IFC accused of standards breach over Ugandan land grab

18 November 2011

A September report by NGO Oxfam International includes criticism of forestry operations in Uganda in which the World Bank’s private sector arm, the International Finance Corporation (IFC), has a stake. More than 20,000 villagers claim to have been unjustly evicted from their homes by UK-based New Forests Company (NFC) to make way for plantations. In the wake of criticism of the Bank’s role in facilitating land acquisition in developing countries by foreign investors, and of the Responsible Agricultural Investment principles the Bank co-authored (see Update 77, 76), Oxfam says the Ugandan case highlights “how the current system of international standards – designed to ensure that people are not adversely affected as a result of large-scale transfers of land use rights – does not work.” Oxfam notes that the case raises particular concern given the involvement of the IFC and other international funders claiming to adhere to social and environmental standards.

The World Bank has called on NFC to investigate the alleged abuses, which the IFC had noted in a field assessment even before investing in the private equity fund that bankrolled the firm. The villagers claim rights to the land they were occupying, and had managed to win court orders restraining evictions which, they say, were not observed. Oxfam raises the prospect of breach of IFC performance standards regarding forced evictions, lack of compensation, and absence of prior consultation or an adequate survey to identify affected persons. “There were no consultations,” father of nine Augustin Allen told Oxfam. “They cut down our crops, burnt and demolished our houses.”

The IFC’s March 2010 field assessment observed NFC had been “unable to apply comprehensively its principles guiding resettlement”, and that “only a full social audit of resettlement can provide sufficient evidence such that IFC can negate the allegations.” Yet two months later, the IFC invested $7 million in private equity fund Agri-Vie, in whose portfolio NFC sits. Oxfam also questions the rigour of the IFC’s assessment, noting that it neglected one of the two districts affected.