In 2016, two complaint were submitted to FMO’s Independent Complaint Mechanism against our investment in the Sendou project.
In May of 2016, a complaint was submitted to FMO’s Independent Complaint Mechanism (ICM) by Lumière Synergie Pour le Développement and Takkom Jerry. This was followed by a second complaint that was issued by the Collectif des communautés affectées de Bargny in June.
In their claims they stated that the project was not in line with the IFC Performance Standards, which are required under FMO’s policies, and that it was non-compliant in environmental and social areas such as: impacts on drinking water, marine impacts, air quality, land title issues and economic displacement.
|IFC Performance Standards
IFC's Environmental and Social Performance Standards (IFC PS) define the responsibilities of investors like FMO with regards to managing our client’s environmental and social risks. FMO evaluates (on a risk-based approach) all of its financing against the IFC Performance Standards regardless of asset class and amount of investment. Should environmental, social and governance gaps be identified at our clients we work with them to develop an Environmental and Social Action Plan (ESAP) and/or Corporate Governance Plan to close these gaps according to the IFC PS and our Corporate Governance Policy. These Plans are part of the financing agreement and therefore contractually binding.
The Independent Complaints Mechanism (ICM) allows external parties to file a complaint concerning projects financed by FMO. At the same time, the ICM assists FMO in implementing and adhering to its own policies and procedures and as such the Mechanism is a learning-by-doing process.
The Independent Expert Panel (IEP) appointed by the ICM further assessed the complaint. The scope of work of the IEP comprised of a compliance review, i.e. a review of how FMO assessed and monitored the project, by comparing its methods with the environmental and social policies to which FMO had committed itself in 2012, when the first credit agreement with the client was signed.
In November 2017, the Independent Expert Panel (IEP) published its compliance review on FMO’s website. The report, in short, stated that the community engagement was insufficient and that environmental and socio-economic baseline studies needed for compliance with the IFC Standards and World Bank Environment and Health standards should have been finalized before the disbursements of the loan.
In particular, the insufficient community engagement created resistance towards the power plant among the local communities. The report states as well, that FMO should not have made the 2nd disbursement, knowing the non-compliant status of the project, and allowing open issues to be solved in a later phase. FMO published its management response soon after.Also
On 27 January 2020 the IEP published its first monitoring report in which it shared its concerns regarding limited progress made in light of the compliance review.