A Report on the Visit of the World Bank Group's Compliance Advisor Ombudsman (CAO) to Toronto

The Office of the Extractive Sector Corporate Social Responsibility Counsellor
Government of Canada
1 Front Street West
Suite 5110
Toronto, Ontario M5J 2X5 Canada

Views expressed herein are those of the Office of the Extractive Sector CSR Counsellor.

Errors and omissions remain the responsibility of the Office.

February 2012

In 2010, the Office of the Extractive Sector CSR Counsellor constructed a dispute resolution mechanism, designed to collaboratively resolve issues between Canadian mining, oil and gas companies and projectaffected communities overseas. The Office's process provides one practical alternative to traditional, sometimes costly, dispute resolution avenues such as litigation or social protest.

In building this process, the Counsellor looked closely at other third-party conflict resolution mechanisms, including the OECD National Contact Points, the Oxfam Australia Mining Ombudsman and the World Bank Group's Compliance Advisor Ombudsman (CAO). This benchmarking is detailed in the Office's backgrounder of June 2010, available on the Counsellor's website. Early on, the CAO was identified as best practice. The CSR Counsellor's approach was, and continues to be, deeply informed by the learnings and leadership of the CAO.

From our public consultations and extensive outreach, we know that key stakeholders will measure success for the Office in terms of its contribution to positive improvements on the ground for communities and companies. The 12-year history of the CAO offers one of the best examples of how such approaches can lead to positive outcomes. As the independent accountability mechanism for World Bank Group private sector operations supported by the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA), the CAO's Ombudsman function works through dispute resolution methodologies to help stakeholders address complex disputes in a constructive and collaborative way. It is a neutral consensus building approach. The role has since been replicated at many of the international financial institutions.

Meg Taylor at the Ryerson CSR Institute

At the invitation of the Office of the CSR Counsellor, Meg Taylor, head of the CAO office since 1999, visited Toronto, Canada for two days of outreach (January 25 & 26, 2012). Meg Taylor and her colleagues Emily Horgan and David Atkins engaged in a variety of activities:

  • Two hour roundtable with representatives from the mining industry
  • Two hour roundtable with representatives from civil society
  • Half day workshop with the Office's Advisory Panel
  • Public presentation as part of the Office's Learning Partnership with the Ryerson CSR Institute (webcast). Visit the web site for more information about the Ryerson CSR Institute.

Biographies of the speakers are attached.

About the CAO

  • Established in 1999.
  • The CAO has three functions:
    • Compliance: the Compliance function is internal to IFC and MIGA only. CAO's compliance arm works on IFC/MIGA's own compliance with its policies, and is completely separate from its Ombudsman role. The CAO does not become involved in commercial questions.
    • Advisor: The Advisory function is directed at IFC/MIGA senior management and the President, and advisory reports are typically disclosed publicly.
    • Ombudsman: A dispute resolution function. All complaints must proceed through the dispute resolution process first.

"The CAO's work provides a valuable and practical example of how to build the space for companies and communities caught in a dispute to use alternative processes such as mediation as a means to achieve sustainable solutions: solutions that can reflect interests, respect human rights, and offer dignity to all involved. Their experience is instructive for all of us convinced of the need for more and better grievance mechanisms in this field."

John Ruggie, United Nations Special Representative on Business and Human Rights

The Ombudsman function

  • The objective of the Ombudsman function is to improve social and environmental conditions on the ground for project-affected people. It does this by fostering a collaborative problem-solving approach to conflict.
  • Low barrier to entry.
  • About 150 total cases to date; of that total, 99 eligible cases; to date, 53% of eligible cases have been resolved by the CAO Ombudsman. Currently 25 open cases, of which 17 are ombudsman cases.
  • Who is eligible to use this service? Project-affected local communities who have social and environmental concerns about an IFC/MIGA supported activity can bring a complaint to the CAO. The Ombudsman process is voluntary for all parties.

How it works

Under the dispute resolution function (the "Ombudsman" role), the CAO serves as a neutral facilitator to help stakeholders address complex disputes in a constructive and collaborative way. The CAO always conducts an initial on-the-ground conflict assessment. This initial assessment is a critical tool to establish whether a collaborative process is possible for resolving the issues raised with the parties. The assessment does not entail a judgment on the merits of the complaint itself. Rather, the purpose of the assessment is to listen to people's concerns, understand the different perspectives of the parties - whether the complainants, their representatives, the broader community, company, and other local stakeholders - and gauge whether it is possible to address the complaint through a collaborative dispute resolution process, which is voluntary for the parties. As per CAO's Operational Guidelines, if the Ombudsman concludes that the parties are not willing or able to reach a collaborative solution, the case is automatically transferred to CAO's compliance function.

If parties do agree to pursue a collaborative process, the CAO Ombudsman acts as a neutral facilitator and helps design a dialogue process. Tools used are common to dispute resolution practices and include: joint fact-finding, information sharing, assisted negotiation, community-led monitoring, consultation and dialogue, among others. A mediator(s) with the appropriate mix of skills and experience, including local or regional knowledge and language expertise, is contracted by the CAO to work on each case, with the approval of the parties concerned.

A ten-year retrospective

  • Four industry sectors have predominated in complaints to the CAO since 1999: extractive industries, infrastructure, agribusiness and manufacturing. The common thread is the resource intensity of these industries, particularly relating to land and water use.
  • 80% of complaints involve socio-economic issues.
  • 90% of mining cases involve water.
  • It takes time – often years – to build processes that help parties resolve conflict as conflicts are typically complex and/or deep seated by the time they are brought to the attention of a mechanism like the CAO.

An Advisory Note based on an evaluation of 12 years of casework is in preparation by the CAO during 2012.

