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Urgent Call for Conditionalities on New IFC and EBRD Loan to Oyu Tolgoi Mine

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Joint Statement

December 9, 2024

We, the undersigned civil society organizations (CSOs) and representatives of herders from Mongolia, strongly condemn the International Finance Corporation (IFC) and European Bank for Reconstruction and Development (EBRD) in providing a $100 million loan each, to Oyu Tolgoi (OT). This decision blatantly disregards years of unresolved grievances, environmental harm, and the failure of OT to comply with IFC and EBRD’s safeguard standards, as well as widespread rejection from local herders, CSOs, and even the Mongolian government.

Unresolved Harms and Non-Compliance

OT has failed to address critical issues, including its commitments under the 2017 Herders Complaint Resolution Agreements and IFC and EBRD’s social and environmental safeguards. Longstanding issues include:

  1. Failures in completing Resolution Agreements: Herders continue to struggle to sustain their livelihoods and protect the environment, as the agreements resulting from CAO complaints remain incomplete. The Tripartite Council (TPC), tasked with implementing the 2017 Agreements, has failed to ensure meaningful involvement of herders in safeguarding their rights and livelihoods.
  2. Tailings Storage Facility (TSF) Seepage: Despite implementing a Remedial Action Plan (RAP) as required by lenders to address the seepage from tailings cell 1 (TC1), OT has neither adequately mitigated the seepage nor transparently disclosed its full extent. Recent data reveals worsening water quality, with Total Dissolved Solids (TDS) levels rising dramatically downstream.
  3. Pasture and Water Scarcity: The mine’s expansion plans threaten vital grazing lands and water resources. Springs that once supported herders’ livelihoods have dried up, forcing herders to compete for limited resources. Moreover, the Dugat-Khaliv river, a key water source for herders, has been diverted around TC2 in a diversion channel without capacity to convey flood-level flows during rainy periods, leading to significant water loss for downstream herders.
  4. Environmental Failures: OT consistently fails to meet the design goal of 64% tailings solid content, resulting in inevitable seepage from the additional pressure exerted by excess water in the tailings cell. This and other design inefficiencies directly lead to massive water wastage estimated at up to $1.46 million per year.
  5. Inadequate Community Engagement: Herders were not meaningfully consulted about the RAP or OT’s expansion plans, violating IFC and EBRD principles of transparency and participation.

Water Mismanagement and Wastage

OT’s operations exacerbate water scarcity through inefficient tailings management. Water wasted due to tailings solids being below design criteria results in significant financial and environmental costs:

  • From 2013-2017, OT achieved 56% solids (8% below design standard), wasting $1.46 million worth of water annually. From 2018-2024, OT achieved nearly 60% solids (4% below design standard) on average, meaning OT wastes $730,000 annually on replacement water. OT has approximately wasted $12.41 million since 2017 from losing 248.2 million liters of water.
  • Oyu Tolgoi (OT) must attain the highest percentage of solid content as specified by its design criteria, 64%, to effectively prevent water scarcity in the South Gobi Desert and ensure improved water access for herders. While lenders argue that the 60-64% range meets the standard, 2012 ESIA states that “Final concentrate will be thickened to 65% solids” which proves otherwise. The TSF operating consistently below 60% results in excessive water waste, posing severe risks to the fragile desert ecosystem and the livelihoods of herders who rely on limited freshwater resources. Achieving the 64% target is not merely an option but a critical necessity to minimize environmental harm, optimize resource use, and uphold OT’s responsibility to local communities.
  • This inefficiency compounds the structural weakness of tailings dams, necessitating costly redesigns and increasing the risk of catastrophic failure. Concerns Over Project Categorization and Political Risks We are deeply concerned that IFC and EBRD categorized OT’s expansion as a Category B project, despite its significant and irreversible impacts on herders and the environment. This misclassification downplays the scale of the risks, undermining proper oversight. Additionally, the Mongolian government is in a disagreement on additional financing that will add more debt, and the Mongolian Parliament Resolution #103 requires an independent audit of underground mine cost overrun which has not been disclosed. Approving new financing in such a contentious political and social environment poses significant risks to the project’s viability.

