Advocacy to Improve the Overseas Private Investment Corporation (OPIC)
The Overseas Private Investment Corporation (
OPIC) is a branch of the United States federal government. OPIC’s mission is to assist U.S. corporate investments in “economic and social development” in developing countries.
OPIC’s Accountability Mechanism
To address harm caused or anticipated from OPIC operations, U.S. Congress mandated that OPIC create an Office of Accountability (OA). The OA was established in 2005 and has received five complaints to date.
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The OA takes complaints from communities who are or who may be harmed by OPIC projects and has problem-solving and compliance audit functions. Accountability Counsel supported the Cerro de Oro communities to submit the fifth complaint, which has gone through the OA’s problem-solving function and is awaiting a response on the request for compliance audit. Our work with the OPIC OA has brought to light several policy issues that require public attention.
The OA’s Problematic Procedural Review
The Director of the OA is currently undertaking his own, private review of the OA’s procedures without public notice and comment and without a transparent timeline or any public information about the scope of the review. While a review of the OA’s procedures is needed, the review must be independent, transparent and public -- this one is not:
•The Director of the OA has denied repeated requests for public participation in the policy review process. Instead, he convened an invitation-only workshop and failed to invite any direct users of the mechanism.
oMaterials provided for that workshop indicated that his review would limit access to the mechanism in the Director’s sole discretion and make other substantive changes that contradict the Board Resolution that established the OA.
•Congress envisioned an accountability mechanism that followed best practices in the field, including those of the World Bank Inspection Panel.
oIn contrast to the OA review, the current Inspection Panel review focuses only on its internal Operating Procedures, avoiding changes that would undermine its founding documents. The Panel has conducted targeted discussions with internal and external stakeholders and plans to make a draft of new procedures available for public comment for 45-60 days.
•The OA’s Director is leaving Congress and the public out of the review even though proposed changes contradict the Congressional directive and OPIC Board resolution.
Problems With the OPIC OA
The Cerro de Oro communities requested a compliance audit in their November 2010 complaint to the OA. For a year, the communities requested information about who would conduct the audit, the timeline for the audit, and the procedures that will govern the audit process. They were repeatedly denied information until November 2011 when the communities were told by the OPIC OA that the Director of the OA would use his own cost-benefit analysis (per a non-public procedure) to determine whether or not to conduct an audit and would apply a number of other highly discretionary factors to his analysis. This response appears to undermine the Congressional mandate that the OA create an accountability mechanism that is “responsive to stakeholders”, “accessible to project-affected parties” and independent.
While we agree with the OA that a revised set of procedures is needed, unfortunately, the Director of the OA launched a review of the OA’s procedures that is not open to the public and about which there is no public information (see text box).
On April 6, 2012, we submitted a letter joined by 19 civil society partners around the world requesting that the OPIC President and Board require that the current OA review be part of a public and transparent process. We are working in coalition with other interested civil society organizations and members of U.S. Congress to bring problems with the OPIC’s OA to the attention of OPIC’s leadership to ensure that the required review results in legitimate changes to the OA’s procedures.
For more information about the OPIC OA, please see our Accountability Resource Guide, available here.
OPIC Environmental and Social Policy
OPIC has its own set of policies that it has committed to following when it makes decisions to give financing or insurance to corporations. OPIC substantially revised its operational policies in 2010 with Accountability Counsel feedback through OPIC’s notice and comment period.
On March 20, 2010, Accountability Counsel submitted comments to OPIC regarding OPIC’s Draft Environmental & Social Policy Statement. Those comments are available here.
On September 10, 2010, Accountability Counsel submitted comments to OPIC regarding OPIC’s Draft Human Rights and Labor Policy Statement (“LHRPS”).
On October 15, 2010, OPIC released its Final Environmental and Social Policy Statement (“ESPS”), abandoning many of the advances in the draft human rights and labor policy in favor of merging less specific human rights language into the existing Environmental and Social Policy.
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Read the Final Environmental and Social Policy Statement (“ESPS”) here.
We remain concerned that OPIC chose not to improve upon its draft, but rather to weaken it in the following ways:
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•We are concerned that the current policy provides insufficient guidance for both OPIC staff and clients regarding how to identify, analyze and address human rights risks and impacts. Notably, the ESPS retreats on the position taken in the LHRPS that OPIC would conduct an independent project review of human rights impacts (LHRPS ¶4.6).
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•While the ESPS suggests that OPIC conducts its own reviews, the policy does not clarify whether these are reviews of human rights risks in particular and, if so, why and when such reviews are triggered. Only review of client-provided data and consultation with the Department of State is accounted for in the ESPS itself.
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•Sections 3.2 and 3.5 of the ESPS leave a number of questions unanswered. For example, if the ESPS allows for self-serving documents to provide the basis of further OPIC review, it is unclear to what extent human rights risks and impacts will be part of the client information provided and based on what criteria and guidance. It is also unclear when OPIC would chose to challenge such information and what criteria they would use in their evaluation. Accountability Counsel and others provided detailed analysis of this issue in our comments on the LHRPS to improve on that draft so that the criteria and duties of both OPIC and its clients would be more clear. We are concerned that not only are the duties and responsibilities less clear in the final ESPS, but that the criteria used for evaluation of human rights risks are now absent entirely.