Appraising the Role of the IFC and Its Independent Accountability Mechanism: Community Experiences in Haiti's Mining Sector

Author:Kate Nancy Taylor
Position:B.A., L.L.B. (Hon.), L.L.M. (International Legal Studies). The author has previously worked as an advocate on human rights in Haiti's mining sector as part of the Global Justice Clinic at New York University's School of Law. While the author's observations during the course of that fieldwork have enriched her understanding of the situation...
Pages:12-25
 
CONTENT
12 Sustainable Development Law & Policy
appraiSinG the role of the ifc
anD itS inDepenDent accountability
mechaniSm: community experienceS
in haitiS mininG Sector
Kate Nancy Taylor*
I. IntroductIon
In 2010, the International Finance Corporation (IFC) pur-
chased an equity stake in Eurasian Minerals Inc., a junior
mining company conducting gold and copper exploration
activities in Northern Haiti. The investment formed part of the
IFC’s Early Equity portfolio, which supports private sector
investment in nascent mineral markets. This article examines the
governance role played by the IFC over the course of the com-
pany’s exploration activities in 2010 through 2012, after which
a de facto moratorium emerged over gold mining operations in
Haiti. This article sets out to scrutinize the role played by the
IFC during the life of its investment in Haiti, querying the extent
to which it was able to enhance the environmental and social
outcomes and foster greater public accountability of the proj-
ect—paying particular attention to the nature of IFC investments
in the earliest phases of mining operations and highlighting the
importance of obligations regarding community engagement
and information disclosure to project-affected communities.
The cornerstone of the IFC’s accountability framework
is the Compliance Advisor Ombudsman (CAO), which oper-
ates as the institution’s independent accountability mechanism
(IAM). Over the last twenty years, IAMs have emerged as a
staple feature of international finance institutions, during a
time in which the idea of citizen-led accountability has gained
currency in multilateral development finance. Despite the pri-
macy of this idea, this article argues that the CAO was not an
accessible or appropriate mode of redress for project-affected
communities in Haiti. Drawing on the Haiti case study, this
article focuses on how different stages of community mobiliza-
tion against mining projects can shape and constrain the capac-
ity of the CAO to enhance citizen-led accountability. Given the
IFC’s recently stated preference for early equity investments in
the mining sector, this analysis is necessary to develop a more
nuanced understanding of how recourse to the CAO functions
for project-affected communities during the earliest phases of
a mine’s life cycle.
Part II of this article sets out the governance architecture
of an IFC-sponsored project, drawing out the applicable norms
and standards that apply to such projects and highlighting the
role and functions of the CAO in particular. Part III goes on to
examine the nature of the IFC’s early equity investment in Haiti,
and conducts a brief analysis of how Eurasian’s conduct over
the course of its exploration activities failed to meet the IFC’s
Performance Standards with respect to community engagement
and the company’s administration of land access agreements
in La Montagne, in Haiti’s Northwest Department. With these
deficiencies in mind, Part IV examines why project-affected
communities did not have recourse to the CAO to address the
company’s failures. Part V concludes that the CAO needs better
solutions for engaging vulnerable project-affected communities.
II. role And functIons of the Ifc And cAo
(a) early equity inveStmentS in the mininG Sector
The IFC is the world’s largest multilateral institution sup-
porting private sector investment, with investments and advisory
services in over 100 developing countries.1 Given the gov-
ernance role played by the institution, its potential to redefine
accountability relationships and institutionalize environmental
and social safeguards in the mining sector could be critical for
the people and communities affected by IFC-sponsored proj-
ects.2 While the IFC’s largest investments are related to infra-
structure, agribusiness, and forestry industries, it has shown an
increasing preference for investments in oil, gas, and mining
industries in recent years—with investments in the sector rising
from approximately $229 million USD in 2011 to $514 million
USD in 2015.3 Under the IFC’s “Early Equity Program,” the IFC
intentionally supports nascent mineral markets by targeting proj-
ects at the earliest stages of mining activity.4
Through its Early Equity Program, the IFC “looks to partner
with junior mining companies with good management and help
them address environmental and social issues maybe four or five
years before they begin developing mines.5 The program allows
the IFC to balance what appears to be two of its key impera-
tives—first, its commitment to natural resource extraction as an
important feature of economic development in the world’s poor-
est countries, and second, its fidelity to projects that maintain
* B.A., L.L.B. (Hon.), L.L.M. (International Legal Studies). The author has
previously worked as an advocate on human rights in Haiti’s mining sector as
part of the Global Justice Clinic at New York University’s School of Law. While
the author’s observations during the course of that fieldwork have enriched her
understanding of the situation analyzed in this paper, the analysis itself is not
based on privileged and confidential information, but is instead based on later
research using publicly available information. Both the fieldwork and the prepa-
ration of this paper were conducted under the supervision of Professor Margaret
Satterthwaite, NYU School of Law.
13Spring 2017
sound environmental and social practices. By investing in the
mining sector at the early stages, the IFC tries to limit its expo-
sure to the more complex and invasive environmental and social
harms associated with a mine’s development and production
while maintaining its fundamental support for the industry. With
respect to the IFC’s investment in Eurasian’s operations in Haiti,
for example, the IFC noted that its investment in the exploration
stage of Eurasian’s projects would only yield “limited” develop-
ment impacts for Haiti, other than generating local employment
and the purported “positive impact of attracting additional for-
eign investments to an underdeveloped but promising sector” of
the economy.6
Notwithstanding the purported “light footprint” left by
mineral exploration, the IFC’s Sustainability Framework
applies equally to the IFC’s early equity investments in the
mining sector.7 The Sustainability Framework consists of
the IFCs’ Policy on Environmental and Social Sustainability
(which defines the nature of the IFC’s commitments), the
Environmental and Social Performance Standards (which
define clients’ responsibilities for managing their risks), the
Access to Information Policy (which sets the parameters for
the IFC’s information disclosure), and the procedures for
Environmental and Social Categorization (which the IFC uses
to categorize the risks of a project).8 Taken together, these ele-
ments are intended to have far-reaching consequences for the
governance of a project, both internally and externally. The
Framework plays important internal governance functions, by
governing how the IFC itself should conduct its due diligence
and ensuring the transparency of its involvement. Externally,
the Framework (primarily through the Performance Standards)
seeks to regulate and influence the behavior of the company
that has accepted the IFC’s funding through debt or equity.9 To
the extent that the Sustainability Framework fulfills this exter-
nal governance function, the IFC’s Early Equity Program could
have beneficial effects for project-affected communities that
endure into the later phases of a mine’s development. In theory,
institutionalizing strong environmental and social practices
in the earliest stages of the life cycle of a mine is prudent, as
implementing best practice from the outset could help to alle-
viate the more acute environmental and social issues that are
likely to arise as the mine matures. Therefore, even in the early
life of projects, the IFC’s Sustainability Framework could play
an important role in governing how environmental and social
risks of a project are managed, and redefining the account-
ability relationships that exist between the IFC, the company,
and project-affected communities. For that role to be fully real-
ized, both the IFC and its clients must strictly adhere to the
IFC’s Sustainability Framework, and there must be appropriate
modes of citizen accountability through which project-affected
communities can voice their grievances about non-compliance
with the Framework.
(b) the eStabliShment of the cao: accountability
aS a watchworD in Development finance
As the IFC’s independent accountability mechanism, the
CAO is charged with a mandate to be directly responsive to the
concerns of project-affected communities.10 It plays a critical
role in providing a forum for communities to raise claims about a
project’s environmental and social impacts, and ensuring that the
IFC and the company are adhering to their respective obligations
under the IFC’s Sustainability Framework. Before evaluating
whether the CAO functions effectively for communities affected
by early equity investments, it is necessary to understand the
circumstances that gave rise to the creation of the CAO, and
the normative purposes it is designed to achieve. In doing so,
it becomes clear how the nature of early equity investments can
shape and constrain the capacity of the CAO to achieve its objec-
tives in the context of specific communities and/or countries.
