Latin America & the Caribbean
Panama / Panama Canal Expansion-01/Gatún
IFC’s Panama Canal project is designed to increase the capacity and efficiency of the Panama Canal. The project includes construction of a third set of locks, including two lock facilities with water-saving basins at the Atlantic and Pacific ends of the Canal; the deepening of the Pacific and Atlantic entrances of the Canal; and the deepening and widening of the navigational channels of the Gatún Lake, the deepening of the Culebra Cut, and the elevation of Gatún Lake’s maximum operational level. IFC’s $500 million investment (of a total $5.25 billion project costs) was approved in November 2008 and is pending disbursement. The project is Category A.
In May 2011, the CAO received letters of complaint from several local and national environmental and citizens’ rights organizations. The complainants cited concerns related to IFC’s due diligence process in assessing and approving the project and outlined specific environmental and social concerns related to community health and safety due to the dam’s site close to seismic fault lines, impacts to the marine ecology and water sources, and issues related to the relocation of communities.
The CAO accepted the complaint for further assessment in July 2011 and initiated an assessment, traveling to Panama in October 2011 to explain CAO’s work to the key stakeholders and listen to their views on the issues. A complaint on the same project was also filed with the European Investment Bank’s Complaints Mechanism, with which the CAO is coordinating closely.
During the assessment process, the CAO understood from community members, civil society organizations, and the company that pursuing a dispute resolution process was not an option at this point in time. Given the voluntary nature of a dispute resolution process, the CAO Ombudsman concluded its involvement in the case and, in line with CAO’s Operational Guidelines, the complaint was transferred to CAO's compliance function for appraisal. The appraisal will determine whether or not an audit of IFC's role in the project is merited in order to provide assurance to the President and public that IFC is complying with relevant social and environmental policies and procedures.
A compliance appraisal was formally triggered on February 23, 2012. CAO's assessment report is available below in English and Spanish, along with IFC's response.
- Project Name & Number
- Panama Canal Expansion 26665
- La Autoridad del Canal de Panama
- Latin America & the Caribbean
- Environmental Category
- $500 million A Loan
- Eligible: Completed
- Assessment Period: Transferred
- Under Appraisal: In Process