The International Finance Corporation’s compliance ombudsman has officially accepted a complaint filed by ethnic minority families in Ratanakkiri province against the IFC for investing in rubber plantations accused of stealing land and clearing forests.
In a letter sent to the families on Monday, the ombudsman deems their complaint eligible for the IFC’s independent compliance body to pursue, and gives them the option of asking the ombudsman to audit the investment or help mediate a solution.
Families from 17 different communities filed the complaint on February 10 accusing the IFC, the World Bank’s private investment arm, of breaking its own safeguard policies by investing in a Vietnamese firm, Hoang Anh Gia Lai (HAGL), that operates several rubber plantations in Ratanakkiri that are accused of breaking a raft of local laws. The families said in their complaint that they want the company to return land it had taken from them.
According to the NGOs helping the families, the IFC has invested $27 million in a Vietnamese equity fund, Dragon Capital, which holds a 5.5 percent stake in HAGL.
Now that it has accepted the complaint, the IFC ombudsman’s office will in the next 120 days draw up a report that will “clarify” the dispute and lay out how all sides perceive it, and then help the families decide what they want the ombudsman to do next.
David Pred of the NGO Inclusive Development International, which helped the families file the complaint, said they could ask the ombudsman to either launch an audit of the IFC’s compliance with its safeguard policies or to mediate a resolution with the IFC, Dragon Capital and HAGL.
“This decision will depend on the willingness of IFC, Dragon Capital and HAGL to cooperate in a mediation process in good faith to repair the harm caused by their investments,” he said.
The IFC has defended its investments in Dragon Capital saying it was the best way to make the most of its money but declined to comment on the complaint itself. HAGL has insisted that its plantations in Cambodia have followed all local laws.
Mr. Pred said the families could ask the ombudsman to launch an audit at any time if the mediation appears to be failing, but that “would be yet another black mark on IFC’s reputation and likely result in Dragon and HAGL’s high profile shareholders being forced to divest.”
Sol Noeuy, one of the affected farmers, said he was willing to give negotiations a try.
“We just want the IFC to come and talk with the company to find a solutions for the affected families,” he said. “I hope the IFC can help us, but if they don’t find justice for the villagers who have a dispute with the company we have nowhere to go because we don’t have any other land.”
(Additional reporting by Aun Pheap)