Summary of the Request

The 11 Requesters are merchants whose businesses are located at "Mercado 4" and around the  Eusebio Ayala Street at Asunción city center, where the IDB is financing a Metrobus system.

They allege that they were not consulted on the project, and for those that will need to leave the are, no alternative location nor compensation has been offered. They also comment that there are no environmental and cultural heritage impact studies.

As regards the alleged harm, they comment that the project will have a negative impact on their livelihoods in two aspects: the first, during execution, as they consider that sales will drop due to lack of access and that will in turn reduce their profits, lead them to fire personnel with the ensuing impact on family incomes; the second, comes from those that have been informed they have to leave the area and relocate somewhere else without any relocation plans or compensation.

This Request is linked to number MICI-PR-2016-0099 , which provides complementary information.

The Request includes testimonial videos available only in Spanish.

Recent actions

2020
Management informed  MICI about the elimination of Component 2 of the Project “First Metropolitan Public Transport Corridor ”(Metrobús). Therefore, MICI considers that there are no conditions to continue with the follow-up stage of the Case and proceeds to close this Case. However, this closure is conditional, so that, if the circumstances of the operation of the Project are modified, MICI may examine the relevance to reopen it.

Past actions

2020

The Board of Directors approved Management's Action Plan to address MICI's recommendations included in its Compliance Review Report. Since MICI will be responsible for monitoring the Action Plan, it will then proceed to develop a Monitoring Plan in consultation with relevant stakeholders.

2018 

On February 6, 2018, at the request of MICI, the Executive Board of Directors approved a third extension to the investigation stage and granted a temporary waiver for circulating the Draft Report with Requesters.

The Draft Compliance Review Report was distributed to the Bank’s Management for review and comments, which were received on 23 May 2018. On 29 May 2018, MICI concluded the investigation and finalized the Report to be submitted to the Board of Executive Directors for consideration.

On 10 December 2018, MICI published the Compliance Review Report, finding that the Bank:

In relation to OP-703 on Environment and Safeguards Compliance:

1. Did not comply with Directive B.5 inasmuch as it did not ensure that the Project had, either overall or for Sections 2 and 3 of the route, environmental assessments that identified the potential risks and impacts of the Metrobus for the entire population in the area of influence and established specific measures and management plans to control these risks and impacts;
2. Complied with Directive B.5 inasmuch as it ensured that the Project had an environmental assessment that identified the risks and impacts of the Project for Section 1;
3. Did not comply with Directive B.6 inasmuch as it did not provide, as part of the dissemination processes for the Project, complete and specific information to affected population, pursuant to the consultation standards of Directive B.6.
4. Complied with Directive B.4 inasmuch as it identified “other risk factors” regarding the governance capacity of the executing agency that could affect the viability of the Project and developed measures to manage them;
5. Did not comply with Directive B.9 inasmuch as it did not identify potential impacts on critical and noncritical cultural sites and establish measures to protect their integrity during the Project preparation stage and within the framework of the environmental assessment process;

In relation to OP-710 on Involuntary Resettlement:

1. Did not comply inasmuch as it did not have a resettlement plan prior to Project approval, as required in the time frames of this policy;
2. Did not comply inasmuch as it did not have a resettlement plan for Section 1 after Project approval that satisfied the requirements of this policy;
3. Complied inasmuch as it had resettlement plans for Subsections 3.1 and 3.2 of the Project; however, these plans do not comply with some requirements of OP-710;

In relation to OP-102 on Access to Information:

1. Did not comply inasmuch as it did not publish all the documentation subject to mandatory disclosure under this policy;
2. Given the above, Bank did not comply with Directive B.1 inasmuch as it financed an operation that did not comply with Directives B.3, B.5, and B.6 of OP-703 and was not consistent with various provisions of OP-710 and OP-102 (2006 and 2010 versions);

Based on the foregoing, MICI proposed seven recommendations, which were approved by the Board of Executive Directors on 6 December 2018.

The seven recommendations are:

• Management should ensure that there is a resettlement plan in place as soon as possible for Section 1 that has been prepared in consultation with the affected parties, complies with the requirements of OP-710, and includes, in particular, mitigation and compensation measures that address the specific vulnerabilities of the affected parties and ensure the restoration of their situations.
• Management should conduct an environmental and social audit to confirm whether the measures designed to address impacts during the construction stage have been implemented effectively and are sufficient to address impacts on the businesses in the area. If not, it should determine the necessary remediation or corrective measures.
• Management should monitor the contractor’s actions to fulfill the guidelines of the socioenvironmental management plan regarding historic heritage assets and should evaluate, at the appropriate time, whether the proposed mitigation measures comply with the standards of Directive B.9.
• Within the framework of OP-710 and within a reasonable period of time, Management should conduct an evaluation to determine the living conditions of the affected population, and depending on the results, should establish corrective measures compatible with the requirements of the Bank’s Relevant Operational Policies (ROP).
• Disclose, in a timely manner, all documents produced in the future that are subject to mandatory disclosure and all updates to published documents.
• Evaluate the relevance of introducing language specific to the issue of economic disruption in the Relevant Operational Policies (ROP), in order to resolve the current gap in the rules.
• Management should prepare an action plan, in consultation with MICI, for implementation of the recommendations included in this report, containing an implementation schedule compatible with the Project, which MICI will monitor.

The Board of Executive Directors asked Management to submit an action plan and asked MICI to prepare a monitoring plan.

2017

On November 8, 2017, at the request of MICI, the Board of Executive Directors approved an extension to the investigation stage. The new issue date for the Draft Compliance Review Report of this case will be January 8, 2018.

On August 28, 2017, at the request of MICI, the Board of Executive Directors approved a forty business-day extension to the investigation stage. The new issue date for the Draft Compliance Review Report of this case will be November 2, 2017.

 In March 2017, the independent experts Ione Jezler (Brazil) and Guillermo Tejeiro (Colombia) were hired to conduct the case investigation led by the Compliance Review Phase Coordinator.

On January 17, 2017 the MICI distributed the Recommendation for a Compliance Review and its Terms of Reference (TOR) to the Board of Executive Directors of the Bank for consideration by Short Procedure. The Board authorized the Recommendation without objection on January 25.

2016

On December 6 and December 7, the MICI received comments from one of the requesters and from Management, respectively.

On November 14, MICI sent the Parties the draft of the Recommendation and Terms of Reference for a Compliance Review of the present case. As of this date, the Parties had 15 business days to comment on the document, which expired on December 7.

On September 29, the Consultation Phase issued its Assessment Report concluding that there were no conditions to carry out the Consultation Phase of MICI. Accordingly, at the request of the Requester, the Request was transferred to Compliance Review Phase.

According to the Requesters’ petition to go to the Consultation Phase, the Request was transferred to that Phase and the assessment process began.

On July 26, the MICI Director, in accordance with the section G of the MICI Policy, determined that the Request was eligible as it met the eligibility criteria established in the MICI Policy. The eligibility of the Request is not an assessment of its merits, nor a determination of the Bank’s compliance or noncompliance with its Relevant Operational Policies; and in no case it leads the suspension of the project or the disbursements made by the Bank.

On June 29, the Bank's Management submitted their Response to the Request, and as per MICI's Policy;an Eligibility Process was carried out to determine whether the Request is eligible or not.

The Request was filed on May 25th. The Requesters were notified as well Bank's Management.