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REPORT: Missing Peoples – IFC projects that did not apply PS7

IFC has failed to flag Performance Standard 7 (PS7) on indigenous peoples in dozens, if not hundreds, of high- and mid-risk investments

This is the third in a series examining IFC’s implementation of its Indigenous Peoples Performance Standard, PS7. See the first report here, analyzing the 29 projects where PS7 was applied. See the second report here, on IFC’s decision to bypass indigenous protections in the Xinjiang Uyghur Autonomous Region.

In NomoGaia’s 2020 report analyzing IFC investments that applied PS7, we noted that IFC’s implementation of PS7 often hinged on host country regulations and restrictions on indigenous rights. Asked for comment, IFC disputed this characterization:

“IFC conducts its own due diligence to determine PS7 applicability regardless of contextual dynamics in each country.” IFC added, “If you have concerns about specific examples besides those captured below in Table 3, please do share the project names with us.”

IFC conducts its own due diligence to determine PS7 applicability regardless of contextual dynamics in each country.” IFC added, “If you have concerns about specific examples besides those captured below in Table 3, please do share the project names with us.”

Those project names took NomoGaia several months to compile. We found nearly 400 such investments.

In addition, we analyzed several dozen of these cases in detail, finding that IFC clients mischaracterize indigenous communities to avoid securing their indigenous protections in politically sensitive contexts and bypass any indigenous review completely in others.

The reasons PS7 is bypassed are both procedural and substantive in nature.

The procedural implementation gaps result from a shortage of adequate internal processes for IFC personnel to understand what analysis would be necessary of clients to confirm or reject the conclusion that indigenous peoples are present. These include expertise gaps in ESIA consulting teams as well as gaps in IFC’s own understanding of how indigenous peoples experience impacts.

The substantive implementation gaps reflect more challenging issues. From 2012 to 2016 IFC and clients sometimes identified affected indigenous peoples but opted not to trigger the PS7 safeguard. This approach ended in 2016, but indigenous communities identified on previous project documents were scrubbed from public summaries on several occasions. Throughout the 2012-2020 period, in regions like Xinjiang Uyghur Autonomous Region, Kashmir, and the Peruvian Andes where governments reject the indigeneity of native populations, IFC hews to government preferences.

The report recommends that IFC establish clearer screening, appraisal and surveillance approaches for PS7 to guide loan officers and E&S specialists in implementing appropriate protections for indigenous peoples. Institutionally, it recommends that IFC give its commitment to indigenous rights primacy over politics, both to reify its climate goals and to give meaning to the principle of equitable development.

Projects Missing Indigenous Peoples (PS7) Analysis

The database assembled by NomoGaia analyzing public data regarding IFC’s potential impact on indigenous peoples is available on this page, both as a downloadable file and through the search function below.

Search:
Total Records Found: 391, showing 10 per page
Project NameProject NumberCountryCategoryNature of Indigenous Risk
Yaramoko Roxgold 36754 Burkina Faso A Burkina has indigenous peoples - but IFC project summaries make no mention of indigenous peoples at all
Xiang Niang II 42401 China B Operations at the Khorgos border crossing - Xinjiang
Xiang Niang II 42401 China B Operations at the Khorgos border crossing - Xinjiang
Vento Brasil 33642 Brazil A The client screening process to avoid "legally protected" IP lands makes PS7 "inapplicable" but IFC PS7 covers peoples who lack legal protections
SECI Mahindra 42683 India B 47 percent of pop is SC or ST. Land acquisition ignored indigeneity of landless 'sharecroppers'. Water resources and mobility could be affected - this is the 3rd solar farm in the area https://bit.ly/3eedXI3
Proteak Exp 38754 Mexico B IFC mentions the displacement of “landless workers" from forestlands but does not evaluate why they are landless or what their heritage is. IPs in Veracruz - Tabasco - Chiapas have forest links
Noble-COFCO 34738 World Region A 5 times in 2015-2018 IFC unsuccessfully required COFCO to source materials with "respect" of IPs. COFCO's Brazil (sugarcane and soy) Paraguay - Argentina - India operations affect IPs. IPs are not mentioned even as potential impacts on “ecologically sen
Nidera-COFCO 34737 World Region A 5 times 4 (2015-2018) IFC unsuccessfully required COFCO to source materials with "respect" of IPs. COFCO's Brazil (sugarcane and soy) Paraguay - Argentina - India operations affect IPs. IPs are not mentioned even as potential impacts on “ecologically se
MCS Property 31669 Mongolia B Local populations say there are IPs at the Kuhaa Khudag (UHG) mine site. https://bit.ly/2RlEudz
Hassan Allam I 37831 Egypt A IFC never explains how it decided PS7 was inapplicable when investing in a construction firm whose projects are unknown

REPORT: IFC and the Uyghur genocide – due diligence gaps in IFC’s Xinjiang investments

This is the second in a series examining IFC’s implementation of its Indigenous Peoples Performance Standard, PS7. See the first report here.

