The Environmental Impacts of International Finance Corporation Lending and Proposals for Reform: A Case Study of Conservation and Oil Development in the Guatemalan Petén

This Article presents a case study of lending by the International Finance Corporation (IFC), the private-sector lending arm of the World Bank Group, in the oil and gas sector in Guatemala. The case study emphasizes the need for additional environmental reform at IFC. With two separate loans in 1994 and 1996, IFC supported the activities of a small international oil company that was operating within a national park in the northern Guatemalan Petdn, an area of rich tropical forests and globally important wetlands. The company\u27s operations had been grandfathered in to the park upon its creation in 1990. Funding from IFC was used to construct a pipeline from the oil field in the park to a refinery outside of the park. The crux of the authors\u27 findings is that the pipeline should have been constructed to follow the path of an existing road, rather than along the chosen route that crosses significant stretches of primary tropical forest and that opened a new right-of-way into a park already facing continued pressure from colonization. The authors conclude that a stronger set of IFC lending policies, combined with a better environmental impact assessment and more extensive public consultation, would have led to a less environmentally damaging outcome. Although the authors acknowledge the complex questions about the role of governments, development agencies, the private sector, conservation organizations, and local communities raised by this issue, they focus on the narrow subject of IFC\u27s role in this matter, stressing the need for a reform agenda at that institution

Great Apes and Biodiversity Offset Projects in Africa: The Case for National Offset Strategies

The development and private sectors are increasingly considering “biodiversity offsets” as a strategy to compensate for their negative impacts on biodiversity, including impacts on great apes and their habitats in Africa. In the absence of national offset policies in sub-Saharan Africa, offset design and implementation are guided by company internal standards, lending bank standards or international best practice principles. We examine four projects in Africa that are seeking to compensate for their negative impacts on great ape populations. Our assessment of these projects reveals that not all apply or implement best practices, and that there is little standardization in the methods used to measure losses and gains in species numbers. Even if they were to follow currently accepted best-practice principles, we find that these actions may still fail to contribute to conservation objectives over the long term. We advocate for an alternative approach in which biodiversity offset and compensation projects are designed and implemented as part of a National Offset Strategy that (1) takes into account the cumulative impacts of development in individual countries, (2) identifies priority offset sites, (3) promotes aggregated offsets, and (4) integrates biodiversity offset and compensation projects with national biodiversity conservation objectives. We also propose supplementary principles necessary for biodiversity offsets to contribute to great ape conservation in Africa. Caution should still be exercised, however, with regard to offsets until further field-based evidence of their effectiveness is available

Sites in Africa where private sector or development projects are seeking to use offsets and compensation projects to counterbalance residual negative impacts to great apes and their habitat.

<p>Sites include (1) the Simandou Project in the Republic of Guinea, (2) the Global Alumina Project (GAP) in the Republic of Guinea, (3) the Bumbuna Hydroelectric Project (BHP) in Sierra Leone, and (4) the Lom Pangar Dam in the Republic of Cameroon.</p

Summary of predicted project impacts on great apes and proposed mitigation measures.

<p>Summary of predicted project impacts on great apes and proposed mitigation measures.</p

Publicly available documentation for each site.

<p>Publicly available documentation for each site.</p

Summary of project’s implementation of international best practice principles for biodiversity offsets with respect to great ape conservation.

<p>Summary of project’s implementation of international best practice principles for biodiversity offsets with respect to great ape conservation.</p