The President of the World Bank, James Wolfensohn, asked for an audit on the controversial US$ 30m IFC loan to the Brazilian soybean giant Amaggi, belonging to the Governor of Mato Grosso, Blairo Maggi.
São Paulo, Tuesday 3 November
The request was sent to the Compliance Advisor/Ombudsman of IFC, the window of the Bank for private sector lending. The results of the audit – focused on the categorization of the project based on its social and environmental risk – will be disclosed to the public, as stated by President Wolfensohn himself in a letter sent to the Forest Working Group of the Brazilian Forum of NGOs and Social Movements.
The loan was approved on September, 23rd, despite repeated alerts from the Brazilian NGOs about the alleged irregular categorization of the project, implying the lack of basic evaluations from the social and environmental point of view. The project aims at expanding the capacity of Amaggi to process soybean in areas of agricultural expansion in the state. While IFC procedures establishes that large scale agribusiness projects in critical ecosystems should go through the “A category” screening – which includes a full EIA and other precautionary measures – IFC staff submitted the project to the Board with a “B” categorization, thereby omitting part of the necessary appraisal.
The Forum, which includes all the principal environmental and social NGOs of Brazil, called since last July for the attention of President Wolfensohn on these facts and also withdrew its representation from the Rio de Janeiro IFC consultation on the overall review of IFC safeguards, in September. NGOs are especially concerned by the fact that the categorization of this project might contribute to lowering standards of IFC – as well as private financial institutions using IFC safeguards as a reference – as far as future possible large agricultural projects in forest ecosystems of the Amazon region.
In his letter, Wolfensohn expresses the hope that, with such a decision, the Bank could continue to play an important role in promoting dialogue on complex issues such as the one of soybean expansion and states that the audit “will provide an independent view of the matter, and its results will be made public in accordance with the CAO’s procedures”. Wolfensohn concludes stating “I will forward to the results of the CAO’s work”.
Roberto Smeraldi, director of Amigos da Terra – Amazônia Brasileira and recipient of the letter, said the initiative of the President is positive and commented: “had the arguments of civil society be considered two months earlier, there would be no need for this audit now”.
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