September 2016
The Executive Board of the Inter-American Development Bank (IDB) has agreed to update its Indigenous Peoples Policy, after an investigation found the bank breached it and other operational policies when it approved an investment in the Mareña Renovables Wind Project. The project, slated for development on the Isthmus of Tehuantepec in Oaxaca, Mexico, was to be the largest wind farm in Latin America. But it drew intense opposition from indigenous communities that feared the wind farm would interfere with their cultural traditions, including limiting access to their sacred sites and damaging the fishery, which provides their principal source of food and income.
The Indian Law Resource Center helped seven indigenous communities secure an examination of the financing decision by the IDB’s Independent Consultation and Investigation Mechanism (MICI). The MICI concluded its investigation and, in a recently released report, confirmed the IDB fell short of its obligations, particularly with regard to transparency, consultation, and analysis and mitigation plans for the social impacts of the project.
“I’m glad to see MICI pushed the boundaries of its mandate by promoting the lessons learned from the investigation to seek improvements in the bank’s current and future operations,” says Leonardo A. Crippa, an ILRC senior attorney representing the communities in their complaint. In addition to updating the Indigenous Peoples Policy, the MICI suggested the Bank create guidelines for navigating situations of significant environmental or social conflicts.
The IDB’s Executive Board of Directors fully endorsed all the recommendations and instructed bank management to prepare a work plan for their implementation.
Crippa anticipates the operational changes inspired by this case will be far-reaching because of the recent structural changes at the bank: the creation of the Inter-American Investment Corporation (IIC), which now handles the private sector lending, while the IDB retains oversight over public sector investments. The MICI processes complaints against both the IDB and IIC, and both were engaged in the proceedings of the Mareña investigation.
In approving the MICI's report, the Directors acknowledged that for the bank to work more effectively, it must ensure the "institutional and regulatory framework of projects involving indigenous communities be based on international best practices." The IDB adopted its Indigenous Peoples Policy in 2006. Since then, both the United Nations and the Organization of American States have both adopted declarations on the rights of indigenous peoples.
“Needless to say,” says Crippa, “the Bank’s Indigenous Peoples Policy does not meet the legal standards set by the declarations. “ He added that because of its regional focus, the OAS American Declaration on the Rights of Indigenous Peoples has particular relevance for the IDB. “The time has also come for the Bank to update its decade-old operational policies with a focus on social issues, especially indigenous issues.”