Papua New Guinea: AES-01/Roku Village
Loss of land and due diligence
Avenell Engineering Systems Ltd. (AES or “Company”) was established in 1997 as an electrical engineering business in East New Britain Province of Papua New Guinea (“PNG”) specializing in power generation supply and assembly. The Company has subsequently diversified its interests into plant and machinery hire, civil, construction and port development and operations. IFC committed a US$4 million loan to the company to fund AES’s project of a capital expenditure program which includes the acquisition of plant and equipment for port operations and civil, its construction activities as well as completion of the wharf construction. The IFC loan was never disbursed and has been cancelled.
In September 2014, Mr. John Samar lodged a complaint with CAO on behalf of the Kuriu Clan of Roku Village in Papua New Guinea. The complainants raise concerns about the illegal occupation of their customary land by AES and IFC’s Due Diligence process which they argue failed to appropriately identify them as the legitimate land owners.
CAO found the complaint eligible in October 2014 and commenced an assessment of the complaint. During assessment, the company indicated that, having cancelled their engagement with IFC, they did not wish to engage in a CAO dispute resolution process, which requires voluntary agreement to participate by the complainants and company at a minimum. In accordance with CAO's Operational Guidelines, the case was referred to CAO Compliance for appraisal of IFC's environmental and social performance with regard to the project.
In April 2015, CAO completed a compliance appraisal with regard to the AES PNG 01 complaint. Although CAO has concerns as to the adequacy of IFC’s E&S review prior to its investment in the company, considering that IFC is no longer involved in the project, and that no investment was made, CAO decided that an investigation of IFC’s performance is not an appropriate response to the issues raised in the complaint. As a result, in accordance with its Operational Guidelines, CAO has decided to close this case.
CAO's appraisal report, providing a full description of CAO's decision with regard to this case, is available under "View Documents" below. As of April 27, 2015, CAO has closed the case with no further action.
Status as of April 27, 2015