Summary of some key lessons learned over the past 10 years

  • Effective problem solving requires a neutral honest broker. After a review in 2005, this was the key change made in the CAO's 2006 Operational Guidelines. These changes removed any judgement function performed by the Ombudsman side of the process. All complaints proceed first through the Ombudsman/dispute resolution process, and with complete neutrality on the part of the CAO. Only if resolution of the issues is not achieved through the Ombudsman function does the case get closed under the Ombudsman and automatically transferred to CAO's Compliance function. CAO Compliance conducts a 45-day appraisal to assess whether an audit investigation of IFC's/MIGA's compliance with its policies, guidelines, and commitments is merited. If an audit is not merited, the case is closed. If an audit is merited, the CAO drafts a Terms of Reference for the audit, and a panel of three independent experts is hired to conduct the investigation under the supervision of CAO's compliance specialists.
  • The CAO's initial on-the-ground conflict assessment is a critical tool for understanding the issues, and how a dispute resolution process might aid the parties. It answers questions such as "who are the stakeholders?" "who do they represent?" "what is the nature of the issues and different concerns?" "what are the opportunities, and challenges, in addressing these issues/concerns?" "what is the wish of the different parties in terms of moving this process forward, or not?" "what suggestions do the key stakeholders have for resolution of the issues?" "is there a role for collaborative problem solving?"

Some identified benefits of this type of approach

  • Emphasis on active problem solving – what solutions do the parties themselves propose, and can the parties themselves help design a framework for the process?
  • Lack of trust in the science or the standards is a key challenge for resolving conflict. Companies may provide technical information that does not meet the needs of communities or may not be trusted. The use of joint fact-finding and independent verification of science and information can support lasting conflict resolution as the design of the process, as well as its findings and outcomes are jointly owned and trusted by all the parties. This is especially powerful around technical or scientific studies (e.g. water, health, environment, etc.).
  • Providing voice to those who may have been excluded from the conversation.
  • Addressing inherent power imbalances by providing an equal place at the table for local communities, including Indigenous Peoples, marginalized or vulnerable groups.
  • Ability to enhance understanding of concerns and issues within the complaint or concern.
  • Widen engagement in the process and ownership of results.
  • Providing improvements in the living conditions of project-affected communities.
  • Ability to positively modify behaviours and attitude, through learning and dialogue.
  • Channelling the conflict away from adversarial confrontation to productive consensus building. The goal is for the parties to tackle the problem, not each other.
  • Establishing the conditions for relationship and trust-building for ongoing conflict resolution.
  • Securing and maintaining the social license to operate.
  • Managing reputational and financial risks.

During the visit, the CAO team shared a number of case studies. These included:

  • Nicaragua Sugar Estates Limited

    Since February 2009, the CAO has convened a dialogue table between two formerly adversarial groups - a major sugar producer and former workers - which is using a collaborative research study and livelihood support projects to address the socio-economic and health priorities of community members. For more information see Building a Foundation for Trust and Healing: NSEL, ASOCHIVIDA and Community Health

  • Minera Yanacocha

    CAO engagement between 2001-2006. Establishment of a dialogue roundtable, joint fact-finding on water quality and quantity; participatory water monitoring. For more information see Peru / Yanacocha-02/Cajamarca

Learn more about the visit:

Learn more about these types of processes:

  • Videos on Oxfam Mining Ombudsman/Tintaya Dialogue Table
    CAO Ombudsman/Ambuklao-Binga Hydro, The Philippines

Learn more about the CAO:

Speakers' biographies

Meg Taylor, Vice-President, World Bank Compliance Advisor/ Ombudsman

Meg Taylor is a national of Papua New Guinea, received her LL. B from Melbourne University, Australia and her LL.M from Harvard University, USA. She practiced law in Papua New Guinea and serves as a member of the Law Reform Commission. Meg was Ambassador of Papua New Guinea to the United States, Mexico and Canada in Washington, DC from 1989-94. She is co-founder of Conservation Melanesia and has served on the boards of international conservation and research organizations. In addition, she has served as a board member of a number of companies in Papua New Guinea in the natural resources, financial, and agricultural sectors, and on the boards of companies listed on the Australian Securities Exchange. Meg Taylor was appointed to the post of Vice President and CAO of the World Bank Group in 1999, following a selection process led by civil society, industry, and academia.

Emily Horgan, Specialist, Communications & Outreach, CAO

Emily Horgan is a communications specialist with expertise in social and environmental issues. Emily manages CAO's communications and outreach program to civil society and other stakeholders. Before joining CAO, Emily worked for the World Bank Group Extractive Industries Review and IFC's environment and social development department, as well as the areas of operation evaluation, sustainability reporting, HIV/AIDS, and the Millennium Development Goals. Formerly, Emily worked for the Financial Times in London. A British national, Emily holds a M.A. in International Relations from the Johns Hopkins School of Advanced International Studies (SAIS) and a B.A. Joint Honours in Politics and History from the University of Durham, U.K.

David Atkins

David Atkins has over 20 years of experience as a water resources and environmental engineer. He has worked in multiple sectors, including extractive industries, agriculture, infrastructure, industry and sanitation. He is an expert in mine hydrology, hydrogeology and geochemical assessment, and is also trained as a mediator.

For the past ten years, he has worked with communities and companies to understand, investigate, and resolve environmental disputes related to natural resource development projects. Much of this work has been with the Office of the Compliance Advisor/Ombudsman (CAO), the independent recourse mechanism for IFC and MIGA of the World Bank Group, where he has focused on complaints that involve environmental and health concerns.

He is also an expert in participatory monitoring and has lead community-driven environmental impact monitoring programs and assessments in Peru, Panama, Nicaragua and Ghana. Through this work, he has developed a deep understanding of community concerns around development and how consensus building and the generation of credible technical information can help build trust and reduce conflict.