Research findings

The absence of communication from the Expert Panel has caused immense frustration

• Community members affected by PHC’s palm oil plantations in the DR Congo were deeply disappointed that more than 30 months after their complaint was accepted, the mediation had not yet started. Restrictions due to the COVID-19 pandemic may explain some of the delays since February 2020. However, the complainants’ experience of haphazard communication with the ICM predates the pandemic.

The absence of clear rules for the mediation process puts complainants at a big disadvantage vis-à-vis the investor

• The complaint against Feronia-PHC was always going to be challenging for any dispute resolution process to carry out well. Logistically, the huge distances between communities involved in the mediation are a major challenge, with complainants from communities spread across two provinces. Research participants from the communities have stated that a lack of communication from the ICM about procedures has hindered their ability to prepare for the medication.

The ICM has no measures in place to ensure the safety of complainants and participants involved in the mediation

• Communities affected by the Feronia-PHC operations in the DR Congo have perceived a marked increase in intimidation, harassment and violence since the nine communities submitted their complaint to the DEG’s ICM in November 2018. For example a report published in 2021 by a coalition of NGOs supporting the community complaint detailed various incidents as well as information on arrests of more than 15 people and the killing of two villagers by PHC security in early 2021. More recent information on incidents of violence also available on the website www.farmlandgrab.org.

Confidentiality of the process is undermined by reliance on the company’s logistics and infrastructure

• Complainants expressed concern that confidentiality of discussions with the ICM panel members was not maintained due to the way the ICM carried out its community meetings. For the initial two visits, the ICM panel members relied on Feronia-PHC to organize the logistics, inevitably disclosing locations and members’ participation at the meetings that focused on discussing the investor’s responsibility.

A lack of funding and expert support from ICM during the extended pre-mediation phase undermines meaningful preparation and puts complainants at disadvantage in the mediation

• The complainants are acutely aware of their need to learn more about the mediation process and to receive support on how to make sure their knowledge, voices and experiences are presented in such a way that they are able to engage on an equal footing with the company and the complaints panel. In particular, they are aware that the lack of adequate funding and financial support may have severe repercussions on their capacity to engage and participate in the process, therefore contradicting the purpose and aim of the whole procedure. The absence of financial provision and support leaves the complainants at a huge disadvantage. The imbalance between the resources of the communities affected and the company is stark given the vast size of the area affected: Feronia-PHC’s concessions span 107,000 hectares in three provinces and affect hundreds of communities. Even a meeting of the nine communities which submitted the complaint would necessitate half of them needing to take an internal flight or travel for several days one way on the Congo river.

There is no guarantee of continuity for the mediation process after DFIs’ exit

• In 2020, in the midst of the pandemic and before the mediation had started, the European development institutions agreed to write off part of their credits and sell their shares to a Mauritius-based private equity company. The new investor had to pay a fraction of the outstanding amount and the development institutions exited the board of the company and any financial control over it. Although abrupt, the exit of the DFIs was a response to months of criticism that they received at home, in particular to reports of human rights violations and the recognition that the investment had been wrongly assessed.

• Despite the verbal reassurances that the nine communities received with regards to the continuation of the mediation, the exit of the DFIs in the midst of a grievance process raises several concerns and requires particular attention. Firstly, the communities were left with the impression that their rights and claims were less important than the financial interests of the investors. For them, it was unacceptable that they had not yet received financial support from the DFIs to prepare for the mediation while these institutions had agreed to accept a massive write-down of their debt to the benefit of the new private equity owner. Money could not be found for the mediation, but money could be lost in order to exit a problematic investment.

• Secondly, the exit of the DFIs meant that the communities lost the main opportunities to put pressure on the investor: through the use of the public funders’ proximity with the board of directors, the threat to withdraw their funds in case of non-compliance with the social and environmental standards, and the request to repay the debt in absence of adequate participation in the mediation process. Once the DFIs exited, the mediation process no longer involved any financial risk for the company, because they are not shareholders or debtors anymore. Although the mediator made a visit to the communities in May 2022, the communities felt even more alone in their attempt to achieve justice, knowing that they cannot put pressure on the company by means of the financial leverage that DFIs have on it anymore.

• Thirdly, the decision to exit during the mediation process led the communities to questions the objectives and goals of the DFIs, and to question their legitimacy. Whereas the stated aim of DFIs is to increase the social and environmental performance of investments, from the communities’ perspective the institutions were leaving a project beset by violations and challenges, which is the opposite of what was expected. Although the presence of the DFIs as creditors and investors had not prevented abuses, their absence reduces the international visibility of what happens on the ground and the ‘legal choke points’ and strategies that communities can leverage.

There are structural limitations to mediating legacy titles

• Interactions with the involved communities highlighted that the grievance mechanisms are not set up to deal with conflicts surrounding the dispossession of land that dates back to the colonial era (i.e. ‘legacy land’ or ‘legacy land rights’). These mechanisms are structured to address human rights violations that happen in the context of the investment rather than providing an opportunity for communities to reclaim their land and therefore challenge the feasibility of the investments themselves. Whilst resolution of such conflicts seems secondary, they are intrinsically connected with the capacity of Official Development Aid to generate development in the areas where the investments take place.

Further information

This research was funded by an ESRC IAA awarded to Tomaso Ferrando whilst he was based at the University of Bristol.

The full report is available in English or French.

KFW-DEG, Independent Complaints Mechanism DEG, version 2.0, 2017

Ferrando T. et al, The Belgian Investment Company for Developing Countries (BIO) as a Sustainable Development Actor, University of Antwerp, April 2022

OHCHR, Benchmarking study on DFIs and human rights, 2022