CAO Monitoring Report of IFC’s Implementation of Management Action Plan Related to Rizal Commercial Banking Corporation (RCBC) in the Philippines

Washington, D.C., January 21, 2025 – The Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for the International Finance Corporation (IFC) has issued a monitoring report covering IFC’s implementation of a Management Action Plan in response to CAO’s investigation of IFC’s investments in Rizal Commercial Banking Corporation (RCBC) in the Philippines. CAO also published IFC’s Progress Report (November 2024) of its actions in this case.

CAO's investigation reviewed how IFC applied its environmental and social requirements to its investments in RCBC and how RCBC in turn applied IFC's requirements to 10 greenfield coal-fired power plants it financed in the Philippines, and 1 plant it committed to finance. IFC has made multiple investments in RCBC since 2011.

The investigation was prompted by a complaint to CAO in 2017 from communities living in the vicinity of the power plants supported by nongovernmental organizations (NGOs), the Philippine Movement for Climate Justice, Inclusive Development International, and Bank Information Center. The complaint alleged that RCBC provided financial support to the power plants without applying IFC's Performance Standards, leading to potentially serious environmental and social harms to local communities and contributing to global climate change. 

Since April 2022, CAO has been monitoring IFC’s implementation of a Board-approved Management Action Plan to address the investigation findings and recommendations. The action plan developed by IFC in agreement with RCBC committed to: a) assessing and mitigating the environmental and social risks and impacts associated with the 10 power plants financed by RCBC; b) addressing the greenhouse gas (GHG) emissions of the power plants and enhancing RCBC’s climate-related disclosures, and c) strengthen RCBC’s environmental and social risk management system, including systematically incorporating Performance Standards requirements in high-risk projects financed by RCBC.  

CAO’s monitoring report, which includes inputs from IFC’s Progress Report as well as a CAO site visit to the Philippines in November 2023, found that:

1. An environmental and social gap analysis of the impacts of the 10 power plants has been completed by an IFC consultant noting that 43 community issues are attributed or likely attributed to the power plants. In relation to these issues, the assessment made 186 recommendations. However, IFC has not charted a path forward on how these recommendations will be implemented and notes that RCBC disagrees with the assessment findings and recommendations. IFC reports that RCBC has not shared the final gap analysis reports with the power plants. 
2. IFC has been unable to assess the GHG emissions from the power plants and unless additional action is taken, the power plants will likely emit significant GHG emissions for decades to come, contributing to climate change and presenting a lost opportunity to enhance the plants’ energy efficiency.
3. IFC has yet to assure itself that RCBC is implementing an environmental and social risk management system (ESMS) to IFC standards. The ESMS should apply IFC’s environmental and social requirements to the higher risk investments made by RCBC. This has been a requirement of IFC’s investment since 2011.

CAO’s monitoring report also notes that while IFC included the complainants and community members in the preparation of the power plant assessments and shared draft executive summaries for comment, RCBC opposes disclosure of the final gap analysis reports with the complainants, including the executive summaries. CAO’s report notes that these gap analysis reports are a major output of the Management Action Plan and were prepared primarily using public environmental information and based on consultation, and as such should be shared transparently with the complainants.

CAO will continue to monitor this case.

More information about this case is available at www.cao-ombudsman.org. 

Information about the project can be found on IFC’s website at www.ifc.org/disclosure 

About CAO

The Compliance Advisor Ombudsman (CAO) is the independent accountability mechanism of the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), members of the World Bank Group. CAO's mandate is to address complaints from people affected by IFC and MIGA projects in a manner that is fair, objective, and constructive, improve environmental and social outcomes, and foster accountability and learning to reduce the risk of harm to people and the environment. For more information, visit www.cao-ombudsman.org.