Express disappointment over the proposed approach paper which is not only narrow in its approach but it does not deliver remotely on remedy or even reflect IFC’s and MIGA’s intent for accountability.

The International Finance Corporation, the private sector arm of the World Bank, released a new draft policy last month, to govern how it responds when projects go wrong and seriously harm people or the environment. The two draft policies are proposed IFC/MIGA Approach to Remedial Action and the draft IFC responsible exit principles. These were available for consultation till the 20th of April.

Close to hundred people’s movements, trade unions, civil society organisations and concerned citizens from India shared their comments on the proposed IFC/MIGA Approach to Remedial Action. They expressed disappointment over the draft policies which they said completely fail to address IFC’s past failures or provide a comprehensive policy on remedy for future investments.

In the comments, they expressed their deep concern about lack of consultation with representatives of affected communities on the draft and disappointment over the proposed Approach to Remedial Action and Responsible Exit Principles published by IFC and MIGA. Not only is it narrow in its approach but it does not deliver remotely on remedy or even reflect IFC’s and MIGA’s intent for accountability. The draft approach falls short of the 2020 External Review and its observations and recommendations. The draft approach does not in any way protect the interest of communities, rather looks at the approach from the lens of protecting the institutions and clients. It’s rather unfortunate that the long wait of the affected communities and civil society organizations for remedy has completely fallen short of the definition of remedy itself.

The conversation on remedy and responsible exit has started as a result of the struggles of communities negatively impacted by the projects of development financial institutions. A big part of the reason why IFC felt pushed to respond has been the struggle of fish workers of Mundra. The fishworkers of Mundra filed the complaint with the accountability mechanism of IFC and despite them recognizing the failures of IFC’s operational policies, the management did not act on it. Later the community filed a lawsuit in the US Court holding IFC accountable for the destruction of their livelihood and environment. It was a landmark victory in 2019, when the US Supreme Court stripped the IFC of its absolute immunity against lawsuits that it enjoyed previously. This was a landmark moment not only for fishworkers of Mundra but for communities across the world who had been negatively impacted by the projects financed by MDBs.

This judgement shook the World Bank Group as it also meant that this could open floodgates of litigation for them. Then CEO of IFC Philippe Le Houérou recognized the failure to respond to the negative impacts of projects. The IFC also launched an external review of the CAO (independent accountability mechanism of IFC), which resulted in some meaningful changes to the way it evaluates complaints. But the CAO review also emphasized the need for remedy for communities harmed by IFC projects, which the CAO has no authority to require and the IFC has refused to provide.  The IFC had promised to release a draft remedial framework. It was imperative that any framework addresses “legacy” cases such as this one, including by establishing a fund to compensate communities. Any approach that fails to do so would lack legitimacy.

One of the main problems with the draft approach to remedy that the submission identified that it was limited only to new or future projects and excluded existing and legacy harms from completed or ongoing projects. In the submission it was stated that,“It would be travesty if the approach paper does not apply to legacy harms, ongoing projects and projects where CAO(IFC’s Independent accountability Mechanism) cases are still ongoing/in the monitoring phase. The fact remains that many communities continue to suffer the disastrous impacts of projects where despite the recognition of the harms by the CAO, IFC either dismissed the findings or came out with an action plan which did not provide communities any support or remedy in any sense. In India alone, many communities continue to suffer the destructive impacts of projects which have been financed by IFC; the Tata Mundra Project where the action plan (which was rejected by the communities) is still in monitoring phase after more than a decade of it being filed with CAO,or the communities in Orissa impacted by the GMR Kamalanga Power Project supported by IFC through its financial intermediary investment who file the complaint with CAO in 2011. In the GMR Kamalanga case the affected community continues to suffer as the monitoring phase of the action plan (which was rejected by the affected community) continues with only one monitoring report which came out in 2017. The communities who continue to suffer from the disastrous projects financed by IFC should be provided remedy and approach paper needs to incorporate that, anything less would be unacceptable and fail the entire effort and purpose of having this approach paper.”

In the submission groups demanded remedy as a right of the communities negatively impacted by IFC’s investments, and not as charity. Avoiding harm needs to be fundamental to the discussion on Remedy, rather than waiting for the harm to happen, communities require to establish harm and then take actions. For that, impact assessments have to be credible and independently verified to assess and avoid the harm early on, rather than letting the damages devastate communities and their livelihoods, ecosystems and the interconnectedness to social cultural traditions, norms and practices; which once destroyed, then at that stage, the options for remedy in its true sense is limited.

While making the submission the Indian groups also stated that the second draft of the proposed approach to remedy should be comprehensive and include recommendations made by groups. They also stated that the second draft should be open to consultation with a wider range of stakeholders, affected communities being an integral part of it. Anything less than this would fail the purpose and would result in a document which is half baked and lacks intent.

To read the full text of the submission: Remedy Framework – Comments from Indian CSOs