Inter-American Investment Corporation Goes Online With Investments in Financial Services, Agriculture, and Energy
By Alexandre Andrade Sampaio (International Accountability Project) and Jocelyn Medallo (International Accountability Project)
In a few months, the Inter-American Development Bank’s newly-consolidated private sector arm, the Inter-American Investment Corporation (IIC), will begin the review and update of its information disclosure policies, the policies that set out what and when project information must be publicly disclosed to communities and other stakeholders.
Most development banks give lip-service to “access to information,” many adopting disclosure policies that, in theory, should provide notice of information to communities potentially impacted by their projects. While these policy commitments are an important step, we wanted to know how the disclosure practice of the banks actually play out.
Recently, IAP met with the United States Treasury and United States office of the IIC to advocate for a stronger IIC disclosure policy that facilitates community engagement at the earliest stages of project design. Using data gathered from the Early Warning System, IAP looked at publicly disclosed project information for 57 projects proposed for funding by the IIC between March 2015 to September 2016. Although our full analysis is forthcoming, we wanted to share several preliminary thoughts.
For the majority of IIC projects, information disclosure is significantly inadequate.
To learn more about IIC investments, click on a country to see IIC projects and project links, the breakdown of financing by sectors, risk categories, and disclosure periods.
As the interactive map illustrates, the longest disclosure period for IIC projects is the average of 140.5 days for Category A. However, Category A accounts for just two projects analyzed within this timeframe.
For the vast majority of projects, the timeframe for and scope of disclosure are far more limited. Let’s take a look at Category B, which accounts for nearly two-thirds of the projects we reviewed.
Disclosure for Category B projects happens on the IIC website, on average, 35 days before Board consideration of a project. That’s a little over a month for a community member in Panama to get information about a project proposed for financing; request and receive additional information from the IIC, if needed; sift through what could possibly be hundreds of pages of technical documents that are most likely not in their native tongue; consult with and mobilize their community; and then figure out the task of getting the attention of decision-makers sitting in Washington, DC.
However, it’s not just the timing of disclosure that is important. It’s also what you disclose — what information is publicly available within these 35 days for Category B? The short answer: not nearly enough, at best a short summary of environmental and social risks for most projects that often lacks a useful level of specificity. Let’s take a closer look.
Environmental and social impact assessments?
With one exception, no environmental and social impact assessments for Category B projects were disclosed.
Stakeholder engagement plans so communities can learn when and how they will be consulted and how they can lodge grievances at the local level?
Project contacts (emails and phone numbers) so communities know to whom they should reach out if they need additional information about the project?
Not for any Category B or any other category of IIC projects reviewed. To be fair, I should note that project websites list the general request for disclosure email. However, IAP’s experience in requesting information through this channel for numerous projects over a period of several months resulted in neither a reply nor disclosure of additional information.
Applicable safeguard standards triggered in case communities want to know what standards apply to the project and therefore what they are entitled to as a matter of bank policy?
Not for a single project within our review.
Information and a link to the IIC’s independent accountability mechanism, the MICI, in case communities want to seek remedy for harms caused by the project?
Not for one.
With few exceptions, information on environmental and social risks is also lacking for Category C and Financial Intermediary (FI-1, FI-2, FI-3) categories. Click on the risk category in the interactive map to learn more about IIC disclosure periods.
What does this mean for communities?
IIC funding is prioritizing several historically risky sectors. Specifically, IIC proposed and approved energy sector investments amount to at least $900 million USD, dwarfing its other sector investments (at this point). Financial services (financial intermediaries) and agriculture follow in terms of dollars of IIC financing. Click on a sector in the interactive map to learn more.
The current model of information disclosure does not provide affected communities with adequate time or space to meaningfully engage in projects, precluding many from being informed and active participants in the design of so-called development. In light of the recent developments in the region, such as Latin America & Caribbean Principle 10 – a regional mechanism that would help people in obtaining information and participate in environmental decision-making that impacts their lives – this is a missed opportunity for the IIC to benefit from the expertise and views of local communities and CSOs in mitigating or wholly avoiding environmental and social risks.
We invite collaborations with partners to monitor IIC projects and to ensure that the disclosure policies of banks, such as the IIC, facilitate meaningful consultation with communities.