Since the early 1990s, accountability has become a watch-
word in multilateral development finance.11 The idea that the
legitimacy of an international financial institution is tied to
the extent to which it is accountable to the people affected by
their projects has increasingly gained currency. The notion of
citizen-led accountability—which refers broadly to the capac-
ity of project-affected peoples and communities to demand that
their localized grievances be addressed—was first operational-
ized by the World Bank in 1993, with the establishment of the
World Bank Inspection Panel.12 The Panel takes requests from
groups who have harmed by a Bank-financed project, and pro-
vides a forum for communities to raise claims that the Bank has
failed to follow its operational policies.13 The creation of the
Inspection Panel was spurred by the work of the World Bank’s
International Bank for Reconstruction and Development (IBRD)
and International Development Association (IDA) performing
essentially public functions (such as building public develop-
ment infrastructure) with no capacity for to hear the voices of
project-affected peoples.14 This accountability deficit within the
World Bank (and other regional development banks) was exac-
erbated by the reality that frequently, project-affected communi-
ties could not rely on their governments to assert their interests,
since those same governments were partners in the operations
and did not have strong enough institutional capacity to regulate
and manage the environmental and social impacts of Bank-
projects. Compounding this accountability gap, project-affected
communities are denied recourse to domestic courts in disputes
against international finance institutions, which are customarily
granted jurisdictional immunity before domestic courts by their
constituent member states.15
As a private lending institution, the need for the IFC to be
responsive to project-affected communities was not a significant
issue until well into the 1990s. Between 1956 and 1990, the IFC
was primarily engaged in non-recourse financing of industrial
and financial projects in emerging markets, rather than large
infrastructure projects which were government-led.16 Beginning
in the late 1980s, the IFC began to involve itself in financing pri-
vate infrastructure projects in developing countries,17 prompted
by the emphasis on the privatization of state enterprises,
14 Sustainable Development Law & Policy
including state mining assets, advanced by the Washington
Consensus in the 1980s and 1990s. This shift in IFC-investment
priorities meant a sudden engagement in projects that entailed
more acute environmental and social harms, which took place
without a parallel development of accountability mechanisms
for project-affected communities. This accountability deficit
was brought to the forefront in 1996, in the context of a hydro-
electric project on the BioBio River in Chile, which directly
affected both indigenous and non-indigenous communities in
the region.18 A Chilean NGO had filed a complaint to the World
Bank’s Inspection Panel in 1995, which found it had no juris-
diction over IFC-sponsored projects.19 As a result of significant
pressure emanating from international NGOs and domestic pres-
sure within Chile, the World Bank established the CAO in 1999,
with a mandate to address complaints from people affected by
projects sponsored by the IFC or guaranteed by the World Bank’s
Multilateral Investment Guarantee Agency (MIGA). 20
The CAO is intended to operate as a fallback mechanism, to
offer recourse to project-affected communities in circumstances
where their grievances are not resolved by the company at the
operation-level, or through legal and administrative procedures
at the state level.21 This mode of recourse offered by the CAO
becomes critically important where a company is not responsive
to the community’s concerns and where the state’s preference
for uninterrupted economic development outweighs its desire to
assert or otherwise address the rights of project-affected people.
In the context of mining operations, the IFC’s involvement in a
project can potentially add a layer of accountability to the typi-
cally vexed tripartite relationship that exists between the state, a
mining company and affected communities.
Today, the notion of citizen-led accountability is regarded as
the key rationale for the proliferation of IAMs by development
finance institutions, and is often represented as the cornerstone of
sustainable development.22 In addition to the World Bank Group,
the African, Asian and Inter-American Development Banks,
as well as the European Bank have adopted IAMs in various
forms for Reconstruction and Development and the European
Investment Bank.23 A 2016 report on the “State of Accountability
in Development Finance” identified a total of 758 complaints sub-
mitted over the past 21 years to 11 different IAMs.24
With over 20 years having passed since the creation of
the World Bank’s Inspection Panel, most recent commentaries
acknowledge that the proliferation of IAMs has resulted in the
increased accountability of IFIs to protect affected persons.25
This is not without qualification. MacDonald and Miller-
Dawkins take the view that while the IAMs’ accountability
practices have been linked to “significant shifts in the norms and
power relations underpinning decision-making in contemporary
development finance,” those shifts have been “modest and con-
text-dependent.”26 With respect to the CAO, Saper takes a more
restrictive view of the concept of ‘accountability’ in this con-
text,27 though conceding that the CAO has “increased the IFC/
MIGA’s responsiveness to a variety of project-affected people by
providing information disclosure, by creating opportunities for
participation in problem solving, and by requiring IFC/MIGA to
publicly give reasons for its action.28 While there are multiple
qualitative case studies that interrogate how the use of IAMs
have increased accountability “over the life history of a griev-
ance,”29 there has not been any parallel interrogation of cases
in which IAMs have entirely failed to bring about increased
accountability because a complaint was never submitted. By
drawing upon the case study of mineral exploration activities in
Northern Haiti, where project-affected communities could have
had recourse to the CAO but did not, we can see how certain
institutional and operational deficiencies in the mechanism, cou-
pled with important contextual factors, undermined its capacity
to bring about citizen-led accountability.
(c) compliance, aDviSory anD
ombuDSman functionS
The CAO has three complementary roles—its compliance,
advisory, and ombudsman functions. Any individual or group
who is affected, or potentially affected, by the environmental or
social impacts of an IFC or MIGA project may make complaints
to the CAO.30 After the CAO team determines the eligibility of
the complaint and conducts an initial assessment of the issues and
stakeholders, 31 project-affected communities may then have their
claims addressed by the ombudsman or compliance functions.32
The CAO ombudsman functions as a dispute resolution
body, which is focused on “flexible, collaborative processes,
aimed at seeking joint solutions to the issues raised in the com-
plaint.”33 Engaging the ombudsman function therefore requires
the voluntary agreement of both the affected community and
the company that has received IFC funding or is guaranteed by
MIGA. The ombudsman has no power to issue binding decisions
against the company for non-compliance with the Performance
Standards.34 However, the CAO actually perceives its lack of
binding powers to be its greatest asset, since it takes the par-
ties outside an adversarial setting.35 It contends that the dispute
resolution process can move the dispute “beyond judgment and
finding fault to focus on practical, effective, and sustainable
solutions for all involved.36 This can be particularly important
in cases where communities are aggrieved that the company has
ignored their interests and breached its obligation to conduct
adequate stakeholder engagement—a concern that is raised in
60 percent of all CAO complaints.37 The goal of the process is
to walk away with a sustainable agreement between the commu-
nities and the companies, and may include proposals for future
action. For example, an agreement in the Yanacocha Gold Mine
case in Peru resulted in the CAO training community members
to conduct participatory water monitoring, together with the
company.38 The ombudsman’s emphasis on collaborative prob-
lem solving places the company-community relationship at the
center of its intervention—adhering to the view that procedural
and informational forms of justice may be equally as important
as any distributional outcomes arising from the process.39
Of all the CAO’s functions, the ombudsman function is
perhaps best positioned to address some of the concerns of
project-affected communities in the context of early equity
investments in the mining sector, where the environmental
15Spring 2017
and social impacts of mineral exploration are relatively non-
invasive, but issues of community engagement and information
disclosure are of central concern. In these contexts, the poten-
tial for recourse to the ombudsman represents an important
mode of redress for project-affected people, whose most prom-
inent demand may simply be more information and enhanced
consultation from the company (as opposed to communities
who oppose the project in its entirety). It is in this way that
the ombudsman function can work to re-orient the account-
ability relationships that typically exist between companies
and affected communities in the mining sector, by enhancing
communities’ ability to demand information, justification, and
responsiveness from the company.
Through its compliance function, the CAO scrutinizes the
IFC’s and MIGA’s own due diligence at the project level.40 The
focus at this stage is how the IFC or MIGA assured itself of
the environmental and social performance of its investment,
both at the initial appraisal stage and during its supervision of
the project.41 Although the center of the inquiry is the conduct
of the IFC or MIGA, it is necessary for the CAO to review
the actions of the company and verify outcomes in the field
while performing this function.42 The CAO Compliance func-
tion has a three-step process involving an initial appraisal, an
investigation phase for cases that raise substantial concerns
or issues of systemic importance, and monitoring of IFC and
MIGA actions to address findings of noncompliance.43 As
noted above, the CAO does not have the power to bind the
IFC or MIGA, and the President and management are free
to disregard the results of the CAO’s compliance investiga-
tion.44 However, the research and production of a compliance
investigation (which is publicly released after its completion)
has the capacity, at the very least, to put information into the
hands of project-affected communities, and can help to correct
asymmetries in the informational resources that exists between
companies and communities.
The CAO’s advisory function operates separately to the
compliance and ombudsman functions, in that it does not
address the direct complaints of project-affected communi-
ties.45 It provides advice to the President and IFC and MIGA
management, highlighting systemic patterns of concern it has
noticed occurring within the institutions’ projects.46 Its advice
is derived from the insights gained through the operation of
its other two functions.47 The advisory function of the CAO
is the least utilized branch of the CAO, though it has recently
published an advisory lesson from CAO cases with regard to
land related issues, which are raised in over 52 percent of CAO
complaints.48 A discrete focus by the CAO’s advisory function
on systemic issues in the early equity investment context might
help to alleviate some of the generalizable concerns and pat-
terns noted in this paper.
III. mInerAl exPlorAtIon In northern hAItI
(a) the ifc’S equity Stake in euraSian
mineralS inc.
