By Toby McIntosh
The Green Climate Fund is keeping secret a report critical of a controversial project in Nicaragua.
Well, partially secret.
The GCF Board decided not the share the report with the indigenous communities whose concerns triggered a 14-month investigation by the GCF’s Independent Redress Mechanism (IRM).
However, the Board has given the IRM report to the GCF staff, the Nicaraguan government and another financer of the project. And asked for their comments (nonpublic) as the Board reviews the IRM report (in closed meetings).
The uneven handling of the IRM report has drawn objections from the indigenous communities, who have requested “an equal opportunity to participate.”
The Board’s actions also have sparked a strong rebuke from Lalanath de Silva, the former head of the IRM. “This is a basic violation of fundamental due process (or natural justice),” de Silva told EYE, also saying that the Board’s process is “simply out of their hats.”
Also raising eyebrows is the slow pace with which the Board is considering the IRM report.
Notwithstanding its own rule to act “expeditiously,” the Board has twice deferred acting on the report, which it received Aug. 30, 2022. The matter is now on the Board’s July agenda, so the consideration process will take at least 10 months.
The $117 million project approved by GCF in 2020 aims to promote sustainable land-use management and forest management to restore degraded forest landscapes in the Bosawás and Rio San Juan Biosphere Reserves in the Caribbean Region of Nicaragua, home to most of the country’s indigenous populations.
The indigenous communities say the project will perpetuate ongoing violence by outsiders already exploiting resources in the region. They raised multiple objections to the project in June of 2021 that the IRM deemed worthy of investigation. During the resulting process, all parties were consulted, including about a draft report. At the end of August of 2022, the IRM issued it “final” report.
The IRM has supported at least some of the complainant’s charges, according to an April 14 article in Climate Change News by Chloé Farand, who saw “excerpts from a draft report.”
Farand wrote that the excerpts “give right to the complainants.” Further, the draft report “finds that the project clearly violates several GCF safeguards and procedures, including the lack of consultation with indigenous groups, and that the project may exacerbate conflict,” she reported. “The draft report cited ongoing human rights violations in the project area, including the massacre of indigenous peoples,” Farand said. (Also see April 17 follow-up story.)
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Complainant Kept in Dark as Board Deliberates
Since the IRM final report reached the Board, the complainants have been locked out of the process, while others have been invited in.
The Board first considered the IRM report during a closed session at its October meeting.
According to the minutes of the meeting, the Board asked the GCF Secretariat for a management response to the report. The Board also requested a “legal assessment on any potential action, including remedies, which GCF may take under the related funded activity agreement, based on the information provided in the Compliance Review Report.”
The Board also shared the report and invited comments from the Nicaraguan ministry in charge of implementing the project (the so-called executing agency) and the “accredited entity,” the Central American Bank for Economic Integration (CABEI), which is co-financing the project.
The minutes say the Board specified that a copy of the report should be shared with “the relevant accredited entity on a strictly confidential and redacted basis in order to allow for the accredited entity to provide any relevant written comments, and for the accredited entity to share the Compliance Review Report with the executing entity in order for the executing entity to provide its written comments to the accredited entity.”
The Board then deferred the matter until its March meeting.
The public summary of the March meeting says the Board “takes note” of the “management response” requested in October. The management response has not been disclosed.
The summary includes four bulleted items, though they do not appear to be Board decisions. One of them says the Board, “Underscores the seriousness, as reflected in the Indigenous Peoples Policy, of GCF’s role in fostering the full respect, promotion, and safeguarding of indigenous peoples.”
The Board deferred further consideration until its July 17-20 meeting.
De Silva Sees Violations of Fairness Standards
The Board’s handling other IRM report deviates from both international standards and GCF policies, according to de Silva, who retired in August 2022 as head of the IRM.
The Board “is creating new processes – unannounced to anyone,” de Silva told EYE. “In doing so,” de Silva said, the Board “left Hamlet (the complainants) out of the play!”
“This totally violates the ‘predictability’ and ‘transparency’ and other effectiveness criteria laid down in the UN Guidelines on Business and Human Rights,” de Silva told EYE via e-mail.
He also pointed out that the Board’s 2021 guidelines for handling IRM reports endorse “standards of fairness, equity, impartiality, transparency and justice.”
The guidelines say that the Board should “[N]ot engage in a fresh (de novo) investigation of the complaint/grievance or request,” and should “[C]onsider the report fairly, in an unbiased fashion with a view to providing redress, where appropriate.”
‘Out of Their Hats’
What the Board is now doing, de Silva said, is “hearing this case ‘de novo’ using a manufactured procedure – simply out of their hats.”
The unequal sharing of information is unfair and prejudicial to the complainants, de Silva said, elaborating:
Essentially, the Board gave the final report to management, Government and CABEI and said “tell us what you think of this report” – but excluded the complaints who triggered this entire process under GCF rules and with regard to whose harms and safeguards this report made findings and recommendations.
