“Development banks should be leading the way to address the climate crisis, but with investments like this the IFC is taking us backwards,” said Aaron Pedrosa, Legal Counsel of the Philippine Movement for Climate Justice. “Communities in the Philippines are suffering both the direct impacts of living near coal-fired power plants and the devastating effects of climate change. This isn’t the kind of development we want.” 

The CAO investigation was launched in response to a complaint brought by the Philippine Movement for Climate Justice, with support from Inclusive Development International and Recourse, on behalf of affected communities across the Philippines. The complaint relates to IFC’s $228 million investment in Rizal Commercial Banking Corporation (RCBC), which went on to become a leading financier of coal expansion in the Philippines, including through the construction of at least 10 new coal-fired power plants. 

In its report, the CAO confirmed that IFC’s failure to ensure that RCBC applied its environmental and social Performance Standards to the financing of these plants very likely caused grave harm to surrounding communities. The coal plants have caused serious impacts on the livelihoods, health and well-being of affected communities due to air and water pollution and physical and economic displacement, among other harms. Local community activists who opposed the projects faced reprisals from the project developers, with one prominent environmental and human rights defender Gloria Capitan being murdered on July 1, 2016. The report also notes that, once operational, the plants will produce approximately 40 million tons of CO2 annually – equivalent to roughly 30 percent of the Philippines’ annual emissions in 2019 – exacerbating a global climate crisis to which the Philippines is acutely vulnerable.

“This case is not an aberration – it exemplifies  IFC’s extremely problematic indirect lending practices,” said David Pred, Executive Director of Inclusive Development International. “IFC has contributed to serious harms to local communities and the environment by failing – over the course of a decade and still to this day – to ensure that RCBC and other financial intermediaries adhere to basic environmental and human rights standards.” 

This is the first investigation ever undertaken by the CAO to specifically examine IFC’s contribution to climate change through its indirect investments in fossil fuels. Despite the World Bank’s climate commitments, including a 2013 pledge to stop funding coal, IFC financing has continued to flow to financial intermediaries like RCBC that support new fossil fuel investments.  

“Given its mission, it’s shocking that IFC has enabled the dramatic expansion of coal in the Philippines,” said Kate Geary, Co-Director of Recourse. “Sadly, this is not an isolated case – in 2020 we saw IFC backing coal plants in Indonesia via Hana bank. So it is vital this report leads to the systemic reforms needed, including stopping clients funding new coal and ensuring IFC investments are aligned with the Paris Agreement.” 

IFC’s board of directors has adopted a Management Action Plan to address CAO’s findings, which goes part way toward addressing the CAO’s recommendations. In response to a request by the Complainants, who were concerned that the plan overly relied on the cooperation of the coal companies to provide redress, IFC agreed to return to the board within 9 months to provide a progress update and make adjustments to the plan if needed. The Complainants have called on the board to ensure that IFC’s response is robust and effective, including by:

• Ensuring  meaningful remediation of harms that local communities have suffered, informed by genuine community consultation.  
• Taking actions  to reduce and/or offset the greenhouse gas emissions produced by the 10 plants financed with IFC money. 
• Implementing systemic reforms to address huge gaps in IFC’s climate policies and financial intermediary lending practices to prevent similar harms in the future. These should include: 
  • Aligning its indirect lending policies and practices with the Paris Agreement on Climate Change by prohibiting financial intermediary clients from funding new coal projects. 
  • Ensuring that its financial sector clients only finance companies and projects that adhere to IFC’s environmental and social performance standards.   

For more information, please see:

• CAO’s full investigation report and press release
• Complaint filed with CAO concerning IFC investments in and financing to RCBC  
• Disaster for Us and the Planet: How the IFC is quietly funding a coal boom
• Broken Promises: The World Bank, international investors and the fight for climate justices in the Philippines 
• Coming clean: Can the IFC help end coal finance?

The post Watchdog Slams World Bank Group for Helping Bankroll Philippines Coal Boom appeared first on Inclusive Development International.

“Tambang DPM adalah bencana yang tinggal menunggu waktu untuk terjadi,” kata Tongam Panggabean, Direktur BAKUMSU, sebuah perkumpulan bantuan hukum di Sumatera Utara yang bertindak sebagai kuasa hukum untuk masyarakat yang terkena dampak. “Kami akan melakukan apa saja yang dapat kami lakukan untuk menghentikannya.”

Sebuah   analisis   di tahun 2019 yang dibuat oleh Inclusive Development International menemukan bahwa IFC memiliki kaitan keuangan dengan tambang yang direncanakan tersebut melalui   $ 300 juta investasi ekuitas   di Postal Savings Bank of China, dengan memberikan pinjaman kepada pengembang proyek tersebut. Berdasarkan tautan ini, masyarakat setempat mengadukan masalah tersebut ke Ombudsman. Bulan ini, setelah melakukan penilaian awal untuk menentukan apakah pihak-pihak terkait dapat mengatasi masalah masyarakat lewat mediasi, CAO mengumumkan bahwa mereka akan membawa pengaduan mereka ke Departemen Kepatuhan untuk melakukan penilaian. 

