2005 Complaint to CAO against the Marlin Mine Project by Sipacapa residents

In March 2005, residents of the municipality of Sipacapa filed a complaint with the Office of the Compliance Advisor Ombudsman (CAO), the independent complaints mechanism for the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). The CAO reports directly to the President of the World Bank Group, and facilitates complaints relating to projects financed by these organizations.

The complaint asked that IFC’s loan to the Marlin project be revoked on the following basis: (1) Water demand from the mine will deny access by communities to their water supplies, (2) the mine will use unsafe processing methods that will contaminate the environment and the water supplies used by people downstream, (3) the rights of indigenous people have been violated as a result of failure by the project to consult with them about the proposed development and its environmental and social impacts, and (4) the presence of the mine is resulting in social conflict, violence and insecurity. As part of its investigation, the CAO visited the project site, interviewed the complainants, other local groups, national and international civil society leaders, and reviewed documents from the IFC and Montana Exploradora de Guatemala, S.A., the wholly owned subsidiary of Goldcorp Inc., among other things.

In September 2005, the CAO found that "the people of Sipacapa are not likely to be impacted significantly by the project", adding that there exists "considerable legitimate space for both the company and complainants to reflect on an appropriate course towards resolving the current dispute." In this regard, the CAO set out a series of recommendations relating to the "enhanced participation by local people in forwards-looking decisions related to future exploration, royalties, environmental monitoring, and distribution of benefits", which it considered a "constructive [step] to promoting dispute resolution" (CAO Assessment, 2005).