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

12 Sustainable Development Law & Policy

appraiSinG the role of the ifc

anD itS inDepenDent accountability

mechaniSm: community experienceS

in haiti’S 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:

euraSian’S 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

int’l 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 int’l 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 int’l 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 int’l fin. corp., proJect information portal: euraSian mineralS

inc., https://disclosures.ifc.org/#/projectDetail/SPI/27409 (last visited Apr. 17,

2017).

7

See int’l 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 pol’y 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.

int’l 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. int’l 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 tranSnat’l 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

envt’l. 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