerning this project.

Since this matter was discussed in May 2000 at the time of the Bank’s Annual Meeting in Thailand there have been a number of further significant developments at the ADB concerning this project:

1 . Following the annual meeting, ADB provided an interim response in May 2000 and a consolidated set of more detailed responses was handed to a representative of the NGO Coordinating Committee for Development in Bangkok in June 2000.

2. ADB instituted a series of special loan review missions. The first mission took place in Thailand from 19-28 June and undertook to address the key issues and concerns of the community affected by the project as well as those of concerned NGOS. The mission’s findings are reported in an aide memoire. (See attachment)

3. Since then, there have been regular monthly special loan reviews.

4. ADB has established a web site on the project. The Government of Thailand is establishing one in the Thai language, with a target completion date of December 2000.

5. The ADB is embarking on a community awareness and development program that is intended to provide the bank with an increased understanding of the community.

6. As part of the ongoing environment work associated with the project, environment management plans have been prepared and ADB will be undertaking an independent review of this plan.

For your further information, as part of ADB and the Government of Thailand’s ongoing review process, an independent review will be undertaken in early 2000. On 24 November 2000, ADB announced that it and the Government of Thailand will commission an independent review by experts of international repute to assess the project. The timeframe, terms of reference and composition of the review team will be developed in consultation with civil society and stakeholders in the project. I attach for your information the full text of the Bank’s announcement of this initiative. (See attachment).

As you may be aware, on 29 November 2000 ADB received a letter dated 27 November 2000 addressed to President Chino from the communities of Klong Daan, Bang Bo, District and Song Klong, Bang Pakong District (a copy of which has been sent to me about the same time I received your fax dated 1 December). This letter represents an important further step in the possible resolution of this matter. ADE3 has advised Board Members that ADB considers this letter the initial required step which may lead to a formal request for an ultimate inspection panel review under the Bank’s inspection function as to whether the Bank complied with its own policies.

Given this latest development, let me briefly explain the steps and the time frame involved in such a recourse to review under the inspection function and the formal processes set up for such a review by the Board of Directors as well as the position of the Board of Directors in addressing such complaints:

(1) On receipt of the complaint, the Management of ADB has up to 45 days to respond to the letter of complaint to the author in the first instance.

(2) If the response by the Management of ADB is not satisfactory to the author of the letter or is not received within 45 days, the author can file a request for inspection directly with the ADB Board Inspection Committee (the Committee) through the Secretary of the Committee. There is no time limit on authors to submit such a request to the Committee.

(3) When such a request is received by the Committee, the Committee carries out an initial review to see if the complaint is legitimate and eligible (e.g. such as it having to be filed by a community, organization or other group affected by the project or, in certain cases, by a representative of the group authorized to act as a representative on behalf of the group affected by the project, or by a Board Member).

(4) If the Committee concludes that the complaint is eligible for review, the Committee refers it to Management for a written response to the Committee (that is required within 30 days).

(5) When the response of Management has been received by the Committee, the Committee meets to determine whether to recommend an inspection to the Board of Directors. That has to be made by the Committee to the Board of Directors within 14 days of receipt of Management’s response to the Committee. The Committee’s recommendation on whether or not to have an inspection is circulated to the Board.

(6)The Board of Directors meet to decide whether to authorize an inspection, which has to be decided within 21 days of receipt of the Committee’s recommendation.

(7) If the Board of Directors approves the recommendation, then the Committee sets up an independent panel of three experts (the Panel) drawn from the Bank’s roster of independent experts (established for a five-year term to be available for such assignments) to carry out an inspection and report bacl( to the Committee on the complaint.

(8) The Panel then carries out the inspection without involvement of Bank staff, although it can ask Bank staff for documentation and information if it deems this necessary.

(9) On receipt of the Panel’s report, the Committee forwards it to Management , who prepares a response to this report (within 30 days of receipt of the Panel report). The Committee reviews the Panel report and Management’s response and then within 14 days of receipt of the response, sends its final recommendation as well as the Panel’s report and Management’s response to the Board of Directors for final decision including any remedial action the Board of Directors may consider necessary.

(10) The Board of Directors meets to consider the Committee’s recommendation and supporting documents within 21 days of circulation.
(If you wish further details of the role and procedure of this inspection process, please refer to the Inspection Function Policy that is posted on the ADB website at http://www.adb.org.)

As you can appreciate, I may as a Board member, have to participate in making two critical Board decisions concerning this complaint if its proceeds that far, namely:

(1) to decide whether to authorize an inspection (as indicated in Step 6 above); and

(2) to decide on the final disposition of the complaint including any remedial action the Board considers necessary (as indicated in step 9 above).

In your letter to me you have asked that I, as a Board member take certain actions, including amongst other things, to suspend activities on this project. In this respect I must advise you that, being potentially involved in the two above steps in a quasi-judicial role that the Bank’s inspection function places Board Members in handling such complaints, it would be inappropriate for me to be involved in handling this complaint until it reaches these two stages. (If I were still a member of the Committee, I would of course, be involved earlier and at several other stages).

However, notwithstanding the al:)ove, I would be pleased to keep you informed as to the stage at which this complaint is being handled in the inspection procedure as well as any other independent initiatives the Bank may take with respect to this project.

I trust this response is satisfactory to you.

Yours sincerely,

Julian H. Payne
Executive Director

Cc:
Inspection Committee Member, Zaheer Ahmed, Pakistan
Inspection Committee Member, Barry Holloway, PNG
Vice President, Myoung-Ho Shin

Mr. Paul Martin, Minister of Finance, Canada
Mr. John Manley, Minister of Foreign Affairs, Canada
Mr. Maria Minna, Minister for International Cooperation, Canada
Mr. Dennis Desautels, Auditor General of Canada