This is no different to a judge telling the defendant and her lawyers – “meet me in my chambers alone and tell me what you think of the Plaintiff’s evidence (and don’t tell the Plaintiff or his counsel you are doing this) – and then proceeds to decide the case without giving the Plaintiff or his counsel any opportunity to be heard.
In another view, while all the parties had a fair opportunity to comment on the draft report before the mechanism, the Board has now given management, government and CABEI a second hearing and excluded the complaints from that process.
The Board’s decision on sharing the IRM report refers to paragraph 63 of the IRM’s procedures and guidelines. But this document “in no way authorizes the Board to violate due process and advantage one set of parties against the other,” commented de Silva. Paragraph 63 states: “The Board shall consider the final compliance report and may make such decision as it sees appropriate, based on the findings and any recommendations contained in the final compliance report. If the Board decides to consider the grievance or complaint in light of the final compliance report, it may also take steps to implement the recommendations of the IRM”.
“This lack of transparency,” de Silva told EYE, “has also had the result of some parties lobbying the Board without the knowledge or participation of the other parties.”
“Additionally, it has allowed individual Board members to horse trade on the outcome of the reports, behind closed doors.” according to de Silva.
The Board is “now re-hearing the case without one party,” de Silva said.
This undercuts confidence in the process, he said, explaining:
It is required to be fair and transparent. It has failed to do so. The violations of the Board’s own guidelines are egregious to the point that I can only quote a famous English judge who called conduct of this nature “the freedom of the wild ass”!
This behavior of the Board does not inspire any confidence in its ability to hold the Secretariat or Accredited entities or recipients of its funds to account for violations of environmental and social safeguards. It undermines the very name of this fund “the Green” climate fund – because it is unable to correct environmental and social negatives through processes it has set up for itself and which it was required to do by the UNFCC COP, its Governing Instrument (para 69).”
Strong Criticisms Also Leveled by Indigenous Groups
Similar objections to the process were lodged by the indigenous groups who filed the complaints about the project.
Being excluded as the Board considers the matter “fills us with doubts about the legitimacy of a process meant to protect affected people such as the ones in our case,” according to February letter. (Those bringing the complaint have done so anonymously, as allowed under GCF rules, and the letter provided to EYE is unsigned.)
The letter says the Board is acting in “in clear breach” of the procedures and guidelines governing the Independent Review Mechanism.
“This course of action is particularly worrying considering that the basis of the complaint here and the problem that the communities in Nicaragua are experiencing is precisely the absolute lack of confidence in the Nicaraguan government and in CABEI as the accredited entity to implement the case in question,” the letter further states.
It concludes by requesting “an equal opportunity to participate in further discussions and proceedings informing the Board, as it considers is final decision on the full Compliance Report.”
Board Acting Slowly
The Board’s handling of the report is now likely to take 10 months, hard to reconcile with the Board’s 2021 guidelines, which state that the Board will “expeditiously consider the IRM report.”
The “expeditiously” standard exists even though the Board in 2021 reduced pressure on itself by dropped a rule mandating action on IRM reports “as soon as possible or at the next Board meeting.”
The GCF Secretariat has not yet replied to an EYE request of April 19 for clarification on the timing policy.
The GCF Board has deferred action two times since receiving the IRM at the end of August, 2022, both times meeting in closed session. The Board discussed the report in October and again in March. It is now on the agenda for the Board’s meeting in July.
Florencia Ortúzar, a Chilean lawyer at the Interamerican Association for Environmental Defense (AIDA), who has been assisting the indigenous communities, called the process “very long.”
“Complainants are kept in uncertainty and meanwhile, violence keeps escalating in the project zone area,” she told EYE.
However, she expects that a decision will be taken in July. “First because they can’t drag it forever and also because CABEI’s reaccredit is due and it would be weird to have that done without this solved. In any case, the good thing is that the project seems very stalled for the time being.”
IRM Report Not Public Until After Decision
Under GCF rules, the IRM final report will not be released to the public or the complainant until after the board makes a decision.
The timeframes for releasing documents is a bit complicated.
The Fund’s procedures and guidelines for the IRM process state:
- Within ten (10) calendar days from the day the Board takes a decision on the final compliance report submitted by the IRM, a copy of the final compliance report shall be made available to the complainant and published on the IRM website. A copy of the Board’s decision on the final compliance report shall be made available to the complainant and shall be published on the IRM website within five (5) calendar days from the date on which the Secretariat publishes the Board decision.
The GCF’s rules also say that if Board, meeting in executive (closed) session, disagrees with a finding or recommendation of the IRM, it “shall prepare a summary of the reasons given by Board members for such disagreement.” (According to a footnote, the summary “will be based on a confidential verbatim record of the closed-door meeting maintained by the Secretary to the Board.”)
The rules states: “The summary will be communicated to the IRM within 21 days of the Board meeting at which the decision was made. The IRM will publish such summary on its website.”
Under GCF rules, the Board’s decision is final and can’t be appealed.
