World Bank’s IFC under fire over alleged abuses at Liberian plantation it funded

By Victoria Schneider

• An investigation into the International Finance Corporation’s handling of human rights abuses at a project it financed in Liberia, the Salala Rubber Corporation, is expected to severely incriminate the World Bank’s private lending arm.
• The World Bank’s Compliance Advisory Ombudsman investigated whether the IFC did enough to address allegations of gender-based violence, land grabbing and unfair compensation by its client, Socfin, between 2008 and 2020.
• It’s anticipated that the report will find the finance institution didn’t act to prevent Socfin from violating its legal obligations to local communities and protect the environment; this finding would follow closely on a damning report into similar failures to hold another IFC client, Bridge International Schools in Kenya, to account
• The IFC missed a February deadline to respond to the CAO report and submit an action plan; the delay comes as a new remedial action framework for the IFC is due to be finalized and released

The World Bank’s independent watchdog, the Compliance Advisor Ombudsman (CAO), has finalized its investigation into a complaint filed five years ago, alleging grave human rights violations by communities living near the Salala Rubber Corporation in Liberia. The communities accuse the plantation, owned by Belgian multinational Socfin, of land grabbing and forced evictions, pollution of water sources, sexual abuse, and the destruction of ancestral graves and sacred sites. Publication of the CAO’s findings is being delayed by the International Finance Corporation, the World Bank body whose 2008 loan supported expansion of the plantation, which missed a February deadline to respond to the investigation and put forward an action plan to directly address the communities’ grievances.

The Salala plantation was originally established in 1959. Members of 22 communities within the concession’s 4,577 hectares (11,310 acres) in Bong and Margibi counties say they were evicted without their consent and have suffered severe disruption to their livelihoods and cultural and religious practices in the decades that followed.

Socfin acquired the plantation in 2007 as Liberia emerged from two decades of civil war. A $10 million loan from the World Bank’s International Finance Corporation a year later enabled the company to expand its concession. The financial institution’s loan disclosure included bold ambitions for the plantation’s role: “IFC’s support will encourage Salala to become a local industry leader with regard to environmental, safety, and social standards.”

Instead, the IFC’s own reports show Socfin was in violation of the institution’s social and environmental requirements from the outset. In July 2008, three months before the first loan disbursement, the IFC noted that Socfin’s policies weren’t in line with the requirements. In what it called a “corrective action plan,” the IFC listed 24 measures that the company was to implement by the end of 2008. These included developing and disseminating a compensation framework, documenting issues surrounding preservation/destruction of cultural heritage on the plantation, and putting in place a grievance resolution procedure in consultation with communities.

If, as expected, the CAO’s report finds the IFC didn’t act on evidence it gathered over the following decade that its client continued violating the institution’s social and environmental standards, the World Bank’s board may pressure its private lender to directly respond to the affected communities, potentially including providing them with financial compensation for harms they’ve suffered.

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