A summary of the Independent Complaints Mechanism’s findings on Barro Blanco and FMO-DEG management response

The Dutch and German development banks, FMO and DEG, each invested 25 US$ million in the Barro Blanco hydropower project in Panama. In May 2014, the Movimiento 10 de Abril (M-10), representing indigenous peoples directly affected by the project, with the support of Both ENDS and SOMO, filed the first complaint to the Independent Complaints Mechanism (ICM) of the FMO and DEG.  The complaint alleges that the Barro Blanco dam will affect part of the Ngöbe-Buglé indigenous territory, flooding their homes, schools, and religious, archaeological, and cultural sites. Despite national and international human rights obligations, the Panamanian government, GENISA and the banks failed to obtain the free, prior, and informed consent (FPIC) of the Ngöbe-Buglé before the project was approved.  This complaint was the first complaint to be admitted by FMO-DEG’s Independent Complaints Mechanism (ICM).  Last week, almost a year after the complaint was submitted, the ICM issued a critical investigation report on FMO and DEG’s compliance with their environmental and social policies with regard to their investment in the Barro Blanco dam.

As part of their Environmental and Social Governance policies, FMO and DEG require their clients to comply with the International Finance Corporation’s Performance Standards (PS) on Environmental and Social Sustainability. The ICM finds that the banks were not in the position to assure themselves that the Barro Blanco was fully compliant with Performance Standards 1 (on Social and Environmental Assessment and Management Systems), 5 (Land Acquisition and Involuntary Resettlement), 6 (Biodiversity Conservation and Sustainable Natural Resource Management), 7 (Indigenous Peoples) and 8 (Cultural Heritage).

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