“Tidak semestinya investor atau produsen yang bertanggung jawab memiliki kaitan dengan proyek berbahaya ini,” kata David Pred, Direktur Eksekutif Inclusive Development International. “Kami berharap bahwa hasil penilaian ini akan memberikan kejelasan kepada para pengembang dan pemerintah Indonesia bahwa tambang ini tidak boleh dibangun.”

Sebagai bagian dari proses penilaian awal, CAO berkonsultasi dengan pihak-pihak terkait untuk menentukan apakah masalah dapat diselesaikan melalui dialog yang dimediasi. Namun, Dairi Prima Mineral tidak menanggapi banyaknya permintaan untuk memberikan komentar dan menolak untuk terlibat dalam dialog dengan masyarakat yang terkena dampak, sehingga menghalangi proses mediasi dan membuat penilaian kepatuhan CAO menjadi sebuah keharusan.   

“Tindakan perusahaan di setiap tahapan sangat disesalkan,” kata  Panggabean. “Mereka gagal melakukan konsultasi secara memadai dengan masyarakat setempat sejak awal, sejak itu juga mereka menolak melihat keprihatinan kami, dan tetap maju dengan tahap pembangunan meskipun ada risiko yang jelas terpampang dan tanpa persetujuan pemerintah atau perlindungan lingkungan yang diperlukan.”

Proyek ini menimbulkan risiko yang mengkhawatirkan

Tambang Dairi akan menimbulkan risiko yang mengkhawatirkan, menurut pengaduan dari masyarakat sekitar, yang ingin agar proyek tersebut ditinggalkan. Ketakutan mereka beralasan. Pakar teknis independen, Richard Meehan, dengan pengalaman 50 tahun di bidang stabilitas bendungan di zona gempa, telah melakukan penilaian risiko proyek. Ia menyatakan keprihatinan yang besar terhadap bendungan tailing yang direncanakan perusahaan untuk menyimpan limbah dari operasi penambangan. Dia mengatakan bahwa di satu waktu nanti keruntuhan (bendungan) tidak terhindarkan. Menurut Meehan dan ahli lain di isu lingkungan tambang timah seng,Dr. Steven Emerman, keruntuhan seperti itu akan membawa kematian yang luas di masyarakat sekitar dan kerusakan lingkungan jangka panjang di aliran sungai besar.

Emerman juga melaporkan bahwa bendungan yang diusulkan tidak dirancang dengan baik. Jika bendungan itu selesai dan penuh, air yang kemungkinan mengandung logam berat yang tinggi akan mengalir, tanpa diproses, ke saluran air yang digunakan sebagai persediaan air sejumlah desa. Ia menggambarkan hal ini sebagai “tidak bisa diterima dengan menggunakan standar apa pun.”

Orang-orang yang tinggal di dekat tambang marah. “Pengembang tersebut bahkan tidak akan diizinkan membangun bendungan ini di Tiongkok sana di mana perusahaannya berkantor pusat, karena letaknya terlalu dekat dengan pemukiman masyarakat,” kata Ibu Saudur Sitorus  yang tinggal di Desa Bonian di sekitar lokasi tambangan yang diusulkan. “Tapi mereka membangunnya di sini meskipun mereka dan kita tahu tambang itu hampir pasti akan meracuni, kalau tidak membunuh kita.” 

Tidak ada persetujuan dari pemerintah Indonesia

Kementerian yang bertanggung jawab atas persetujuan lingkungan masih mempertimbangkan Adendum Analisis Mengenai Dampak Lingkungan (ANDAL) asli tambang DPM, yang diperlukan setelah perubahan pada desain dan lokasi bendungan tailing yang direncanakan. Tanpa persetujuan lingkungan ini, proyek tidak dapat dilanjutkan secara sah. Akan tetapi, perusahaan telah memulai pembangunan fasilitas penyimpanan tailing tersebut.

“Kami sudah mengatakan kalau kami tidak mau ada tambang ini. Kami mengirimkan petisi untuk menolaknya. Perusahaan tidak jujur dan tidak mau mengatakan informasi tentang risiko yang kami tahu ada,” kata Bapak Barisman Hasugian dari Dusun 3 Desa Bonkaras “kami tidak ingin pemerintah kami menyetujui tambang ini.”

