Tata Power's 4000 MW Ultra Mega Power Project (UMPP) in Kutch district has come under scanner of the Ombudsman for International Finance Corporation (IFC), a member of the World Bank Group. IFC is funding this project. This is following a complaint by the association of local fishing community raising concerns over the adverse social and environmental impact on them.
The Office of the Compliance Advisor Ombudsman (CAO) for the IFC and the Multilateral Investment Guarantee Agency (MIGA) of the World Bank Group have initiated a process to assess if an audit of IFC‘s handling of its investment in the Tata Power's UMPP at Mundra in Kutch is warranted.
The process also known as CAO's compliance appraisals has been initiated based on the complaint filed by Machimar Adhikar Sangharsh Sangathan (MASS – Association for the Struggle for Fishworkers‘ Rights), which represents interests of fishing communities in the areas of Mundra and Anjar in the Kutch district.
Through the complaint MASS had raised a number of concerns about the UMPP's environmental and social impact on the local community of migratory fisher folk. The complaint further questions the quality of the environmental and social impact assessment and the company‘s community consultation activities, the project‘s adherence to IFC‘s performance standards, as well as its compliance with national legislation. They further claimed that when seen in the context of widespread industrial development along the Mundra coast, the project ultimately threatens to displace their activities entirely, thus fundamentally threatening their livelihood.
Based on the complaint, a series of meetings and discussions by the CAO‘s dispute resolution team was held last year with the fishermen. Despite that the complainants decided against a collaborative process to resolve the dispute. They requested that the complaint be transferred to CAO‘s compliance function to appraise whether an audit of IFC‘s handling of its investment in the project is merited.
"The focus of compliance auditing is how IFC assured itself that its environmental and social obligations were met in relation to issues raised by project affected people," a statement on the CAO's website read. They have also formed a series of questions to undertake a compliance audit.
The appraisal report is expected by end of July, the CAO website added.
CAO compliance appraisals and audits focus on the actions of IFC—not IFC‘s client company—and whether IFC has followed its own rules and procedures. A case will go to a full audit if the CAO finds evidence that that IFC provisions failed to provide adequate protections at the project level; that policies have not been applied properly; or that there may be potentially adverse environmental and social outcomes in the future. “Tata Power's Mundra UMPP project strictly abides by stipulated norms for its operations including environment, community engagement and ecological impact. The company is committed to its communities and environment in which it operates. Mundra plant is fully compliant on all environmental and social norms and the same has been endorsed by MOEF and other statutory bodies," the company said in a statement.
"The core issues raised by MASS (the Association for the Struggle for Fishworkers’ Rights) are not specific to Mundra UMPP and relate to certain generic issues concerning the coastline of Gujarat," the statement further added.
Coastal Gujarat Power Limited (CGPL), a fully owned company of Tata Power is building the 4000 MW (5x 800MW) power plant in Kutch with estimated at about US$ 4.14 billion. IFC has invested $450 million of its own capital in this project.
