By Toby McIntosh
The Green Climate Fund Board has excluded its internal watchdog from any further role in reviewing a controversial project in Nicaragua.
The Independent Redress Mechanism (IRM) reported to the Board last year that a proposed project in Nicaragua would “cause or exacerbate” violence against indigenous people and made recommendations to correct the problems.
The IRM noncompliance report was the first such report to go to the Board, which took three meetings and 10 months to consider it.
In a decision made in closed session on July 13, the Board decided not to give the IRM a continuing role, specifically in the creation and implementation of a remedial action plan.
Instead, the Board handing the job of following up on the IRM report to the GCF staff, known as the Secretariat, effectively cutting the IRM out from further involvement with the $117 million Bio-CLIMA project (FP146).
The Board asked that the Secretariat ensure that “the accredited entity” contracted to implement it,(the Central American Bank for Economic Integration (CABEI) “has addressed the instances of policy non-compliance to the satisfaction of the Secretariat in a manner consistent with the relevant legal agreements.”
What these “instances” are was not spelled out.
The project aims to reward climate-friendly land-use management in region of Nicaragua that is home to most of the country’s Indigenous populations. The Indigenous communities said the project will perpetuate ongoing violence by outsiders who had seized land and exploited resources in the region.
‘Worrisome Precedent’
The decision was termed “a worrisome precedent” by a lawyer who assisted the Indigenous communities in bringing the complaint about the project.
Florencia Ortúzar, a Chilean lawyer at the Interamerican Association for Environmental Defense (AIDA), said, “The decision basically hands the whole process back to the Secretariat, which is now in charge of the legal proceedings to get the accredited entity in compliance, without allowing the IRM to fulfill its critical oversight function in ensuring that its findings of non-compliance are thoroughly remedied.”
“Furthermore, the decision leaves the complainants, their direct representatives and all civil society out, with no clarity as to what process the Secretariat will follow to ensure the accredited entity complies with GCF policies,” she said, continuing, “We do not know which specific instances of non- incompliances will be looked into nor how they will aim at fixing them.”
The IRM report, critical of the Fund’s assessments of the risks involved, finally has been released to the public in English and Spanish. Under GCF rules the IRM report, submitted on Aug. 31, 2022, remains confidential until after the Board decision. The 77-page report details numerous issues with the project, which has not yet begun, including violations of the GCF’s safeguard provisions on informed consultation and participation.
The Board took more than 10 months to deal with the IRM’s report, violating pledges of expeditious action. See previous EYE article on the lack of transparency surrounding the matter and procedural defects.
A summary of the Board’s decision has been released, along with its statement of “reasons.” The Board has suspended funding for the project, which has yet to start. The full version of the decision is not yet available. Also after the Board’s action, the GCF released the Secretariat’s response to the IRM report, previously nonpublic.
IRM Role in Remediation Rejected
The Fund’s procedures and guidelines for the IRM process describe with considerable specificity how the IRM could be involved after Board decision. Under one provision (66), the Board can request the Secretariat to prepare a remedial action plan, a step that the IRM recommended.
However, the Secretariat advised against creation of a plan and the Board agreed.
Had creation of remedial action plan been ordered, its development would have taken place “through a process that includes consultation with the IRM (and through the IRM, the complainant)….” The accrediting agency and others would have been involved, too. The IRM would report to the Board if it could not reach agreement with the GCF Secretariat.
In opposing creation of a remedial plan, the Secretariat said “it is not clear whether risk mitigation measures and remedial actions could be sufficient.”
Instead, the Secretariat suggested “that policy guidance be developed for the Board’s review on developing projects/programmes in conflict and post-conflict areas and fragile states.” The Board did not comment on this idea.
IRM Report Critical of Evaluations, Secretariat
Among other things, the IRM said that GCF should prepare a conflict sensitivity analysis and a human rights due diligence report. It recommended that the Fund “carry out a meaningful informed consultation and participation (ICP) process with indigenous communities in the project areas.”
The documents reveal a fundamental disagreement about when some assessments should be carried out. The Board would prefer to delay assessments and do them at the sub-project level after specific locations have been identified.
The IRM report at times is critical of the Secretariat. It states, for example, that “under the current model, the ways and means available to the Secretariat to verify the accuracy and veracity of project related information supplied by an AE, are limited and constrained.” The Secretariat said it has increased relevant staffing levels.
The Board did address comments about the Secretariat and “took note,” without offering specifics, “of the actions taken by the Secretariat under the relevant legal agreements with the accredited entity to address the instances in which the development of the funding proposal for FP146 was determined by the Secretariat not to be in compliance with the policies and procedures of GCF.”
