MAC: Mines and Communities

India: World Bank IFC doesn't even heed its own advisors

Published by MAC on 2015-01-27
Source: MASS, Huffington Post

Scepticism is sometimes expressed about the efficacy and thoroughness of the World Bank IFC's independent mechanism for addressing violations of its own guidelines - the Compliance Advisor Ombudsman (CAO).

Not so, in the case of a huge Indian coal-fired power plant that the IFC has been funding to the tune of US$500 million. In 2012, the World Bank ordered a full investigation of claims that Tata - the company behind the project - had violated several critical World Bank operational principles. The CAO report, presented eighteen months later, substantiated most of these.

It found that land acquisition and "resettlement" of local people had been accompanied by human rights abuses, biodiversity and conservation had been violated, and there had been  complete indifference over the cumulative impacts of the projects surrounding the plant on the local community and population.

But did the Bank listen and act? Not a bit of it.

Last week, the CAO came out, all guns blazing, in scathing criticism of the IFC's failure to addressed its findings.

World Bank Panel Exposes Continued Violations at Tata Mundra UMPP

MASS Press Statement

22 January 2015

MASS Demands President to Act; ‘Withdraw IFC from the Project’

In a scathing report, the compliance mechanism of World Bank Group’s  International Finance Corporation (IFC), the Compliance Advisor Ombudsman  (CAO) has said that IFC has failed to address the findings of CAO in the  case of Tata Mundra (Coastal Gujarat Power Ltd).

CAO released its monitoring yesterday (January 21) after one year of their audit report. The report says, “While acknowledging the actions reported by IFC, CAO does not find them sufficient to address the findings of the audit at this stage. In particular, CAO notes that a number of its findings suggest the need for a rapid, participatory and expressly remedial approach to assessing and addressing project impacts raised by the complainants. Such measures are not well developed in IFC’s reporting which focuses on the commissioning of technical studies as well as corporate social responsibility measures implemented by the client.”

IFC’s response to the monitoring report once again fails to address the key points raised by the report and make it clear that they are not serious about addressing the concerns which include threat to their livelihood and health risks.

It may be noted that in October 2013, CAO published its audit report on Tata Mundra listing a number of serious violation of IFC’s policies while financing the 4000 MW, $4 bn project in Kutch, Gujarat. CAO found that: Environmental and Social risks and impacts of the project were not considered and addressed; There is no social baseline data; IFC’s policies for land acquisition not applied, despite physical and economic displacement; Inadequate attention paid to the requirement of biodiversity conservation; IFC failed in its review and supervision of the impacts on air-shed & marine environment; and IFC failed to examine the cumulative impact of projects around Tata Mundra.

Machimar Adhikar Sangharsh Sangathan (MASS, the Association for the Struggle for Fishworkers’ Rights), the complainants to the CAO had rejected IFC’s action plan released in November 2013. MASS called it “non-serious, non-committal one”, “empty and a non-starter” and said that “We reject this statement and action plan. This is only an attempt to obfuscate the liability and making mockery of communities’ concerns.”

“The report vindicates our position that what IFC has come up as an action plan is just a set of activities under the CSR, without addressing the findings of CAO. IFC’s continued dismissal of CAO findings is trivialising  a body like CAO, which was made to address affected people’s concerns. We  demand nothing less than IFC withdrawal from the project,” MASS General Secretary Bharat Patel said.

He added, “We wonder what stops President Jim Kim from taking action on a  report by a body under him”.

MASS demands that the World Bank President Jim Kim, who has so far not taken any action on the CAO findings of serious violations of IFC’s  policies, should act upon CAO’s monitoring report, which exposes that  nothing has changed for the people who are affected by the IFC’s financed Tata Mundra.

MASS demands that the President should withdraw IFC financing from the  project and set a precedent that violators should pay. His continued silence on this matter will only be a tactical support to the violations.


CAO documents:


Tata Mundra: World Bank Group's Guide to Breaking Your Own Rules

Huffington Post

26 January 2015

The Compliance Advisor Ombudsman (CAO) provides recourse mechanisms for communities who are affected by projects supported by the World Bank Group's International Finance Corporation (IFC). Concerned communities can petition the CAO to look into claims that the project is not living up to its agreed terms and safeguards. These safeguards can encompass anything from labor issues to environmental degradation and everything in-between.

On the surface, having an accountability system in place is a big achievement for civil society. This internal World Bank Group watchdog is a critical institutional measure to address grievances. It truly is a step in the right direction. But having a policy and enforcing the policy are two totally different and separate things. After all, law without enforcement is no law at all.

With that in mind, in August 2013, the CAO published its audit report on the Tata Mundra coal-fired power plant in western India. The results were not pretty. This report detailed a number of serious infractions including land acquisition abuses, biodiversity conservations violations, and perhaps worst of all, complete indifference concerning the cumulative impacts of the projects surrounding the plant on the local community and population.

That was some eighteen months ago. The Association for the Struggle for Fishworkers' Rights, which represented these communities in western India, sounded an alarm as far back as March 2014 that the CAO reported violations and material harms were falling on deaf ears. CAO did not give up on its work and did not turn a blind eye to what is still continuing apace at Tata Mundra.

Has the situation improved?

CAO's follow-up report says that little if anything has changed. Not at Tata Mundra and what's more disconcerting, not at the IFC. In a letter dated January 20, 2015, from the IFC to the CAO, the IFC sounds all the right bureaucratic notes without actually saying or agreeing to anything. All that IFC offers is a loose commitment to doing an action plan based on studies after studies. This was the same response they published last year, but it's not going anywhere. The economic condition of affected fishermen and farmers has not improved.

So at this point there's an independent monitoring group in the CAO that is doing its job and doing it well. The local communities and peoples have been supporting their work. But the IFC, under President Jim Kim's watch, keeps ignoring and dismissing the findings. Its official response is filled with bureaucratese but there's no movement in remedies. Responses have not led to improved outcomes. For the local populations and the civil society organizations that support them, enough time has been wasted waiting on the IFC. It is long overdue for the World Bank Board and Dr. Jim Kim to intervene.

Safeguards are being blatantly ignored. Local populations - the same populations that are supposed to benefit from the plant - are being adversely affected. Air and water standards are being flouted. And those that have the power to change the status quo at Tata Mundra - the IFC with its investment capital - refuse to act. Dr. Kim must intervene. He needs to ask his administration and staff at the IFC to do their jobs with the same independence and vigor that those at the CAO have shown.

If he does not - if nothing changes - what reason would any local population or government or civil society organization have to trust the word and promises of the World Bank Group in the future? There is much more at stake here than a power plant in western India. The reputation of the Bank and of sustainable international development is hanging in the balance.

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