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ENVIRONMENT: Critics Weigh In as IFC Tightens Mining Rules

Abid Aslam

WASHINGTON, Sep 10 2007 (IPS) - The International Finance Corporation (IFC) faces pointed criticism in coming days as an effort to lessen the damage wrought by large mining projects enters a new phase.

At issue are updates and enhancements to environmental, health, and social guidelines from the World Bank’s private sector arm. Green groups and international charities say the proposed changes lack adequate standards in critical areas such as water contamination and the disposal of toxic waste.

They further question the economic benefits of mining in poor countries.

The groups, in a 20-page critique, decry a 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.”

Critics include the World Wildlife Fund, Oxfam, Earthworks, Bank Information Centre, and Centre for Science in Public Participation. The groups’ complaints come as the IFC draws up specific standards for mining and more than 60 other industries as part of a broader effort to apply, at project sites, global performance standards updated last year.

In coming days, the activists’ views will be balanced against feedback from other non-governmental organisations (NGOs), mining companies, and governments, said an IFC spokesman. The agency on Friday closed a 60-day period of public comment on the nascent rules.

“These NGOs have given their input into that process and this is welcome as it is what we wanted and asked for,” the spokesman, Hannfried von Hindenburg, told IPS.

“This input we will take into account and it will have an influence, in one way or another, although I cannot say now how much of it we will take on,” he added.

The NGO report advances specific language its authors say must be used if the IFC guidelines are to pass muster. Proposed amendments cover issues such as water conservation and quality, acid drainage, groundwater protection, reclamation of waste rock dumps and the management of worthless ore, known as tailings.

These and other areas of concern are covered by the draft IFC guidelines, some for the first time and some in greater detail than before. Even so, the activist coalition says in its critique that the emerging document lacks specific targets the IFC can use to decide whether to back a given project or to judge its performance.

“The draft IFC mining guidelines, like their predecessors, do not contain sufficient quantitative standards and requirements for IFC project approval. This means that during application almost everything is left to the judgement and discretion of the IFC reviewer of the project,” says the NGO critique. “Ultimately, this level of discretion is not protective of communities, countries, or companies.”

The guidelines are designed mainly to apply to new IFC-financed projects. As with earlier versions, and because they lay out international best practice, the rules also are destined to serve as benchmarks against which mining companies will set goals or be judged by critics regardless of IFC involvement.

As such, the guidelines will enjoy authority far greater than the IFC’s small financial presence in mining worldwide. That is why, over the years, interested parties ranging from environmentalists and aid groups to local communities, governments, and corporations have sought to influence the rules. The IFC has had to strike difficult compromises between those groups’ often competing demands.

Mining’s critics long have said the extraction of natural wealth constitutes a so-called resource curse in poor countries, where it contributes neither to economic growth nor to poverty reduction yet sparks or fuels health and environmental crises and armed conflict. Nigeria often is cited as the prime example.

Opponents of that view point to Botswana, Chile and, going further back in history, to Australia, Canada, and the United States as countries where mining played a key role in diversifying and developing national economies.

The IFC’s critics, in their document, urge the agency to detail the “positive and negative impacts of each of its mining investments on a project-specific basis.”

This, they say, will enable the IFC “to report meaningfully on whether its mining investments actually reduce poverty.”

The World Bank Group, of which the IFC is a member, itself concluded in 2004 that it needed to enhance its efforts in “more explicitly identifying and tracking poverty reduction associated with its projects.”

The agencies long have acknowledged what some term a “paradox of plenty”: In some countries, extractive industries have failed to generate sustainable benefits for society despite providing jobs and producing revenue.

The IFC’s environmental, health, and social safeguards are aimed at addressing these very problems, officials have said.