South Africa: Lonmin-02/Marikana

Date Filed
16 Jun 2015
Status
Open
Phase
Compliance
Country
South Africa

Case Tracker

Eligibility
Eligibility
Assessment
Assessment
Dispute Resolution
Mediation
Transferred
Compliance
Appraisal
Investigation
CURRENT Status
Investi3gation (COMPLIANCE)

Complaint Overview

Complainant

Local community members

Concerns

Air and water pollution, negative impact on living conditions

Cross-Cutting Issues
Labor Resource Efficiency Community Health and Safety Land Resettlement Informal Settlers Air Land Water Women Discrimination Unfulfilled Commitments Project Benefits

Project Information

Region
Sub-Saharan Africa
Institution
IFC
Name & Number
Lonmin 24803
Company
Lonmin plc
Sector
Mining, Oil, Gas and Chemicals
Department
Other
Category
A
Commitment

10 year A loan of $100 million, $50 million equity

Synopsis

Complaint

At the time of the complaint, IFC had an active Category A project with Lonmin Plc, a large platinum producer, for a multi-year expansion program of the company’s operations. The project consisted of the development, expansion, and mechanization of Lonmin’s South African mines; and the development of a comprehensive, large-scale community and local economic development program (LEDP). IFC’s investment in the project entailed a standby 10 year A loan of $100 million and an equity investment of $50 million. IFC completed its involvement in the project in January 2016.

In June 2015, CAO received a complaint from a local community organization and community members regarding Lonmin’s Marikana mine in North West Province, South Africa.  The complaint cites concerns about contamination of air and groundwater, and negative impacts on the living conditions of nearby communities, including on housing, water and sanitation, infrastructure and employment. The complaint also cites concerns about the project’s social and environmental commitments, IFC’s social and environmental due diligence, and non-compliance with national law.

CAO Action

CAO found the complaint eligible for further assessment in June 2015 and an assessment trip was conducted in August 2015. During the assessment, the parties agreed to engage in a CAO convened dispute resolution process. CAO subsequently held a series of bilateral meetings with the parties during 2016 to provide capacity building and information, and assist them in drafting and adopting a set of principles to govern the dispute resolution process. CAO also convened several joint meetings as part of the mediation.  However, in December 2016 the complainants decided to withdraw from the process citing lack of progress, and this decision was confirmed in March 2017.  In accordance with CAO’s Operational Guidelines, the case is being transferred to CAO's compliance function for appraisal.

In December 2017, CAO concluded its compliance appraisal. Considering the accounts of adverse impact provided by the complainants and the questions CAO identified in relation to IFC’s review and supervision of the project’s related aspects, CAO concludes that the complaint meets CAO's criteria for investigation.

Terms of reference for this compliance investigation were disclosed on January 16, 2018. English and Xhosa versions are available. All documents related to this case are available under the "Case Documents" section below.

Status

A compliance investigation has been initiated and will be conducted under the 2013 Operational Guideline. 

 

Status as of February 23, 2018

Case Documents

  • Dispute Resolution

    Complaint
    Complaint regarding Lonmin project
    Jul 01, 2015
    English
    Complaint regarding Lonmin project
    Assessment Report(s)
    Assessment Report- Lonmin-02
    Sep 01, 2015
    English
    Assessment Report- Lonmin-02
    IFC Formal Response - Lonmin-02
    Oct 15, 2015
    English
    IFC Formal Response - Lonmin-02
    Close-out Report(s)
    Conclusion Report
    May 01, 2017
    English
    Conclusion Report
  • Appraisal Report(s)
    Compliance Appraisal Report- Lonmin-02
    Dec 04, 2017
    English
    Compliance Appraisal Report- Lonmin-02
    Compliance Appraisal Report- Lonmin-02
    Dec 04, 2017
    Xhosa
    Compliance Appraisal Report- Lonmin-02
    Audit Report(s)
    Terms of Reference for Compliance Investigation of IFC
    Jan 16, 2018
    English
    Terms of Reference for Compliance Investigation of IFC
    Terms of Reference for Compliance Investigation of IFC
    Jan 16, 2018
    Xhosa
    Terms of Reference for Compliance Investigation of IFC