In 2015, IFC invested US$34.44 million in equity in the holding company “Joyville Shapoorji Housing Private Limited”, established by the Shapoorji Pallonji Group to develop eight to ten affordable housing sub-projects across India.

In December 2020, CAO received a complaint from an individual concerning IFC’s investment in the Joyville Shapoorji Pallonji project. The complaint raised concerns about the alleged forcible and illegal acquisition of his farmland in Pune, India for the development of affordable housing units. It also cited pending legal disputes over ownership of the land.

In December 2020, CAO found the complaint eligible and initiated an assessment. The assessment was completed in October 2021 (Available in English). As the parties did not agree to engage in a voluntary CAO-led dispute resolution process, the case was transferred to CAO Compliance for appraisal of IFC’s E&S performance.

On March 16, 2022, CAO completed its compliance appraisal of IFC’s investment in Joyville Shapoorji Pallonji project. The appraisal concluded that several issues raised by the complainant merited further investigation, specifically with regard to IFC’s performance in applying its environmental and social requirements. In particular, CAO determined that the complainant’s allegations of project-related physical and economic displacement warranted a compliance investigation in relation to IFC’s application of Performance Standard 5 (PS5) on land acquisition and resettlement. The Appraisal Report is available in English.

At IFC’s request, and following consultation with the complainant, CAO deferred the compliance investigation to allow IFC and its client to implement an action plan to address the complainant’s concerns in line with IFC’s environmental and social standards. CAO established a monitoring framework and timeline for the deferral period and committed to releasing a public report on the outcomes once the period concluded.

At the end of the deferral period, CAO reviewed the information provided by IFC and consulted the complainant. Based on this review, CAO determined that the issues had not been substantially addressed. These issues included consideration of use and occupation of land, without a recognizable legal right, that was later used for project development. 

CAO concluded that there was value in proceeding with a compliance investigation to ensure accountability, institutional learning, and identification of potential remedial measures. The compliance investigation will provide an opportunity to examine indications of related harm, the application of PS5 requirements, and potential remedial solutions.

The Compliance Deferral Outcome Report and the Terms of Reference for CAO’s Compliance Investigation are available in English.