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Undermining communities and the environment:
A review of the International Finance Corporation’s Environmental, Health, and Safety Guidelines for Mining


David M. Chambers, Stuart M. Levit, Payal Sampat, Scott Cardiff, Keith Slack, Marta Miranda, Nikki Reisch

Center for Science in Public Participation (CSP2), Earthworks, Oxfam International, WWF, Bank Information Center (BIC)

September 2007

SARPN acknowledges BIC as a source of this document: www.bicusa.org
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Introduction

The International Finance Corporation (IFC), the private sector arm of the World Bank, has recently released a draft set of guidelines for managing the environmental and public health impacts of its controversial large-scale mining projects. The guidelines (“Environmental, Health and Safety Guidelines for Mining” [EHS Guidelines]) are marked by significant gaps and omissions, including the failure to specify the performance levels or quantitative measures necessary to protect local communities and environments impacted by these projects. In some cases the guidelines do not even meet the mining industry’s existing “best practice” standards. When it adopted its Policy and Performance Standards on Social and Environmental Sustainability in 2006, the IFC stated that the subsequent EHS Guidelines would provide the details missing from the new policy and performance standards. The draft mining guidelines, however, fail to compensate for the lack of specificity of the Performance Standards, which consist of neither firm standards nor measurable criteria for performance.

The weaknesses of the mining guidelines, which are set out in detail below and include the failure to stipulate appropriate protections to prevent contamination of local water sources by toxic chemicals, ensure proper disposal of mine waste or guarantee prior community consultation on the design of mine closure plans, are matched by IFC’s refusal to report meaningfully on whether its mining investments actually reduce poverty. The lack of stringent standards and clear threshold levels regarding mine impacts exemplifies IFC’s reluctance to meaningfully capture and assess the net effects of its mining investments on communities and the environment. We urge IFC to rethink its support for this sector and commit immediately to (1) redrafting the mining sector guidelines with the involvement of independent experts and civil society; and (2) reporting on the positive and negative impacts of each of its mining investments on a projectspecific basis.

IFC’s investments in the mining sector have become increasingly controversial in recent years due to serious environmental problems and strong community opposition at several IFC-financed mines. In 2004, at the giant Yanacocha project in northern Peru, concerns about the lack of local benefits and impacts on local water sources led to massive community protests against the mine’s planned expansion. In 2005, an internal IFC review found that the corporation had not adequately complied with its social and environmental impact policies prior to approval of the Marlin project in Guatemala, which subsequently became a focal point of protests over community concerns about water quality impacts. In 2006, a review by the US Environmental Protection Agency found serious deficiencies in plans for controlling acid mine drainage at an IFC-financed mine in Ghana. The same mine has also sparked concerns about the lack of any long-term solution to the land and livelihood losses suffered by the more than 10,000 affected people in the surrounding farming-dependent communities.

By destroying local land and water resources, displacing communities and generating staggering amounts of toxic waste, large-scale mining can have profound and permanent effects on local communities and environments. Among the most serious and long-lasting impacts is acid mine drainage, an irreversible process by which mined rock begins to generate sulfuric acid that destroys ground and surface water sources. Such contamination can last thousands of years. It is therefore essential to prevent its occurrence and set aside guaranteed funds to treat the problem if it does appear. As the de facto global standards for the mining industry, IFC’s mining guidelines, combined with its Policy and Performance Standards on Social and Environmental Sustainability, should establish strong requirements for dealing with these kinds of issues. Unfortunately, they fail to do so and leave much of the responsibility in these areas to the discretion of the IFC’s mining industry clients.

The environmental impacts of mining are compounded by the lack of any real long-term sustainable development benefits to impacted communities in the majority of cases, and by mining’s poor overall track record as a driver of development. To date, the IFC has refused to actually measure the net impacts of its individual projects, preferring instead to release aggregated data from across the sector. Such data is not useful for assessing whether IFC’s mining projects are fulfilling its mission to “reduce poverty and improve people’s lives.” (See the 2006 report “Tarnished Gold: Mining and the Unmet Promise of Development” for more information on this issue: www.bicusa.org/en/Article.2956.aspx)

The lack of strong environmental management guidelines and measures for tracking development impact within IFC policies needs to been seen in light of IFC’s stated intention to increase investment in the mining sector in countries like Democratic Republic of Congo, Guinea, Vietnam and Indonesia that face significant governance challenges.1 Such countries often lack adequate regulations or capacity to ensure that mines do not cause undue damage to the environment and local communities. This creates a troubling scenario in which the social and environmental problems that have characterized IFC’s past mining investments in countries like Guatemala, Peru and Ghana could increase dramatically. Thus the need for concerted action by IFC to address these issues is all the more urgent.

Presented below is a detailed analysis of IFC’s draft mining sector guidelines. The comments have been prepared by a coalition of nongovernmental organizations with extensive experience monitoring the mining sector. The coalition has relied in particular on the expertise of the Center for Science in Public Participation, an organization comprised of technical experts that advises local communities around the world impacted by mining. It is our hope that the IFC will accept the comments contained here, and commit to redrafting the guidelines and to establishing – and publishing – project-level development impact indicators.


Footnote:
  1. “IFC to put more into African Mines,” Business Report, March 14, 2007; “IFC to invest in Asia mining projects,” Dow Jones/Mindoro Resources, April 5, 2007.


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