Colombia: Eco Oro-01/Bucaramanga

Date Filed
13 Jun 2012
Status
Closed
Phase
Compliance
Country
Colombia

Case Tracker

Eligibility
Eligibility
Assessment
Transferred
Assessment
Dispute Resolution
Compliance
Appraisal
Investigation
Monitoring
Closed
CURRENT Status
Closed (COMPLIANCE)

Complaint Overview

Complainant

Comité por la Defensa del Agua y el Paramo de Santurbán, national, and international NGOs

Concerns

Water quality and quantity, environmental degradation, project due diligence, community consultation and information disclosure

Cross-Cutting Issues
Risk Management Resource Efficiency Community Health and Safety Land Resettlement Biodiversity Land Water Climate Change Impacts Social Order / Conflict Violence / Abuse Loss of Livelihoods Industry Standards and Certifications

Project Information

Region
Latin America & the Caribbean
Institution
IFC
Name & Number
Eco Oro 27961
Company
Eco Oro Minerals Corp
Sector
Mining, Oil, Gas and Chemicals
Department
Other
Category
B
Commitment

US$9.6 million

Synopsis

Complaint

Eco Oro Minerals Corp (formerly Greystar Resources Ltd) is a publicly listed junior mining company headquartered in Canada. Eco Oro owns 100% of the Angostura gold and silver exploration project near Bucaramanga, in the Santander region of Colombia. IFC is supporting the feasibility study, environmental and social impact assessment (ESIA) and other needed ground works to prepare for the project development stage.

In June 2012, CAO received a complaint from local civil society committees in Bucaramanga, with the support of several international NGOs.  The complainants raise concerns about the development of the gold mine in the Santurbán Páramo. They contend that the mine development would have adverse impact on the quality and quantity of drinking water downstream and around the páramo, which is the major source of water for the Bucaramanga region. The complainants are also concerned about what they see as irreparable environmental damage to the unique ecology of the páramo.  Furthermore, the complainants are of the opinion that the project is in violation of IFC’s social and environmental policies and should not have received project approval.

The complainants originally requested that CAO keep their identities confidential. Subsequently, the complainants decided to publicly release the complaint and their identities.

 

CAO Action

CAO found the complaint eligible for further assessment in July 2012.  A CAO team conducted a field trip in October 2012 to meet with the relevant stakeholders and discuss options for addressing the issues in the complaint.  

During the assessment process, CAO understood from the complainants that pursuing a dispute resolution process was not an option at this point in time. CAO released its Assessment Report, which is available at the below links in English and Spanish, along with IFC's response. The case was transferred to CAO’s compliance function for appraisal in November 2012. CAO's Operational Guidelines provide for a compliance appraisal in order to decide whether an investigation of IFC's role in the project is warranted. 

On the basis of the Compliance Appraisal, which was completed in June 2013, CAO conducted a compliance investigation into IFC’s investment in Eco Oro. As the possibility for a discussion of outcomes is limited by the current stage of development of the project, the CAO investigation focused on IFC’s approach to E&S review and supervision. 

CAO’s compliance investigation was finalized in June 2016, and was released publicly on August 25, 2016. The investigation report makes findings in relation to: 

Environmental and Social Risk Assessment and Categorization

When considering its investment, IFC analyzed the E&S impacts of the client’s immediate planned activities—to complete a bankable feasibility study and prepare an E&S Impact Assessment (ESIA) for the proposed mine. IFC did not analyze the E&S risks beyond this phase. This approach allowed IFC to take an equity stake in a company that was planning to develop a mine for which the potential to comply with IFC’s E&S policies was uncertain and potentially challenging due to the location’s environmental sensitivity. IFC’s approach to categorizing the risk profile of this investment was also based on the client’s immediate planned activities, which contributed to gaps between IFC’s actions and community expectations. 

IFC Assessment of Client Commitment and Capacity

IFC’s project documentation did not promptly capture regulatory actions that were relevant to assessing the client’s capacity and commitment, including information about an investigation carried out by the regional environmental authority from 2006 to 2008. In 2010, the client was fined for breaches of environmental requirements related to acid water treatment, soil erosion and slides, but again IFC did not adequately capture this information. 

Consultation and Disclosure

IFC considered that the client had support of local communities for its immediate planned activities, and required its client to develop a stakeholder engagement process as the mine progressed towards construction. As the project proceeded, IFC identified significant gaps in the company’s stakeholder engagement strategy, and advised its client with the objective of strengthening community support. The IFC approach to project E&S review and categorization did not reflect the affected community members’ understanding of risks associated with the project (which included potential impacts from construction and operation of a mine). 

Compliance with National Law

IFC was aware of the project’s proximity to the páramo at the time of its investment, and recognized that the project would need to abide by the national law as it applied to the area. At the time of IFC’s investment in 2009, the legal restrictions related to the páramo were unclear, and its specific boundaries had not been determined. 

Community Health, Safety and Security 

IFC’s assessed security risks during its appraisal and recommended to the client that it implement new measures, including new legal arrangements to reflect the Voluntary Principles for Security and Human Rights (VPSHR). However, there was not sufficient information to establish whether IFC assured itself of the company’s compliance with PS4 requirements on security, in particular on the progress on implementing the VPSHR. 

Biodiversity Conservation

In its documentation for the project, IFC did require its client to complete an ESIA consistent with the Performance Standards, including a biodiversity assessment. IFC’s supervision did not show substantive progress on the completion of necessary studies, such as an adequate biodiversity baseline study or critical habitat assessment. IFC has not pursued a remedy, but has made subsequent investments in the company. 

CAO completed a monitoring report in relation to this investigation in June 2018. Overall, CAO found that IFC’s response had only partially addressed the investigation findings. Nevertheless, CAO has decided to close the case considering that IFC has divested from the company, IFC’s decision not to engage in a project-level response with its former client or the complainants, and given that mine development has been suspended. 

Status

CAO closed the case in June 2018. The final monitoring report is available in English under “View Documents” below. A Spanish translation of the report will be available in due course.

Status as of June 28, 2018

Case Documents

  • Dispute Resolution

    Complaint
    Queja presentade ante la CAO
    Jun 13, 2012
    Spanish
    Queja presentade ante la CAO
    Complaint to the CAO
    Jun 13, 2012
    English
    Complaint to the CAO
    Assessment Report(s)
    Assessment Report
    Nov 01, 2012
    English
    Assessment Report
    Informe de Evaluacion Ombudsman
    Nov 01, 2012
    Spanish
    Informe de Evaluacion Ombudsman
    IFC's Formal Response
    Nov 26, 2012
    English
    IFC's Formal Response
  • Appraisal Report(s)
    CAO Compliance Appraisal of IFC
    Jun 28, 2013
    English
    CAO Compliance Appraisal of IFC
    Audit Report(s)
    Terms of Reference for Compliance Investigation
    Jul 26, 2013
    English
    Terms of Reference for Compliance Investigation
    CAO CommuniquÃ, Eco Oro Investigation Report
    Aug 25, 2016
    English
    CAO CommuniquÃ, Eco Oro Investigation Report
    CAO Investigation Report
    Jun 30, 2016
    English
    CAO Investigation Report
    CAO Investigation Report
    Jun 30, 2016
    Spanish
    CAO Investigation Report
    IFC's Response to CAO Investigation Report
    Aug 05, 2016
    English
    IFC's Response to CAO Investigation Report
    Monitoring Report(s)
    CAO Compliance Monitoring Report
    Jun 15, 2018
    English
    CAO Compliance Monitoring Report