An association representing fisher people who would be impacted by a 4,150 MW coal-fired power plant planned for an Indian coast town filed a complaint with the International Finance Corporation (IFC) Compliance Advisor Ombudsman (CAO) raising concerns about IFC policy violations in the implementation of the project.
In its 2013 Audit and 2015 monitoring report, the CAO found several violations of IFC safeguard policies.
Among other findings, the CAO found that the IFC failed to ensure that consultation carried out as part of the environmental and social analysis constituted “effective consultation.” The CAO explained “[t]his lack of effective consultation with fishing communities early in the project cycle resulted in missed opportunities to assess, avoid and reduce potential adverse impacts of the project and to examine technically and financially feasible alternatives to the sources of adverse impacts[.]” In addition, the inadequate consultation and disclosure “hindered efforts to build and maintain over time a constructive relationship with project affected communities.”
In addition, the CAO found that the IFC’s environmental and social assessments “were not commensurate to risk,” failed to adequately review marine impact, and failed to adequately determine cumulative impacts.
The CAO also found the “IFC did not take the steps necessary to ensure that the application of [Performance Standard] 5 (Land Acquisition and Involuntary Resettlement) in relation to the complainants was properly assessed.”
Finally, the CAO determined that the IFC also failed to ensure World Bank Thermal Power Guidelines were applied properly.
The 2015 Report notes that the IFC has taken some steps to rectify problems raised in the Audit, but the CAO concludes that these steps are not “sufficient to address the findings of the audit at this stage.” Due to the continued violation of IFC policies, the CAO has kept the audit open for continued monitoring.