Located close to the Sinharaja Rainforest in southern Sri Lanka, the Rainforest Ecolodge is a joint venture eco-tourism project set up by several private sector companies in the tourism industry.  IFC, through its South Asia Enterprise Development Facility (SEDF), is providing technical advisory services to the project to obtain US Green Building Certification, and promote eco-tourism in the country.

In August 2009, a local NGO - Save the Sinharaja Campaign - filed a complaint with the CAO on behalf of residents of the Deniyaya Village in Sri Lanka.  The complainants raise concerns about how the project benefits local communities living in and around the area.   The complaint also raises environmental concerns, including felling of trees within the 1.6 kilometer prohibition zone and dammin of a river tributary which the complainants believe threatens the rich biodiversity of the Sinharaja Rainforest - a UNESCO World Heritage Site.

CAO Ombudsman conducted a field assessment in October 2009 and discussed the claimant's issues with local stakeholders. The company, IFC, and the claimant have accepted all of the recommendations of CAO's Assessment report, which include: public disclosure of environmental permits and impact assessments; a dialogue with government, IUCN and UNESCO to promote demarcation of the forest boundary; and preparation of a locally-owned community development plan.  In addition, IFC accepted recommendations to improve consideration of social and environmental risks on Advisory Services projects.