Compliance Advisor Ombudsman

Complaint

Chemplast Sanmar Limited (CSL) is part of the Sanmar Group of companies which proposed to locate a new plant on 100 acres of land of which 80 acres have been allotted by the State Industrial Promotion Corporation of Tamil Nadu (SIPCOT). According to IFC, the company selected the SIPCOT industrial area in Cuddalore because the land was barren, uninhabited, and unutilized.  The company applied to IFC for a loan to support the project.

In June 2002, Corpwatch India and the Cuddalore District Consumer Federation Council filed a complaint to the CAO on behalf of communities affected by the project in Cuddalore. The complaint cited concerns relating to IFC's Environmental Impact Assessment and lack of public consultation concerning the project. Specific concerns related to potential impacts the proposed project may have on fragile coastal environments and groundwater used by local communities. The complaint also questioned IFC's support for the project due to concerns about Persistent Organic Pollutants (POPs) linked to PVC manufacture and the World Bank's position on implementing the Stockholm Convention on Persistent Organic Pollutants (POPs treaty).

CAO Action

The CAO accepted the complaint and conducted an assessment of the issues raised. In July 2003, IFC terminated the 2001 and 2002 mandate letters (letters of agreement) with Chemplast Sanmar Limited given the significant time that had elapsed since the signing of the mandate letters and IFC’s appraisal process.  The CAO understood that a new IFC appraisal would be required for IFC to reconsider financing this or any other project with Chemplast. The termination of the mandate meant there was no longer a potential project between IFC and the sponsor.

With regards to broader issues of POPs and IFC’s funding of PVC manufacture related processes, the CAO awaited a position statement by IFC.

Status

The CAO formally closed the complaint in January 2005.