Nicaragua: Condor Gold PLC-01/Santa Cruz de la India

Date Filed
06 Jul 2018
Status
Closed
Phase
Compliance
Country
Nicaragua

Case Tracker

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

Complaint Overview

Complainant

11 individuals with the support of Centro Alexander von Humboldt, Centro Nicaraguense de Derechos Humanos (CENIDH), and Center for International Environmental Law (CIEL)

Concerns

Compliance with IFC Performance Standards, water quality and quantity, lack of consultation and information disclosure, potential impacts to biodiversity, risk of seismic activity, risk of displacement

Cross-Cutting Issues
Risk Management Resource Efficiency Community Health and Safety Land Resettlement Biodiversity Land Water Climate Change Impacts Children Women Social Order / Conflict Violence / Abuse Access to Information Policy

Project Information

Region
Latin America & the Caribbean
Institution
IFC
Name & Number
Condor Gold Plc. 32519
Company
Condor Gold Plc
Sector
Mining, Oil, Gas and Chemicals
Department
Other
Category
B
Commitment

Equity up to US$ 10 million

Synopsis

Project Overview

According to IFC’s disclosures, Condor Gold is a dual listed AIM and TSX junior exploration company based in London, and focused on gold exploration in Nicaragua. The Company holds a total of 386.26 km2 of licensed concessions in Nicaragua, with eight concessions that comprise La India, the company’s flagship project. Condor holds its Nicaraguan concessions through two wholly owned subsidiaries incorporated in Nicaragua (Condor S.A. and La India Gold S.A.). IFC’s equity investment in Condor is to support its exploration program at La India, and to fund studies required to advance the La India Project from Pre-Feasibility Study to Bankable Feasibility Study. The project is classified as Category B, denoting potential limited adverse environmental and social risks.

Complaint

In July 2018, CAO received a complaint from eleven community members residing in Santa Cruz de la India, supported by the Centro Alexander von Humboldt, Centro Nicaraguense de Derechos Humanos (CENIDH), and Center for International Environmental Law (CIEL).

The complaint claims that Condor Gold’s La India project is in violation of national and international laws, and IFC’s Performance Standards and Access to Information Policy. It also raises concerns regarding actual and potential social and environmental impacts including, lack of consultation and information regarding the project, depletion of underground water sources and reduced access to water for part of the affected community, risk of involuntary displacement, risk of seismic activity, and potential impacts to biodiversity and the ecosystem. The complaint also cites the criminalization of community actions in response to the project. 

CAO Action

CAO found the complaint eligible for further assessment in August 2018. During CAO’s assessment, while the company expressed their openness to dispute resolution, the complainants conveyed to CAO that they wished for the complaint to be addressed by CAO’s Compliance function. Due to the lack of consensus amongst the parties to engage in a CAO dispute resolution process, which is voluntary, the complaint was referred to CAO’s compliance function, in accordance with CAO’s Operational Guidelines.

A compliance appraisal report was released on October 3, 2019. The compliance appraisal identified questions as to the adequacy of IFC’s pre-investment E&S review of the project, and whether IFC had a reasonable expectation that the project would be able to meet the requirements of the Performance Standards. In particular, CAO noted that IFC’s review was limited to exploration activities, and did not include screening of potential future impacts of a mine, including some that may have constituted red flags in terms of the client’s ability to meet IFC E&S standards during mine development, construction and operation. However, IFC picked up a number of these issues early in its supervision, including the potential relocation of the La India village and economic displacement of artisanal miners. CAO acknowledged that IFC expressed concerns to the client around issues relevant to the CAO complaint. These concerns were communicated by IFC management to the client on several occasions.

During the period of IFC financing, the client undertook activities that are preparatory to the construction of a mine. The complainants’ main areas of concerns related to potential future impacts of mining activities on the environment, their homes and livelihoods. IFC fully divested from the project in June 2019 and has no ongoing commercial relationship with the client. Challenges in ensuring the effective application of IFC’s E&S standards to the project contributed to this decision.

In this context, CAO concluded that IFC’s approach to the review and supervision of this project in relation to the issues raised in the complaint, did not meet the threshold of raising substantial concerns regarding E&S outcomes and/or issues of systemic importance to IFC that would warrant a compliance investigation. In accordance with its Operational Guidelines, CAO has thus decided to close this case.

Status

The case was closed in October 2019 after compliance appraisal.

Status as of October 3, 2019

Case Documents

  • Dispute Resolution

    Complaint
    Complaint
    Mar 01, 2019
    English
    Complaint
    Assessment Report(s)
    CAO Assessment Report
    Mar 01, 2019
    English
    CAO Assessment Report
    CAO Assessment Report
    Mar 01, 2019
    Spanish
    CAO Assessment Report
    IFC Response to CAO Assessment Report
    Mar 01, 2019
    English
    IFC Response to CAO Assessment Report
  • Appraisal Report(s)
    CAO Compliance Appraisal
    Sep 30, 2019
    English
    CAO Compliance Appraisal
    CAO Compliance Appraisal
    Sep 30, 2019
    Spanish
    CAO Compliance Appraisal