47909 INTERNATIONAL BANK FOR RECONSTRUCTIONAND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION THE INSPECTIONPANEL 1818 HStreet, N.W. Telephone: (202) 458-5200 Washington, D.C. 20433 F a : (202) 522-0916 U.S.A. Email: ipanel@worldbank.org Werner Kiene Chairperson IPNREQUESTRQ 09/03 March 20,2009 MEMORANDUMTO THE EXECUTIVEDIRECTORSAND ALTERNATES OFTHE INTERNATIONAL DEVELOPMENT ASSOCIATION Re: Requestfor Inspection DEMOCRATIC REPUBLICOF CONGO: PrivateSector Developmentand CompetitivenessProject(Credit No. 3815-DRC) Pleasebe advisedthat on February27,2009, the InspectionPanel (the "Panel") received a Request for Inspection (the "Request") related to the above-mentioned Projects. The Panel registered the Request for Inspection in the Panel's Register on March 19, 2009, as provided in paragraph 17 of the Panel's Operating Procedures.It also delivered a copy of the Request to the Presidentof IDApursuantto paragraph 17 of the Resolutionthat establishedthe Panel. Enclosed for your information are: (1) A copy ofthe Notice of Registration; and (2) A copy of the transmittal Memorandum to the President. Becausethis Request raises similar issues and refers to the same project as the Request of March 12, 2009, and for reasons of economy and efficiency, the Panelwill consider processing bothRequestsjointly as it has done inprevious similar situations. Enclosures INTERNATIONAL BANKFORRECONSTRUCTIONAND DEVELOPMENT INTERNATIONALDEVELOPMENTASSOCIATION THE INSPECTIONPANEL 1818HStreet, NW. Telephone (202) 458-5200 Washington, D C 20433 Fax. (202) 522-0916 Email. ipanel@worldbank org Werner Kiene Chairperson IPNREQUESTRQ 09/03 March 19,2009 MEMORANDUMTO THE PRESIDENTOF THE INTERNATIONAL DEVELOPMENT ASSOCIATION Requestfor Inspection DEMOCRATICREPUBLIC OF CONGO: PrivateSectorDevelopmentand CompetitivenessProject(CreditNo. 3815-DRC) Inaccordancewithparagraph 17 of IDAResolutionthat establishedthe Inspection Panel (the "Resolution") and paragraph 17 of the Inspection Panel's Operating Procedures (the "Operating Procedures"), Ihereby notify you that on February 27, 2009, the Inspection Panel (the "Panel") received a Request for Inspection (the "Request") relatedto the above-referenced Projects. IhaveonMarch19,2009,whichisalsothedateofthedispatchofthisnotice, registeredthe Requestinthe InspectionPanel Register. Enclosed are: 1. copy ofthe Notice of Registration; and 2. copy ofthe Request for Inspection In accordance with paragraph 18 of the Resolution, paragraphs 2 and 8 of the "Conclusions of the Board's Second Review of the Inspection Panel" (the "1999 Clarifications"), and paragraph 18 (d) of the Operating Procedures, Bank Management is hereby notified that it must provide the Panel, no later than April 17, 2009, with written evidence that it has complied, or intends to comply with the Bank's relevant policies and procedures in relation to the above-referenced Projects. The subject matter the Management must deal with in a response to the Request is set out inparagraphs 3 and 4 of the 1999 Clarifications. 2 After receiving the Management response, the Panel will, as outlined inthe 1999 Clarifications and as provided by paragraph 19 o f the Resolution, "determine whether the Request meets the eligibility criteria set out in paragraphs 12 to 14 and shall make a recommendation to the Executive Directors as to whether the matter should be investigated." TheRequest has been assigned IPNRequest Number RQ 09/03. Sincerely, Werner Kiene Chairperson Enclosures: Request for Inspection Notice o f Registration THE INSPECTIONPANEL INTERNATIONAL BANK FORRECONSTRUCTIONAND DEVELOPMENT 1818 HStreet,NW Phone:(202) 458-5200 INTERNATIONAL DEVELOPMENTASSOCIATION Washington, DC 20433, USA Fax :(202) 522-0916 Internet: httD://www.worldbank.ordinsoection Werner Kiene Chairperson IPNREQUESTRQ09/03 March19,2009 NOTICEOFREGISTRATION Re: Requestfor Inspection DemocraticRepublicof Congo: PrivateSectorDevelopmentand CompetitivenessProject (CreditNo. 