Overcoming Obstacles: The Long and Winding Road to Remedy for Communities

Despite claims that development projects are designed to benefit communities around the world, they often do the opposite. Projects, especially infrastructure projects, can bring myriad problems — impacting access to or quality of water, forcing communities to resettle, infringing on grazing land, and polluting the air, water, and land, among other devastating consequences.

When things go wrong, where do communities turn? Six years after the adoption of the UN Guiding Principles on Business and Human Rights (UNGPs) and over twenty from when the first development bank created an independent accountability mechanism, communities around the world still struggle to get redress when they are harmed by development projects.

Remedy, or redress, is designed to provide a solution (such as compensation, land, or medical options) when a project harms a community. All development banks have independent accountability mechanisms (IAMs), which conduct independent investigations of whether a project followed the policies of the bank and whether it harmed local communities. CIEL works constantly to strengthen the IAMs, ensure robust environmental safeguards, and support communities seeking remedy for the harms they suffer.

At this year’s UN Forum on Business and Human Rights, CIEL, SOMO, Accountability Counsel, the Bank Information Center, and the network of the Independent Accountability Mechanisms themselves (IAMNet) hosted a session called the “Road to Remedy” to highlight both the opportunities presented by the IAMs and the challenges communities face.

So what is the road to remedy?

Stop 1: Finding the Mechanism

When a development finance institution funds a project, construction trucks rolling into a village is often the first notice a community gets. In many cases, local communities don’t know about projects, much less who is financing them or that there is a way to seek remedy when projects cause harm.

For example, presenter Sukhgerel Dugerseren worked with local herders in Mongolia who filed a complaint to two IAMs about a mining project. The herders alleged that the project impacted their land and water and disrupted their nomadic way of life. But other than protesting locally, it was hard to find information on how to stop or challenge the mine.

So what do we do?

Recognizing this problem, the IAMs are increasingly holding outreach events in countries (both in person and virtually) to try to inform local NGOs and communities about the IAMs, how they operate, and how to reach them.

Similarly, NGOs work to inform people about the IAMs and often join the IAMs for outreach events. CIEL and the International Accountability Project created the Early Warning System to identify, in the early stages, projects that may harm communities, so that communities can access information on such projects and dispute them—sometimes even before the project begins.

Lastly, but importantly, the company plays a role. Some development finance institutions require their clients to disclose the existence of the IAM as a condition of the loan, but that is not always true.

Companies also often have their own processes for resolving disputes at the project level. Increasingly development banks are requiring companies to have such processes and tout these as ways to quickly resolve disputes. However, it is not clear how effective these project-level mechanisms are. Do these processes really solve problems equitably and respect people’s rights, or do they just deal with them quickly for show? Though they may work more quickly, these mechanisms can exacerbate the problems and conflict with the community if not implemented properly. And they can delay access to other mechanisms that could provide actual solutions and redress for the community.

Step 2: Filing the Complaint

Once a community knows about the IAM and how it works, what then? How does a community decide to bring a complaint? Sometimes it’s the only option.

In many instances, local courts are not an option for various reasons, including weak rule of law in the country. Plus, development finance institutions cannot be held accountable in national courts because they have immunity from legal challenges. So the only recourse for communities is to go to an IAM.

However, not everyone reacts positively to an IAM complaint. Often, when a complaint is filed, companies initially deny it and act defensively. A company representative from Newmont Mining who presented at the event recognized the flaws in this reaction, as it’s not in the best interest of the company to be in conflict with local communities. Based on his experience, he noted that IAMs can help build trust and that the process can lead to better community-company relations.

The complaint process often lasts a long time — 17 months on average — and requires considerable dedication from all involved, including supporting NGOs, to try and get redress for the people being harmed.

Step 3: Seeking Remedy

So what happens in the end? After this long journey, communities finally get redress for the harms they’ve faced, right? Well, the answer to that question is complicated. Unfortunately, one of the greatest obstacles in this process is getting actual remedy for people on the ground. Even when the process addresses a lot of issues and proposes productive solutions to rectify the harms, it’s often not enough.

Sometimes, even after a productive process at the IAM, the development bank does not respond adequately or at all. IAMs are independent from the development banks that are the subject of their investigation, but it is the banks that have the responsibility to provide actual remedy to impacted people. The recommendations and findings of the IAMs are not binding. And in most instances, the development bank is responsible for creating an action plan to remedy the harm or ensure the project meets the bank’s standards moving forward.

Even after thorough investigations by the IAM, development banks sometimes ignore the report or claim the findings are just the IAM’s “opinion.” For example, in the Assam tea case, the CAO, the IAM for the World Bank’s private-sector lending arm (the IFC), issued a strong report finding that the project did not comply with the IFC’s own standards. But unfortunately, the IFC has done nothing to remedy the harms or change the situation in the country, which is devastating for people on the ground who continue to suffer.

Often it is poor and vulnerable people and communities that bear the risk of development projects that are supposed to benefit them. But these communities deserve better. After the long and winding road to remedy, communities should be able to find actual recognition of and solutions to the harms they have faced.

After all, development is supposed to bring about positive change in the world — not just a trail of devastation.

By Erika Lennon, Senior Attorney

Originally December 22, 2017