Recommendations and Conditionalities

IFC and EBRD must impose strict conditionalities on OT before any disbursements begin and ensure the conditionalities are placed in the lending agreement, including:

  1. Fulfillment of Past Commitments:
    • Include the 2017 Herders Complaint Resolution Agreements (HCRAs) in lenders’ compliance requirements and fully implement them.
    • Amend the RAP to include routine medical assessments for herders and their animals impacted by the contaminated water from the TSF seepage, and update Stakeholder Engagement Plan to involve the wider herder community impacted by the seepage.
    • Disclose all the important data from the attachments and annexes of the RAP.
  2. Water and Tailings Management Improvements:
    • Achieve the 64% as the highest solid content target for tailings as per the original ESIA.
    • Disclose the full extent of TSF seepage impacts, including chemical contamination and health risks.
  3. Protection of Herders’ Livelihoods:
    • Permanently halt land acquisitions that displace herders and prioritize using existing lease areas for future tailings cells.
    • Construct a permanent Dugat-Khaliv diversion channel based on maximum flood probabilities.
  4. Transparency and Meaningful Engagement:
    • Disclose all environmental and social impact assessments (ESIA) for expansion plans, implementation of the ESAP from the initial OT project loan, and OT Green Investment Plan.
    • Take actions to strengthen TPC functions through assessing TPC Charter and the implementation of the HCRAs
    • Ensure meaningful consultation with affected communities on all project aspects. This includes consultations on the expansion plans, environmental and social assessment related documents and strengthening of the Tripartite Council with valid herder representation as the body responsible to address herders’ concerns around the OT project.

The approval of new financing to OT without addressing these critical issues perpetuates harm to herders and the environment while eroding public trust in IFC’s and EBRD’s commitment to sustainable development. We call on IFC and EBRD to uphold their safeguards and suspend agreement signing and financing until OT achieves full compliance and fulfills its obligations to herders and the environment.

(Link to full statement in English and Mongolian)

Contact Information:
Sukhgerel Dugersuren, Oyu Tolgoi Watch, 976-99185828, otwatch@gmail.com
Battsengel Lkhamdoorov, Gobi Soil, 976-88705595, tsengel_5595@yahoo.com
Julio Castor Achmadi, Accountability Counsel, julio@accountabilitycounsel.org
Nina Lesikhina, Bankwatch Network, ninalesikhina@bankwatch.org

Signatories:
Gobi Soil, Mongolia
Oyu Tolgoi Watch, Mongolia
Center for Human Rights and Development, Mongolia
AFE, Mongolia
APPDO, Mongolia
CA NGO, Mongolia
GFS, Mongolia
MFSW, Mongolia
RwB Mongolia
SR NGO, Mongolia
SWA, Mongolia
SWB NGO, Mongolia
Accountability Counsel
CEE Bankwatch Network, Regional
Bank Climate Advocates, USA
Bank Information Center, USA
Both ENDS, the Netherlands
Center for Community Mobilization and Support, Armenia
Centre for Research and Advocacy, Manipur, India
Earth Thrive, UK/Serbia
Friends with Environment in Development (FED), Uganda
GAIA, Regional
Gender Action, USA
Green Advocates
Initiative for Right View (IRV), Bangladesh
International Accountability Project
INWOLAG
Kazakhstan International bureau for human rights, Kazakhstan
London Mining Network
LSD, Senegal
NGO Forum on ADB, Regional
Peace Point Development Foundation-PDF, Nigeria
Recourse
Samata & mm&P, India
Sinergia Animal, Brazil
Urgewald, Germany
Witness Radio, Uganda.

Source: Accountability Counsel.

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NGO WORK

World Bank Fails to Remedy Harms it Caused in Tanzania, Despite a Scathing Investigation by its Inspection Panel

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Oakland, CA – A scathing investigation by the Inspection Panel of the World Bank confirms the responsibility of the Bank in enabling the expansion of Ruaha National Park and related severe human rights abuses in Tanzania. The Panel confirms “critical failures” of the institution in the planning and supervision of the Resilient Natural Resource Management for Tourism and Growth (REGROW) project that resulted in “serious harm” to communities and violated Bank’s safeguards and operating procedures.1

“The independent Inspection Panel has confirmed the Bank’s grave wrongdoing which devastated the lives of communities. Pastoralists and farmers who refused to be silenced amidst widespread government repression, are now vindicated, and Bank’s efforts to sweep human rights abuses under the rug laid bare,” said Anuradha Mittal, Executive Director of the Oakland Institute.

The REGROW project enabled the government to expand the Ruaha National Park and move ahead with eviction plans – formalized in October 2023 through Government Notice 754. The Bank directly funded TANAPA rangers who committed atrocities with no oversight. In a drastic turn from its initial defense of the project, the financial institution has been forced to recognize “weaknesses in the project design, preparation, implementation, and Bank supervision.” As a result, at least 84,000 people from 28 villages face eviction while pastoralists and farmers have suffered gruesome human rights abuses by Bank-funded rangers and over US$70 million in economic damages.

