Open Statement by CSOs from South Asia on IFC Policy and Performance Standards on Social and Environmental Sustainability

July 2010

We, representatives of various people’s movements and other civil society organizations, researchers and activists, have heard about the consultation IFC held on Policy and Performance Standards on Social and Environmental Sustainability in Delhi on June 25, 2010.

We are dismayed with the way the consultation was held, undermining the democratic processes, lacking transparency and failing to hear the communities hitherto affected by various IFC funded projects.

We learn that there weren’t any CSO representative at the consultation from any other South Asian country except India, while the industry was represented from different countries. The only forum IFC planned in the region to solicit inputs had only the industry represented from other countries in the region and not CSOs engaged with IFC funded projects is a matter of serious concern.

A consultation of this nature cannot be held only in the confines of a hotel. Who else than the communities affected by the IFC funded projects can say how the policies and performance standards fared during the implementation of projects? IFC will never be able to properly assess its performance standards unless public hearings in a transparent, participatory way are held in at least selected project areas where it is funding.

However, recognising the large scale negative impacts IFC funding is bringing on the communities and the consequences of performance standards not upholding the rights of the people, we take this opportunity to raise some key issues. This, however, is not in substitution to another consultation IFC should hold in South Asia, ensuring proper representation from all South Asia countries and communities affected by projects funded by it; and public hearings by an independent jury acceptable to all parties in at least selected projects to learn firsthand about its past performance. Detailed submissions could be done in such forums.

Environmental and Social Impact Assessment and Monitoring

At the bare minimum, IFC should adapt the model practiced at Allain Duhangan project for securing ESIA. Some of the emulative lessons from that project funded by IFC include, appointing an independent panel to hold public hearings, engaging a CSO to facilitate ESIA meetings, translation and dissemination of full ESIA to local language, redoing the ESIA following critique by the CSOs, etc. Mechanisms should be put in place to ensure that these happen in credible way, as not all these steps were taken in credible way in case of Allain Duhangan hydropower project in Himachal Pradesh, leading to continued agitation by the affected people.

Departing from the current practice of annually sharing updates on Environmental Management Plan (EMP), the same should be done monthly and in local language to ensure proper monitoring and corrective measures where necessary. Adequate participation of project affected communities (at least 50% of the members) in the panel to implement EMP should be made mandatory.

It is pertinent that information needs to be drawn from independent sources, including local communities for project planning and compliance monitoring, than relying on, often unverified, client provided information.
Information from these sources help IFC in categorizing the project (as one with irreversible or unacceptable adverse impacts or not); whether free, prior informed consent is required and achieved; suggest action plans and monitor compliance.

Human Rights Impact Assessment

Having witnessed colossal violation of human rights in the past projects, there should be a robust human rights impact assessment done apart from SIA and EIA, as a prerequisite for approval of any project. Such a HRIA should be done by an independent and credible body.

PS on Compliance

There should be a separate Performance Standard for Compliance. Such a PS could ensure compliance with the IFC standards through the planning, decision making, appraisal, construction, operation and decommissioning stages of any project, and take course correction where the client fails to comply with the norms. In an event of continued non-compliance, necessary corrective steps would apply, including cancelation of assistance to the project. Today there is general acceptance about need to ensure compliance, but since there are no clearly defined performance standards, there is little confidence inspiring improvement. Without compliance the most well defined performance standards remain meaningless. Hence there is a need for separate performance standard for ensuring compliance.

Free, Prior and Informed Consent

Recognising historical injustice meted out to the Indigenous Peoples / adivasis, IFC should in principle accept FPIC as a prerequisite for approval of any projects where IPs/adivasis get affected. Operational part of the FPIC could be drawn in consultation with CSOs in a certain time frame. There should be no attempt to dilute this with replacing consent with consultation.

Environment and Climate change

Incentives/ subsidies should be given to renewable energy projects. The incentives for renewable energy must be sufficient to overcome the incremental costs of procuring such energy over other forms of conventional energy including fossil fuel based energy production.
No option should be given to offset GHG emissions for clients. IFC should ask its client to withdraw the application for CDM status for the Allain Duhangan project, since the CDM status is accorded to the project under completely fraudulent claims. The project for which the client started work in 1990s is clearly a non additional project. IFC being an equity partner in that project, IFC is also partner to this fraud and must immediately correct this by withdrawing the application for the CDM status for the project. Similarly IFC should withdraw application for CDM status for the Mundra Coal based thermal mega power plant since it is certainly going to only increase the emission, not decrease it. IFC should not finance bio fuels as source of energy. IFC should have special procedure for environmentally sensitive areas. No projects must be approved in bio geographic zones which are left with little or no biodiversity and critically endangered species enlisted in the Schedule I of the Wildlife Protection Act in India and IUCN list of endangered species.

