CAO Cases

Arne Hoel, The World Bank

Latin America & the Caribbean

Nicaragua / Ingenio Montelimar-01/ Montelimar Environs

Complainant
Asociacion Montelimar Bendicion de Dios (AMBED)
Date Filed
October 01, 2015
Concerns
Community health & safety, environmental pollution, land tenure, and information disclosure
Case Status
Open - Ombudsman
 

Synopsis

Complaint

Consorcio Naviero Nicaraguense (Navinic) owns the smallest of four sugar mills in Nicaragua (Montelimar mill), with a milling capacity of 2,300 tons of sugar cane per day. The project involves an increase in the Company’s sugar annual production and includes the acquisition of 1,628 ha of land to increase planted area, investment in irrigation and other infrastructure in the field, increasing milling capacity, acquiring additional harvesting and transportation equipment and funding incremental working capital needs. Total project cost is estimated at US$38 million, and IFC has provided a US$15 million A Loan for IFC’s own account.

 

In October 2015, the Asociacion Montelimar Bendicion de Dios (AMBED), a local organization comprised of current and former workers of Montelimar,their families, and members of communities in the Municipality of San Rafael del Sur, filed a complaint with CAO regarding IFC’s Montelimar project.  The complaint cites concerns about the high prevalence of Chronic Kidney Disease (CKD) in the local communities and the company’s response to the epidemic, environmental impacts due to industrial cultivation of sugarcane, issues related to evictions and land tenure, and lack of information disclosure and community engagement.  The complainants also raise questions about IFC’s compliance with its Performance Standards in relation to these issues.

 

CAO Action

CAO found the complaint eligible for further assessment in October 2015. During the assessment, the company and complainants expressed desire to meet to exchange information on the concerns raised in the complaint and continuing towards dialogue under CAO’s auspices. The complainants and company have since held several meetings to clarify misconceptions and address issues of common interest. In January 2017, the parties signed an agreement to work together to provide support to those suffering from CKD. Agreed actions include health and livelihood support to former workers, which encompasses the creation of a cooperative. The parties have also agreed to have AMBED operate as an additional in-take channel for the company’s grievance mechanism; and to request government support to form a commission to improve access to health care services and pensions. See full agreement under “View Documents”. 

 

Since January 2017, the parties have been working to implement the agreement and find solutions to address the remaining complaint concerns. Due to the acute political crisis faced in Nicaragua, starting in April 2018, no joint meetings were possible for a period of three months.  In mid-August 2018, the parties were able to meet again and engage in dialogue under CAO’s auspices. Though it’s been impossible for CAO to meet with the parties since April, the parties have continued to work together and as a result of their sustained effort, the cooperative, Textil of Multiple Services Manantial de Agua Viva– which is composed of 144 former workers, including some complainants—started operating in August 2018. The cooperative’s first project is a small textile workshop. CAO remains dedicated to the process and will continue to support the parties as they work to address the issues through dialogue, find solutions, and implement those agreements to the satisfaction of both parties.

 

Status
The CAO dispute resolution process is still ongoing.

 

Note: A CAO assessment does not entail a judgment on the merits of complaints.  Rather, the aim is to listen to people's concerns, understand the different perspectives, and determine what options are available to address the complaint through CAO's Dispute Resolution and Compliance functions.

 

Status as of September 18, 2018

Project information

Institution
IFC
Project Name & Number
Ingenio Montelimar 32253
Department
Global Manufacturing & Services
Company
Corporacion Montelimar SA
Sector
Agribusiness
Region
Latin America & the Caribbean
Country
Nicaragua
Environmental Category
A
Commitment
$15 million A loan

Case Tracker

Ombudsman

  • Eligible: Completed
  • Assessment Period: Completed
  • Facilitating Settlement: In Process

Compliance