Start main page content

World Bank to investigate complaint on Lonmin's social and environmental impacts

- Lee-Anne Bruce

The Compliance Advisor Ombudsman will investigate a complaint by the women of Marikana on Lonmin’s failure to comply with its social and labour plans

On 4 December 2017, the Office of the Compliance Advisor Ombudsman (CAO) completed its appraisal of a complaint lodged by the women of Sikhala Sonke, assisted by the Centre for Applied Legal Studies. The complaint focuses on the International Finance Corporation’s (IFC) investment in Lonmin Plc. The appraisal concludes that the IFC should be investigated for failing to ensure Lonmin complied with its performance standards, especially as they relate to the company’s impacts on the environment and failure to comply with its social and labour plan.

In June 2015, Sikhala Sonke lodged the complaint with the Office of the CAO, an independent entity which reviews complaints from communities affected by development projects undertaken by the private sector lending arms of the World Bank, including the IFC. In 2007, the IFC made a $50 million investment in Lonmin which was earmarked for Lonmin’s local economic development programme. The funding was granted to ensure Lonmin contributed to the development of nearby affected communities by providing infrastructure, basic services and poverty eradication programmes in line with its social and labour plan commitments.

Ten years after receiving this funding, the living conditions of the communities near Lonmin’s Marikana mine remain dire. Lonmin has failed to comply with its commitments and the IFC’s performance standards and the purpose for which the funding was granted. The complaint lodged by Sikhala Sonke, with the assistance of the Centre for Applied Legal Studies, highlights the women’s concerns with the living conditions in Nkaneng, an informal settlement near Marikana. These concerns relate to access to housing, water, and sanitation, and ensuring sound and effective environmental management, gender empowerment, education and black economic empowerment.

It is clear that the IFC has failed to properly monitor Lonmin’s compliance with its own standards. The IFC funds companies that commit human rights violations all over the world, but is not subject to litigation. The only mechanism for holding the entity to account is the CAO, which will be investigating this complaint despite the fact that the IFC is no longer a shareholder in Lonmin. No other complaint from South Africa has ever reached this far in holding the IFC accountable for its investments.

“This investigation could have a huge impact on development projects in South Africa and beyond,” says Nomonde Nyembe, attorney at CALS. “The IFC has a great deal of immunity, but this could result in the entity changing its methods of operation in other contracts and ensuring the companies they invest in, such as Net1, comply with their safeguards and human rights standards.”

For enquiries, please contact:

From the Centre for Applied Legal Studies:

From Sikhala Sonke:

  • Thumeka Magwangqana on 079 706 2295 / 061 928 5380