Title: Political and Community Value of IFI Compliance Mechanisms: CAO and Uruguay Pulp Mills
1Political and Community Value of IFI Compliance
Mechanisms CAO and Uruguay Pulp Mills
- Presented by David Barnden
- david_at_cedha.org.ar
- Center for Human Rights and Environment (CEDHA)
2IFC and MIGA
- IFC to finance two large scale pulp mills on the
River Uruguay - US200m ENCE (Spain)
- US170m Botnia (Finland)
- MIGA to provide
- US350m political risk insurance Botnia
3ENCE
Botnia
Rio Uruguay
ARGENTINA URUGUAY
Argentina
Uruguay
4Grounds of Action at CAOSeptember 2005
- Violations to Environmental and Social Safeguards
- Violations to Disclosure Policy
- Violations to International Waterways Policy
- Poor Stakeholder Consultation
- Poor EIAs
- Violations of International Treaties
- gt Focuses on Obtaining Audits
5IFC broad community support
6CAO Audit Findings
- Complaint by 40,000 Stakeholders
- IFCs due diligence to satisfy itself that the
EAs were complete in all material respects was
inadequate and not incompliance with the
organizations Disclosure Policy (CAO, Feb 22,
2006) - Insufficient evidence that proper consultation
has occurred - No cumulative impact study IFC Fosters
Separation of Projects! - Need to generate transboundary trust in Local
Communities - Botnias beginning construction undermines
legitimacy - Special Efforts must be made to legitimize future
studies - Must study impacts of eucalyptus tree farming on
water - Must examine International Law Obligations MIGA
says not needed! - Establishes legitimacy of (Gualeguaychú Assembly)
- IFC Fails to Give Clarity on how it will address
Study Flaws - Further technical information and facts will not
be sufficient
7Community Value of CAO Findings
- Ease of access for stakeholders - low threshold
mechanisms for complaint process - Direct access - stakeholders to IFI
- Exposed stakeholder marginalisation
- Legitimised stakeholders AND concerns
- Psychological value for community
- CAO helped community by explaining their own
mandate
8The publics response to these new industrial
features ... may potentially change over time as
the public becomes accustomed to the new
landscape. Final CIS
9CAO Findings - Political Value
- Inter American Commission on Human Rights
- Dialogue between international tribunal and
compliance mechanism - First time ever CAO findings used by an
International Human Rights Tribunal - Cited by Argentina at the International Court of
Justice - CAO refers to undermining legitimacy of
protocols - Equator Principles (based on CAO findings)
- ING cancels US480m of involvement
- Calyon loses sustainable banking award
- BBVA endures protests in Spain
10CAO Findings - Political Valuecontinued...
- OECD Complaints (based on CAO findings)
- open dialogue between stakeholders and Botnia for
the first time - engages export credit agency and private banks
- diplomatic facilitation occurs for first time
(Finland and now Sweden) - ENCE relocates
- Impact on the IFC
- Delayed decision to finance for 14 months
- Forced improved review of impacts
11120 000 protest against Botnia
The worlds largest environmental march
12No Appeal Mechanism Compliance Fallout
- Role of CAO over after release of Preliminary
Assessment and Compliance Audit - No mechanism for review or appeal
- IFC and MIGA limited response to CAO findings
- IFC failed to
- Fully address findings
- Incorporate some findings into revised EIA -
errors persisted - Address legal, political and social concerns
raised by CAO - What the World Bank President failed to do
- Act upon findings, instruct Executive Directors
to give weight to findings
13Botnia today IFC financed and over 60complete