In documents made available today, the Bank’s management concedes that by “enhancing TANAPA’s capacity to enforce the law,” the project “increased the possibility of violent confrontations” between rangers and villagers. The Inspection Panel found the Bank to have failed to adequately supervise TANAPA and to be unaware of the agency’s operating framework which permits the rangers to use “excessive force,” in violation of international standards. As documented by the Institute, over the course of the project, at least 11 individuals were killed by police or rangers, five forcibly disappeared, and dozens suffered physical and psychological harm, including beatings and sexual violence. The Bank provided TANAPA rangers with 21 different types of equipment to strengthen their patrolling capacity in the project area – including bush knives that the Panel found “could potentially have been used to burn or strip naked” Maasai women in a May 2023 incident.

The Panel’s report documents the timeline of Bank’s failure to act after April 2023, when it was informed by the Oakland Institute about the abuses and violations of its safeguards. Instead, the Bank disbursed over US$33 million to the project over the next year. REGROW task team leader, Enos Esikuri, even publicly stated that the Bank was “very impressed with what is going on,” when meeting with government agencies implementing the project. In April 2024, disbursements were finally suspended as a result of Tanzania’s noncompliance with Bank safeguards, followed by cancelation of the project in November 2024.

“The World Bank failed to act after it was informed of the harms it was financing. It continued disbursements for a full year, allowing cattle seizures and farm closures to drain family savings, kept children out of school, and let TANAPA rangers murder more innocent villagers with impunity. No institution is above law and can be allowed to get away with crimes like this,” said Mittal.

The Bank’s Executive Directors, however, approved the Management Action Plan (MAP) that does not address the Panel’s findings. In blatant disregard of the facts and official documentation, the World Bank has conveniently refused to acknowledge its responsibility in allowing the park expansion, which it falsely claims took place prior to the project.  It is this expansion of Ruaha National Park that triggered murders, evictions, and decimated livelihoods. The MAP delusionally places trust in the government that there will be no resettlement while it is already well underway. The impacted communities conveyed their rejection of the MAP to the Bank’s Board and called for it to remedy the harms caused by park’s expansion by reverting boundaries to the 1998 borders, suspending livelihood restrictions, resuming basic services, and providing justice and reparations for victims.

“Instead of remedying harms identified by the Panel, the MAP patches together two projects that have nothing to do with REGROW and are in no way designed to provide redress. The Action Plan put forward by the World Bank is beyond shameful. Suggesting that tens of thousands of people forced out of their land can survive with “alternative livelihoods” such as clean cooking and microfinance is a slap on the face of the victims. It demonstrates World Bank’s continued lack of remorse for harms financed by tax dollars and makes a mockery of its own accountability mechanism. Financing of this institution – responsible for misery of the poor instead of ending poverty – must be challenged,” commented Mittal.

Despite fear of retribution from Tanzania’s repressive regime, the impacted communities were relentless in demanding justice till they forced the cancellation of the project. “For years we have waited for the World Bank to fix the disaster it created. Today the Board of the Bank has undoubtedly failed in its own mission, but we will not give up, no matter what it takes,” said a community representative.

“The World Bank’s financing commitments for operations in Tanzania amount to US$10 billion. It does have the leverage and authority to fix this catastrophe. The United States, as the largest shareholder and funder of the World Bank Group, must also take responsibility,” concluded Mittal.

Source: oaklandinstitute.org

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NGO WORK

The World Bank Must Be Held Accountable for Harm Inflicted on Tanzanian Communities by Tourism Project

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The World Bank’s Board of Executive Directors is reviewing the Action Plan (MAP) prepared by the Bank’s management to address the findings of the Inspection Panel’s investigation into the Resilient Natural Resource Management for Tourism and Growth (REGROW) project in Tanzania. The investigation followed a complaint filed by the Oakland Institute in June 2023 on behalf of impacted communities. While the Panel’s findings and MAP will only be made public after its approval by the Board, the Oakland Institute urges the Bank to ensure that demands of impacted communities are addressed by the MAP to redress the harms caused.

“The Bank is responsible for the devastating crisis which has left over 84,000 lives hanging in the balance. For several years, using tax-payer dollars, it financed a project that blatantly violated its operating procedures and safeguards around human rights abuses and forced resettlement. It failed to act when made aware of the violations and continued pouring money into the project. Now the Bank cannot hide behind lame excuses and should fulfil the demands of communities harmed by its financing,” said Anuradha Mittal, Executive Director of the Oakland Institute.

Beacon marking expansion of Ruaha National Park to consume Luhanga village and make communities trespassers in their own lands
Beacon marking expansion of Ruaha National Park to consume Luhanga village and make communities trespassers in their own lands

The US$150 million REGROW project in Tanzania began in 2017 as a credit from the International Development Association (IDA). It was cancelled on November 6, 2024 after nearly two years of advocacy by the Oakland Institute and affected villagers to hold the Bank accountable for enabling the expansion of Ruaha National Park (RUNAPA) and supporting TANAPA, the paramilitary Tanzania National Parks Authority. Its rangers, equipped and financed by the Bank, are responsible for egregious human rights abuses, including extrajudicial killings, forced disappearances, and crippling livelihood restrictions that have terrorized local communities. Forced resettlement was initiated by the Tanzanian government in complete disregard for the Bank’s safeguards that require proper consultation and adequate compensation for affected communities.

