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IFC’s Compliance Advisor/Ombudsman Finds Guatemalan Mine Poses No Significant Environmental Threat to Local Community


In Washington
Hannfried von Hindenburg

Phone: (202) 458-5613
Fax:     (202) 974-4384

Email:  
hvonhindenburg@ifc.org

Adriana Gomez

Phone: (202) 458-5204

Fax:     (202) 974-4384

Email:  
agomez@ifc.org


Washington, DC, September 8, 2005 — The International Finance Corporation’s independent Compliance Advisor/Ombudsman (CAO) said on Thursday that the Marlin gold mine in Guatemala, an IFC investment project, has managed environmental impacts of the project appropriately and that the community near the mine does not face any significant environmental risks.

The independent CAO report finds that the residents from the municipality of Sipacapa, who had filed the complaint with the CAO office, will not face “a significant risk from any contamination to waterways” and that they “will not experience increased competition for water.” The complaint had asserted that the mine is certain to cause environmental damage. The town of Sipacapa is located about 12 kilometers from the mine.


“The CAO’s report validates IFC’s own assessment that there won’t be significant adverse environmental impacts for the people of Sipacapa,” said Rashad Kaldany, director of IFC and the World Bank’s Oil, Gas, Mining and Chemicals Department. “We are hopeful that the report will help clear up some of the misinformation and controversy around the mine and alleviate anxieties about its environmental impact,” he added.


IFC is the private sector arm of the World Bank Group. The Marlin mine is operated by Montana Exploradora de Guatemala, a subsidiary of Glamis Gold Ltd.


IFC fully supports the CAO’s key recommendations, including the establishment of a dialogue among the mine’s stakeholders. IFC believes additional community engagement efforts are needed and that more extensive consultations and communications after construction started might have helped to alleviate concerns among local people. The CAO recommends a “comprehensive and participatory plan for the public monitoring of environmental performance of the project.” Local communities and the mine are now engaged in setting up such a process, so that the community can participate in environmental monitoring. This is being done with the help of a respected nongovernmental organization, local universities, and religious organizations. This process is designed to enhance the trust between local people and the mine.


IFC is convinced that mining will contribute to sustainable development in Guatemala, as natural resources can be an important driver of growth and poverty alleviation. The Marlin mine has already brought a number of tangible benefits to local communities. Examples include:


The mine is being built in a sparsely populated rural area, where farmers are usually able to derive only a subsistence living.  First improvements in the region can already be measured:

·        
Job creation has significantly reduced the need for local residents to migrate to the coast during the harvest season, a practice that was very disruptive, particularly to the schooling of their children.
·        
The area around the mine is now enjoying economic development and growth as a result of the jobs that have been created for local people and the significant expenditures the company is making for the mine and for social projects.

Montana has invested over Q10 million ($1.3 million) to date in social and environmental programs that directly benefit the communities close to the mine.  These programs include:

·        
Installation of chlorinators in the municipal water systems of San Miguel Ixtahuacán and Sipacapa.
·        
Support for construction of a medical clinic, with 24-hour service for the community. Montana has purchased and equipped an ambulance, and helicopter rescue service is available.
·        
Collaboration with Banco de Desarrollo Rural to establish the first branch of a bank in San Miguel Ixtahuacán to provide services and financing to small and medium enterprises.
·        
Funding for the hiring of 11 teachers for seven schools in nearby communities, for repairs to school facilities for these and other schools in the area, and for books and materials during the past school year.
·        
Construction of much-needed infrastructure to facilitate communications, transport, and trade between towns, including a road from La Hamaca to Salitre, a road from San José Nueva Esperanza to Sipacapa, and a bridge that is benefiting 12 communities in San Marcos and Huehuetenango.
·        
Transplanting or donation to the community of over 105,000 saplings to the reforestation areas in the Marlin project and surrounding areas, with more than 100 hectares of reforestation carried out in 2004.

The company also established a foundation, Fundación Sierra Madre, with assistance from Citizens Development Corps, a Washington-based nongovernmental organization, to plan and implement sustainable, community-based development and capacity building programs in the local municipalities. To date, the Foundation has:

·        
Provided health services to more than 1,200 people during five company-sponsored health fairs;
·        
Established 18 communal banks, with more than 420 local women participating and receiving a total of over $100,000 in microcredits;
·        
Provided technical assistance for local entrepreneurs, such as a Sipacapa-based tailor who sells uniforms to the mine;
·        
Trained more than 300 people in vocational skills such as carpentry, sewing, cooking, and bread-making;
·        
Supported the creation of local enterprises that have generated a number of jobs, including more than 50 people employed in local reforestation projects;
·        
Provided training to health volunteers, including midwives and rural health posts, through the San Miguel-based NGO, APROSAMI;
·        
Helped to establish agroforestry businesses, including potato, bean, and peach farming;
·        
Collaborate with an NGO, Helps International, to introduce a new closed-flame stove that significantly reduces smoke emissions, with 25 families each in San Miguel and Sipacapa participating in the pilot project;
·        
With funding from IFC’s Corporate Citizenship Facility, helped establish community-managed nurseries to supply the mine's reforestation needs.

The mission of IFC (
www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.

Media Advisory

For IFC-related interview requests in English or Spanish, please contact Hannfried von Hindenburg or Adriana Gomez.


To contact Montana or Glamis, please write to or call Joe Danni, VP for Communications at Glamis,
josephd@glamis.com, (+1) 775-827-4600 (ext. 3123)

For the company’s Annual Monitoring Report, which describes the developmental impacts of the project, visit
http://www.glamis.com/properties/guatemala/marlin_index.html.

To find out more about Fundación Sierra Madre, the foundation established by the mine, visit
http://www.cdc.org/desktopdefault.aspx?page_id=122 or contact Daphne de Souza Lima Sorensen of Citizens Development Corps (CDC) at dsorensen@cdc.org or (+1) 202-530-7689

For a copy of the CAO report and a summary, go to
www.cao-ombudsman.org.