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Both the Orion and Celulosas de M'Bopicua Projects are Greenfield eucalyptus kraft pulp mills. In September 2005, the Centre for Human Rights and Environment, an Argentine non-governmental organization, lodged a complaint with the CAO on behalf of the stakeholders in relation to the two proposed IFC projects. The claimants argued that the proposed projects posed serious social risks to the livelihood of local communities as well as detrimental environmental damage. Furthermore, they also sought a transparent and fair consultation process that gave all stakeholders the opportunity to raise concerns and have those concerns effectively addressed.
The CAO assessed the complaint in order to ascertain opportunities to negotiate a settlement. Given that a resolution could not be reached, a preliminary assessment report was produced and distributed to stakeholders. In November 2005, the CAO Vice President commenced a compliance audit surrounding internal due diligence in order to ensure greater clarity in the implementation of social and environmental appraisal procedures by both IFC and MIGA. In particular, the audit focused on public disclosure of environmental and social documentation.
Case Status: Closed
The compliance audit, completed in March 2006, recommended that IFC ensure that:
A system of documentation of the adequacy of clients’ social and environmental processes is kept as well as an outline of procedure in relation to short-comings;
In the cases of joint-projects with MIGA, a procedure for collaboration is established and all appropriate information is accessible and reliable. The audit emphasized the fact the absence of explicit procedures concerning public disclosure results in the process being unnecessarily unpredictable for stakeholders and project sponsors. Accordingly, greater clarity in relation to the application of social and environmental appraisal procedures by both IFC and MIGA would prove invaluable in assisting the dispute resolution process. The complaint was closed in March 2006.
CAO case story page: http://www.cao-ombudsman.org/cases/case_detail.aspx?id=117