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Who Pays the Costs of Development?

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Who Pays the Costs of Development? Who Pays the Costs of Development? Who Pays the Costs of Development? Common patterns and trends of rights violations in hydroelectric projects financed by Multilateral Development Banks in Guatemala Published by: 1 Who Pays the Costs of Development? Common patterns and trends of rights violations in hydroelectric projects financed by Multilateral Development Banks in Guatemala Published by Jotay: Acting Together Program, Plataforma Internacional contra la Impunidad, and Bank Information Center in January 2021. The research and publication of this report was made possible by the generous support of the Jotay: Acting Together Program. The views and conclusions expressed in this publication are those of the organizations publishing the report alone and do not necessarily reflect opinions of other individuals and organizations that are mentioned in the report. Authors: Anne Bordatto and Carolina Juaneda Additional research done by Anne Bordatto Editing Team: Johanna van Strien, Mara Bocaletti, Claire Weisner, and Ana Avalos. Cover picture: A community member of the Ixquisis micro-region regrets the quality of the water of the Negro River due to the work of the hydroelectric plant in February 2017. Credits: Protection International. Who Pays the Costs of Development? Jotay: Acting Together Program is a joint program in Guatemala of five European ecumenical organizations: Norwegian Church Aid, Christian Aid, Act Church of Sweden, Bread for the World and the Lutheran World Federation. We accompany organizations, groups and social movements of civil society in Guatemala, including indigenous peoples, women, and faith-based organizations, in their efforts to establish an inclusive and sustainable society, with policies that guarantee respect for human rights. Plataforma Internacional contra la Impunidad is an alliance of European and Central American civil society organizations that support and promote advocacy processes for the full enforcement of individual and collective human rights, with the vision of building stronger and fairer societies in Central America. It is based in Geneva. BIC is an independent, non-profit, non-governmental organization that advocates for transparency, accountability, sustainability, and inclusion in development finance. BIC partners with civil society in developing and transition countries to monitor and influence the policies and operations of the World Bank Group and other international financial institutions (IFIs). In partnership with international, regional, and local CSOs, BIC conducts research and advocacy aimed at reforming and improving IFI policy and practices. 3 Who Pays the Costs of Development? Table of contents List of abbreviations and acronyms 5 Executive Summary 6 Energy policy, hydroelectric dams, and resistance in Guatemala 8 1. Canbalam Hydroelectric Plant 11 Table N1: IFC and Financial Intermediaries 11 2. Santa Rita Hydroelectric Plant 12 3. Ixquisis: San Mateo and San Andrés Hydroelectric Plants 13 Table N2: Chixoy Hydroelectric Plant 13 Are socially and environmentally sustainable hydroelectric plants a possibility? 14 Social and Environmental Safeguards: The Performance Standards of the IFC 15 Table N3: Accountability Mechanisms, CAO, and MICI 16 Risks and impacts identified by the project affected communities and the grievance 17 processes at the Accountability Mechanisms 1. Violations of the rights of Indigenous Peoples 17 2. Lack of access to information, free, prior, and informed consultation and consent. 18 3. Rupture of the social fabric and increase in social conflict 21 4. Community Safety: Retaliation Against Communities 23 5. Differentiated harm to women 27 6. Environmental risks and impacts 28 7. Fraudulent land purchase 31 Table N4: Governments, corruption, and denounced projects 32 8.Damage and destruction of sacred and ceremonial sites of Maya indigenous 33 Lessons Learned 34 Table N5: Alternative to the imposed energy model: Community proposals 38 for energy sovereignty Conclusions 40 Recommendations 43 Bibliography 46 4 Who Pays the Costs of Development? List of abbreviations and acronyms IDB Inter-American Development Bank WB World Bank MDB Multilateral Development Bank CAO Compliance Advisor Ombudsman CEDER Center for Rural Development CIFI Inter-American Corporation for Infrastructure Financing CPLI Free Prior and Informed Consent EIA Environmental Impact Assessment FI Financial Intermediary WBG World Bank Group IFC International Financial Corporation LRIF Latin Renewables Infrastructure Fund, L.P. MENR Ministry of Environment and Natural Resources MEM Ministry of Energy and Mines MICI Independent Consultation and Investigation Mechanism MIGA Multilateral Investment Guarantee Agency MW