The International Finance Corporation (IFC), the World Bank’s private sector lending arm, is under scrutiny for failing to address harms caused by its support of Rizal Commercial Banking Corporation (RCBC), which financed ten coal-fired power plants in the Philippines. The project is alleged to have led to forced displacement, health issues and environmental damage. Yet, IFC’s December 2024 Management Report indicated no plans to address these harms. Moreover, the IFC has chosen not to publicly disclose the findings and recommendations from its multi-year, multi-million-dollar assessment, prompting accusations of a “cover-up” from affected communities and human rights organisations. A January report by the Compliance Advisor Ombudsman (CAO), the IFC’s independent accountability mechanism, confirmed that while the IFC identified specific risks, actual impacts remain unaddressed.

This case provides yet another example of the risks associated with financial intermediary lending, where public development banks invest in private banks, prioritising profit over environmental and social standards (see Observer Spring 2024, Winter 2023). Civil society organisations have called this a “moral failure and reputational risk” for the World Bank Group, especially given the IFC’s prior commitments to remediate harms associated with its financing activities.

“Eight years since filing the complaint, and four years since the CAO finding of IFC’s violation of its Performance Standards, affected communities continue to demand remedies as they confront the daily realities of pollution, sickness, displacement, lack of water, and threats and reprisal, which have only worsened ever since,” noted Aaron Pedrosa, of the Philippine Movement for Climate Justice. “Our case is not just a test case of complaints initiated under the new CAO policy, it is a test for the IFC, and the broader World Bank Group, to deliver remedies when their direct or indirect investments cause harm to people and planet,” he stressed.