OPIC’s “Office of Accountability” Refuses To Be Accountable | Mobilization for Climate Justice
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NOTE: The following Op-ed comes to us from Nan Chen at  Accountability Counsel. – GJEP

OPIC (the Overseas Private Investment Corporation) is a little known U.S. agency that finances development projects abroad with the stated goal of promoting sustainable development and U.S. “foreign policy”. In reality, OPIC finances projects run by private profit-seeking businesses that often harm the same local communities in which it is presumably trying to generate good will. Previously, these communities could petition OPIC’s Office of Accountability (OA) to cease funding these harmful projects, but now the OA is changing its complaint procedures without any public notice. These changes could limit the ability of local communities to seek redress and have generated outrage among NGOs.

As A Proxy For U.S. Business Interests, OPIC Often Does More Harm Than Good

OPIC helps U.S. businesses gain footholds in emerging markets and developing nations, with a stated goal to generate income and create good will in the developing world. On paper, this sounds like an admirable goal (Who doesn’t love money and friends?), but often OPIC’s development projects act as a proxy for purely business interests that harm local communities. The Office of Accountability’s purpose is to review and assess complaints from these affected communities.

Recently, Maxwell Kennedy, who sits on OPIC’s Board of Directors, extolled the virtues of investing in development.  He wrote, “When [the indigenous peoples’ lives] improve because an American company has begun working in their town, their view of America begins to shift and everyone wins.”  Kennedy’s somewhat facile statement may be true in some contexts, but when the lives of an indigenous community are harmed, rather than helped, by foreign development, the view of America as a predatory and imperialistic hegemon is reinforced. When OPIC provided $142 million to fund BP’s development of a pipeline near the Caspian Sea, leading to human rights abuses, I would venture to guess that the local community did not start brandishing their American flags.

For that reason in 2005, Congress and OPIC established the Office of Accountability to address complaints by local communities in a manner that is, in OPIC’s own words, “transparent and fair to all stakeholders.” Through the Office of Accountability, communities affected by OPIC backed development projects can raise their concerns about the impact of these projects.

Harmed Local Communities Find Relief Through Complaint Mechanism

Take for example, the story of three Chinanteco communities in Oaxaca, Mexico.  In the late 1980s, approximately 26,000 Chinanteco people were forcibly displaced to make way for the Cerro de Oro dam. In 2010, OPIC provided financing for a project to convert the Cerro de Oro dam into a hydropower project, resulting in the further destruction of drinking water, fishing areas, and agricultural land that the Chinanteco communities rely on for their livelihood. The project would have also painted American developers as avaricious exploiters of local communities, in direct conflict with OPIC’s foreign policy goals.

Through Accountability Counsel, a non-profit organization that represents communities facing conflict over development issues, three Chinanteco communities submitted complaints to the Office of Accountability in late 2010 and early 2011.  In an historic agreement, the project was halted in March 2011 pending negotiations between the communities and the responsible companies, and the future of the project was placed in the communities’ hands.  In November 2011, the communities determined that the project’s harmful consequences outweighed the benefits and formally rejected the project.

By asserting their rights to the Office of Accountability, the Chinanteco people were able to prevent destruction of their land and livelihood. Clearly, the OA can be an important check on potentially harmful development projects, but the OA’s current clandestine revision to its own procedural rules could throw this already opaque process into further confusion.

Civil Society Petitions OPIC for Transparency

The OA’s changes lack transparency and transparency is the lynchpin of a democratic society. There’s a reason why U.S. court decisions must be supported by well-reasoned opinions and why discussions in Congress are recorded into the annals of lengthy tomes. President Obama, in a statement regarding the Freedom of Information Act, stated “A democracy requires accountability, and accountability requires transparency.” Apparently, the ironically named Office of Accountability at OPIC has forgotten this fundamental aspect of democracy.

On April 6, 2012, a group of 19 civil society organizations (including Accountability Counsel) issued a letter criticizing the OA for secretly revising its complaint procedures without public notice or comment. This furtive review could drastically restrict the ability of communities harmed by OPIC’s development projects to find redress. This letter complains that the proposed changes conflict with OPIC’s stated mission, narrows the scope of who can bring a complaint and makes even the decision to review a complaint highly discretionary.  For example, the letter states that “the proposed changes would limit access to the [accountability] mechanism by creating new bars to eligibility that contradict the relatively low bar to “standing” set forth in [OPIC’s] Board Resolution.”

The “Office of Accountability” Is Avoiding Accountability

The OA’s decision to quietly revise its own complaint procedures stands in stark contrast to the practices of other institutional developers like the World Bank or the Asian Development Bank that hire independent contractors to conduct such a review, seek input from internal and external stakeholders, and provide opportunity for public comment.  The OA has adopted none of these transparency and legitimacy-increasing processes.

Curiously, OPIC has previously sought public comment for its policy decisions. Thus, the OA’s choice to hide these important revisions from the public eye deserves concern. In fact, the OA has released no information regarding the scope of this review or the timeline in which it will be completed. The OA has also denied repeated requests from civil society for public participation in this policy review process.

The Voices Of Those Harmed The Most Must be Heard

While a revised set of OA procedures is needed, a review of these procedures must be open to public review and comment. For example, should the OA change or limit the definition of those communities that are eligible to bring complaints, which some civil organizations believe it might, this could have a deleterious effect on the ability of local communities to seek redress. This change would also conflict with the Congressional recommendation and Board Resolution that established the OA.

The OA is the only mechanism through which communities impacted by OPIC’s activities may formally voice their concerns. These communities, and the organizations that support them, should also have a voice in the rules making process.

For this government agency that ostensibly seeks to export America’s democratic and entrepreneurial spirit, a revision of its accountability mechanisms without any democratic participation is a grave and ironic mistake.


Nan Chen is an attorney and activist interested in issues of international development and rule of law. He is the co-chair of the International Development Exchange’s Young Professionals Group and provides pro bono services to Accountability Counsel. He previously clerked for the Center on Wrongful Convictions during law school and worked with NGOs focused on building civil society and rule of law in China.

Article source: GJEP Climate Connections Blog

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