Accountability Counsel has supported three communities in Oaxaca, Mexico in their efforts to prevent the Cerro de Oro Hydroelectric Project from causing contamination of their drinking water and fishing areas, and other threats to their livelihoods and culture. The Project, supported by the Overseas Private Investment Corporation (“OPIC”), was designed to convert the existing Cerro de Oro dam and alter local waterways to produce energy for private companies.
With our assistance, the communities participated in a successful dialogue process through OPIC’s Office of Accountability (“OA”), and were able to reach an agreement in March 2011 which halted project construction and placed the future of an alternate design for the Project into the hands of the communities. In November 2011, the communities rejected the Company’s alternative Project design. As of today, the Project remains stopped.
In April 2012, OPIC’s Office of Accountability determined in its Compliance Appraisal Report that a full compliance review to determine OPIC’s compliance with its own policies in funding the Cerro de Oro Hydroelectric Project was not necessary in this case. While the Appraisal Report did not include formal compliance findings, it did generate several important recommendations for OPIC aimed at avoiding problems that arose in this case. The OA’s Compliance Appraisal Report concludes its involvement in this case. OPIC Management Responded to the OA’s Compliance Appraisal Report in October 2012. The Response demonstrates that the case has had a concrete impact on OPIC’s attention to social and environmental risks associated with their investments and the need to ensure that project-level grievance mechanisms function properly.