Tag Archives: UNDRIP

How did the DFC Handle Human Rights Concerns about Alto Maipo? Part Two

When presented with an opportunity to review human rights risks at a major hydropower plant in Chile, the Development Finance Corporation and affiliated international development banks reacted defensively and responded with boilerplate.

In a July post, I set out some context for records I received in response to a Freedom of Information Act request made to the Development Finance Corporation. It’s probably best to review that post before reading this follow up. Briefly, in August 2020, five UN Special Rapporteurs on Human Rights sent a detailed letter to DFC CEO Adam Boehler, warning of serious human rights risks at Alto Maipo Hydroelectric Project in Chile. The DFC is a major funder of the project.

A second set of responsive records, which DFC tells me is the final release, arrived yesterday. I’ve put them online here.

These are emails circulating within DFC and with other members of the Alto Maipo Lender Group in August and September, 2020, in response to the rapporteurs’ letter. The Santiago office of Norwegian bank DNB apparently received the letter first, on 18 August 2020, and emailed others in the Lender Group to alert them that it was on its way.

I don’t know what else the Office of Investment Policy (OIP) had heard about the Alto Maipo project before receiving Uauy’s email, or what exactly prompted OIP’s Jean Kim to remark “It Just keeps on coming.” Maybe Alto Maipo was already a source of concern or bureaucratic headaches, or maybe (given the email was sent at 8PM) it was just an especially busy day at the office.

The correspondence that follows Jean Kim’s email is pretty thoroughly redacted, making it difficult to assess the DFC response, but a few things are tolerably clear.

As suggested by Uauy’s email, DFC, DNB, International Finance Corporation, the Inter-American Development Bank, and other members of the Lender Group (like Germany’s KfW Development Bank and Brazil’s Banco Itau) will coordinate their response to the UN letter. The Lender Group’s Independent Environmental Consultant, ERM, will lead this effort.

ERM organizes a call to bring everyone up to speed, and after the call, a Social Risk Officer at DFC emails colleagues with a summary of the letter’s contents: “apparently the letter is claiming that the Project did not complete FPIC [Free, Prior and Informed Consent, as established in the UN Declaration of the Rights of Indigenous Peoples], amongst 5 other comments.” The 26 August chain of correspondence also includes a summary of a UN press release on the topic, with this quotation called out in bold:

“The Chilean Government would not be fulfilling its international human rights obligations if it prioritises economic development projects over the human rights to water and health,” said Léo Heller, UN special rapporteur on the human rights to drinking water and sanitation. He referred specifically to the Alto Maipo Hydroelectric Project, southeast of the capital, Santiago, and the avocado business in Petorca province in the Valparaiso, region north of Santiago.

Heller focuses his remarks on the Chilean government’s obligations to protect human rights. He goes on to suggest that steps taken by the government have been inadequate:

“Not only may this project reduce the main source of drinking water for residents of Santiago de Chile, it could also make air pollution in the capital worse,” Heller said, by damaging the “green corridor” of the Maipo River basin that has helped offset pollution.

During implementation of the project, which is due to come online in December, “although the Government has investigated damages to the environment no effective measure was taken to guarantee the human right to water for people affected by this megaproject”, Heller said.

There is clearly a role — or an opportunity — for the Lender Group to help the Chilean government address these challenges. As funders, the DFC and the Lender Group have a shared, concomitant responsibility to respect human rights in the economic development projects they back; to this end, DFC has its own environmental and human rights policies and compliance procedures in place.

But by September 4, the DFC appears to have assumed a defensive posture. “The letter,” writes Kate Dunbar of the Office of Investment Policy, “has reiterated key issues claimed by the opposition group throughout the Project.” She no doubt has in mind the group — “the opposition” — led by the Center for International Environmental Law, the Chilean NGO Ecosistemas, and Coordinadora No Alto Maipo. These organizations have been monitoring the project and raising concerns over human rights due diligence since its inception.

By September 21st, as the deadline for responding to the letter approaches, this defensive stance has hardened among some members of the Lender Group: the UN letter “contains a series of allegations than contain with [sic] no support whatsoever,” writes one member of the International Development Bank, dismissively. A strategy takes shape:

DNB is on board with the suggestion that the Lender Group keep the response non-confrontational, “high level and pointing to public information and bank’s general procedures.” ERM produces a draft and revisions follow, but all of that is redacted.