It is not surprising that the IFC had its sights set on sup-
porting private investment in Haiti’s nascent mineral sector. The
country’s profile sits squarely within those targeted by the IFC’s
Early Equity Program—that is, impoverished states in desperate
need of increased economic development that also possess vast
unexploited natural resources. For Haiti, both of those conditions
are met. The country is frequently referred to as “the poorest
country in the Western hemisphere.49 With a Gross Domestic
Product of just $846 USD per capita,50 the vast majority of
Haiti’s citizens live under severe conditions of socioeconomic
deprivation.51 Both the Haitian Government and the IFC believe
that a vital component of reversing the country’s economic des-
titution lies in the mineral belt that spans across Haiti’s Northern
departments, 52 which is speculated to contain approximately
US$20 billion in unexploited gold.53
Gold mining in Haiti is a relatively new endeavor,54 and
companies have not yet moved beyond preliminary research,
prospection, and exploration activities.55 The IFC contends
that if the exploration in the country eventually leads to mine
development and production, “the development impacts for
Haiti could be substantial.”56 To that end, the IFC invested $10.3
million USD in equity in Eurasian Minerals Inc. between 2010
and 2015, intended to fund Eurasian’s prospecting and explora-
tion activities in Haiti.57 Notably, the IFC’s initial contribution
of $5 million USD received IFC Board Approval on January
13, 2010—just one day after a 7.0 magnitude earthquake struck
Haiti’s capital Port-au-Prince, killing at least 200,000,58 inter-
nally displacing 1.5 million people, and causing an estimated
$7.8 billion USD in damage.59 The IFC claimed that the invest-
ment came “at a critical time for supporting the country’s recov-
ery through private sector participation.”60 The equity stake in
Eurasian added to the IFC’s wider investment portfolio in Haiti,
which included $61 million USD in private sector finance to cli-
ents in the telecom, energy, textile, and manufacturing sectors.61
The IFC’s client in Haiti, Eurasian Minerals Inc., is a
Canadian company that first initiated a gold and copper explo-
ration program in Haiti in 2006, seeking to take advantage of
the first-mover opportunities in Haiti’s emerging minerals mar-
ket.62 In 2008, the company signed a joint venture agreement
with Newmont Ventures Limited, a wholly owned subsidiary
of US-based Newmont Mining Corp.63 Together, the compa-
nies’ activities covered six “Joint Venture Designated Projects”
along the Massif du Nord mineral belt in Haiti’s north.64 The
exploration activities continued until 2013, when the Haitian
Senate passed a resolution calling for a moratorium on mining,
following which the government of Haiti began to work with the
World Bank’s Extractive Industries Technical Assistance Fund to
draft a new mining law to govern the sector.65 Since that time,
gold exploration activities in Haiti have remained in “care and
maintenance status”—effectively dormant.66 In November 2015,
Eurasian sold its interests in the Newmont-Eurasian joint venture
16 Sustainable Development Law & Policy
to Newmont.67 Then, in February 2016, Eurasian disposed of
its last remaining interest in Haiti (the Grand Bois project) to
a subsidiary of Delaware-based VCS Mining LLC.68 Eurasian
has retained only marginal royalty interests in both Newmont’s
assets in Haiti and the Grand Bois project.69 In January 2016, the
IFC marked its project status in Eurasian as “completed.”70
Since the IFC’s first tranche of funding in early 2010,
Eurasian was placed under an obligation to ensure that its explo-
ration activities in Haiti complied with the IFC’s Environmental
and Social Performance Standards.71 The company committed
to formalizing “existing community engagement activities” and
agreed to prepare site specific Stakeholder Engagement Plans
in order to meet the requirements laid out in the Performance
Standards.72 Eurasian also covenanted to address the envi-
ronmental and social aspects on projects managed by its joint
venture partner Newmont, “using commercially reasonable
efforts to encourage its partners to implement IFC Performance
Standards or equivalent practices.”73
Despite the formal commitments to environmental and
social safeguards negotiated in the corridors of power in
Washington D.C., the reality on the ground in Haiti was vastly
different. The following section endeavors to discuss some of the
key ways in which Eurasian (and the Newmont-Eurasian joint
venture) may have failed to bring the project into compliance
with applicable Performance Standards during the exploration
phase of the project, having regard to failures in community
engagement and the problematic land access agreements the
company acquired.74
(b) fallinG below the StanDarDS:
euraSianS community enGaGement
anD lanD acceSS aGreementS
Eurasian conducted a variety of exploration activities in
Haiti’s Northern Departments between 2009 and 2012.75 At the
outset, the IFC categorized the project’s possible impacts as a
“Category B” risk, denoting only limited adverse environmen-
tal and social impacts which are generally site-specific, largely
reversible, and readily addressed through mitigation measures.76
While it is true that exploration activities in general are sig-
nificantly less invasive than the construction and operation of
a large-scale open-pit gold mine, Eurasian was nevertheless
under an enduring obligation to ensure compliance with the
IFC Performance Standards, including adequate community
engagement (including duties of consultation and information
disclosure) and ensuring that its acquisition of any land rights
complied with the Performance Standard on Land Acquisition
and Involuntary Resettlement.77 The company’s activities dur-
ing 2009 through 2012 involved early-stage exploration activi-
ties such as surface sampling, as well as late-stage exploration
activities that involved core drilling and sampling. To conduct
its exploration activities on privately owned land,78 Eurasian
concluded a number of land access agreements with landowners
and occupants sometime between 2011 and 2012.79
The following analysis seeks to highlight the discrepancies
between the lived experiences of project-affected communities
in Northern Haiti and the obligations owed by Eurasian under
IFC Performance Standard 1 (detailing the requirements for
community engagement) and Performance Standard 5 (detailing
the requirements for land acquisition). While there may have
been other environmental and social impacts brought about by
Eurasian’s exploration activities, this analysis has been delib-
erately confined to issues of community engagement and land
acquisition due to limitations in available evidence.80
Since Eurasian placed its projects in care and mainte-
nance status in 2012, the Global Justice Clinic (GJC) at New
York University School of Law has conducted a number of
fact-finding visits to Haiti’s Northwest Department to inter-
view project-affected communities. The GJC, acting together
with local community organizers, has interviewed numerous
community members about their interactions with Eurasian,
with a particular focus on the land access agreements that
were concluded between the company and landowners. Their
experiences highlight the ways in which obligations regarding
information disclosure and consultation are inextricably linked
with processes of acquiring consent for land use and acquisition.
Landholders cannot meaningfully agree to land acquisition or
use if they are not informed about certain fundamental issues,
such as the purpose of preliminary mining activity, their rights
and entitlements under law, and the implications of large-scale
gold mining if it were to go ahead.
The GJC’s fact-finding efforts led researchers to several
small communities situated across the hills of La Montagne in
Haiti’s Northwest department. Newmont-Eurasian conducted
exploration activities in this area between 2009 and 2012. The
residents of these villages are primarily farmers—growing
crops such as beans, plantains and peanuts, and raising small
livestock.81 During their visits to the La Montage Village, the
GJC found steep hills and narrow roads isolate the villages from
the larger communes of Jean Rabel and Baie-de-Henne to the
north and south of the mountains. Some villages have primary
schools, though most children must walk hours to access educa-
tion beyond fourth grade. Residents speak Haitian Creole, rather
than French, which is used by the government and taught in
secondary schools in Haiti. While there is no reliable data on
the literacy and education levels of the community members in
these areas, GJC’s research found that they generally have low
literacy rates and do not rely on written documents as a method
of record-keeping.82 Prior to Newmont-Eurasian entering the
area in 2009, the communities’ interactions with external actors
and state institutions were extremely limited. These communi-
ties face immense socioeconomic disadvantage and political
marginalization, which in turn create significant inequalities in
bargaining power when they interact with mining companies.
During 2011 and 2012, a number of residents in the vil-
lages of La Montagne signed paper agreements that authorized
Newmont-Eurasian to use their land for exploration activities.83
These agreements were concluded between landowners/occu-
pants and Eurasian’s Haitian subsidiary, Marien Mining. The
GJC was unable to verify the exact number of agreements that
were signed, though it estimated that several hundred land access
17Spring 2017
agreements were signed over the exploration period.84 In inter-
views with GJC researchers, the landowners recounted experi-
ences that raised serious questions about the circumstances in
which these land access agreements were concluded, and in
many cases, indicate that informed consent to the agreement was
not given.85
The land access agreements, written in Creole, are drafted
in terms which are remarkably favorable to the company, leaving
the landholders with comparatively few rights, and no benefits
whatsoever. The agreement grants the company a ‘carte blanche’
to perform activities relevant to exploration (including permis-
sion to conduct activities that may destroy the land), and does not
provide the landowner with a right to terminate the agreement. It
states that the company will indemnify the landowner for dam-
age to the land and provide compensation for damage to crops,
though it specifies that those amounts are to be determined by
the company, and forbids the signatory from making “any other
monetary demands.”86 Notably, it provides a sweeping limitation
of the landowners’ rights, stating that the landowner does not
have the right, during or after the life of the agreement, “to ask
for anything else, or make any demands or take action against
the Company that has to do with this contract or its execution,
for whatever reason.87 Read together, the provisions of the
agreement appear to foreclose the rights of the landholder to any
remedy outside the company’s specified forms of compensation
for damage.88 These agreements were drafted by company, and
do not appear to have been open for revision by the landowners
at any time—suggesting that no meaningful negotiation took
place as to the agreement’s terms.
In correspondence with the GJC, Newmont-Eurasian has
contended that the land access agreements were not intended
to function as legally binding documents between the company
and the landowners.89 This position is incredibly hard to accept,
having regard to the agreement’s use of legal language, the
strength of its terms and the formalities of its execution. One
of the clauses in the agreement states that the agreement may
not be “corrected, modified, changed, or amended except in writ-
ing signed by the parties to the agreement or their legal repre-
sentatives.”90 Under the terms of the agreement, the document
needed to be executed with the signature of the landowner, the
CEO of Marien Mining and a witness.91 It would take a seri-
ous exercise of legal sophistry to come to the conclusion that
these agreements were not intended to establish a legally bind-
ing relationship between the parties. Even if the agreements did
not constitute legally binding documents, it is arguable that the
formalities in the agreements’ execution were intended to create
that impression in the mind of the landowners.
