Meg Taylor

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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

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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)

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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

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“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

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CAO works at the intersection of corporate - community conflict

Hydropower,

Himachal Pradesh, India

Water privatization,

Guayaquil, Ecuador

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Sugar industry,

Chichigalpa, Nicaragua

Palm oil, West Kalimantan &

Sumatra, Indonesia

Oil pipeline, Chad &

Cameroon

Overview of CAO’s work 2000-2012:

Regions

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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

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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

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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?

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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

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Permits issued by national government

Company acquires permits for

exploration in specific corridor

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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

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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

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With villages and one tribal

community “for” the project

NGOs start a campaign against mining

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Support interests of disgruntled

tribal community

Complexity makes conflict inevitable

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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

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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