An official complaint filed in October against the private sector arm of the World Bank, the International Finance Corporation (IFC), has made history as it became the first ever climate change-related complaint submitted to the IFC’s independent accountability mechanism, the Compliance Advisor Ombudsman (CAO). On behalf of affected communities and civil society organisations, the Philippine Movement for Climate Justice (PMCJ), through its complaint to the CAO, accused the IFC of “contributing to the crisis of global climate change and causing other serious environmental and social harm”. The accusation is based on the IFC funding 19 coal power plants across the Philippines and companies that operate them through a financial intermediary (FI) and local bank, Rizal Commercial Banking Corporation (RCBC).
The complaint additionally claimed that despite failing to meet the IFC’s social and environmental Performance Standards and climate commitments, RCBC was given $253 million by the IFC to invest in projects that were considered to have “significant adverse environmental and social risks that are diverse, irreversible or unprecedented”.
This is not the first time that the IFC has been called out for its inability to monitor its FI investments. Civil society groups have previously highlighted how IFC funding has continued to support fossil fuel-related projects over the past decade and a half, such as those in Indonesia and India, in contravention of its social and environmental responsibilities and World Bank policy (see Observer Summer 2017, Winter 2017, Bulletin Dec 2013). The complaint provided additional evidence to support civil society calls for the IFC to ensure its investments in FIs do no harm to local communities or the environment (see Observer Winter 2017-2018, Spring 2017).