In February 2014, local community organizers, together
with the GJC, brought affected communities together to discuss
the content and implications of the land access agreements. GJC
researchers remarked that many of the residents who had signed
the land access agreements appeared to be learning of their true
content for the first time.92 Some landholders thought that sign-
ing the agreement meant they were guaranteed jobs with the
company.93 Another explained that she thought the agreement
would bring future development benefits, like those brought by
NGOs.94 Other landholders reported that they were handed the
agreement to sign, but did not have time to read or understand
it.95 Many said they had no idea the agreement gave the com-
pany the right to damage their land.96 In other cases, landholders
reported that they were offered a sum of 1000 Haitian Gourdes
(approximately $16 USD) in exchange for their signature, but
reported that they were not informed of the agreement’s con-
tents.97 Others confirmed that they understood they needed to
sign the Agreement in order to get compensation for damaged
crops.98 One resident recalled that a company engineer asked
him if he owned the land, and whether or not he could read.
When the resident replied that he could not, the engineer then
dipped the man’s thumb in ink, and affixed it to a land access
agreement.99 Newmont-Eurasian, in contrast, made the claim
that it “took nearly two weeks to complete each agreement”.100
It can be argued that Eurasian’s conduct, in carrying out its
exploration activities in La Montagne, fell short of the obliga-
tions contained in the IFC Performance Standards.101 In par-
ticular, the administration of land access agreements illustrates
Eurasian’s acute failure to comply with Performance Standard
1 (PS1), under which the company was obliged to undertake
effective community engagement. The obligation under PS1
is comprised of several elements which, relevant to the instant
case, include consultation and information disclosure.102 These
duties must also be read together and cross-referenced with
Performance Standard 5 (PS5), which address the company’s
obligations regarding land acquisition and resettlement. The key
objective of PS5 is to anticipate and minimize adverse social
and economic impacts from land acquisition or restrictions on
land use, resettlement and displacement. While some landown-
ers raised claims that the company’s exploration activities had
caused damage to their crops (and thus, economic displacement
in some instances), it is argued here that the company’s central
failure related to the process through which the Land Access
Agreements were negotiated, and the manner in which the com-
munities were informed and consulted about Eurasian’s explora-
tion activities. It is for this reason that Eurasian’s conduct will be
primarily evaluated according to the company’s compliance with
PS1, addressing community engagement as the critical concern.
(i) Community EngagEmEnt
Upon receipt of IFC funding, Eurasian began to formalize
its “existing community engagement activities” and prepare site-
specific Stakeholder Engagement Plans (“SEPs”) for each explo-
ration property.103 No SEPs prepared by Eurasian for its projects
in Haiti have not been made publicly available, and efforts made
by the GJC to obtain them via the IFC Information Disclosure
process or from the companies directly were unsuccessful.104
As such, the full extent of Eurasian’s community engagement
is unclear. The extent and adequacy of such stakeholder engage-
ment is not typically revealed or examined unless a complaint
is filed to the IFC CAO.105 Newmont-Eurasian reported to the
GJC that they had conducted “formal meetings” with commu-
nity members at the sites of their exploration activities, and that
18 Sustainable Development Law & Policy
Newmont-Eurasian employees had conducted informal visits
to individual landowners.106 However, the efficacy of any such
engagement must be questioned in light of the community mem-
bers’ differing understandings about the nature of the company’s
exploration activities, and the misinformation about the potenti-
ality of gold extraction in the community’s future. One resident
of Gode, La Montagne, for example, stated “We were in the dark.
They took our land and dug on it. They sent a paper to some of us
and we did not know what it was.107 Another resident of Lalan,
La Montagne, recalled “[t]hey showed us that this was a great
opportunity for us. They said that they were looking for gold . .
. and if they found [it], they would sell it in another country and
give us American money.”108 While PS1 emphasizes that SEPs
form the basis for building “strong, constructive and responsive
relationships” between the company and communities, it also
recognizes that the “nature, frequency and level of stakeholder
engagement may vary considerably and will be commensurate
with the project’s risks and adverse impacts, and the project’s
phase of development.”109 In light of this, it might be somewhat
understandable if a company formed the view that its obligations
regarding community engagement at the exploration phase of
mining activity were less onerous, since activities conducted
during the exploration phase are typically less invasive than late-
stage mining activities.
The communities’ differing understandings of the mining
activity is, in itself, evidence of the company’s failure to comply
with the Performance Standards. It must be noted, however, that
Eurasian conducted its exploration activities in Northern Haiti
between 2009 and 2012, and it is estimated that the majority
of Land Access Agreements were administered between 2011
and 2012.110 Thus, when the GJC interviewed residents in La
Montagne in 2014, a minimum of two years had passed since
the company had interacted with the communities. It is possible
that this passage of time may have led to some level of recall bias
and confusion about the precise details that community mem-
bers were given by company representatives. However, given
the importance of the subject matter, it is arguable that Eurasian
should have gone to greater lengths to ensure that community
members had an unimpeachable understanding of the materi-
als facts, regarding both the content of the Agreements and the
nature of Eurasian’s interest in the land. In later correspondence
with the GJC, in which Newmont-Eurasian were disputing
allegations that the Land Access Agreements were administered
improperly, the companies stated that “any information to the
contrary must be based on a misunderstanding.” 111
(ii) ProjECt Consultation
When a company accepts IFC funding for a project, its
obligations under the rubric of ‘community engagement’ in PS1
includes processes of community consultation and participa-
tion.112 The extent of these obligations are commensurate with
the type, scale, location and likely impact of the project,113 as
well as the presence of indigenous groups in the project’s vicin-
ity.114 For example, the obligation on companies to undertake an
“Informed Consultation and Participation” (ICP) process only
attaches to projects with significant adverse impacts on project-
affected communities.115 For projects with adverse impacts to
indigenous peoples, in some cases the company is required to
go beyond ICP, and obtain the group’s Free Prior and Informed
Consent (FPIC).116 In the instant case, Eurasian was not tech-
nically obligated by IFC Standards to undertake either ICP or
FPIC processes, because the company’s exploration activities
were only categorized as potentially causing ‘limited’ adverse
impacts on project-affected communities, and did not affect any
indigenous populations.117 However, even under the weakest
applicable requirement for community consultation, Eurasian
appears to have fallen below the standards that attached to its
project under PS1.
In the instant case, Eurasian was under an obligation to
undertake a “a process of consultation in a manner that provides
the affected communities with opportunities to express their views
on project risks, impacts and mitigation measures, and allows the
client to consider and respond to them.”118 PS1 explicitly states
that this is a two-way process that should begin early in the life
of the project, and must be based on the prior disclosure of easily
accessible project information.119 Despite the ‘formal meetings’
purportedly held by Newmont-Eurasian, it is arguable that the
consultation process was inadequate, having regard to the enor-
mous inconsistencies between the varying degrees of information
given to landholders. There also appeared to be a critical com-
munity-wide information deficit about the nature of the venture
and the possibility of gold mining in the communities’ future.120
These failures are particularly salient in the earliest stages of min-
ing development, recalling that one of the key purposes of the
consultation processes is to manage community expectations by
clarifying the extent of the company’s responsibilities, so that mis-
understandings and unrealistic demands can be avoided.121 Based
on the expectations held by many project-affected people in La
Montagne, Eurasian’s consultation processes failed in this regard.
One resident of Gode, La Montagne, stated that “if they found
gold on your land they would give you a house if you deserved a
house, a car if you deserved a car”.122 Another resident of Lalan,
La Montagne recalled the impression that if the company found
gold on residents’ land, they could “even get a visa to leave the
country.123 Newmont-Eurasian later rejected allegations that
residents were promised visas in exchange for signing land access
agreements,124 but the “expectation management” envisioned by
the PS1 seems to have failed spectacularly.
The IFC itself recognizes that companies often make ‘stra-
tegic choices’ about community consultation in the early stages
of large-scale projects.125 Outside the Performance Standards,
the IFC encourages businesses to ‘disclose and consult selec-
tively in the very early stages’, because “full public disclosure of
information may not always be feasible or prudent, and can lead
to unintended consequences such as raised expectations, fears,
or speculative behavior, as well as pose business risks vis-à-vis
competitors.”126 It notes that some of the particular challenges
in the exploration phase include difficulties in explaining the
nature of exploration to communities, informing them about the
differences between exploration and an actual mining operation,
19Spring 2017
and trying to manage expectations in the face of uncertain out-
comes.127 This is important in the later phases of exploration
activities, as core-drilling equipment can easily be misconstrued
as active mining.128 Although parsing out these complexities
to local communities does demand a thorough consultation
process, a failure to do so could create long-standing and deep
divisions between the company and communities. In the case
of exploration activities in northern Haiti, Newmont-Eurasian’s
consultation with project-affected communities seems to have
bred distrust toward mining companies.129 This is particularly
important if gold mining extraction goes ahead in Haiti, since
community consultation during the exploration phase can “often
set the tone for the remainder of the project’s life.” 130
(iii) information DisClosurE
Eurasian’s obligations regarding consultation were inex-
tricably tied to its obligations surrounding information dis-
closure, since the quality of any consultation efforts should
be measured in light of the scope of the information made
available to the project-affected community. Information dis-
closure is a critical part of community engagement, as it allows
project-affected communities to understand the risks, impacts
and opportunities of a project.131 As evidenced by the state-
ments made by residents about the purpose and content of the
land access agreements, the residents of La Montagne do not
seem to have received sufficient information about Eurasian’s
exploration activities in their communities.