It’s hard to say how much these redactions could matter. Overall, the impression is that the Lender Group had decided, by late September, to stonewall. If that impression is mistaken, I welcome corrections. 

A Comment on the Aquila Back Forty Wetland Permit

AquilaWetlandMap

An Aquila Resources map outlines the wetlands that will be impaired by its open pit sulfide mine on the Menominee River.

Earlier this morning, I sent this comment on the Aquila Resources Back Forty Wetland Permit to the Michigan Department of Environmental Quality. Public comments may be submitted here until February 2nd.

To the MDEQ:

You have probably already received a number of comments on the Back Forty Mine wetland permit application from people who live out of state, as I do. Some of those opposed to sulfide mining on the Menominee River live on the Wisconsin side, just across or downstream from the proposed mine site. Others, across the country and around the world, are deeply concerned about the cumulative effects the current leasing, exploration, and sulfide mining boom around Lake Superior will have, and are alarmed to see federal and state regulatory agencies abdicating their responsibilities to the American public in order to do the bidding of foreign mining companies.

Denying the wetland permit is the only prudent and responsible course for MDEQ to take.

As the organization American Rivers noted when it placed the Menominee River on its list of “most endangered” rivers in 2017, the Aquila Resources Back Forty project poses a “significant threat” of acid mine drainage to the river, and to the “cultural and natural resources of the Upper Peninsula, Wisconsin, and the Great Lakes Region.” Allowing Aquila to destroy or compromise area wetlands to construct its mine will only heighten the risk of large scale environmental catastrophe.

The risk is compounded by both regulatory and scientific uncertainty. As you are well aware, the Menominee Tribe maintains that the MDEQ lacks authority to issue this permit, because under provisions of the Clean Water Act the Menominee River and its wetlands are federal waters. This question remains unsettled. In the meantime, a third party, independent review of Aquila’s wetland permit application found errors and inconsistencies regarding the company’s findings on groundwater drawdown and the mine’s feasibility analysis. The wetland permit application you are considering is either flawed, because the people who filed it are incompetent, or misleading, because they have something to hide.

Deceit might be Aquila’s best strategy at this point. The Back Forty project has no claim to social license — none. The Menominee and other Wisconsin tribes have been adamant in their opposition. Local residents are overwhelmingly opposed as well. Of the 90 people who had the opportunity to speak at the January 23rd public hearing in Stephenson, only 4 could muster an argument for the mine, mainly because they put stock in the vague promise of “jobs” made by mining proponents. The rest — 86 out of 90, or 95 percent — stood in opposition to the mine.

Even if Aquila is not deliberately misleading the MDEQ and the public, the Canadian company has demonstrated time and again that it is not a responsible steward of Michigan or Menominee lands. In archaeological surveys of the region, for instance, Aquila claims to have uncovered nothing of “historical significance.” That is telling. These surveys have found nothing because they fail, or refuse to see, the significant Menominee history and culture that is right in front of their eyes. As tribal members have made repeatedly clear, Menominee history, ancestry, and culture begin and end in the river, the land, and the forest. What is historically significant or meaningful is not merely a collection of artifacts; it is a way of life and a deep connection to place. The Back Forty Mine threatens to destroy that connection.

In sum, the wetland permit application is flawed, the company has no social license to operate, and allowing the Back Forty to go forward would violate the public trust.

Postscript: On Monday, 4 June, Michigan DEQ Director Heidi Grether granted this wetlands permit, despite the DEQ’s own findings that the Aquila Resources project will likely cause “an unacceptable disruption to the aquatic resources of the State…and that the activities associated with the project are not consistent with the permitting criteria for an acceptable impact to the resources regulated under Parts 301, Inland Lakes and Streams, and Part 303, Wetlands Protection.” The permit DEQ issued — over its own objections — includes 28 pages of special conditions. It’s unclear why the DEQ did not simply deny the permit, as its findings warranted and in keeping with EPA objections to the Aquila application. More here.