Leaked Review Slams World Bank over Canadian Mine

August 22, 2005 - A leaked internal audit assessing the World Bank's involvement in a controversial Canadian gold mine in Guatemala has exposed glaring deficiencies in the due diligence undertaken by the Bank prior to approving a $45 million loan for the mine.

Glamis Gold's Marlin mine in the Western Highlands of Guatemala has been plagued with controversy since the outset. In March, the Compliance Advisory Ombudsman (CAO), the internal auditor for the Bank's private sector lending arm, the International Finance Corporation (IFC), began an investigation after receiving local complaints about the mine.

According to the CAO, the IFC's failure to adopt a policy regarding human rights and the use of security forces at project sites contributed to rising tensions in the region. The Ombudsman blames the IFC for not addressing the project's potential impact on human rights and failing to adopt measures to mitigate this risk. "The leaked review describes a tragedy waiting to happen," said Graham Saul, Director of International Programs at Friends of the Earth Canada. "The Canadian Government should ensure that this project is suspended until communities are properly consulted and the environmental problems and human rights conflicts are addressed."

The CAO reveals that Glamis failed to deliver IFC-required studies and management plans on time. Two plans, concerning tailings dam operation and emergency response, have never been submitted. The CAO characterizes the tailings dam as a high risk structure and warns that the dam not be used until the missing plans are inspected by the IFC Tailings Dam Review Board.

The CAO investigated allegations concerning the mine's environmental and social impacts. Complaints concerned the failure to respect indigenous rights and the role the mine has played in creating an increasingly tense environment that has led to violence. The CAO accuses the IFC of failing to enforce its own social and environmental policies, and neglecting to guarantee that adequate, timely and informed consultations were carried out with local populations.

According to the Ombudsman report, Glamis does not �appear to be committed to working proactively with the local population to build a clear understanding of the appropriate protocols for the dissemination of information and consultation. The CAO advises that Glamis undertake focused, culturally-appropriate consultations with all directly-affected communities.

"The Canadian government should tell the Bank to clean up its act, stop supporting projects that run roughshod over human rights, or shut down the mining department at the IFC altogether," said Jamie Kneen of MiningWatch Canada.

In June, the House of Commons Standing Committee on Foreign Affairs and International Trade adopted a report on mining and human rights. The report recommends that Canada work with like-minded countries to apply international human rights standards to the World Bank, in accordance with the recommendations of the EIR.

For further information, contact:
Jamie Kneen, MiningWatch Canada, (613) 569-3439, jamie@miningwatch.ca
Graham Saul, Friends of the Earth Canada, (613) 241-0085 extn. 22, gsaul@foecanada.org
Fraser Reilly-King, Halifax Initiative, (613) 789-4447, freillyking@halifaxinitiative.org