Export Credit

World Bank attacked over gold mine

Christopher Swann – Financial Times

August 21, 2005
The World Bank has come under fire from one of its own internal watchdogs over its role in funding a gold mine project in Guatemala.

The venture has been seen by some as a test case of the bank’s ability to handle successfully such projects following its rejection of a recommendation by an independent report to pull out of extractive industries. The confidential draft report, obtained by the FT, charges that the bank failed adequately to consult the local community or properly evaluate the environmental and humanitarian impact of the mine. Although only in draft form, the report is likely to be an embarrassment to the bank. Glamis Gold, the Canadian company constructing the mine, has said the venture has broad support from the indigenous Mayan Indians. But the project has been plagued by controversy. In January a 40-day protest by locals ended in bloodshed when security forces clashed with protesters, resulting in one death.

On March 13 a villager was shot dead by an off-duty employee of Grupo Golan, a company providing security for Glamis. And in June a referendum in a nearby municipality showed 98 per cent opposed moving forward with the project. The draft report charges that the IFC – the private finance arm of the World Bank – failed to give sufficient time “to allow a reasonably informed consultation”. “The IFC should have considered more systematically the potential risk on human rights at the project level; should have taken appropriate measures to mitigate these risks.” Kevin McArthur, president and chief executive of Glamis Gold, said: “We have a signed document from the indigenous leadership
early on in the project that they wanted to go ahead. We are convinced this will be good for the local community.”

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