Bretton Woods Project - Critical voices on the World Bank and IMF

Jump to main content | Jump to sidebar | Jump to navigation menu

IFC's mining investments: a black hole for human rights?

News|Bretton Woods Project|16 April 2010|update 70|url
print|email |bookmark FacebookTweet thisdel.icio.usDigg!Stumble UponRedditGoogle BookmarksYahoo Buzz

A spate of human rights violations and environmental abuses by mining ventures backed by the International Finance Corporation (IFC), the private sector arm of the World Bank, is raising alarm over the inadequacy of its social and environmental standards.

US corporation Newmont has agreed to pay $5 million in compensation for negligently spilling cyanide at its Ahafo gold mine in Ghana, which received a $125 million loan and social and environmental guidance from the IFC (see Update 56). The spill occurred at a processing plant in October 2009, causing water contamination and damaging fisheries on which local livelihoods depend. The company failed to prevent or properly investigate the spill, and delayed notifying downstream communities and regulatory authorities, according to a ministerial panel report.

Daniel Owusu-Koranteng, director of Wacam, a Ghanaian civil society association of communities affected by mining, says this incident is the latest of a long series of human rights and environmental abuses relating to the mine: "A petition signed by over 1,200 community people from Ahafo that raised social, economic and environmental concerns about the mine was presented to the board of directors of the IFC at the time when the loan application was being considered. However, the IFC board completely ignored the issues raised by the petitioners and now we are suffering the consequences."

In India, a subsidiary of French company Lafarge has admitted mortgaging ecologically sensitive tribal land to secure a loan from international banks, including the IFC. Though approval had previously been given for the mortgage, in February the Supreme Court halted mining operations in the area after the Shella Action Committee, a community group, protested against the land transfer and lack of mandatory environmental clearance. In an early March letter, the IFC reiterated its commitment to funding the project. The company was ordered to produce a new environmental impact assessment, seek approval from relevant agencies and fund welfare projects for tribal peoples before resuming mining.

Indigenous peoples in the Peruvian Amazon have also been adversely affected by the IFC's activities in extractive industries. In early April, Shipibo-Konibo communities filed a complaint with the IFC's ombudsman against Irish corporation Maple Energy for polluting their ancestral land and rivers with repeated oil spills.

In Yemen, community interests look to be excluded from a mining law developed with IFC assistance that is now passing through the parliament (see Update 65). "Nobody representing potentially affected communities was invited to participate in the drafting of Yemen's mining policy," says Nadia Daar of US NGO Bank Information Center. Though Yemen is a candidate for the Bank-supported Extractive Industries Transparency Initiative, "there was no mention of EITI in the draft code." Conflicts of interest

The IFC's dual role as investor and advisor to governments on taxes, regulations and laws continues to fuel charges of conflicts of interest, despite the existence of the institution's policy for such cases (see Update 65). Concerns have been heightened by an upward trend in disputes between multinational companies and governments over revenues generated.

In February, the IFC said it would make no further investments in the Democratic Republic of Congo (DRC) until a dispute over the Kolwezi copper and cobalt project – in which the IFC has a 7.5 per cent share – is resolved. The DRC cancelled the project because of delays and the refusal by lead investor First Quantum Minerals to revise the contract, made under the post-war transitional government, to give better terms to the state. The IFC's advisors have played a leading part in encouraging pro-business reforms in the DRC. The case is currently before an international tribunal.

Cases relating to extractive resources have also proliferated at the International Centre for the Settlement of Investment Disputes, an arbitration forum which is part of the World Bank Group (see Update 66). According to Rebecca Dreyfus of the Washington-based Institute for Policy Studies, this "reflect[s] the growing practice among global corporations of bypassing countries' domestic legal systems and bringing cases over sensitive resource rights issues before unaccountable international tribunals."

Published: 16 April 2010 , last edited: 16 September 2013

Viewings since posted: 16080

Articles: 3465

Advanced article search
Search newswire and resources

New website launched

You are now browsing an archive version of the Bretton Woods Project's website. This site has not been updated since September 2013, but may be used for reference material as the nbew site is being developed. However we suggest you look at the new website:

Recent briefings & reports

Memorandum to the International Development Committee: Inquiry on the Future of UK Development Cooperation  26 June 2013

The Doing Business review: a test of World Bank leadership 24 June 2013

Climate Investment Funds Monitor 7: April 2013  25 April 2013

Working paper: The private sector and climate change adaptation: International Finance Corporation investments under the Pilot Program for Climate Resilience  24 April 2013

The UK's role in the World Bank and IMF: Department for International Development and HM Treasury  13 March 2013

World Bank on jobs: a "significant departure" or "business as usual"? 13 February 2013

No item found

Latest IFI-related video

The World Bank and human rights abuse in Honduras 7 August, Social Justice Committee of Montreal


Bretton Woods Update, 6 emails/year:
highlights fulltext pdf
Alerts of new web content
Weekly newswire email


Bretton Woods Project on Facebook

home | subscribe | donate | search | help | contact

validate: | XHTML | CSS | RSS

powered by Action Apps | hosted by GreenNet | Credits