The requirements of IFC’s PS1 mandate that the client
(here, Eurasian) will provide project-affected communities with
access to relevant information on (i) the purpose, nature, and
scale of the project; (ii) the duration of proposed project activi-
ties; (iii) any risks to and potential impacts on such communities
and relevant mitigation measures; (iv) the envisaged stakeholder
engagement process; and (v) the company’s operational-level
grievance mechanism.132 With respect to the land access agree-
ments, Eurasian was also under an obligation under PS1 and PS5
to ensure that landowners were given sufficient information to
understand the nature of the terms and the legal implications
of the agreements.133 The guidance note that accompanies PS5
states that in negotiating agreements for land acquisition (includ-
ing land use), the company should summarize all relevant infor-
mation for public disclosure, and ensure that all project-affected
people understand the acquisition procedures and know what
to expect at the various stages of the transaction (e.g., when an
offer will be made to them, how long they will have to respond,
grievance mechanism, legal procedures to be followed if nego-
tiations fail).134 Based on the landowners’ various comments and
impressions of the Agreements and the mining venture gener-
ally, it appears that Eurasian’s conduct represented a serious
departure from the requirements laid out in PS1 and PS5. Many
residents of La Montagne stated that they did not understand
that the land access agreements granted the company the right
to explore for gold on their land, and were uninformed about
the risks and consequences of mineral exploration.135 Interviews
with landowners revealed that very few of them knew they had
the right to refuse to sign the agreement.136 More generally, the
IFC Performance Standards also encourage clients to provide
relevant documentation, such as Stakeholder Engagement Plans,
Ecosystem Restoration plans, and the company’s environmental
and social policies.137 PS1 also encourages the client to provide
“easy-to-understand” summaries of key issues and commit-
ments.138 The information should be in the appropriate language,
and accessible and understandable to the various segments of the
affected communities.139 After its exploration activities were
completed, Newmont-Eurasian confirmed that it did not prepare
any educational or explanatory documents about key issues for
the community, and stated that it only shared information with
community members orally.140
The failures related to information disclosure were not
Eurasian’s alone. It must be kept in mind that the primary duty to
inform project-affected communities about mining activity and
to protect their human rights lies with the government of Haiti—
which appear not to have materially assisted during Newmont-
Eurasian’s negotiations with landowners.141 Correspondence
with the companies and interviews with landowners revealed
that local members of the Conseil d’Administration de la Section
Communale (CASEC) were in some cases present during home
visits or during meetings conducted by Newmont-Eurasian.
While Newmont-Eurasian claimed that the presence of the
CASEC member “allowed for more transparency” in the pro-
cess,142 some community members reported that the presence
of the local authorities made them feel like they did not have the
option to reject the Land Access Agreement.143
In any case, it does not appear that the presence of CASEC
members at various sites of consultation actually improved the
quality of information disclosure or enhanced the consultation
process—leading one to conclude that the government had vio-
lated many of its applicable obligations under domestic Haitian
law and human rights law.144 Both international and regional
human rights instruments binding on Haiti guarantee a right of
access to information,145 which is also enshrined in the Haitian
Constitution.146 In the Inter-American context, the right to access
information is understood as a positive state duty to “provide the
public with the maximum quantity of information proactively, at
least in terms of . . . the information required for the exercise of
other rights.”147 This is particularly important in the context of
mining operations, where project-affected communities require
sufficient information to allow them to meaningfully participate
in decisions affecting their own lives and to protect their enjoy-
ment of other rights frequently impacted by mining operations,
such as the right to water, the right to health, and the right to
own and use land free from forced eviction.148 With respect to
the administration of the Land Access Agreements, the positive
duty of the Haitian state to provide for access to information
under human rights law should also be read together with rel-
evant domestic laws, such as the 1976 Mining Decree, which
guarantees arms-length negotiations between landowners and
companies, and provides for recourse to an arbitral tribunal in
the event of disagreement between the parties.149 If the state had
informed residents of La Montagne with information about their
20 Sustainable Development Law & Policy
rights under the Mining Decree, the residents may have been at a
better position to assert their rights and interests.
However, it must be recalled that the obligation of the
Haitian state in these circumstances does not displace Eurasian’s
obligation to comply with the IFC Performance Standards, and
therefore does not negate any failure by Eurasian’s adequately
disclose information about the project to affected communities.
This is particularly important bearing in mind considering that
a key rationale for the Performance Standards is to strengthen
the accountability relationships between the company and com-
munity in governance contexts where the state is institutionally
weak, and cannot be relied upon to protect the rights and inter-
ests of its project-affected communities.150
(iv) laCk of griEvanCE mEChanism for
ProjECt-affECtED CommunitiEs
One final deficiency in Eurasian’s conduct during its explo-
ration activities in La Montagne relates to the company’s failure
to provide an operational-level grievance mechanism (OGM) for
the project-affected communities.151 PS1 requires companies to
establish a grievance mechanism for project affected communi-
ties to receive and facilitate resolution of communities’ concerns
about the client’s environmental and social performance.152
Eurasian was under an obligation, even at the exploration phase,
to operationalize such a mechanism and ensure that the proce-
dure was easily accessible and understandable, and to commu-
nicate its availability to affected communities.153 The obligation
to establish an OGM also forms a critical component of the UN
Guiding Principles on Business and Human Rights, which the
IFC clients should respect.154 Residents of La Montagne said
that they were not aware of any grievance mechanism or any way
to submit a complaint to Newmont-Eurasian, and the company
has not adduced any evidence that a formal mechanism ever
existed.155 While Newmont-Eurasian claimed that it had estab-
lished “informal” complaint mechanisms for project-affected
communities, the GJC’s interviews with community members
suggest that these informal mechanisms were not sufficiently
publicized or accessible.156 The company’s failure to establish an
accessible OGM was compounded by the community’s lack of
effective recourse to the IFC CAO, discussed below.
Iv. evAluAtInG communItIes’ recourse
to the cAo
(a) acceSS to the cao for proJect-affecteD
communitieS in northern haiti
As the IFC had an equity stake in Eurasian from 2010-2015,
project-affected communities in Haiti had the right to access
the CAO as a mechanism to assert their grievances against the
company.157 The CAO’s function as a “fallback mechanism” is
particularly important in countries like Haiti, where communi-
ties cannot rely upon the government to protect their rights and
in scenarios such as the one described here, where the company
has failed to provide operational-level grievance mechanisms
or other channels. The CAO, when functioning effectively, has
the potential to mitigate disparities in power relations between
companies and communities, put information in the hands of
project-affected peoples, and encourage collaborative solu-
tions to localized grievances. For the communities affected
by Eurasian’s activities in Northern Haiti, invoking the CAO’s
ombudsman function may have helped to alleviate some of the
gross failings of the company’s community engagement pro-
cesses, including both inadequate consultation and information
disclosure. At the very least, at the urging of local communities,
a CAO mediator could have helped to bring Eurasian to the table
and encouraged a meaningful process of consultation.
The CAO was never engaged in Haiti—as project-affected
communities, in La Montagne and at Eurasian’s other project
sites, did not file a complaint with the mechanism. There were
a number of factors which may help to explain why the mecha-
nism was not invoked in this case. It is arguable that the commu-
nities’ position as an ‘early equity project-affected community’
(EEPAC) played a significant role in determining whether or not
the CAO was engaged. For the purpose of the following analy-
sis, EEPACs may be thought of as involving contexts in which
there are only nascent levels of community mobilization around
mining, limited informational resources, and weak linkages with
transnational advocacy networks to help them survey complex
accountability landscapes. Arguably, the design and operation of
the CAO is not well equipped to respond to these unique dynam-
ics—undermining the capacity of the CAO to achieve its desired
normative purpose of enhanced community responsiveness, and
leaving the interests of EEPACs vulnerable to disregard in the
earliest stages of mining operations.
The following analysis offers two potential explanations
why EEPACs in Haiti may not have engaged the CAO mecha-
nism as a forum to assert their grievances. It does not purport to
speak for, or on behalf of those communities, but merely seeks
to reflect upon certain institutional, operational and contextual
factors that may have rendered the CAO effectively inacces-
sible in the instant case. The first explanation relates primarily
to the embryonic nature of community mobilization concerned
about mining that exists during the earliest stages of mining
operations. From the starting point that EEPACs in Haiti did not
even know that the IFC and/or the CAO existed, it reflects that
IAMs, like the CAO, are generally the most accessible and are
most effective when affected communities have linkages with
transnational advocacy networks that open up spaces for raising
claims in international fora, and help to unlock accountability
landscapes. The second explanation relates to concerns that the
CAO does not offer a space for communities to contest develop-
ment paradigms, and the analysis attempts to dissect the multiple
factors which may render EEPACs disinclined to engage with an
accountability mechanism that is connected to an international
financial institution funding the project. These types of “contes-
tational grievances,” which question the legitimacy of the CAO
as a mediator or reject the need for a mediator at all, arise only
after communities have the informational resources to under-
stand the nature of their concerns and form preferences about
the ways they should be asserted.
