Urging Crucial Updates to the Independent Complaints Mechanism of FMO, DEG, and Proparco

In August 2025, external stakeholders were finally given an opportunity to provide input into a review of the shared Independent Complaints Mechanism (ICM) of three bilateral development finance institutions (DFIs) – Deutsche Investitions- und Entwicklungsgesellschaft (DEG) of Germany, FMO Dutch Entrepreneurial Bank (FMO) of the Netherlands and Proparco of France.

The perspectives of the groups for whom the ICM is designed to provide accountability offer valuable insight on the effectiveness of the ICM. Accordingly, civil society had called for inclusion early in the review process, which commenced in 2022, and urged disclosure of an independent external review report to facilitate more constructive consultations based on a common understanding of issues. Neither of these calls were heeded, but nevertheless the Boards of the DFIs are now in possession of comments submitted by civil society and community advocacy groups to inform their final consideration of a proposed revised policy.

Accountability Counsel, along with Both ENDS, Inclusive Development International and 12 other endorsing organizations, have submitted formal comments along with proposed policy amendments to the ICM consultation. The comments support much-needed improvements to the policy and shared structure of the mechanism, while also naming specific areas that potentially compromise the ICM’s independence, perceived legitimacy, and overall effectiveness.

[Click here to read our comments submitted to the ICM Review]

Noticeable improvements in the new revised policy

Proposed revisions to the ICM policy stand to address numerous areas in which the ICM presently falls short of international good practice for independent accountability mechanisms. Although there is still room for improvement, the following improvements articulated by the draft revised policy should be preserved to improve the status of the ICM:

• A more cohesive ICM (a) governed by a single policy agreed by and applicable to all three DFIs, (b) led by a Panel Chair of the Independent Expert Panel (IEP) entrusted with the responsibilities to oversee and allocate its budget and to recruit and manage operational staff, and (c) supported by a secretariat responsible for maintaining a discrete website with an independent centralised complaints registry for all complaints relating to all three DFIs;
• Codification of access to remedy as a core mandate of the ICM and a clearly prescribed duty on the part of the banks and their clients to provide the ICM with all relevant information to help the ICM execute its mandate;
• A new advisory function equipped to enable institutional learning and improvement on environmental, social and human rights performance;
• A better articulated retaliation policy that includes commitments to assess, prevent and address risks of retaliation and to protect the safety of complainants;
• An explicit mandate for the ICM to monitor and report on the implementation of dispute resolution agreements and management action plans to address issues of non-compliance;
• Clearer procedural timelines that benefit predictability of process; and
• A stronger outreach function to improve transparency and proactive disclosure about the existence, purpose, and process of the ICM.

The ICM’s independence and perceived legitimacy is at risk

Despite these improvements, major gaps in accountability remain, including in areas where the draft revised policy has resulted in concerning regressions. Most concerning of all are evident opportunities for management interference throughout the ICM’s process. In particular, under the draft revised policy:

• The ICM would ostensibly be required to apply a management lens when when interpreting the DFIs’ Environmental, Social and Human Rights policy in order to temper recommendations to address non-compliance that has caused or contributed to harm;
• The ICM would need to yield to DFI Management regarding all complaints concerning projects not yet approved;
• Oversight over the development and implementation of management action plans to address non-compliance would be severely limited to the detriment of ensuring remedy for harm;
• The respective Management Boards of the DFIs would be given final authority over the adequacy of resources allocated to hold them to account.

The unique governance structures of these bilateral DFIs as compared to multilateral development banks (MDBs) make the ICM particularly vulnerable to management influence if these policies are approved. In particular, the Supervisory Boards of the DFIs are markedly more distant from day-to-day operations than is typical of the Boards of Directors at MDBs. Given the vulnerability of an accountability mechanism lacking strong deferential support, serious steps must be taken to mitigate the risks of management interference with the ICM’s activities.

Major gaps in accountability and concerning regressions remain

The draft revised policy also falls short of good practice in several other areas. Commendably, the ICM leadership was provided an opportunity within the draft policy to disagree with proposed provisions that implicate the ICM’s effectiveness. Civil society organizations largely echoed those concerns in so many words within their own recommendations:

• The ICM must be empowered to hold the DFIs accountable for all applicable standards, policies, and requirements, and not merely their idiosyncratic environmental and social policy commitments.
• Complaint eligibility timeframes should be broadened to equip the ICM both to facilitate dialogue to prevent avoidable harm, as well as to provide institutional learning on responsible exit and facilitate remedy for harm caused by qualifiedly irresponsible exits.
• The ICM must be allowed to conduct site visits to understand contexts, sensitively meet with communities, and facilitate effective dialogue during the eligibility phase of a case and in any dispute resolution process.
• The ICM must be equipped to deliver accountability for discrete impacts to biodiversity and the environment, and a crucial way to do this is by equipping it to self-intitiate complaint investigations into purely environmental issues where there may be no apparent direct harm experienced by communities.
• Maintaining flexible sequencing between compliance review and dispute resolution is essential to more dynamically and effectively respond to harm and ensure accountability.
• While there is a need to articulate how the ICM will consider and engage with complaints concerning projects supported by financial intermediary (FI) lending, the proposed approach should be streamlined to avoid confusing potential complainants. In addition, the ICM’s effective management of FI-related complaints will be successful only if the DFIs drastically improve disclosure regarding their FI investments.

Final opportunity for improvement

It is now up to a joint working group to review feedback received from external stakeholders and seek to agree on a final ICM policy for the DFI Supervisory Boards’ approval in December 2025 or early 2026. This is the final opportunity to bring the ICM policy in line with peer DFIs. We therefore call on the joint working group to incorporate all recommendations of the IEP as well as other improvements proposed by civil society organisations.

A weak ICM not only leaves vulnerable communities across the regions the DFIs operate in without effective channels to resolve grievances and secure remedy for harms caused by DFI funded projects, but it also leaves the DFIs themselves unable to hear directly from communities they hope to benefit. An independent, accessible, transparent and accessible ICM is the only way to ensure the DFIs’ investments are sustainable and rights-compatible, and truly meet their mark.