FOR IMMEDIATE RELEASE
April 11, 2019
Yesterday, International Finance Corporation (IFC) CEO Philippe Le Houérou released a statement acknowledging the critical role of accountability in development finance and the need for the IFC to do better.
The Center for International Environmental Law (CIEL) welcomes Le Houérou’s announcement and released the following statement:
For more than 20 years, CIEL has worked alongside partners to advocate for IFC accountability. We have accompanied impacted communities and built on those experiences to advocate for reforms at the IFC. CIEL has always done this with two major goals in mind: to prevent harms to project-affected communities through strong safeguards and proper implementation within the IFC, and to strengthen the IFC’s independent accountability mechanism, the Compliance Advisor/Ombudsman (CAO). The CAO plays a critical role, and having a strong, independent CAO is necessary. However, protecting communities from harm depends primarily on the IFC.
Le Houérou’s statement is a step forward for the IFC in recognizing and taking on its role in the accountability system, with a clear commitment to “early-stage prevention and proactive problem solving” when the IFC becomes aware of concerns.
If done properly, this proactive approach can prevent harm to communities and potentially provide solutions and remedies when harms do occur. This change in direction is laudable, but the change in “behavior and culture” identified by Le Houérou points to the fact that, even with this new policy and guidance in place, the change in practice will only occur after all staff adopt this change in attitude and the institution as a whole works systematically toward this goal.
The IFC has numerous opportunities to prevent and solve problems during the whole lifecycle of a project. It has the full authority to call on its clients to correct their performance during project operations. Yet the IFC has shirked this responsibility in the past, and even when the CAO has issued compliance reports detailing harms, it has often failed to respond. This is what led fishing communities and farmers supported by Earthrights International to bring the IFC to court in the US. In the wake of the Supreme Court decision in Jam v. IFC, there is an opportunity to reflect on where the IFC and the World Bank Group can lead in this new era of accountability.
With the Board about to embark on a review of the IFC’s environmental and social accountability framework and the role and effectiveness of the CAO, Le Houérou has signaled that the IFC will embrace this review and use it to strengthen its whole accountability system. The CAO has a breadth of knowledge from its nearly 20 years of casework that can provide important lessons for the IFC at an institutional level. The CAO can and should serve as a key resource for the IFC as it considers ways to strengthen its broader accountability system.
During the upcoming review, it is critical that the Board pay special attention to how the IFC responds to the CAO. Even when the CAO has released reports documenting human rights and environmental abuses surrounding a project, the IFC has repeatedly failed to take action to remedy those harms. To that end, it’s important that the IFC not only strengthen the CAO, but that it take proactive steps to start responding to CAO reports in a more meaningful way.
Equally important is that this review also build on its current practice to strengthen the CAO to ensure that it is independent, transparent, accessible, and equitable. The CAO is an essential component of the broader system of accountability, providing a necessary avenue for communities to bring concerns when projects cause harm. A strong, well-resourced CAO, accompanied by a proactive response by the IFC, is essential to providing the real remedy and redress communities deserve.
And while Le Houérou’s statement is a good step, the proof will be in how the IFC implements these changes going forward. CIEL will be watching to ensure that the IFC embraces accountability in practice during all its operations and recognizes and acknowledges the role of the CAO, thus creating a robust and effective accountability system. Only then will the ultimate goal of providing redress to those who are harmed by its projects be fulfilled.
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Contact:
Amanda Kistler, Communications Director, CIEL: akistler@ciel.org, +001.202.742.5832