The Inter-American Development Bank Group (IDB Group) is uniquely positioned not only to support recovery efforts in Latin America and the Caribbean, a region hard hit by the pandemic, but also to do so with respect for people and the environment.

The IDB Group—composed of the IDB, which works with governments; IDB Invest, which collaborates with the private sector; and IDB Lab, the bank’s innovation laboratory— is the continent's most important development financing entity. In 2020, it approved a record US$21.6 billion for its 26 member countries in the region.

In addition to the challenge of leading the recovery of public finances, the current economic and social crisis represents an opportunity for the IDB Group to successfully face another major challenge: the adoption of operational policies that comply with international environmental and human rights standards, as well as improved accountability processes. This is fundamental to the role the Bank plays in the region, and has become even more relevant in the current context:

Regarding accountability and the evaluation of its current policies, it is important to consider that four hydroelectric projects financed by the IDB Group are or have been under scrutiny by the IDB's Independent Consultation and Investigation Mechanism (MICI) due to the impacts caused by their implementation in indigenous and rural communities in Guatemala, Chile and Colombia. These projects, financed by IDB Invest, have affected the livelihoods of those who live in their shadow.

AIDA—together with the International Platform Against Impunity and the Plurinational Government of the Q'anjob'al, Chuj, Akateko, Popti and Mestiza Nation—has supported members of the Mayan communities of the Ixquisis micro-region in Guatemala in the face of the destruction caused by two of these projects: the San Mateo and San Andres dams.

Personally, I’ve seen first hand the damages caused to the indigenous population. I’ve heard the fear and uncertainty in the voices of local women as they explained how their rivers were polluted, their children fell ill, and their lives forever changed.

“One day we will run out of water and we won’t be able to live,” a female indigenous leader from Ixquisis told me. “Our children will suffer.”

The women of Ixquisis have played a central role in the complaint presented before MICI, as a primary question at play centers on the supposed violation of the Bank’s operational policy on gender, which recognizes that development projects often have differential impacts on local women. For the women, the rivers are a vital element, since they enable access to fresh water and food, also playing a key role in their interactions with each other.

In the complaint, affected communities also denounced the projects’ lack of compliance with the Bank’s operational policies indigenous rights and the environment, and for the resulting damages. They argue that the company implementing the San Mateo and San Andrés dams acted without due diligence and violated the right to consultation and the free, prior and informed consent of affected indigenous peoples.

In fact, the implementation of the projects actually ignored the results of a good faith consultation, carried out in 2009, in which the majority of the local population decided they did not consent to the implementation of such mega-projects in their territory.

What’s evident is that the Bank’s capacity to supervise the projects it finances is limited and, despite meeting minimum standards, its operational policies are often ineffective. What’s more, spaces in which the Bank verifies compliance are reduced and the consequences for that non-compliance, uncertain.

Earlier this year, MICI published a report on Chile’s Alto Maipo hydroelectric project, finding that the dam violated several operational policies, including that on gender. Yet that report has come under scrutiny for failing to offer restitution measures for the ongoing damages incurred by affected communities.

In the coming months, the preliminary report on the Ixquisis case will be released. Affected communities hope that the recommendations it holds are reflective of the realities on the ground, and oriented toward the adoption of corrective measures, including the immediate divestment of financing.

With this case, the Bank has a key opportunity to demonstrate its commitment to accountability, as well as its openness to assess compliance with its own operational policies and to remedy the damages that failure to comply has caused to vulnerable groups. It’s also an opportunity for the entity to take preventive measures and lay the groundwork for changing its practices.

When he was elected president of the institution, Mauricio Claver-Carone promised to "act on priority issues in the region.” This includes an evaluation of any global context that affects the very development the IDB Group seeks to promote.

These days, that includes not just the current public health crisis, but also the global climate crisis, the serious situation facing environmental defenders, and resolving a number of pending complaints on gender equity and respect for indigenous rights.

The actions taken by the IDB Group as a result of the Ixquisis case may be the first step in establishing a fundamental precedent for the protection of human rights and the environment among international financial institutions, a contribution that is undoubtedly as, if not more, valuable than the economic one.