Reference: SG/E/2014/07
Received Date: 16 July 2014
Subject: Olkaria I & IV Geothermal Extension
Complainant: The Complainant has waived the right to confidentiality. However, the Complainant requested that his/her name remains anonymous.
Allegations: Failure to adequately implement the Resettlement Action Plan; alleged forced eviction
Type: E - Environmental and social impacts of financed projects
Outcome*: Areas for improvement
Recommendations: yes
Admissibility*
Assessment*
Investigation*
Mediation*
Consultation*
Closed*
11/08/2014
11/03/2015
13/07/2015
28/05/2016
9/11/2015
20/11/2015

* Admissibility date reflects the date the case was officially registered. All other dates pertain to the date in which a stage was completed.

Case Description

Complaint

In July 2014, the EIB Complaints Mechanism (EIB-CM) received a complaint concerning the involuntary resettlement related to the expansion of activities in the Olkaria geothermal field. Between August and September 2014, the EIB-CM received 3 additional complaints on the same matter. The allegations concern the preparation and implementation of the Resettlement Action Plan (RAP). More particularly, it is alleged that Project Affected People (PAPs) had been requested to leave their places without being provided with the land titles and without the infrastructure being finalised. They also alleged that a number of PAPs had been left out of the census carried out by the promoter. In addition, they alleged that their socio-economic livelihood activities had not been restored to a level equal to or above the previous one as required by the international lenders’ policies for involuntary resettlement.

The project is financed by the Bank under the Mutual Reliance Initiative (MRI), whereby the French Development Agency (AFD) plays the role of Lead Financier amongst the EU International Financial Institutions, which also include the EIB and the German Development Agency (KfW). Other financiers of the project are the World Bank and the Japan International Cooperation Agency (JICA). All the EU lenders have adopted the World Bank’s policies for land acquisition and involuntary resettlement as the framework for implementing the Resettlement Action Plan (RAP). The World Bank Inspection Panel (WB-IP) received a complaint with similar allegations in October 2014. Therefore, and in order to maximise synergies, the EIB-CM and WB-IP have worked together to assess the allegations, seeking complementarity whenever possible. A Memorandum of Understanding (MoU) was signed by the two parties to formalise this cooperation.

EIB-CM Action

A joint compliance review with the WB-IP was carried out between March and July 2015. In August 2015, a formal mediation process was launched after obtaining the agreement of the parties and under the leadership of the EIB-CM.

Conclusions and Recommendations

The compliance review carried out by the EIB-CM following the allegations received shows the complexity of the issues at stake. This collective effort has had positive results, such as (i) the implementation of the land-for-land principle to resettle the community; (ii) KenGen’s undertaking to provide land titles to the community, which had not possessed those titles in the past; (iii) the improvement of the social infrastructure (school, clinic, social centre, churches); (iv) the good quality of the materials used to build the structures on the RAP land; (v) the creation of a RAP Implementation Committee intended to represent, in an inclusive manner, the different groups of the community. The analysis indicates also that, despite all the efforts and good intentions of the parties involved, the project has failed partially to implement the RAP in accordance with key provisions of the World Bank’s policy framework for land acquisition and involuntary resettlement, as was agreed by the lenders, including the EIB. The investigation revealed that the actual resettlement of the PAPs was carried out before the necessary infrastructure - including land titles, water supply, roads and transport - was in place. The conversion of the moving allowance into a connection to the electricity grid also raises concerns.

The compliance review concluded that there were several areas of non-compliance with the WB resettlement policy framework. In addition, at the appraisal stage, the promoter and the lenders had failed to identify the Maasai community as an indigenous people, which, according to the Bank and other lenders' social policies, demands special consideration during the preparation and implementation of the RAP. The EIB-CM review also shows that, whilst the MRI arrangements are intended to coordinate the action of the three lenders and facilitate the promoter’s interaction with them through the Lead Financier, each EU lender is responsible for providing its non-objection to the RAP. In this context, the EIB-CM noted that the EIB’s services had contributed meaningfully, under the MRI arrangements, to identifying critical areas for the successful implementation of the RAP. However, the review also shows the limitations of the MRI which resulted in the non-compliance of the resettlement policies contractually agreed between the Bank and the borrower. The EIB-CM concludes therefore that the Bank has succeeded only partially in guiding the promoter – directly or indirectly under the MRI – to the successful implementation of the RAP.

Status

The mediation process is finished. The mediation agreement is being implemented.