News / 15 April 2022

IDB stops funding for two controversial dams in Guatemala: ground-breaking decision

The Inter-American Development Bank (IDB) has taken a unique decision to withdraw from the construction of two controversial dams in Ixquisis, Guatemala. Both ENDS has supported our partner AIDA for many years in its fight against the dams. Tamara Mohr and Pieter Jansen explain why this decision is so exceptional.

In 2018, AIDA filed a complaint before the IDB on behalf of the indigenous communities and called upon the bank to withdraw their funding for the Pojom II and San Andrès dams. In 2019 the bank started their investigation. The decision to withdraw is the outcome of this investigation.

Why is this decision so ground-breaking?

Pieter: "It doesn't happen very often that a bank withdraws from a project that it is already funding, and certainly not for social or environmental reasons. And, as far as I am aware, it is the first time a bank has done so on the basis of its gender equality policy. That's what makes this a really ground-breaking decision, and one which we at Both ENDS and our partner organisations are very happy about!"

Tamara: "And what is also important is that they want to withdraw in a responsible way. So not just pulling out the plug and not being concerned about the impact, but drawing up a responsible exit plan in which the affected communities also have a voice. Now it is crucial to see how that plan is drawn up and what it will contain."

Pieter: "There is, however, one point that could be improved. Rather than consulting the communities after the plan has been drawn up, it would be better to involve them in the drawing up phase itself."

Do we already know what the exit plan looks like?

Pieter: "In the exit plan, the bank devotes a great deal of attention to how they themselves can learn from this case. But there appears to be less attention to adequate compensation and restoration of the damage already caused. It is important to restore the living environments of the local communities as they were before the construction of the dams started. That this must happen is in the bank's own policy, so they have to comply with it. That will be a very complex job, as the dams are located in a conflict zone."

Tamara: "We also hope that this decision will help to prevent similar cases in the future. In practice, policy – and in this case gender policy in particular – often proves not to work effectively or is not complied with. It is therefore important that the bank learns from this project for the future."

What does this decision by the IDB mean for Both ENDS and our partners?

Tamara: "It shows that cases like this are important and that, although with a great deal of time and effort, they are winnable. That gives a lot of hope to other organisations, women and communities affected by problematic investments by development banks!"

Both ENDS and our partner organisation AIDA have been involved in this case for many years. AIDA supports indigenous people in the communities in submitting their complaints to the bank and participating in the exit plan, and Both ENDS brought the complaint to the attention of the bank's management through the Dutch representative. But what happens next?

Tamara: "The real work is only just starting. We are not only now using this case in our conversations with the IDB to get them to tighten up their policy, but it is especially important to ensure that this withdrawal really delivers for the communities, does not leave them to deal with the damage and really helps to restore their former living environment, also after the bank has left. Within GAGGA [Global Alliance for Green and Gender Action, a partnership between FCAM, Mama Cash and the Dutch Ministry of Foreign Affairs] we will continue to work with AIDA to ensure that the communities have sufficient participation in the exit plan."

Pieter Jansen is an expert on the social and environmental policies of development banks like the IDB. Tamara Mohr is project leader of Global Alliance on Green and Gender Action (GAGGA).

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