Since 2017 the government of China’s Xinjiang Uyghur Autonomous Region has been imprisoning Uyghurs en masse, subjecting them to reeducation and forced labor, separating them from their children and forcibly sterilizing them.

Development actors and businesses are a key component of Uyghur subjugation. Agricultural commodities – specifically cotton and tomatoes –  are harvested by detainees or villagers targeted by authorities for “poverty reduction campaigns” that traffic them to remote villages. Manufacturing firms use detainees as a captive labor force, either for their operations or for short-term contracts. Tech companies have taken grants from Beijing to create a surveillance state in Xinjiang that has made the whole region a prison. The government has worked to dilute the Uyghur population by incentivizing businesses to set up shop in Xinjiang and import labor forces along with them.

Policy experts and, recently, the US government, has referred to this systematic campaign of repression as Cultural Genocide. Industry associations, government agencies and auditors have placed blanket bans on working in or sourcing goods from Xinjiang as a result.

The World Bank’s private lending arm, the International Finance Corporation (IFC) has taken no comparable stance. Although the IFC has environmental and social Performance Standards to govern the practices of its clients, implementation of these standards is not on display in Xinjiang. Of 10 investments IFC made in the region since the 2012 standards were launched, only one considered whether the region’s indigenous Turkic Uyghur population merited protections – and concluded they did not.

IFC’s investments in the region are in agriculture, manufacturing and IT. NomoGaia sought clarity on IFC’s due diligence processes in these investments starting in November 2020. Since then, IFC has divested from three of the 10 projects but has failed to demonstrate that its remaining clients are removed from the campaign of ethnic erasure underway.

The map below geolocates IFC’s investment, spread across the region.

Map of IFC investments in Xinjiang linked to a KMZ file
KMZ file for an interactive version of this map and location data

IFC was not aware of the footprints of many of these investments, making it impossible for it to have been monitoring land use changes or destruction of cultural heritage, as the bank has been unable to visit the region since mid-2019. Absent compelling data demonstrating that IFC is monitoring the complex business relationships that subjugate Uyghur people and culture in Xinjiang, IFC should terminate its remaining outstanding loans and commit to a development approach that recognizes no level of ‘poverty reduction’ can justify cultural erasure.

REPORT SERIES: IFC investments are failing indigenous peoples

In 2020, NomoGaia launched a multi-part series evaluating IFC’s implementation of its Indigenous Peoples Performance Standard, PS7. We found that:

IFC is restricting the scope of PS7 to exclude FPIC even where the standard is applied (“FPIC at the IFC” October 2020)

IFC bypassed PS7 on dozens of projects where indigenous peoples are present (“Missing Peoples” May 2021)

IFC never fulsomely applied PS7 in the Xinjiang Uyghur Autonomous Region, resulting in investments where clients were incapable of respecting indigenous rights under Chinese Law (“IFC and the Uyghur Genocide” March 2021). Further investigation of these investments found that IFC clients actively contributed to the Uyghur Genocide (“Financing and Genocide” February 2022 published with the Atlantic Council’s DFR Lab and Sheffield Hallam University).

IFC’s investment portfolio includes only 29 applications of its Indigenous Peoples safeguard. Those applications are almost all partial. FPIC has only been demonstrated four times.

The International Finance Corporation needs new approaches to implementing its Indigenous Peoples Safeguard, PS7. Bypassing indigenous rights has grave consequences for people and planet.

The report says the IFC must reform its lending to clients that impact indigenous peoples by:

  • Hiring indigenous specialists onto E&S teams, worldwide
  • Removing red tape that disincentivizes clients from acknowledging indigenous peoples
  • Increasing transparency around the identification of indigenous people and the determinations of impacts
  • Assuring that indigenous peoples, not clients, dictate whether they will experience impacts
  • Geolocate projects so that IFC can easily demonstrate where projects overlap with traditionally stewarded lands

The report says the IFC has begun to reform its application of the Indigenous Peoples Safeguard in response to recent criticisms. These steps include hiring indigenous expertise in Asia and committing to heightened transparency around the application of PS7. However, the report says fundamental flaws remain and more needs to be done.

CONTACT INFORMATION

NomoGaia:  info@nomogaia.org +13035141522

Human Rights Impact Assessment Resources

In collaboration with the American University Washington College of Law Human Rights in Business Program, along with the American Association for the Advancement of Science and the ABA Center for Human Rights, we have worked to compile publicly available resources, case studies and literature on HRIA. The PDF File is updated frequently and provides hyperlinks to available resources. For recommendations and additional submissions, please contact us at rdewinter@rcn.com or at info@nomogaia.org 

HUMAN RIGHTS IMPACT ASSESSMENT RESOURCES

  1. GUIDANCE AND TOOLS
  2. PUBLICLY AVAILABLE HRIAs
  3. UN DOCUMENTS 
  4. REPORTS AND ANALYSIS
  5. ACADEMIC RESOURCES 
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  6. HRIA IN THE NEWS
  7. EDUCATIONAL AND TRAINING MATERIALS
  8. RELATED FIELDS OF IMPACT ASSESSMENT