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Ethos International Conference
Business and Civil Society in the New Economy
June 13, 2012
Office of the Compliance Advisor Ombudsman (CAO)
for IFC and MIGA
2
Birth of “accountability model” arose from 1992 Rio Summit
Independent Accountability & Recourse
Mechanisms
World Bank responded by setting up “Inspection
Panel” (1993) to respond to civil society concerns
CAO created in 1999 for World Bank private sector
Today, all multilateral development banks have
“Independent Accountability Mechanisms”:
- African Development Bank (AfDB)
- Asian Development Bank (ADB)
- European Bank for Reconstruction and Development (EBRD)
- European Investment Bank (EIB)
- Inter-American Development Bank (IDB)
3
4
Who is the Compliance Advisor
Ombudsman (CAO)?
Independent accountability & recourse mechanism for IFC & MIGA, World Bank Group
Social & environmental mandate
Triggered by locally impacted communities
100+ complex multiparty disputes in 38 countries
5
“Citizen-led” accountability & recourse
IFC MIGA
Project-affected
communities
World Bank Group Board
Private sector client
Private sector client
Private sector client
PRESIDENT Robert B. Zoellick
6
CAO works at the intersection of corporate - community conflict
Hydropower,
Himachal Pradesh, India
Water privatization,
Guayaquil, Ecuador
9
Sugar industry,
Chichigalpa, Nicaragua
Palm oil, West Kalimantan &
Sumatra, Indonesia
Oil pipeline, Chad &
Cameroon
Overview of CAO’s work 2000-2012:
Regions
12
Latin America accounts for almost 40% of complaints
Complaints from Asia region on increase
Mobilized regional civil society?
Greater awareness of IFC, and CAO?
39%
21%
15%
13%
8%
2% 2%
IFC/MIGA Projects in CAO Cases by Region, FY00-12
Latin America and Caribbean
Sub-Saharan Africa
South Asia
East Asia and the Pacific
Europe and Central Asia
Middle East and North Africa
World a
Sectors
13
Four industry sectors predominate in complaints:
Extractive industries, infrastructure, agribusiness
& manufacturing
Pattern reflects resource intensity of these industries
- i.e. land and water use
32%
29%
21%
13%
3% 2%
IFC/MIGA Projects in CAO Cases by Industry, FY00-12
Oil, Gas, Mining and Chemicals
Infrastructure
Agribusiness
Global Manufacturing & Services
Financial Markets
Advisory Services
Environmental & Social Issues
14
81% 77%
73%
60% 53% 52%
45%
35%
20% 15%
11%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
% o
f C
ase
s
Frequency of Issues Cited in CAO Cases, FY2000-12
Socio-economic grievances characterize 80% of
complaints = access to & distribution of local benefits
Consultation & disclosure (73%), Land (60%),
Water (45% - rises to 90% in mining projects)
What is the framework that informs
CAO’s work?
Policy on Social and Environmental Sustainability
Performance Standards 1-8: 1. Assessment & Management of Social and Environmental
Risks and Impacts 2. Labor and Working Conditions 3. Resource Efficiency and Pollution Prevention 4. Community Health, Safety and Security 5. Land Acquisition and Involuntary Resettlement 6. Biodiversity Conservation & Sustainable Management of
Living Natural Resources 7. Indigenous People 8. Cultural Heritage
Policy on Disclosure of Information
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Voluntary standards & guidelines for
private sector
IFC standards applied by broader private sector - Equator Principles: Environmental and social standards
covering 90% of global project finance
- Used by 30+ OECD Export Credit Agencies
- Used by European Development Finance Institutions
- Global benchmark used by significant number of industry associations & companies worldwide
Voluntary initiatives & principles: - UN Global Compact
- UNEP Finance Initiative
- Global Reporting Initiative (GRI)
- UN Business and Human Rights Guiding Principles
- OECD Guidelines
- Extractive Industries Transparency Initiative (EITI)
Even with the best standards & commitments,
can you predict where conflict will arise?
17
Mapping a conflict
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Country X
Province Y is resource
rich
Geophysical mapping of the asset
Governor of Province Y supports
private sector investment
Delineation of land parcels
20
Permits issued by national government
Company acquires permits for
exploration in specific corridor
21
Has international financing and
support of national and
provincial governments
Tribal communities claim ancestral
domain
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Claim company has violated their lands without Free, Prior, &
Informed Consent
(FPIC)
National Council for Indigenous Peoples
determines ancestral boundaries
23
Excludes one tribal
community - decision
determines company
consultation strategy
Tribal communities are divided
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Chiefs are divided for &
against mining
activities
Municipal boundaries
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Elected mayors also have oversight of their domains
National Department of Environment
defines forestry reserves
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Overlaps with lands permitted for mining exploration
Village boundaries & elected captains
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Conflict over tribal land
claim which overlaps
with village land
Company embarks on CSR projects
28
With villages and one tribal
community “for” the project
NGOs start a campaign against mining
29
Support interests of disgruntled
tribal community
Complexity makes conflict inevitable
30
What can you do about it?
You have to uncover common interests
Tools you can use
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Early social mapping - interest-based to identify
conflict potential
Livelihood needs assessment (communities)
Give people an opportunity to participate in the
project
Participatory approaches when facts are in
dispute
Where there is conflict,
use dispute resolution:
- Mediation, facilitation,
assisted negotiation
BUT, there is no one
model or solution
Summary: Outstanding questions
Are voluntary standards credible to civil
society?
Transparency: what is disclosed?
- The project & CSR strategy?
- Or outcomes on the ground?
Accountability: by whom and to what?
- Are there publicly accessible mechanisms to provide
accountability/recourse against commitments made?
- E.g. Equator Banks?
What about mandatory frameworks?
- Is self-regulation enough in the context of Rio+20
goals and a lack of government leadership in most
regions? 33
CAO Film: Building Company-Community
Dialogue in the Philippines
34
See BASESWiki: Business & Society Exploring Solutions http://baseswiki.org/en/Video/Philippines_Dialogue
Film produced by Corporate Social Responsibility Initiative at Harvard & UN Business and Human Rights Program
www.cao-ombudsman.org
Contact us
Compliance Advisor Ombudsman for IFC & MIGA 2121 Pennsylvania Avenue NW
Washington, DC 20433
www.cao-ombudsman.org www.facebook.com/CAOoffice