Where: Dairi regency, North Sumatra, Indonesia
Sectors: 
  • Finance
  • Mining and extractives
About the project

Dairi Prima Mineral’s proposed zinc mine is situated in one of the most earthquake-prone regions of the world. The tailings dam will sit above the faults responsible for the 2004 tsunami in an area that is also prone to torrential rainfall and landslides. International experts consider a dam collapse to be a virtual certainty. Local communities, including Indigenous populations, complained to the CAO in 2019 using financial intermediary links to IFC through its client Postal Savings Bank of China (PSBC). The compliance appraisal completed in June 2022 noted that a tailings dam failure “could result in significant and potentially irreversible impacts on the lives and livelihoods of several thousand villagers located downstream.” However, IFC and PSBC disputed whether the financial links raised in the complaint actually exposed IFC to DPM, and the CAO decided not to conduct a full compliance investigation. Communities used the CAO appraisal report to successfully challenge DPM’s environmental permit at the Supreme Court, but DPM pledged to continue construction. The CAO process was demonstrative of the extreme difficulty faced by affected communities when trying to hold IFC and its financial intermediary clients accountable for projects that pose obvious and severe risks.

Relevant IFC standards that were violated

  • Performance Standard 1 Assessment and Management of Environmental and Social Risks and Impacts
  • Performance Standard 3 Resource Efficiency and Pollution Prevention
  • Performance Standard 4 Community Health, Safety, and Security
  • Performance Standard 6 Biodiversity Conservation and Sustainable Management of Living Natural Resources
  • Performance Standard 7 Indigenous Peoples

For more information, read here.