Engagement and Access to Justice In International Development Finance Case Study PULP Mills in Fray Bentos - Uruguay August 3, 2007 – UNEP/University of Geneva Civil Society and Public Participation Module Presented by Center for Human Rights and Environment (CEDHA) - Argentina Jorge Daniel Taillant –

Common Myths and Realities about Participation We have a right to Participate always! Information is Power, Don’t Give it – or measure it carefully! Participation is About Accountability If you allow for Participation you open Floodgates NGOs want irrelevant information - time/resource consuming NGOs represent Society/Community (Legal/Powers) NGOs are all the same; NGOs are all vying for power; What they don’t know wont hurt them Elected Governments are already Participatory Govt’s never allow for participation in real decision-making Participation make projects more democratic – self owned Participation and information should be strictly regulated NGOs represent Social Movements Access to Information is about getting a timely response Legal action leverages participation and access to information

Participation and Engagement Generally Suffer from GROSS communications errors As well as misalignment of stakeholder objectives Actors Speak Different Languages Different “Drivers” Influence Their Interests They Rarely Engage on Same Issues Rarely Aim for Common Objectives

Uruguayan Pulp Mills Case

ArgentinaUruguay Rio Uruguay Botnia Ence

Key Source of Problem Sensitive Mega Sized Border Investment Failure of Argentine & Uruguayan Govts to Anticipate Local Conflict Failure to Include Community in Global/Local Investment Decision Failed International Environmental Governance Procedures (IFC, EPs) Nascent and Evolving Social Movement Problematic Environmental Impact Assessment –Two Mills ENCE/Botnia measured separately –Incomplete EIAs –Failed community engagement leads to mistrust –IFC says on April 20, 2005 that “Consultations indicate that the project enjoys broad public support”

Broad Public Support! Just 10 Days Later!

A Few Questions to Pose What is the case really about? –Contamination? Business? Politics? Who and what relations govern the case? Who is responsible/accountable? Who to engage to resolve the case (Company, IFIs, Governments, others) On What to Engage? How to Engage? What are the Rules that Govern Engagement?

Principal Proponents Companies - Botnia/ENCE IFC MIGA Private Banks (ING / BBVA / Nordea / NIB / Calyon ) Finnvera (Finnish Export Credit Agency), CESCE, ICO Uruguayan Government (National and Local) Uruguayan Gov Netherlands Spain

Principal Opposition Gualeguaychu Assembly (40,000 personas) (Public/Business/NGOs) Select NGOs and Public in Uruguay Argentine Government (National, Provincial and Municipal) Uruguayan Prosecutor Press CEDHA (later added others) Gualeguaychú Assembly 40,000 persons Entre Ríos Gov Argentine Gov Taking to Bridge

What Governs Engagement and Participation? An Established Right A Voluntary Agreement A Standard Practice A Regulation or Rule (A financial sine qua non) A Political Circumstance (Votes/Investment) The Market The Capacity of the Claimant The Media A Social Movement A Shareholder Public Opinion Others? IT IS NOT ALWAYS A FORMAL STRUCTURE!

Engagement Dimensions in Pulp Mill Case CommunityCompany GovernmentIFIs Prvt BanksNGOs Local Nat’l Foreign ECAs CAO Int’l OECD UN

Key Power Relations Company - IFC Company - Prvt/State Banks Company - Foreign Govts Assembly - Local Government Assembly - Local Media NGO - Local Government NGO – Assembly (CEDHA) NGO - CAO NGO - Human Rts Tribunal Company - Assembly Company – Nat’l Government Assembly – NGO (others) Assembly - Pcial/Nat’l Govt Assembly - CAO Assembly - Private Banks CEDHA - National Government CEDHA - Media Weak Links Engagement and Advocacy Generally Falls Into KPRs, not WLs (It’s what we know and are comfortable with) Successful Engagement Can be Leveraged by Building Capacity into WLs (It’s what we feel UNEASY with but need to face)

Engagement Determinants E a1a1 a2a2 Understanding of Macro/Micro Decision Drivers Knowledge of Relative Power/Weaknesses Other Willingness/Obligation to Engage Leverage Capacity/ Negotiation Skill Strength/Weaknesses of Alliances Time

Accountability Determinants A a1a1 a2a2 Are there Obligations in Power Relations? Can they be enforced? Does complainant have capacity to file? Can complainant leverage compliance elsewhere? Can public opinion affect decision of denounced? Will the complaint affect investment drivers?

Example of Drivers of Accountability for Botnia BOTNIA Corporate Board IFC Board Finnish Gov’t Finnish Media Children o/ Directors Private Bank EU Presidency Exp. Cred Agency OECD Int’l NGOs Shareholders Labor Unions CSR Commit Clients

Possible Channels of Engagement and Accountability CAO Inter-American Commission of Human Rights European Commission Spanish/Finish Courts (Finnvera - ECA) Criminal Actions in Argentina against CEOs Media Campaigns / Shareholders / Clients / Family International Court of Justice Legal Action in Uruguay Teaming up With Finnish Labor Unions Equator Bank Compliance Claim (to BBVA and ING) OECD Guidelines for Multinational Enterprises UN HRts Norms for Transnational Corporations UN Global Compact Corporate Social Responsibility Commitments Corte Internacional de Justicia

Engagement– What We Did

Positive Results Critical CAO Audit – Debate in Investment Scheme Withdrawal of One Pulp Mill (ENCE) Withdrawal of One Major Financial Bank (US$480m) Improvement of Design Remaining Mill (Botnia) 18 Month Delay Board Vote WB Investigation process initiated at IAHRC Greater Attention to Policy Procedures Awareness Building Experience Possibility New Compliance Procedure at Equator Banks Debate Opening at OECD of Bank Liability to Guidelines

Failures CAO Could Not Sway IFC/MIGA or Board of Directors Company Ignored Community Opposition / Local Conflict Polarization and Conflict Between Argentina/Uruguay with Complaint Filing to ICJ Roadblocks Affect Cross Border Community Relations IFC Ignores Policy Compliance Two Equator Banks decide to Ignore EPs & fund project (Calyon & Nordea; BBVA and ING withdraw) Community Faces Imminent Installation of Mill

Lessons Learned Understanding Actors, and Mapping out Power Relations and interests is Critical to Successful Engagement Actors are generally far more inter-related than they seem Participation, if it is not integrated en real terms and early stages of project design, is often fruitless with little or no impact on the evolution of important strategic financial/investment decisions IFIs moving from Free Prior and Informed “Consent” to … “Consultation”, which is implying a huge paradigmatic shift and problem for outcomes Key Actors are Fundamental to Devising Engagement Strategies State/Govt play disparate, conflicting, and sometimes contradictory roles in Protection of Rights and Promotion of Economic Development; this is problem to integrity of the system; Acquiring Knowledge about Relations Dynamics and Accountability Systems is Critical to more Successful Engagement Engagement/Participation is more Successful if thought of “out of the box” – building capacity as you go while exploring unchartered territories Information or Participation for its own sake is generally useless Accountability is not always a formal / lineal process and may be in areas that are not anticipated

August 3, 2007 – UNEP/University of Geneva Civil Society and Public Participation Module Presented by Center for Human Rights and Environment (CEDHA) - Argentina Jorge Daniel Taillant – Engagement and Access to Justice In International Development Finance Case Study PULP Mills in Fray Bentos - Uruguay