IFI governance

Background

CSO discussion with IFC/MIGA Compliance Advisor Ombudsman

21 September 2005 | Minutes

Present: Meg Taylor, Compliance Advisor Ombudsman; Amar Inamdar, Senior specialist; Kate Kapiski; and other CAO and Bank representatives.

The meeting consisted of a clarification of the CAO’s role and procedures, and a discussion of current projects under investigation, including: Glamis goldmine in Guatemala, Karachaganak in Kazakhstan, the Chad-Cameroon pipeline, and Yanacocha in Peru.

The CAO has recently carried out successful meetings with civil society in Amsterdam, the Netherlands and Germany. They have also met with human rights organisations and IFIs in Belgium. They will be in South East Asia later this year, where Action Aid will help to set up a meeting with civil society groups in the region.

the CAO has three functions:

  • 1) Compliance: auditting the due diligence of the institution (IFC and MIGA). To date there are two reviews taking place under that- the Amaggi soy project in Brazil, and the Dikulushi mine in DRC, which they are currently finalising.
  • 2) Ombudsman: a “conflict resolution function”- all complaints come throught this first. They look for an opportunity to resolve the dispute. They use the assessment process to define what the complainant wants- an audit or compliance. the emphasis is to ensure that affected people have their voice heard.
  • 3) Advisory function:e.g on IFC safeguard policies. They do not envisage doing large policy work like this in future. They are currently tracking trends over the last 40 complaints.

There is a tension between these three roles, in particular between whether to focus on conflict resolution, or carry out a direct audit. There is a need to walk complainants through all the different options- if an audit is carried out and it finds that compliance was adequate, then the complainant looses weight. Amar Inamdar explained that the CAO tries to get to grips with all the possible causes of the reasons for the complaint.

Ombudsman’s report (Amar Inamdar)

  • BTC: 24 complaints, all from Georgia except for one. It has been a challenge to deal with the level of complexity. Systematic approach- look at the way that BP handles disputes locally. They suggested setting up an appropriate local dispute mechanim, but this was not accepted by BTC
  • Allain Duhangan (India): Are now looking at an additional complaint in relation to this
  • Kalahari diamond project: Following their assessment they concluded that the project was not the root cause of reasons for complaint
  • Karachaganak, KPO (Kazakhstan): They feel the process has now stalled, and have a number of concerns
  • Peru
  • Guatemala Marlin mine: (see report on the website) will follow-up with a field visit.

Also two on-going longer term projects:

  • Chile Pangue project (Bio-bio dam): Meg is to visit this at the end of September. The IFC pulled out of the investment and communities were damaged by the dam. A foundation was set up by the company. The CAO have said there should be a gesture from the Bank which has not happened so far. The CAO are drafting a settlement agreement.
  • Yanacocha in Peru: An evaluation was carried out, including good talks with the community. 20 things had to be done as follow-up but nothing was done. Communities have to take responsibility. There is only so much CAO can do.

On the Compliance audit’s findings on Amaggi: The onus is now on the IFC to respond to the CAO’s findings. The response to far has been unsubstantial. The outside world has also dropped the ball and should pursue this with IFC. Generally speaking, once a report becomes public the pressure drops off.

Issue and project discussion

Kate Watters from Crude Accountability raised issues relating to conflict resolution and oversight in the case of Karachaganak. The complaint process very important to the locals, as a result of this other people have taken an interest. The complainants, IFC and the company do not stand on an equal footing given that the complainants have been harassed and threatened as a result of their activities. The CAO report treats the complaint as a mere misunderstanding between the IFC, the company and the community. It also does not address the use of toxic emissions. Kate suggested including scientific/ technical on the panel as currently there is a lack of capacity to address technical issues

Alexi Knizhnikov from Crude Accountability asked what would happen if during the course of a CAO investigation, another wrong-doing external to the complaint was uncovered, as occurred in the case of Karachaganak. The CAO responded that in order to be fair to all parties in the process, they stick to the questions asked of them in the complaint.

Eric Holt-Gimenez from Bank Information Centre raised a question regarding the procedure on the recently released report on the Glamis goldmine. The press coverage on release of the report suggested a substantially different content from the leaked draft of a few weeks prior to that. The press coverage failed to mention significant environmental and social shortcomings that were dealt with in the report. The report had not changed substantially, rather, a positive spin (not reflective of the genuine findings) was put on it by IFC. In response CAO said that different interpretations of the report were put out, depending on the interest of the stakeholder. The leak of the report was a breach of trust and not necessarily helpful to the complainants. .

Ndoumbé Nkotto from FOCARFE, Cameroon raised questions on safety, given the close proximity of the Chad-Cameroon pipeline to houses in many areas. He also pointed to the futility of requests for evidence long after the event, for example requesting proof of the contamination and death of livestock months after their corpses had been disposed of. Imar Anamdar responded that this would be a good example of how their office would adopt more of a dispute resolution approach, given that a compliance approach is more strict about looking for evidence.

On instutionalisation of the CAO: Currently the existence of the CAO must be mentionned in IFC/MIGA documents, though this does not necessarily get passed on to the client, and subsequently affected communities. They are working on this at the moment and have raised it meetings with CODE. Some EDs have been supportive of such a move, though this does not go far enough.

On human rights: CAO did carry out research on this at the request of the previous IFC head, Peter Woicke. However, the CAO does not carry the weight to spearhead these institutional changes. This issue is now being managed by the environment and social department.

On broad community support: The CAO thinks the World Bank must be much clearer in its definition of this. It should be the IFC’s responsibility, and not the client’s.

On company engagement: there is little the CAO can do to ensure that companies engage. Many do not want a reputational issue, but others do not care.