Financial Intermediaries

Information of Financial Intermediaries – their past and current business practices, capacity to deal with environmental and social risks and lists of all financial intermediary subprojects and equity investments receiving IFC assistance – should be make public. IFC should not lend to any banks/FIs that do not comply with equator principles.

Signed by:

Bangladesh

1. Aid Accountability Group, Dhaka
 2. Ahmed Swapan Mahmud, Voices for Interactive Choice and
Empowerment, Dhaka
 3. Arup Rahee, Lokoj Institute, Dhaka
 4. Brahmmaputra Society, Mymensingh
 5. In Search of Light, Jamalpur
 6. Kazi Zaved Khalid Joy, Initiative for Right View, Khulna
 7. Kormi, Pabna
 8. M Nazrul Islam, Centre for Research and Action on Development,
Dhaka
 9. Muhammad Hilaluddin, Angikar Bangladesh Foundation, Dhaka
 10. S M Nazer Hossain, ISDE Bangladesh, Chittagong
 11. Shah Zulfiqar Haider, Dhaka

India

1. Amitabh Behar, Delhi
 2. Amit Srivastava, India Resource Centre
 3. Amit Vatsyayan, Oxfam GB, South Asia
 4. Anil Tharayath Varghese Delhi Solidarity Group
 5. Arundhati Dhuru, Right to Food Campaign, Uttar Pradesh
 6. Bijulal M.V., Mahatma Gandhi University, Kerala
 7. Bipin Chandra Chaturvedi, Update Collective, Delhi
 8. Bobby Kunhu, MAM Ltd, Kerala
 9. Clifton D’Rozario, Alternative Law Forum, Bangalore
 10. Debi Goenka, Conservation Action Trust, Mumbai
 11. Dunu Roy, Hazards Centre, Delhi
 12. E. Deenadayalan, The Other Media, Delhi
 13. Gopal Krishna, WaterWatch Alliance, Delhi
 14. Gururaja Budhya, Urban Research Centre, Bangalore
 15. Harsh Kapoor, South Asia Citizens Web, New Delhi
 16. Himanshu Thakkar, South Asia Network on Dams, Rivers and People,
Delhi
 17. Joe Athialy, Bank Information Center, South Asia.
 18. Justice Rajinder Sachar, former Chief Justice, High Court of Delhi
 19. Kalyani Menon-Sen, Jagori, Delhi
 20. Lalit Batra, Researcher, City University of New York
 21. Latha Anantha , River Research Centre, Kerala
 22. Madhuresh Kumar, National Alliance of People’s Movements, India
 23. Maj. Gen S.G.Vombatkere (Retd), Mysore
 24. Medha Patkar, Narmada Bachao Andolan
 25. Mukta Srivastava, National Alliance of People’s Movements, Mumbai
 26. Nityanand Jayaraman, Corporate Accountability Desk of The Other
Media
 27. Prashant Bhushan, Senior Advocate, Supreme Court of India, Delhi
 28. PT George, Intercultural Resources, Delhi
 29. Rajendra Ravi, National Alliance of People’s Movements, Delhi
 30. Raman Mehta, ActionAid India, Delhi
 31. Ramananda Wangkheirakpam, North East Peoples Alliance, Manipur
 32. Ravindranath,River Basin Friends, Assam
 33. Rosemary Viswanath, Equations , Bangalore
 34. Samir Mehta, International Rivers, Mumbai
 35. Simpreet Singh, Ghar Bachao Ghar Banao Andolan, Mumbai
 36. Souparna Lahiri, National Forum of Forest People and Forest
Workers, India
 37. Sumesh Mangalasseri, Kabani, Kerala
 38. Thomas Kocherry, National Fishworkers’ Forum, India
 39. Vijayan M.J. Delhi Forum, Delhi
 40. Vimalbhai, Matu Peoples’ Organisation, Delhi
 41. Vinay Baindur, Researcher, Bangalore
 42. Vinod Raina, Alternatives Asia

Pakistan

1. Mazhar Arif, Society for Alternative Media and Research,
Islamabad

Sri Lanka

 1. Hemantha Withanage, Centre for Environmental Justice, Colombo
 2. Green Movement of Sri Lanka, Gangodawila Nugegoda

Cc:
Board of Directors

Address for correspondence:
 Bank Information Center, Post Box No. 4659, New Delhi – 110016
 Email: jathialy(at)bicusa.org