3815-DRC) On March 13, 2009, the Inspection Panel received a Request for Inspection (the "Request") relatedto the above-referencedProject. Mr.BidimuKamunga, residentof Likasi, Katanga, inthe Democratic Republic of Congo, submitted the Requestacting as President of "le Collectij"des Ex-agents Ge`camines ODV" ("the Collective of VDO [Voluntary Departures Operation] of former Ge`camines employees"). The Request included 14 signatures of other members of the collective. On February 25, 2009, the Panel received a first Request related to this Project, raising similar issues on non-compliance and harm, and registered it in the Inspection Panel Register on March 12,2009. The Proiect The Project's objective is to "support the Borrower s policy of the promotion of private- sector led growth through: (a) improving the investment climate; @) supporting parastatal reform in the telecommunications, energy, finance, transport, and mining sectors; and (c) improving mining competitiveness in the Katanga region of the Borrower." According to the Project Appraisal Document (PAD), Component 3 of the Project will consist of `tfinancial assistance to retrenched mining workers at Ge`camines ["GCnCrale des Carrieres et des Mines"] (...). Efforts to restructure the company have focused on cost-cutting measures and measures aimed at increasing efficiency. As a result, Government has approved a voluntary departures program, with a cost of $40 million (...)." The PAD states that more than 10,000 workers have decided to benefit from the program and their severance packages will be distributed during project implementation. In addition to distributing the payments, the project will finance social assistance and training to prepare workers for self-sustaining economic activities. The PAD adds that "the lessons learned in the Katanga province will be used for subsequent severancepackage distribution to workers in other sectors." 1 The PAD also adds that fiduciary arrangements are made to ensure that: (i) GCcamines staff, beneficiaries o f the severance packages, are properly identified; (ii) payments are made in full to eligible beneficiaries; and (iii)following IDA (International Development Association) disbursementsto a special account, funds flow in a timely manner and appropriate amounts are made. The PAD further adds that supervision o f the disbursements will be conducted by the Project implementingunit, BCECO (Bureau Central de Coordination), which will review the list o f beneficiaries prepared by GCcamines and audit the payments, and that all necessary protocols, acceptable to IDA, will be drawn up and signedby the parties concerned ina legal agreement. The Reauest The Requesters state that GCcamines, "in agreement with the World Bank", dismissed 10,655 employees and workers under the Voluntary Departures Operation (VDO), adding that the VDO would not have taken place ifthe World Bank was not a contractingparty "tojnance the restructuring of Ge`camines." They further add that the Bank imposed "the requirement to dismiss andpay aportion of the workforce [that it] deemed excessive in its view." The Requesters state that employees accepted to be part of the VDO becausethey hadn't received their wages for 36 months. They also state that "it was only to escape certain death, or at least immediate impoverishment, that employees instinctively signed on to this operation." They add that their signatures came "under material, moral, andpsychological duress." The Requesters refer to the application Article 78 of the Congolese Labor Code in matters arising between employers and workers, including en masse dismissal. They state that the Congolese labor laws and regulations pertaining to en masse dismissal were not followed. They add that "Ge`camines and the World Bank grantedformer employees a miniscule amount, equivalent to one-jjlh of what they were due, even though the campaign that was carried out to sign up theseformer employees had offered much more attractive payoffs." They also add that the amounts granted "sufJiced only to pay debts contracted to ensure their survival." The Requesters further add that GCcamines and the World Bank did not even comply with the recommendations laid out as law inPresidential Decree 035/2003 o f March 18,2003. The Requesters enumerate the impacts o f the VDO, stating that they include, among other: "impoverishment, dismantling and destruction of households, prostitution of girls who are still