New links expose World Bank Group investments and human rights abuses

The International Finance Corporation, the World Bank’s private lending arm, has little-to-no control over how around 90 percent of its investments into commercial banks and other financial institutions are used, according a report by Oxfam and Inclusive Development International. 

Owning the Outcomes” builds on newly published research by IDI and other organizations, linking IFC investments through “financial intermediaries” to dozens of cases involving human rights and environmental abuses like displacements, disappearances, and severe air and water pollution. Some of these include Adani’s Mundra coal plant, port, and special economic zone, the Tia Maria copper mine in Peru, and mega-dams in Vietnam.

Nadia Daar, head of Oxfam International’s Washington office, said: “The IFC is profiting off indirect investments into projects that it wouldn’t dare consider touching directly. Oxfam called out the IFC for its irresponsible practices last year, and we will continue to do so.”

Natalie Bugalski, IDI’s legal director, said: “It’s time for the IFC to stop passing the buck and guarantee that its investments are actually helping people and fighting poverty, not disrupting lives, displacing communities, and destroying the environment.”

Investing into FIs has become the most prominent form of financing for the IFC. The institution invested more than $50 billion between Fiscal Years 2010 and 2015, and over $8 billion in FY 2015 alone.

“Owning the Outcomes” comes ahead of the World Bank’s Annual Meetings in Washington. While the IFC has taken some important steps forward, Oxfam and IDI are once again urging the institution to quickly and positively improve where it invests and how it tracks the impact of these investments.

The IFC has given several excuses for why it can’t be responsible for what its FI clients do with their investments. The report tackles these arguments and shows that with stronger monitoring and greater transparency, for example, the IFC can invest responsibly and even promote respect for human rights and the environment in the financial sector.

Daar said: “Ultimately, if the IFC cannot effectively manage the risks in its growing FI portfolio, it needs to dramatically scale down those investments to the point where they can track how they are being used.” 

Contact information

Simon Hernandez-Arthur in Washington

+1 585 503 4568
 
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