February 9, 2009
Yesterday, the Center for International Environmental Law (CIEL) asked the President of the World Bank, Robert Zoellick, to retract a letter written by the Agribusiness Department of the International Finance Corporation (IFC) that contains false and misleading statements regarding a pending complaint on biofuels. The letter jeopardizes imminent negotiations between the IFC client and the local communities that filed the complaint.
In March 2008, hundreds of community members in Nicaragua submitted a complaint to the IFC’s Compliance Advisor Ombudsman (CAO), for injuries to their health and environment. The communities believe the operations of Nicaragua Sugar Estates Limited (NSEL) are responsible for these injuries, which include an epidemic of chronic renal insufficiency resulting in the death of 2,500 to 3,500 sugarcane workers. NSEL received a $55 million loan from the IFC in 2006 to continue and increase these operations, enhancing sugarcane production and funding the construction of an ethanol plant.
The IFC Agribusiness Department, in a letter addressed to the CAO, concludes, without reference to any scientific study, that the epidemic has nothing to do with the operations of its client. Additionally, it inaccurately claims that the CAO has stated there is no causal connection between NSEL and the epidemic of chronic renal insufficiency; the CAO makes no such assertion. Finally, it implies, falsely, that the CAO has found that NSEL was in compliance with the IFC’s policies – the CAO has made no such findings, and will not unless and until the complaint reaches the compliance audit stage of the complaint process.
This letter threatens efforts by the CAO to facilitate an amicable agreement between the parties.
“With this letter, the IFC has made its allegiance clear,” commented Kris Genovese, Staff Attorney for the Center for International Environmental Law, who assisted the communities in the preparation of their complaint. “The Agribusiness Department, not content with the power imbalance between a group of sugarcane workers and the largest corporation in Central America, put its thumb on the scales of justice in favor of its client.”
The letter from CIEL to World Bank President Robert Zoellick, in addition to requesting that the IFC retract its letter, asks that a person be designated to supervise the Agribusiness Department’s continued involvement in the CAO case.