Emerging Markets
May 12, 2002

The inspection of the Samut Prakarn Wastewater Management Project has sparked criticism of the Bank Management by the Board and led protesters to call for President Chino’s resignation.

Many board members raised the issue in their address to the Bank, including  Australia, Austria, Canada, Denmark, Germany, Italy, Japan, Switzerland, the  UK and the US. Austrian governor Karl-Heinz Grasser describes the project as  a “deplorable experience”, while interim US governor Keneth Dam says the  inspection panel’s activities “raised concerns about the ADB’s commitment to  an independent and credible inspection function.”

Protestors says the Bank’s inspection process is fatally flawed, as it is  continuing with the project despite finding a number of faults with its  implementation. Dawan Chantarahesdee, representing the project-affected  communities of the Klong Dan region of Thailand, says she wants to see  President Chino go. “He doesn’t take any responsibility for his mistakes.”

President Chino has begun a reciew of the inspection function following the completion of the Samut Prakarn inspection, which is the only inspection the  Bank has performed.

Initial funding for the Samut Prakarn project was approved in 1995, with further funds released in 1998. The total cost of the project is estimated  at $750 million, with $230 million coming from the Bank. The reminder was  provided by the Thai government and the Japanese Bank for Internation  Cooperation. The protesters requested an inspection in November 2000 and the  inspection started in July 2001. The final stage of the process – approval by the Board of recommendations made by a Board standing committee – was concluded in March this year.

ADB staff and board members say there are many lessons to be learnt from the  case. Frank Black, alternate governor for Austria, Germany, Turkey and the  UK, says the inspection has failed the poor of the Klong Dan region by shrouding its procedures in legal jargon and complex internal processes. He adds that confusion could arise under the current system, as the members of the ADB board were responsible for both making recommendations and passing  them on the final stage of the inspection process. Black says he would welcome a new inspectin function, possibly using an ombudsman.

“[Inspections] will only work if the attitude of management changes  significantly,” he warns. “We need some kind od education process in the Bank.”

The protesters complain that the process lacks legitimacy and say they feel the continuation of the project was a foregone conclusion in the inspection.

“It became clear the inspection process has serious problems of legitimacy and lack of transparency to local people,” says Luntharimar Longcharoen, of Thai-based Towards Ecological Recovery and Regional Alliance. Maetet Diokno Pascual, representative of the NGO Forum on ADB, also calls for the Bank to allow inspections of its general policies, as well as of specific projects.

Rajat Nag, Bank representative for the Mekong Region, defends President Chino’s action on Samut Prakarn, saying he is following the recommendations approved by the Board.