Inclusive Development International’s new report on IFC financing abusive corporations
Inclusive Development International released the second part of its four-part report series investigating the International Finance Corporation's outsourcing of its development work to for-profit financial institutions. Entitled, Bankrolling India’s Dirty Dozen, this part of the report reveals how the IFC is bankrolling India’s largest and most irresponsible corporations through its support for six Indian commercial banks. These include notorious companies such as Vedanta Resources, NHPC Limited and Jindal Steel & Power, which all have well-documented records of complicity in grave human rights violations and environmental destruction.
As the World Bank’s private sector arm, the IFC provides funds for private-sector development projects and while these companies are not in a position to receive direct assistance, they are financed through the for-profit commercial banks the IFC has outsourced its development funds to. This process hides the funds from public scrutiny and results in little oversight by the IFC on how the funds are used.
Between 2005 and 2014, the IFC invested $520 million in one Indian infrastructure bank, IDFC, and five Indian commercial banks. The banks went on to provide or arrange tens of billions of dollars in general corporate and project-specific financing for at least 12 of India’s most socially irresponsible corporations. IDI uncovered 68 Indian companies or projects implicated in serious harmful environmental impacts or abusive human rights practices that received funding from IFC intermediaries. The dire impacts of this funding and its resulting projects for people on the ground are outlined in IDI's report.
This report is part of the larger investigative project, Outsourcing Development: Lifting the Veil on the World Bank Group’s Lending through Financial Intermediaries, by Inclusive Development International and in collaboration with Accountability Counsel, Bank Information Center, Urgewald, and 11.11.11. Over the past decade, the IFC has increasingly outsourced its development funds to third parties in the financial sector, such as banks, private equity funds and insurance firms. These reports follow the money to determine how this is impacting people on the ground and reveal how the IFC is working with some of most notorious companies and projects in the world. The first part of the series began with a report on the IFC’s involvement with the coal sector, “Disaster for us and the Planet": How the IFC is Quietly Funding a Coal Boom, investigating how IFC funding is going to the coal industry despite the World Bank's claims that it is no longer funding coal projects.
According to IDI's findings, IFC intermediaries have financed companies that have forcibly evicted and impoverished tens of thousands of people. They have contributed to climate change, ravaged forests, polluted the oceans and rivers, and killed endangered species. Activists who have dared to resist them have been jailed, beaten and even murdered. The projects come from a range of high-risk sectors, such as energy, agribusiness, mining, transportation and infrastructure and are in Africa, Asia and Latin America.
The project also includes a growing database of cases of IFC financial intermediary sub-investments with serious social, environmental and human rights risks and impacts. The database is updated with new findings and cases as the project progresses.