Independent Complaints Mechanism

The German Investment Corporation (DEG) and the Netherlands Development Finance Company (FMO) are both national development finance institutions. DEG is a subsidiary of the KfW Group, which is wholly owned by the German government. FMO is majority owned by the Dutch government.

DEG and FMO both provide financing and advice for private enterprises in developing and transitioning economies. In 2014, they each had a project portfolio of between €7-8b, with investments in Asia, Latin America and the Caribbean, Africa and Europe (outside of the EU).

DEG and FMO jointly established the ICM to give individuals and communities adversely affected by projects the opportunity to raise, and to seek resolution of, their concerns. The ICM consists of an Independent Expert Panel (IEP) that is supported by complaints offices in each finance institution. The IEP is made up of three members, each with environmental, social, legal and/or financial expertise. The members are appointed by the Board of each financial institution and cannot have had any involvement in project related activities for that institution for at least two consecutive years. The IEP is supported by complaints offices, staffed by FMO and DEG employees, within each institution. They register and acknowledge receipt of complaints, coordinate the complaints process and provide practical support to the IEP.

ICM became operational in January 2014. It offers problem solving and compliance review functions.

Problem-Solving – The IEP works with complainants and the project company to develop a process to try to reach a mutually acceptable solution to the complainants’ concerns. This process may include information sharing, joint fact-finding or facilitated discussions.

Compliance Review – The IEP investigates whether a DEG or FMO project has had or will have substantial adverse impacts or risks for the complainants and whether the financial institution complied with its relevant policies, standards or other appraisal criteria in relation to that project. The IEP may make recommendations for how DEG or FMO could strengthen the application of their policies to the project at issue or to future projects.

Complainants can ask to use the problem solving and/or the compliance review function, in either order. While the IEP will take into account the complainants’ views, it will ultimately make its own assessment of the best approach to the complaint.