Megawatts PS Performance Standards PAC Civil Self-Defense Patrols NCP National Civil Police ESMS Environmental and Social Management System 5 Who Pays the Costs of Development? Executive Summary The aim of this study is to analyze patterns and trends of syste- fabric in the territories. Companies sought acceptance of matic human rights violations in three hydroelectric projects fi- the projects using patronage practices, offering families nanced by Multilateral Development Banks (MDBs) in Guatemala: certain benefits in exchange for their support without in- (1) Canbalam in Santa Cruz Barillas (2011), (2) Santa Rita in Corbán forming them about the risks and impacts that the proj- (2012), and (3) the Ixquisis hydroelectric complex (2013), which in- ects may have had. When discussion roundtables organized cludes the projects of Generadora San Mateo and Generadora San by government entities were implemented, they served Andrés in the microregion of Ixquisis1 financed by the Internation- to identify and criminalize opposition leadership to the al Finance Corporation (IFC), the private lending arm of the World project. Bank Group and the IDB Invest, the private arm of the Inter-Amer- ican Development Bank, respectively. 4. Community Safety: Retaliation Against Communities. In the three cases analyzed, the companies and governments The project affected communities of the three hydroelectric facing community organization and actions in opposition to projects in Guatemala submitted complaints to the accountabil- the projects, responded with attacks (making use of private ity mechanisms of those Banks (Compliance Advisor Ombudsman and public security forces) on the life, integrity, and free- -CAO- and the Independent Consultation and Investigation Mech- dom of those who opposed the construction of hydroelec- anism -MICI-) claiming a number of social and environmental tric plants. harms and impacts, as well as human rights violations that are re- lated to non-compliance with IFC’s Performance Standards (PSs)2 5. Differentiated harm to women. In all of the cases, little or and lack of correct supervision of the implementation of the PSs. no assessment of gender impacts and risks was performed during the environmental and social impact assessment In the three cases, patterns of systematic rights violations of the processes. Nor were complementary studies, such as com- project-affected people and harm to the environment are evident prehensive gender assessments, carried out. Therefore, no and repeated: differentiated risks and impacts on women were identified to avoid, prevent, or mitigate them. Nor were measures es- 1. Violations of the rights of Indigenous Peoples. Self-iden- tablished to prevent gender violence caused by the influx of tification as an indigenous people has been denied to the outside workers into the construction area. population of the microregion of Ixquisis, granting the proj- ect a lower social and environmental risk category. In the 6. Environmental risks and impacts. The hydroelectric proj- other projects, the specific impacts on Indigenous Peoples ects were approved with numerous information gaps re- were not taken into account, and the right to free, prior and garding the impact on water flows, which makes it difficult informed consent (FPIC) was not respected. to assess their technical feasibility or to know the exact ex- tent of the impact of the work. The deficiencies in the envi- 2. Lack of access to information, meaningful consultations, ronmental and social management and monitoring systems and FPIC. The affected communities report that in the three make it impossible to avoid or minimize impacts on the envi- cases the right to information and the right of Indigenous ronment or to make sustainable use of resources, in partic- Peoples to free, prior, and informed consent and consulta- ular water. As a result, there are impacts on biodiversity, as tion has not been fulfilled. well as, the maintenance of ecosystem services. 3. Rupture of the social fabric and increase in social 7. Fraudulent land purchase. The communities claim fraudu- conflict. The projects have eroded the community’s social lent purchase of land. This action produced the closure of 1 For the aim of this study, we are considering the projects Generadora San Andrés and Generadora San Mateo as one project since both hydroelectric projects are part of a large hydroelectric complex in the microregion of Ixquisis. Both projects are developed by the same implementing company, in the same location, and with the same environmental and social impacts and risks. Also, the request to the MICI describes the situation of residents of various communities in northern Guatemala, in the area where the Generadora San Mateo and Generadora San Andrés Hydroelectric Power Projects are located. 2 The three projects
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