For the first time, a case brought before the Inter-American Development Bank’s (IDB) Independent Consultation and Investigation Mechanism (MICI) opens the possibility for the bank to responsibly exit financing granted to hydroelectric projects, after concluding that the investment was made without acknowledging the presence of indigenous peoples, thus violating the bank’s operational policies.

Washington DC, United States. The Independent Consultation and Investigation Mechanism (MICI) of the Inter-American Development Bank Group concluded that, within the framework of the financing granted to the Generadora San Mateo and Generadora San Andrés hydroelectric projects—located in the Yich K'isis micro-region, territory of the Native Maya Chuj Guatemala Nation—IDB Invest ignored the presence of indigenous peoples in the area by failing to verify their existence, thus ruling out the implementation of safeguards to protect them.

MICI also established that the Bank failed to comply with several of its internal policies and, based on this, opened the possibility for a responsible withdrawal of the investment.

These and other findings are contained in the case’s Final Report, approved by the IDB Board of Executive Directors, in which MICI resolved the complaint filed in 2018 by the affected communities—represented by the Ancestral Plurinational Government of the Maya Q'anjob'al, Maya Chuj, Maya Akateko, Maya Popti and Mestiza Native Nations; the Interamerican Association for Environmental Defense (AIDA); and the International Platform Against Impunity.

Of the 29 recommendations issued in the report: 10 are aimed at institutional changes to avoid non-compliance with environmental and social safeguards in other IDB Invest operations; 18 are focused on implementing specific corrective actions to redirect the San Mateo and San Andrés projects; and one of them, number 29, opens the possibility for IDB Invest to withdraw its investment from the hydroelectric plants.

"In case of exit from the Projects, IDB Invest should adopt the necessary provisions to ensure a responsible exit from Operations," the report reads.

"Recommendation 29 is the most consistent with the findings of the Final Report and the one that best responds to the request that the communities have made since the beginning of the process: it is unsustainable for IDB Invest to finance projects that were developed in indigenous territories while ignoring their presence," said Liliana Ávila, senior attorney at AIDA. "In an effective accountability process, the bank must be held responsible for its mistakes and remedy the damage it has caused."

This represents a milestone for the region, as it is the first time that MICI has made such a consistent recommendation regarding projects under investigation. The recommendation demonstrates improvements in the bank's accountability processes, increases opportunities for communities affected by IDB Group-financed projects, and sets a precedent for better financing practices.

"The report sets a precedent for accountability in the region. It puts MICI and the compliance verification phase one step closer to responding to the requests and demands of affected communities," said Carolina Juaneda, Latin America Coordinator for the Bank Information Center.

"Recommendation 29 is a novel and encouraging development, as it puts the requests and demands of the communities that have been negatively affected by the projects at center stage. Although there are still many challenges to continue working on, the report undoubtedly represents a clear and powerful step toward strengthening accountability in the region."

For the communities, it is through full compliance with Recommendation 29 that their primary request may finally be answered.

The bank’s divestment from the dams must incorporate a responsible, participatory and comprehensive withdrawal plan that respects the good faith consultation carried out in 2009, in which the communities decided not to carry out the such projects in their territory.

The plan must include: 1) recognition and restoration of social and cultural damages caused; 2) respect for the rights of indigenous peoples and recognition and restoration of the damages generated; 3) recognition and restoration of the damages generated by the differentiated impacts on women; and 4) prevention, mitigation and restoration measures from an environmental perspective.

"The measures proposed in Recommendation 29 should have been part of the project planning phase. By not having considered them in its initial phase, a series of impacts and damages to the community were generated," stated Mara Bocaletti, Regional Director of the International Platform Against Impunity.

"Only a responsible exit process by the investors will be able to restore the conditions of credibility towards the accountability mechanisms of international financial institutions."

Another of the communities' expectations is that the IDB Group will guarantee their access to information and participation in the following phases of the process, which would allow the effective guarantee of their rights and the improvement of the bank's protection strategies.

"This report is very valuable because it recognizes the impacts generated by the projects and validates the complaints we have been making for years. It is an important report not only for us, but for all indigenous peoples in Guatemala," said Lucas Marcos, local authority. "The bank's responsible withdrawal from the projects will allow us to maintain our rivers and access to water for us and our families."

In addition to non-compliance with the IDB's policy on indigenous peoples, MICI concluded that the development of the San Mateo and San Andres projects caused differentiated impacts on women, environmental impacts, increased conflict, and harm to the social fabric. It also found that the bank did not guarantee access to information for the communities.

"It is a serious wrongdoing that the bank has prioritized the advancement of these projects despite failing to comply with its internal requirements, to the detriment of our life as communities and ignoring our presence as indigenous peoples," said Rigoberto Juarez, Coordinator of the Plurinational Government of the Maya Q'anjob'al, Maya Chuj, Maya Akateko, Maya Popti and Mestiza indigenous nations.

"Our individual and collective rights cannot be undermined in the face of private interests; consequently, a responsible withdrawal is the least the bank can do in the face of the magnitude of the damages caused. We hope that this will not happen again in other cases, and that the bank will assume its responsibility to respect the rights of indigenous peoples."

The outcome of this complaint, as well as the international attention surrounding the case, is the result of a process of organization and resistance undertaken by the Mayan men and women of Yich K'isis upon being faced with of the imposition of large-scale hydroelectric projects, developed without due diligence and without consultation. For years, they have been demanding respect for their ways of life, and the value they hold for their water and their culture.

The MICI report, apart from supporting the allegations of the affected communities regarding the violations of their rights, also sets an important precedent for Guatemala. This decision should be taken into account on a national level to address the countless irregularities and rights violations denounced throughout the country in the context of the implementation of mega-development projects, specifically large dams.

press contacts

Victor Quintanilla (Mexico), AIDA, [email protected], +525570522107

Camila Castellanos, International Platform Against Impunity, [email protected]