21Spring 2017
(b) community mobilization in the early StaGeS of
mininG operationS
Unsurprisingly, the earliest stages of mining activity are
accompanied by nascent (or even non-existent) stages of com-
munity mobilization around mining in project-affected areas. In
fact, they appear to develop in parallel to one another. As mining
activity matures, so to does the strength of the community mobi-
lization poised to respond to it. As the case of mineral explora-
tion in Northern Haiti highlights, one clear defect in the CAO’s
institutional design is that its accessibility and efficacy may turn
on the strength of community mobilization around the mining
operations (including informational resources to facilitate stake-
holder mapping) and their connection to national and perhaps
transnational networks. Where community mobilization is only
weak, project-affected people are unlikely to bring complaints
to the CAO, as they do not possess the informational, human, or
financial resources to access the mechanism.
The concept of community mobilization in response to
mineral extraction can be understood as a set of processes of
collective action, that are sustained across space and time, that
reflect grievances about perceived injustices, and may constitute
the pursuit of alternative agendas.158 This mobilization develops
in response to the threats presented by particular forms of eco-
nomic development. In the context of mineral extraction, there is
a litany of common concerns that range from environmental and
social impacts, such as concerns about interference with local
water sources and resettlement, to grievances with the inequi-
table distribution of the harms and benefits of resource extrac-
tion. The extent to which this mobilization is able to modify
development practices depends greatly on the relative power of
the moments versus the economic actors involved.159 This means
that in circumstances where the community mobilization around
mining is weak, their capacity to influence decision-making
and development outcomes may be significantly reduced.160
Understandably, the strength of the movement critically depends
on its access to financial, human, informational, social and other
resources.161 In the earliest stages of mining activity, project-
affected communities’ access to such resources are considerably
limited. The fact that these communities have not been previ-
ously exposed to mining operations means that they never had
the need to accumulate the resources either.
At first glance, submitting a complaint to the CAO does
not depend on the strength of the community mobilization in a
project-affected area, since the process does not require a great
deal of financial or human resources to engage. Its complaint
submission process is well designed to maximize accessibility
for project-affected communities. It does not have any formal
requirements for complaints (other than that it is in writing), and
it accepts these in any language.162 In theory, communities do
not need to approach the CAO with complaints that are articu-
lated as legal claims (or refer to the Performance Standards),
nor do they need to be substantiated by evidence.163 As distinct
from human rights courts, complainants need not show there has
been an exhaustion of domestic remedies prior to approaching
the CAO, or establish that it has already attempted to engage
with the company in any way.164 In contrast to the World Bank
Inspection Panel, complaints can be lodged by a representative
organization (such as a domestic or international NGO) as long
as there is evidence of authority to do so.165 A complaint may
be submitted by one individual alone or group of individuals
(although during the CAO’s assessment phase, it will gather the
viewpoint of other community members). This is an important
procedural feature, since it does not demand any community-
wide coherence or agreement about the nature of the grievances
prior to making a complaint. The cumulative effect of these
features is that the CAO does ensure a commendable degree of
procedural accessibility.
In the instant case, it appears that the CAO’s operational
design does not go far enough in ensuring contextual acces-
sibility. The CAO’s contextual accessibility should take into
account the lack of resources held by a community, which could
inhibit the ability of its members to access the CAO. The case of
mineral exploration in Haiti demonstrates how a lack of infor-
mational resources in particular can constrain the communities’
ability to map stakeholders, unlock complex accountability
landscapes and access grievance mechanisms such as the CAO.
In La Montagne, for example, the accessibility of the CAO must
be understood in the context of the isolated terrain in which the
residents live. Communities had very little information about the
nature of the company’s interest in their land and the impacts
and opportunities of gold mining that might occur in the com-
munities’ future.166 Residents have only limited access to formal
education, and do not possess the informational resources (such
as the internet, access to newspapers, radio, etc.) which could
have enabled them to begin to grasp the complex nature of the
investments and their potential modes of recourse against the
company even at the early exploration stages.167 Crucially, the
community members did not know what the IFC is, or that it had
an equity interest in Eurasian.168 They did not have any idea that
the CAO existed.
Internally, the CAO is well aware of these shortfalls. It notes
that “there is very little knowledge of the existence of IFC and
MIGA, and communities and civil society do not know that the
investments in their midst have the World Bank Group’s involve-
ment.” 169 The CAO also claims that it has “persisted in asking
IFC and MIGA to enhance efforts to ensure that communities
know of their involvement, and are aware of the availability of,
and access to, recourse where needed.”170 Of its own volition,
the CAO undertakes outreach activities, which generally consist
of meetings with domestic civil society organizations (CSOs),
rather than undertaking direct outreach to affected or potentially
affected communities.171 The CAO’s outreach activities in Haiti
were limited to civil society meetings conducted in the U.S., that
took place after Eurasian’s operations had been placed in care
and maintenance status—with the result that communities and
mining activists in the Northern departments did not know about
the IFC or CAO until after the exploration activities by Eurasian
had ceased.172 While Eurasian’s exploration activities were
active, information about the CAO was only available online,
which is insufficient in the instant case since project-affected
22 Sustainable Development Law & Policy
communities in remote areas such as La Montagne tend to lack
access to computers or smartphones (even if project-affected
communities in Haiti had access to the internet, the CAO web-
site is in French, not creole, and literacy levels are low, to say
nothing of technical capacity).173
Notably, the IFC does not legally require the company to dis-
close the existence of the CAO to project-affected people (or the
role of IFC funding in the project), although arguably this could
be achieved by incorporating disclosure as part of the company’s
Stakeholder Engagement Plans.174 The World Bank itself con-
cedes that evidence shows that “IFI and borrower staff are reluc-
tant in sharing information on accountability mechanisms with
people in project affected areas.”175 Both the IFI and the company
have a vested interest in ensuring that progress is not disrupted
by community mediation, which can be timely and expensive.
For example, between 2003-2015, Minera Yanacocha—an IFC-
sponsored company that operates the Yanacocha gold mine in
Peru—has contributed $3.21 million USD to the CAO to pay
for the costs of “extended-term CAO mediation” between the
company and project affected communities.176
In the absence of a company that engages in meaningful
community engagement at the earliest phases of its mining
activity, remote communities like those in La Montagne face
startling asymmetries in their informational resources compared
to the companies encroaching upon their land. The ability of
EEPACs to gain such resources (and in turn, unlock channels of
redress such as the CAO) appears to depend in large part upon
their links with broader networks of community mobilization, as
well as domestic and international NGOs. Linkages to transna-
tional advocacy networks become crucial. Keck and Sikkink’s
seminal work on transnational advocacy networks explains
how they function to multiply channels of access to the inter-
national system, and help to make international resources avail-
able to new actors in domestic political and social struggles.177
Transnational advocacy networks include “those relevant actors
working internationally on an issue, who are bound together
by shared values, a common discourse and dense exchanges
of information and services.”178 In the case of transnational
advocacy networks working on accountability struggles against
large-scale mining operations, the shared values may be con-
ceived of as an overarching commitment to the empowerment
of project-affected communities to have greater influence in the
decisions that affect their lives—whether that entails the power
of communities to veto a project in its entirety, to protect them-
selves against its threatened harms, or to access a greater share
of its proposed benefits.179 Keck and Sikkink argue that at the
core of the relationships in transnational advocacy networks is
information exchange, which allows actors to mobilize informa-
tion strategically, gaining leverage over powerful entities.180
These linkages to transnational advocacy networks are
extraordinarily important in the context of EEPACs, which face
complex accountability landscapes they alone do not have the
informational resources or experience to unlock. For commu-
nities, surveying the multiple actors, understanding their roles
and knowing where to access channels of redress is a complex
task. They are gravely burdened by the lack of transparency in
modern development finance. The World Bank notes that “[w]
hat . . . project-affected people . . . see on the ground is the gov-
ernment, a company, or a subcontractor implementing a project.
Where the financing is coming from is generally quite opaque to
them.”181 As there is no duty for companies to disclose the fact
of IFC funding (and in most cases, obligations around commu-
nity engagement during mineral exploration tend to be construed
loosely), it is difficult to see how CAO could be accessible to
EEPACs without help from broader advocacy networks.
At first glance, the CAO’s data presents a picture to the con-
trary. It finds that in the past 15 years, the majority of complaints
to the CAO (44 per cent) have been filed solely by individuals
and community members, without the assistance of other orga-
nizations on their behalf.182 A further 24 per cent of complaints
were filed by local CSOs, 14 per cent by national CSOs, and
only 8 per cent by international CSOs.183 However, this data
does not capture the presence or absence of transnational advo-
cacy networks that may be helping to build the communities’
informational resources that ultimately facilitates their access to
the CAO. It must also be understood in light of the increasing
trend that international NGOs ‘remain in the background’ when
communities lodge complaints to IAMs, given the preference
held by IAMs for being directly contacted by communities.184
The data also fails to capture the instances where communities
were impacted by IFC-funded projects, but did not know the
CAO existed (and so, did not register a complaint). An attempt
to gauge the accessibility and efficacy of any accountability
mechanism should pay close attention to how well it functioned
for the people most-overlooked, whose rights and interests have
been disregarded most acutely. During the years that Eurasian’s
mining exploration activities were underway in Haiti, the CAO
was effectively inaccessible. The CAO itself did not conduct
outreach activities to the communities,185 and the communities
had not yet forged relationships with transnational advocacy
networks that might have helped to open up channels of redress.
