"Outsourcing Development: Lifting the Veil on the World Bank Group’s Lending Through Financial Intermediaries"

In October 2016, Inclusive Development International published a report linking International Finance Corporation projects to human rights and climate change impacts: "Outsourcing Development".  

As the introduction states:

"...The investigation tackled only a small portion of the IFC’s extensive financial-sector portfolio. Yet the results were shocking. The IFC is funneling billions of dollars into some of most notorious companies and projects in the world. The problem is systemic, and not limited to just a few cases..."

Business & Human Rights Resource Centre invited the IFC to respond - access its response here.  

The report refers to many cases and companies. If any company wishes to provide a response to any of the cases mentioned, they are welcome to do so. Please send your statements to maeda[at]business-humanrights.org

Previously, Business & Human Rights Resource Centre has received responses from the following companies regarding cases mentioned in the report:

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All components of this story

Article
7 November 2016

Full list of sub-investments with environmental & human rights impacts

Author: Inclusive Development International

"International Finance Corporation - Financial Intermediary Portfolio: Sub-Investments with Serious Adverse Social, Environmental and Human Rights Risks and Impacts," 27 Sept 2016

[Also refers to other companies. Please see the document for full list.]

Download the full document here

Article
7 November 2016

Full report: Introduction

Author: Inclusive Development International

"Outsourcing Development: Lifting the Veil on the World Bank Group’s Lending Through Financial Intermediaries - Introduction," Oct 2016

...Between 2011 and 2015, the IFC provided $40 billion to commercial banks, private equity funds and insurance firms, which invested the money as they saw fit, with little apparent oversight...Observers have warned for years of the dangers of this hands-off approach to development…Despite this pressure, the IFC has mostly refused to disclose the end-use recipients of its financial-sector investments…citing banking and privacy laws. Because of this lack of transparency, the full extent of the problem was not known...However, it is possible…to follow the trail of money…Inclusive Development International…spent months doing just that. The investigation tackled only a small portion of the IFC’s…portfolio. Yet the results were shocking. The IFC is funneling billions of dollars into some of most harmful companies and projects in the world…In many instances, these sub-projects…have forcibly evicted and economically displaced tens of thousands of people. They have contributed to climate change…They have engaged in combat and child labor. And activists who have dared to resist them have been jailed…

[Also refers to CDC, Essar, European Investment Bank, FMO, and Indian Oil Corporation.]

Download the full document here

Article
7 November 2016

Full report: Part 1

Author: Inclusive Development International

"Disaster for Us and the Planet”: How the IFC is Quietly Funding a Coal Boom," Oct 2016

…In 2013, the [World] bank made history when it pledged to get out of the coal industry for good, except “in rare circumstances.”…World Bank President Jim Kim articulated the bank’s concerns…Building more coal plants...“…would spell disaster for us and the planet,” he said. Despite President Kim’s strong words…the World Bank continues to be a major funder of the coal industry…Billions of dollars in IFC funds have quietly flowed into new coal projects around the world through multilayered financial transactions that exist beyond the scrutiny of the public…These financial intermediaries received $40 billion in IFC funding between 2011 and 2015. They now represent over half of the IFC’s lending portfolio…After receiving capital from the IFC, these financial institutions have gone on to fund dozens of the largest and dirtiest coal projects and companies in the world…Inclusive Development International was able to follow the trail of money during a monthslong forensic investigation…Adding fuel to the fire, these projects have also decimated the world’s forests…

[Also refers to Axis Bank, BDO Unibank, Cerrejon Coal, Credit Agricole, Essar, HDFC, Hidalco, ICICI, IDFC, Kotak Mahindra, Rizal Bank, and Yes Bank.]

Download the full document here

Company response
7 November 2016

Response by IFC

Author: International Finance Corporation

Download the full document here