IFC has an active project (#32763) with Terminal de Contenedores Quetzal (TCQ) to construct and operate a new dedicated container terminal within Puerto Quetzal. The Terminal will operate under a 25-year Usufruct Agreement on leased land owned by Empresa Portuaria Quetzal, the state owned company that owns and administers Puerto Quetzal. The Project is estimated to cost approximately US$177 million. IFC has approved a US$35 million A loan and a $9.7 million equity investment.  

In March 2014, CAO received a complaint from a labor union at Empresa Portuaria Quetzal, who alleges that the TCQ project and its Usufruct Agreement violate national law, and were approved without consulting some appropriate sectors of civil society and based on an unduly processed EIA.  The union contends that their members’ economic wellbeing and that of the communities that neighbor the port zone will be negatively affected.

CAO found the complaint eligible for assessment in April 2014, and conducted a field visit in May to discuss options for addressing the complaint with the relevant parties.  The parties indicated an initial willingness to explore the possibility of a dispute resolution process.  However, after weighing its decision the company ultimately decided it did not see the necessary conditions for dialogue and declined participation.  Given the voluntary nature of the dispute resolution process, and in line with CAO’s Operational Guidelines, the case was referred to CAO Compliance for appraisal.

CAO’s appraisal of the case considered IFC’s due diligence with respect to the project and whether IFC acted consistently with its policies and performance standards in identifying and responding to environmental and social (E&S) risks in relation to its investment. 

CAO completed its compliance appraisal in April 2015. CAO recognizes that the focus of the complaint relates to concerns regarding the social impact of the project, the adequacy of the client’s stakeholder engagement process, and the project’s compliance with national law.

In relation to these concerns, CAO has not identified issues of a systemic nature regarding the E&S outcomes of IFC’s investment that merit further enquiry in the form of a compliance investigation. As a result, and in accordance with its Operational Guidelines, CAO is closing this case at appraisal.