The case study in Northern Haiti also illustrates why it is
problematic for the accessibility of the CAO to hinge largely on
the linkages that communities have with domestic NGOs and
transnational advocacy networks. As noted earlier in this paper,
the IFC’s investment in Eurasian was approved by the IFC Board
of Directors just one day after Haiti was struck by the earth-
quake in 2010.186 Following the earthquake, NGOs attempting
to undertake disaster relief and reconstruction flooded into
the country on a scale as massive as the shock itself.187 This
post-earthquake chaos compounded an already problematic
NGO landscape in Haiti, which was frequently referred to as
a ‘Republic of NGOs’ even before 2010.188 As a result of the
outpouring of support from the international community, in
the form of both charitable donations and grant funding, an
immense (and inestimable) amount of funding was received
by humanitarian NGOs.189 Having regard to the mammoth
extent of the human rights violations occasioned by the January
2010 earthquake,190 and the cholera outbreak brought by UN
Peacekeepers in October of the same year,191 it is perhaps not
23Spring 2017
surprising that isolated communities affected by mining explora-
tion in the country’s north were overlooked by advocacy NGOs
operating in the country in the aftermath of the earthquake.
While in another context, it might be expected that the presence
of a transnational mining company would elicit immediate atten-
tion from domestic and international advocacy NGOs, the same
could simply not be assumed in Haiti, a country caught up in
a maelstrom of natural and man-made disasters. As this paper
has attempted to show, linkages with domestic and international
NGOs play a pivotal role in allowing project-affected communi-
ties to build the informational, human and financial resources
needed to unlock complex accountability landscapes and access
IAMs. Ultimately, these contextual factors must be kept in mind
when appraising the true accessibility of IAMs such as the CAO,
which critically rely on the presence of engaged civil society
networks to facilitate their accessibility and usage.
Although Eurasian’s activities in Haiti ceased in 2012,
project-affected communities in Haiti’s Northern departments
continue to mobilize against the future threat of gold mining in
their future. The Justice in Mining Collective (‘Koleftif Jistis
Min’ or KJM), a platform of ten CSOs across Haiti, has since
been working in mining-affected areas to inform local com-
munities of their rights related to the mining operations and the
potential impacts of metal mining. In addition, the KJM made
productive partnerships with a number of foreign-based advo-
cacy organizations in Canada, the United States, and in countries
in Central and South America and in West and Central Africa.192
Since 2013, KJM has worked closely with the Global Justice
Clinic (GJC) of New York University School of Law. GJC con-
tinues to provide advocacy support and technical assistance to
monitor the development of the extractive industry.193 In 2013,
the KJM and GJC held a number of community meetings in
Northern Haiti to discuss the potential impacts of gold mining
if it returned the region.194 In an apt illustration of the reach
of transnational advocacy networks, GJC advocates also held
screenings of ‘video postcards’ that conveyed advice and shared
the experiences from a mining-affected community from the
Porgera Valley in Papua New Guinea.195 The KJM and GJC now
works with community members to develop water monitoring
practices, so that affected populations are accustomed to care-
fully tracking changes to their local water sources.196 Evidently,
project-affected communities in Haiti’s nor th are increasingly
gathering the type of informational resources necessary to
make preferences about mining on their land in the future, as
well as the technical and human resources necessary to defend
their rights against mining companies if they return to conduct
further exploration or extraction activities. There is no doubt that
if gold mining does return to the region, the communities will
have to grapple with the rapidly changing landscape of actors
involved in such projects.197 However, they will be markedly
better equipped to do so in light of the growing strength of their
resources and their linkages to transnational advocacy networks
across the world.
(c) the cao aS a Space for conteStinG anD
reJectinG proJectS
The second hypothesis as to why EEPACs in Haiti may have
been disinclined to file a complaint with the CAO is related to
the fact that the mechanism does not offer sufficient space for
communities to challenge the project and fundamentally contest
the development paradigm that underlies it. This limitation goes
beyond questions of accessibility in the strict sense, but goes to the
heart of whether or not the mechanism is able to properly fulfill its
normative function of enhancing responsiveness to communities
in a meaningful sense. The issue arises once communities know
about the potential for recourse to the CAO, and have enough
information to make strategic decisions about how they wish to
frame and assert their grievances against the company, state and
IFIs sponsoring the project. It is important to note that by the time
communities in Haiti had begun to connect with transnational
advocacy networks and mobilize informational resources, the
Newmont-Eurasian joint venture had completed its exploration
activities and left the region. Technically, communities could have
lodged a complaint with the CAO until January 2016, at which
time the status of the IFC’s investment in Eurasian was marked as
‘complete.’198 Community organizers noted that after 2012, there
was a general sense amongst communities that they did not wish
to re-engage with companies that had already left.199 Engaging
with the CAO mechanism can be incredibly resource intensive for
communities, and the resolutions brokered by the CAO’s media-
tion function often entail protracted, collaborative engagement
with the company (such as joint water monitoring).200 For reasons
discussed below, this is not the preferred mode of recourse for
communities that reject the project outright; that do not wish to
engage further with the company; or for whom it would be a waste
of resources to channel energy into an IAM that cannot address
their fundamental concerns.
By its institutional design, the CAO is limited to mitigating
the environmental and social risks of IFC-sponsored projects.
Through its ombudsman function it brings the company and
communities together for enhanced dialogue and collaborative
problem solving. Therefore, in circumstances in which com-
munities wish to entirely oppose resource extraction on their
land, the CAO is an unsuitable venue for raising such claims.201
Balaton-Chrimes and Haines draw an important distinction,
in the field of accountability in development finance, between
“imminent complaints” and “contestational grievances.”202
Immanent complaints are those that primarily relate to social
and environmental impacts of projects—to which the CAO may
provide an appropriate forum for redress. Contestational griev-
ances are those that seek to reject the project entirely, or at the
very least demand respect for the communities’ right to partici-
pate in the decision whether mining should go ahead at all. The
problem-solving approach to accountability and focus on impact
mitigation, espoused by the CAO, is appropriate for grievances
regarding ‘how’ but not ‘whether’ a project should proceed.203
The distinction between immanent complaints and contes-
tational grievances can be particularly salient during the earliest
phases of mining, when the state has not yet made a decision
24 Sustainable Development Law & Policy
whether to permit the construction of a mine and the extraction of
resources from the land. By engaging with the CAO’s ombudsman
function to address the environmental and social impacts of the
project, communities may risk ‘depoliticizing’ the accountability
struggle, by organizing and legitimating the broader account-
ability failures related to their contestational grievances.204 If
communities wish to reject the project altogether, it may be more
advantageous for them to engage in more adversarial advocacy
strategies, asserting their grievances against the state which may
still be considering whether to grant permits for mine development
and resource extraction, rather than framing immanent complaints
against the company by engaging the CAO (and implicitly legiti-
mating the company’s ‘right’ to be there). While it may also be
advantageous for communities to assert their opposition directly
against the company at the early phases of mining activity, though
they may not wish to do so through the depoliticized and disciplin-
ing context of the CAO.
The community dynamics that exist in relation to the
Amulsar gold project in Armenia, which also falls under the
IFC’s early equity investment portfolio, are instructive.205 The
IFC currently holds an equity stake in Lydian International
Limited, a junior gold mining company, sponsoring explora-
tion activities in Armenia.206 In July 2014, project-affected
communities filed a complaint with the CAO (with the help of
nine domestic NGOs), highlighting the inadequacy of Lydian’s
stakeholder engagement process and raising concerns about
the project’s potential environmental and social impacts as the
mine matures.207 Before an Agreement to Mediate was signed,
community representatives decided they did not wish to par-
ticipate in mediation with the company after all, fearful that
doing so would “compromise their principles” and undermine
their broader opposition to the mine.208 There was a general
recognition that the CAO’s ombudsman function did not provide
an adequate space for the community to contest and reject the
project in its entirety.
Although the Armenian communities felt the CAO’s
ombudsman function was insufficiently suited to accommodate
the nature of their accountability struggle, they did elect to have
their complaint proceed through the CAO compliance func-
tion.209 As of April 2016, the case is under compliance audit,
after an initial appraisal by the CAO found that the project raised
“substantial concerns about a range of potential or actual envi-
ronmental and social impacts of the project,” 210 certain aspects
of which relate directly “to its nature as an early equity mining
investment.”211 Indeed, the CAO’s compliance appraisal identi-
fied many concerns that have been highlighted in the context of
mineral exploration activities in Northern Haiti.212 In particular,
it identified problems with the company’s restricted stakeholder
engagement, the lack of information given to project-affected
people, the absence of a company grievance mechanism, as well
as broader concerns about the company’s land acquisition under
PS5—including a failure to deal with landholders transparently
during the exploration phase.213
Importantly, the CAO’s compliance investigation, which
is currently pending, will go beyond an assessment of the
company’s exploration activities and will include a review of
the project’s potential impacts on the environment and surround-
ing communities, as the mine moves into the development and
construction phase in 2016. Once the report is released publicly,
communities will have a significant amount of information at
their disposal, such as evaluations of Lydian’s environmental
and social management systems, which can be used to inform
their broader accountability struggles. Thus, although the CAO’s
ombudsman function did not offer a suitable forum for redress
for the communities in Armenia, the products of the compliance
function may at least help to partially correct the informational
asymmetries between the parties.