minors,juvenile delinquency among boys, lack of school enrollment for children,famine and malnutrition (one meal per day, or even one meal every other day), a spike in the morbidity rate (due to a lack of medical care) and the mortality rate amongformer employees (an average of 2.5 deaths per week at the present time)." The Requesters add that the former GCcamines employees, who worked inGCcamines for more than 25 years, are hopeless and "jkd themselves sentenced to a collective suicide." They also add that former GCcamines employees' hope resides inpayment oftheir due. The Requesters state that based on the Universal Declaration of HumanRights, the DRC Constitution, andthe Congolese Labor Law, they have undertakensteps to reestablish their rights "in all institutions of the Republic." They add that "all institutions of the Republic have been unanimous in recognizing that [their] rights have been trampled upon and that there is a need to correct the harmful effects of the ill-conceived Voluntary Departures Operation by paying the 2 final breakdown in full, in accordance with the spirit of Article 103 of the Congolese Labor Code, and as stipulated in Recommendation VII of the Permanent Framework for Social Dialogue." The Requesters conclude that the VDO caused "the utter destitution" o f 10,655 direct victims and roughly 350,000 "collateral victims," asking for speed in the implemeqtation o f Recommendation VI1o f the Permanent Framework for Social Dialogue. Ina separate communication, the Requesters state that they wrote to the World Bankon February 27, 2009, but "received no reply." They also state that the Bank failed to take into account the "social management of the restructuring that it imposed on Ge`camines." They add that their "rights were violated, causing [them] intangible and tangible damages with multiple and serious consequences.'' They ask the Panel to "open an inquiry aimed at resolving this social conflict." In this regard, the Requesters ask for: "payment of 36 months' of arrears in compensation, pension principal, payment of legally paid leave, all social benefits associated with the contract." The Requesters authorize the Panel to publishthe Request. Registration The above claims may constitute non-compliance by the Bank with provisions o f the following operational Policies and Procedures: OD 4.15 Poverty Reduction OPBP 6.00 BankFinancing OpMemo Financing Severance Pay inPublic Sector Reform Operations OPBP 13.05 Project Supervision All communications with the Requesters in connection with this Request will be sent untilfurther noticeto Mr.BidimuKamunga. In accordance with paragraph 17 of the Panel's Operating Procedures (the "Operating Procedures"), Iam notifying you that Ihave, on March 19, 2009, which i s also the date o f the dispatch o f this notice, registered this Request inthe InspectionPanel Register. Inaccordance with paragraph 18 of the Bank Resolution that established the Panel (the "Resolution"), paragraphs 2 and 8 o f the "Conclusions of the Board's Second Review of the Inspection Panel" (the 1999 Clarifications"), and paragraph 18 (d) o f the Operating Procedures, " Bank Management must provide the Panel, no later than April 17, 2009, with written evidence that it has complied, or intends to comply, with the Bank's relevant policies and procedures in relation to the above-referenced Project. The subject matter that Management must deal with in a responseto the Requesti s set out inparagraphs 3 and 4 o f the 1999 Clarifications. 3 After receiving the Management response, the Panel will, as outlined in the 1999 Clarifications and as provided by paragraph 19 of the Resolution, "determine whether the Request meets the eligibility criteria set out inparagraphs 12 to 14 [of the Resolution] and shall make a recommendation to the Executive Directors as to whether the matter should be investigated." The Request has beenassignedIPNRequestNumber RQ09/03. Yours sincerely, Werner Kiene Chairperson To: Mr.BidimuKamunga 8 Avenue du Bronze Commune de Panda LikadKatanga Mr.RobertB.Zoellick President InternationalDevelopment Association Room M C12-750 cc: The Executive Directors andAlternates InternationalDevelopment Association 4