Peran perusahaan mobil internasional  

Tambang Dairi hampir pasti akan menjadi pemasok utama seng bagi produsen mobil dunia, yang menggunakan mineral tersebut dalam produksinya. Itu artinya, jika merek mobil besar secara terbuka menyatakan bahwa mereka menolak mengambil suku cadang yang dibuat dengan seng dari tambang, maka pernyataan tersebut akan membuat proyek menjadi kurang layak dan dapat membantu mencegah dijalankannya. “Kami juga meminta produsen mobil untuk membantu mencegah bencana yang akan bisa terjadi ini dengan mengumumkan bahwa tidak ada yang mau membeli seng dari tambang ini,” kata Pred.

“Kami meminta semua investor untuk tidak mendukung proyek ini. Kami meminta pemerintah Indonesia untuk menghentikan tambang ini. Kami mohon kepada produsen mobil untuk menjauhi perusahaan yang terlibat di tambang ini,” kata Panggabean.

The post Pengawas Bank Dunia akan meninjau proyek tambang Dairi Prima Mineral yang berisiko di Sumatra Utara appeared first on Inclusive Development International.

“The DPM mine is a disaster waiting to happen,” said Mr. Tongam Panggabean, Director of BAKUMSU, a legal group in North Sumatra that is acting as legal representative for the affected communities. “We will do everything in our power to stop it.”

A 2019 analysis by Inclusive Development International found that the IFC has financial links to the planned mine through its $300 million equity investment in Postal Savings Bank of China, which has provided loans to the project developer. Based on this link, local communities filed a complaint with the Ombudsman. This month, after conducting an initial assessment to determine whether the parties could address the communities’ concerns through mediation, the CAO announced that it would transfer the complaint to its Compliance department to conduct an appraisal. 

“No responsible investor or manufacturer should have anything to do with this dangerous project,” said David Pred, Executive Director of Inclusive Development International. “We hope that the outcomes of this assessment will make it clear to the developers and the Indonesian government that this mine should not be built.”

As part of its initial assessment process, the CAO consulted with relevant parties to determine whether the issues could be resolved through mediated dialogue. However, Dairi Prima Mineral failed to respond to multiple requests for comment and declined to engage in dialogue with affected communities, precluding any such mediation process and necessitating the CAO’s compliance appraisal.   

“The company has acted deplorably at every stage,” said Mr. Panggabean. “They failed to adequately consult with local communities from the beginning, they have since refused to engage with our concerns, and they moved forward with construction despite clear risks and without necessary government approvals or environmental protections.”

The project poses alarming risks

The Dairi mine would pose alarming risks, according to the complaint filed by surrounding communities, who want to see the project abandoned. Their fears are well-founded. Independent technical expert, Richard Meehan, with 50 years’ experience in dam stability in earthquake zones, assessed the project’s risks. He has expressed major concerns about a tailings dam the company plans for storing waste from mining operations. He suggests a collapse is almost certain at some point in the future. According to Meehan and another expert on lead-zinc mine environmental issues, Dr. Steven Emerman, such a collapse would likely lead to widespread deaths in surrounding communities and long-term environmental destruction down a major stream system.

Emerman also reported that the proposed dam was under-designed. When the dam was complete and full, water likely high in heavy metals would flow, untreated, into waterways used as water supplies for a number of villages. He described this as “unacceptable by any standards.”

People living near the mine are infuriated. “The developer wouldn’t even be allowed to build this dam in China where the company is headquartered because it is located too close to human settlements,” said Ms. Saudur Sitorus who lives in Bonian village in the vicinity of the future mine site. “But they’re building it here even though they and we know the mine is almost certain to poison if not kill us.” 

No approval from the Indonesian government

The government ministry responsible for environmental approval is still considering an Addendum to the original Environmental Impact Assessment (EIA) for the DPM mine, which was required following changes to the planned tailings dam design and location. Without this environmental approval, the      project cannot lawfully proceed. However, the company has already initiated construction of the tailings storage facility.

“We have said we don’t want this mine. We sent petitions against it. The company is dishonest and not divulging information about the risks we know are present,” said Mr. Barisman Hasugian from Sub-village 3 of Bonkaras Village “we don’t want our government to approve this mine.”

A role for international car companies

The Dairi mine would almost certainly be a key supplier of zinc to car manufacturers globally, who use the mineral in production. That means if major car brands publicly stated that they would refuse to source parts that are made with zinc from the mine, it would make the project much less viable and could help prevent it from moving forward. “We also call on car manufacturers to help prevent a disaster in the making by letting it be known that no-one wants to buy zinc from this mine,” said Pred.

“We call on all investors to avoid supporting this project. We call on the Indonesian government to terminate the mine. We implore car manufacturers to steer clear of any company involved in this mine,” said Panggabean.

The post World Bank watchdog to review risky Dairi Prima Mineral mine project in North Sumatra appeared first on Inclusive Development International.