It is worth noting, however, that the communities’ capacity
to use the information generated by the CAO’s compliance func-
tion may turn on the strength of their linkages with transnational
advocacy networks and access to impartial experts. In order to
use information such as environmental and social impact assess-
ments (ESIAs) for leverage in accountability struggles, commu-
nities often rely on alliances with scientific and technical experts
from both domestic and international NGOs and universities.214
These alliances can help to place communities in a position to
engage in dialogue with the government and mining companies
about the projects, and may be crucial in facilitating the capacity
of communities to thoroughly frame and assert their rights and
interests.215 For isolated communities with low literacy levels
and scarce access to formal education—and in the absence of
dense linkages and trust within such networks—there is a very
real risk that CAO compliance assessments could operate as
spaces through which processes of exclusion are reproduced and
legitimated. This risk appears to be particularly acute in cases
involving the earliest phases of mining activity, where levels of
community mobilization in response to mining are nascent, and
connections with transnational advocacy networks may be weak
or non-existent.
v. conclusIon
At the outset of this paper, it was suggested that the involve-
ment of an IFC in a mining project has the potential to disrupt
and re-orient the typically vexed relationships that exist between
company, state and project-affected communities. This is of
particular importance for projects within the IFC’s early equity
portfolio, where the IFC’s governance functions (such as the
Environmental and Social Performance Standards) have the
potential to embed responsible practices and establish positive
company-community relations that endure as the mine matures.
However, as the case study of Eurasian Minerals in Haiti has
shown, the ability of the IFC to redefine traditional account-
ability relationships and enhance project outcomes has been
significantly limited.
As the IFC’s primary institution for bringing about citizen-
led accountability, the availability and efficacy of the CAO
plays a critical role in allowing citizens’ voices to be heard
when the IFC’s governance functions are failing, and projects
are adversely affecting communities’ rights and interests. While
the CAO is often heralded for its simple complaints submission
25Spring 2017
procedure, this is not where an analysis of its accessibility
should end. Ultimately, the CAO’s accessibility must be viewed
in light of important contextual factors within project-affected
communities, such as nascent stages of community mobilization
and linkages (or lack thereof) to transnational advocacy net-
works which can help to unlock accountability landscapes. The
case study in Northern Haiti is an important one, as it demon-
strates the CAO’s failings with respect to those communities that
are most marginalized. As has been shown, while exploration
activities were undertaken, those communities had no capacity
to know the nature of the project or the IFC’s investment, and
had no knowledge of the right of recourse to the CAO. Unless
the CAO’s functions are to remain as sites of continued exclu-
sion, the CAO’s outreach activities directly to project-affected
communities must be enhanced, and companies should be placed
under more onerous obligations to disclose the availability of the
CAO as part of their stakeholder engagement plans. While some
communities in the early equity context may prefer to eschew the
CAO’s depoliticized and disciplining processes as inappropriate
spaces for asserting contestational grievances, at the very least
those communities have the right to make fully informed strate-
gic decisions about their accountability struggles. In the end, the
lessons drawn from this case study serve as an earnest call to the
IFC and CAO to better understand the deeply contextual nature
of the CAO’s true accessibility, and to devise solutions to ensure
that the most vulnerable project-affected communities are not
again overlooked.
enDnoteS
1
intl fin. corp., Where We Work, http://www.ifc.org/wps/wcm/connect/
corp_ext_content/ifc_external_corporate_site/about+ifc_new/where+we+work/
wherewework (last visited Apr. 17, 2017).
2
See Kate MacDonald, The Meaning and Purposes of Transnational
Accountability, 73 auStl. J. pub. aDmin. 426, 433 (2014) (explaining that
accountability relationships establish standards for seeking information, justifi-
cation and responsiveness from whom and about what).
3
worlD bank Group, ifc inveStment by inDuStry—annual Summary,
https://finances.worldbank.org/Projects/IFC-Investment-By-Industry-Annual-
Summary/59dm-bgyg (last visited Apr. 17, 2017).
4 See intl fin. corp., oil, GaS & mininG, http://www.ifc.org/wps/
wcm/connect/industry_ext_content/ifc_external_corporate_site/industries/
oil,+gas+and+mining/mining/miningcontent (last visited Apr. 17, 2017)
(“Under our unique Early Equity Program, we support mining projects at the
pre-feasibility stage by becoming a shareholder and long-term partner.”); see
also intl fin. corp., early equity for lonG-term returnS, http://www.
ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/
news+and+events/news/kiwara_early_equity (last visited Apr. 17, 2017) (dis-
cussing early equity investments in the mining sector in Sub-Saharan Africa).
5 See early equity for lonG-term returnS, supra note 5.
6 See intl fin. corp., proJect information portal: euraSian mineralS
inc., https://disclosures.ifc.org/#/projectDetail/SPI/27409 (last visited Apr. 17,
2017).
7
See intl fin. corp., SuStainability framework, http://www.ifc.
org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corpo-
rate_site/Sustainability+and+Disclosure/Environmental-Social-Governance/
Sustainability+Framework (last visited Apr. 17, 2017) (“The 2012 edition of
IFC’s Sustainability Framework applies to all investment and advisory clients
whose projects go through IFC’s initial credit review process after Jan. 1,
2012.”).
8
See id.
9
See David Hunter, International Law and Public Participation in Policy-
Making at the International Financial Institutions, in international financial
inStitutionS anD international law 199, 206 (Daniel D. Bradlow & David
B. Hunter eds., 2010) (explaining that the IFC Performance Standards have an
external governance function beyond the IFC’s clients, in that they form the
basis of the Equator Principles—to which 86 private lending institutions have
also committed—covering over 70 percent of international project finance debt
in emerging markets).
10
office of the compliance aDviSor/ombuDSman (cao), termS of
reference 2, http://www.cao-ombudsman.org/about/whoweare/documents/
TOR_CAO.pdf (last visited Apr. 17, 2017).
11
See Samantha Balaton-Chrimes & Fiona Haines, The Depoliticisation of
Accountability Processes for Land-Based Grievances, and the IFC CAO, 6
Global poly 446, 447 (2015) (“Following the 1992 Earth Summit in Rio de
Janeiro . . .‘citizen-driven accountability for sustainable development’ became
the norm.”).
12
See kriSten lewiS, citizen-Driven accountability for SuStainable
Development 1 (2012), https://www.opic.gov/sites/default/files/files/citizen-
driven-accountibility.pdf (explaining that the Inspection Panel, as the first IAM,
was crucial “in giving citizens a right to recourse” and “was an innovation
in both global governance and international law, broadening the concept of
accountability and creating a first ever formal avenue for people themselves to
challenge the decisions of international institutions and seek redress for harm
done”).
13
worlD bank inSpection panel, how to file a requeSt for inSpection
to the worlD bank inSpection panel: General GuiDelineS, http://ewebapps.
worldbank.org/apps/ip/Documents/Guidelines_How%20to%20File_for_web.
pdf (last visited Apr. 3, 2017); accord linDa c. reif, the ombuDSman, GooD
Governance anD the international human riGhtS SyStem 349 (2004).
14
See lewiS, supra note 13, at 3, 6 (stating that the World Bank itself notes
that “IAMs are in many ways ‘children’ of the 1992 Earth Summit—products
of a range of social, political, and institutional forces that came to a head in
Rio and changed, in fundamental and beneficial ways, development practice”);
see also U.N. Conference on Environment and Development, Rio Declaration
on Environment and Development, U.N. Doc. A/CONF.151/26/Rev.1 (Vol. I),
annex I (Aug. 12, 1992) (calling for the right of citizens to participate in the
development process and access information, as well as to be provided with “[e]
ffective access to judicial and administrative proceedings, including redress and
remedy . . . .”).
15
See Benjamin M. Saper, Note, The International Finance Corporation’s
Compliance Advisor/Ombudsman (CAO): An Examination of Accountability
and Effectiveness from a Global Administrative Law Perspective, 44 n.y.u. J.
intl l. & pol. 1279, 1322 (2012); see also Eusike Suzuki & Suresh Nanwani,
Responsibility of International Organizations: The Accountability Mechanisms
of Multilateral Development Banks, 27 mich. J. intl l. 177, 206 (2006)
(noting that “the absence of access to effective remedies stemming from an
[international organization’s] immunity from local jurisdiction is the essential
reason for the establishment of the [IAMs]”).
16
See Carol M. Mates, Project Finance in Emerging Markets—The Role
of the International Finance Corporation, 18 tranSnatl law. 165, 166-67
(2004).
17
See id.
18
u.n. envtl. proGramme, panGue Dam—the international finance cor-
poration (ifc) anD the office of the compliance aDviSor ombuDSman (cao)
(2006), http://new.unep.org/dams/documents/ell.asp?story_id=134.
19
See id. (noting that the World Bank Inspection Panel has jurisdiction only
over IBRD and IDA).
20 See Adebola Adeyemi, Changing the Face of Sustainable Development in
Developing Countries: The Role of the International Finance Corporation, 16
envtl. l. rev. 91, 96 (2014); see also Saper, supra note 16, at 1289 (explain-
ing that MIGA provides guarantees to private investors in developing countries
continued on page 44