Investigation Finds that OPIC Denied that Project-Affected Community is Indigenous, Did Not Comply with its Policies


Center for International Environmental Law Press Release

Date of publication: 
27 February 2009

Washington, D.C.-In a report released this week, the Office of Accountability of the U.S. Overseas Private Investment Corporation found that OPIC staff failed to ensure that indigenous peoples were adequately compensated for the impacts of an OPIC-supported silver mine, San Bartolomé, operated by U.S. mining company Coeur d’Alene Mines Corporation in the historic town of Potosí, Bolivia. In response, OPIC President, Lawrence Spinelli, denied that OPIC was obligated to follow the social and environmental standards contained in its Environmental Handbook. Instead, Spinelli insists that OPIC follows as-yet unpublished procedures on involuntary resettlement and indigenous peoples.

In April 2008, a Bolivian indigenous community, Ayllu Jesus de Machaca, submitted a complaint to OPIC’s Office of Accountability, expressing its concerns regarding the activities of the silver mine, including the environmental impacts of the disposal of tailings in its territory, failure to adequately compensate community members who were involuntarily relocated—in some cases removed entirely from their territory to the city of Potosí, and failure to ensure that the indigenous community shared in the benefits of the project as required by OPIC’s policy on indigenous peoples. In 2004, OPIC had provided $54 million in political risk insurance to Coeur d’Alene Mines Corporation of Idaho for the operation of a silver and tin mine on the Cerro Rico—once the source of silver for the Spanish empire.

The Office of Accountability discovered that OPIC staff did not apply the Indigenous Peoples Policy because it found that no local population met the World Bank definition of “indigenous peoples.” The Ayllu Jesus de Machaca is recognized by the Government of Bolivia as an indigenous community. It collectively owns 11,000 hectares of land on which they raise llama and sheep. It is a member of the Consejo de Ayllus Originarios de Potosí (Council of the Original Communities of Potosí), which, in turn, is a member of the national organization Consejo de Ayllus y Markas del Qullasuyo (Council of Ayllus and Markas of Qullasuyo).

“If the members of the Ayllu Jesus de Machaca are not indigenous, neither is Bolivian President Evo Morales,” said Jorge Cortés, director of the Centro de Estudios Aplicados a los Derechos Económicos, Sociales y Culturales in Cochabamba, Bolivia. OPIC never recognized the existence of an indigenous community because it did not require, nor did it undertake, a social and environmental assessment of the San Bartolomé project.

OPIC’s Office of Accountability found that the relevant policies OPIC was required to follow are the World Bank’s policies on Involuntary Resettlement and Indigenous Peoples, that OPIC agreed to follow in its 2004 Environmental Handbook. Under those policies, OPIC is required to ensure that the project sponsor prepares and executes a Resettlement Action Plan, to ensure adequate compensation for those that are relocated and for people whose livelihoods are adversely affected, and an Indigenous Peoples Development Plan, which ensures that indigenous peoples share in the benefits from projects on their territories. OPIC did not request, nor did it receive either plan from Coeur d’Alene Mines. OPIC’s response states that the project was implemented in compliance with procedures that have not been made public.

“Sometimes a defendant will make up the facts, and sometimes it will make up the law,” said Staff Attorney, Kris Genovese of the Center for International Environmental Law in Washington, D.C. “Here, OPIC has made up both the facts and the law. OPIC is financing U.S. companies operating abroad without requiring that they meet any known environmental or social standards.”


The Office of Accountability’s report can be found here:

OPIC’s Management Response to the OA Report:

The Center for International Environmental Law (CIEL) is a nonprofit organization working to use international law and institutions to protect the environment, promote human health, and ensure a just and sustainable society. We provide a wide range of services including legal counsel, policy research, analysis, advocacy, education, training, and capacity building.

Jorge Cortés jcortes [at] ceadesc [dot] org
Adriana Soto asoto [at] ceadesc [dot] org
Kris Genovese 202-742-5831

Kristen Genovese
Staff Attorney
Center for International Environmental Law
1350 Connecticut Ave. NW, Suite 1100
Washington, D.C. 20036-1739
United States
+1 (202) 742-5831
kgenovese [at] ciel [dot] org