The World Bank’s Compliance Advisor Ombudsman (CAO) is currently considering a complaint made by Guinean villagers against the International Finance Corporation (IFC), a sister organisation of the World Bank, for funding the expansion of a controversial bauxite mining project. Such grievances are not uncommon; which begs the questions, is CAO powerful enough to hold organisations, including its own, to account when grievances occur? Heidi Vella investigates.
After international outcry for greater accountability and transparency, in 1999 the World Bank established The Office of the Compliance Advisor Ombudsman (CAO). The Ombudsman’s role is to review complaints from private citizens who claim to have been harmed by private sector development projects funded by World Bank organisations.
When created, CAO was a first of its kind accountability mechanism, and in many ways, is world leading. Yet its effectiveness in dispute remediation and enforcing accountability has often been called into question.
In a recent case, lodged against the International Finance Corporation (IFC), residents of 13 villages in western Guinea allege a $200m loan made by the IFC to the Compagnie des Bauxites de Guinée (CBG) mining project violated IFC’s environmental and social Performance Standards, as well as international law.
Funding controversial projects
The complaint filed by 540 villagers to CAO comes amid a backdrop of local discontent surrounding Guinea’s burgeoning mining sector. The West African nation is believed to have the largest reserves of bauxite in the world, which the government, along with international companies, has been eager to exploit.
Growth in mining projects however, has come at the expense of proper government oversight and livelihoods of locals, according to an investigation by Human Rights Watch (HRW).
CBG, which is co-owned by the Guinean government, US-based Alcoa, the Anglo-Australian Rio Tinto and the Guernsey-registered Dadco, has a mined deposit located in Sangaredi, as well as exclusive rights over a 579km2 mining concession in north western Guinea.
According to the 2018 HRW report, since CBG operations began in 1973, it has taken land from rural farmers without adequate compensation, exploiting the Guinean government’s failure to provide legal protections to customary land rights, and has polluted local water resources and air quality.
Yet despite this legacy, the company was still granted funding from the IFC, even though, according to the 2012 IFC Sustainability Framework, it was required to conduct environmental and social due diligence of CBG’s activities.
David Pred, co-founder and executive director of Inclusive Development International (IDI), a US-organisation supporting the complainants along with two Guinean NGOs, says IFC justifies these kinds of investments by arguing it will serve to raise standards and improve performance and human rights.
“That is good if there is genuine political and financial will to meet the IFC Performance Standards; but we often see only lip-service and a continuation of long-standing practices of externalising environmental and social costs,” he says.