“We call on the World Bank to fully assume its responsibility and urgently take these necessary steps to answer our pleas for justice. Our lives are on hold as the threat of eviction looms over us every single day. Our livelihoods have been undermined for years, our children are out of school, our farms sit fallow and our cattle are still being forcibly seized. We cannot continue living like this. The Bank must adequately address our past and ongoing suffering.”

Statement by impacted villagers in Mbarali, January 2025

In December 2024, the Institute worked with the impacted communities to carry out a thorough assessment on the ground to evaluate the consequences of the REGROW project. This research lays bare the devastation caused by the expansion of the park – formalized during the project in October 2023 through Government Notice 754. While the Tanzanian government claims only five villages are now inside RUNAPA, the December assessment found that 28 villages across 10 wards and home to over 84,822 people are located inside the area added to the park. As Tanzanian law forbids settlement in National Parks, these farmers and pastoralists will be forcibly evicted unless the expansion is revoked.

Livelihood restrictions enforced by TANAPA rangers have decimated these communities. Thousands of farmers have been barred from farming by the government. For 551 members of two farmer associations stopped from cultivating rice over the past three years, the economic loss is over US$66 million.1

Herders have also been massively impacted by the restrictions of access to pasture land, cattle seizures, and violence committed by TANAPA rangers. Since 2021, 52 pastoralist families have had cattle seized, losing 7,579 cattle for a value of over US$6 million.2 Since 2018, 39 families have paid the equivalent of US$212,175 in fines to recover 4,757 cattle confiscated by TANAPA within disputed park boundaries. These fees and fines have pushed families into destitution.

Over the course of the project, at least 11 individuals were killed by police or rangers, five forcibly disappeared, and dozens suffered physical and psychological harm, including beatings and sexual violence. Victims and their relatives have lost hope of seeing TANAPA rangers brought to justice while continued repression has stopped many from speaking out.

“The World Bank claimed the project was intended to benefit local communities; it has instead destroyed their lives. It must take responsibility for enabling violence and displacement and ensure that the expansion of the park is revoked,” concluded Mittal.

Impacted communities are demanding that the MAP address the following urgent issues:

  1. Removal of beacons placed marking the expansion of the park and to officially revert park boundaries to the 1998 borders established by GN 436a.
  2. Provide comprehensive compensation for damages incurred by livelihood restrictions and violence inflicted by TANAPA rangers, including:
    1. Value of fines paid by pastoralists to reclaim cattle illegally seized.
    2. Value of cattle auctioned.
    3. Compensation for the loss of agricultural production for three seasons (2023, 2024, 2025).
    4. Compensation for the victims of violence and killings by TANAPA.
  3. Establish a multistakeholder independent mechanism to oversee reparations.
  4. Restore social services to villages impacted by GN 754.
    1. Complete construction on Luhanga Secondary School and provide it with government teachers.
    2. Reopen Mlonga Primary School that was closed in October 2022.
    3. Ensure all villages located within GN 754 boundaries are provided with the power, water, and social services they are entitled to like other villages.

S0urce: oaklandinstitute.org

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NGO WORK

Business, UN, Govt & Civil Society urge EU to protect sustainability due diligence framework

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As the publishing date for the European Commission’s Omnibus Simplification Package proposal draws closer, a coalition of major business associations representing over 6000 members, including Amfori and the Fair Labor Association, has called on the EU to uphold the integrity of the EU sustainability due diligence framework.

Governments have also joined the conversation, with the Spanish government voicing its strong support for maintaining the core principles of the CSRD and CSDDD.

Their call emphasises the importance of preserving the integrity of the Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD).

These powerful business voices have been complemented by statements from the UN Working Group on Business & Human Rights, alongside 75 organisations from the Global South and 25 legal academics, all cautioning the EU against reopening the legal text of the CSDDD.

Additionally, the Global Reporting Initiative has urged the EU to maintain the double materiality principle of the Corporate Sustainability Reporting Directive, meanwhile advisory firm Human Level published a briefing exploring the business risks of reopening level 1 of the text.

Concerns stem from fears that reopening negotiations could weaken key human rights and environmental due diligence provisions, undermine corporate accountability and create legal uncertainty for businesses.

The European Commission’s Omnibus proposal is expected to be published on 26 February.

Source: Business & Human Rights Resource Centre

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