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October 24, 2004

Immunities of World Bank: A Legal Overview

Kawser Ahmed & Aminul Hoque

Already the proposed bill regarding immunities of International Bank for Reconstruction and Development (IBRD) popularly known as World Bank has become a debatable question in the sight of civil society of Bangladesh. In the editorials and reports of a number of national dailies the matter has been given special concern, which in sum manifest a particular standpoint of national interest. But for the sake of a more live debate on this issue in this regard, more light should be cast on another important side of this matter, and that is the footing of World Bank as an international organisation under international law.

From the very beginnings of the international organisation, privileges and immunities thereof were regarded as important requisites for smooth functioning as an international person. Article 7 of the League Covenant provided: "Representatives of the Members of the League and officials of the League when engaged on the business of the League shall enjoy diplomatic privileges and immunities." United Nations Charter provides in Article 105: "1. The Organisation shall enjoy in the territory of its Members such privileges and immunities as are necessary for the fulfilment of its purposes. 2. Representatives of the Members of the United Nations and officials of the Organisation shall similarly enjoy such privileges and immunities as are necessary for the independent exercise of their functions in connection with the Organisation."

Article 105(3) of the United Nations Charter has empowered the General Assembly to make recommendations to put paragraphs 1 and 2 into effect of this Article. In follow-up the General Convention on the Privileges and Immunities of the United Nations was approved in 1946. Similarly a separate Convention was approved in 1947 on the privileges and immunities of Specialised Agencies of the United Nations.

The International Court of Justice in the Reparation for Injuries Suffered in the Service of United Nations case [1949] ICJ 174 drew evidences from Convention on the Privileges and Immunities of the United Nations 1946 to determine international legal personality of United Nations regarding rights and duties between each of the signatories and the Organisation. In later period other Organisations such as the League of Arab States, the Organisation of American States and the Council of Europe etc heavily relying on these two conventions in framing up their agreements of articles in relation to privileges and immunities made them as generally accepted model for the constitutions of international organisations.

International Bank for Reconstruction and Development, which mostly goes by the name World Bank is one of the seventeen Specialised Agencies of the United Nations. World Bank was born of the Bretton Woods Conference in July 1944 for the purpose of assisting in reconstruction and development, promoting private investments and other international trade related aspects.

In international plane immunities and privileges of World Bank were governed by both the Articles of Agreement of IBRD and the Convention on the privileges and immunities of Specialised Agencies1947. Article VII of the Articles of Agreement of IBRD states the status, immunities and privileges of the Organisation in relation to states, individual or other legal entities. Section 1 of Article VII makes it mandatory for every member state to accord to the Bank such privileges and immunities as enumerated in this article. Section 2 of Article VII provides that the Bank Shall have juridical personality with the power to enter into contracts, acquiring and disposing of immovable and movable property and instituting legal proceedings.

Section 3, 4 and 6 of the same set out immunities and privileges relating to assets of the Bank to the extent that the assets and properties of the Bank shall not be subject to seizure and attachment pending final judgement, shall be immune from search, requisition, confiscation, expropriation or any other form of seizure by executive or legislative action and shall be free from restrictions, regulations, controls and moratoria of any nature to the extent necessary to carry out the operations provided for in this agreement.

Section 5 and 7 of the said Article speaks for immunity of Bank Archives and privilege of communication among Bank officials.

Section 8 of the same Article provides that all governors, executive directors, alternates, officers and employees of the Bank shall be immune from legal process with respect to acts performed by them in their official capacity except when the Bank waives this immunity; shall be provided with the immunities from immigration restrictions, alien registration requirements and national service obligations.

Section 9 exempts the Bank as well as its aforementioned officials from tax obligation in several respects. Section 10 imposes obligation upon every member to take necessary steps in their own territories for the purpose of making effective the principles set forth in this Article in terms of its own law. The Convention on the Privileges and Immunities of Specialised Agencies 1947 contains more or less same directives with special reference to World Bank in Annex VI thereof.

Much as international organisations enjoy certain privileges and immunities, it is also true that in most of the cases at the national level, international laws regarding immunities and privileges of International Organisations are applied through domestic statutes.

For example UK International Organisations Act 1968 and the US International Organisations Immunities Act 1945 may be mentioned. The usual way of these legislations is that the empowering provisions contained in those Acts are applied to named international organisations by specific secondary acts, notification or order.

In the case of the International Organisations Act 1968, the privileges and immunities are conferred upon the international organisations by Order of Council. In US, the same process is normally conducted by means of Executive Order issued by president. Both the UK and US statutes feature a similarity that one single piece of legislation regulates the whole regime of privileges and immunities of all the international organisations in each country.

In Bangladesh the state practice regarding privileges and immunities of international organisations is considerably at variance with that of either UK or US. In our country there is no comprehensive legislation as such which covers this area as a whole. For instance we can cite International Financial Organisations Order1972 and the Asian Development Bank Order 1973. By virtue of these statutes, privileges and immunities have been accorded to four international organisations namely the Asian Development Bank, International Monetary Fund, International Bank for Reconstruction and Development (World Bank) and International Development Association. The chief characteristic of these statutes is that provisions of Articles of Agreements concerning privileges and immunities of the aforesaid institutions have been directly incorporated and endowed with legal force.

From the foregoing discussion it is clear that as per the law of international organisations, they should be provided with privileges and immunities but the question is why should the government legislate anew to provide privileges and immunities for World Bank which it already enjoys under an existing statute? And if the government thinks to provide extra immunities, the counter argument will be in accordance with the Articles of Agreement of IBRD, the government is not at all bound to provide any extra immunity than agreed upon. So the government is solely accountable to justify it before the countrymen.

On the other hand the fact should be admitted that in this era of globalisation international entities will be more and more overarching, that is why it is high time the government should deal this matter not on an ad hoc basis but in a comprehensive way as the government can not chuck up what it is provided under international law. So it may be a better idea the government should take to steps for enacting laws like that of UK or US to give its policy a firm basis.

The authors have graduated from Department of Law, University of Dhaka.