A group of 16 indigenous individuals in Cambodia has formally rejected an informal resolution offer proposed by the International Finance Corporation (IFC), a private-sector arm of the World Bank Group. The complainants, who allege that microfinance loans backed by the IFC caused significant harm to their livelihoods, cited safety concerns and a fundamental lack of trust in the institution as primary reasons for their refusal.

The tension stems from a four-year complaint process that culminated in an October 2025 report by the Compliance Advisor Ombudsman (CAO), the World Bank’s independent watchdog. The 188-page document detailed systemic failures within the IFC’s microfinance investments in Cambodia, linking them to land loss, food insecurity, and intimidation. However, the World Bank’s Board of Directors rejected these findings last June, prompting the resignation of the CAO president and drawing criticism from over 100 human rights and civil society organizations.

In a joint statement released on August 26, 2026, the complainants expressed doubt regarding the effectiveness of the IFC’s proposed “Special Management Action Plan.” They noted that the plan lacks direct financial compensation and relies on grievance mechanisms they consider ineffective. One complainant stated, “I’m afraid that the solution outside the system is not fair because the IFC has blamed us before.”

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Civil society groups Licadho and Equitable Cambodia, which had been representing the affected individuals, have withdrawn from the new mechanism. Naly Pilorge, Director of External Affairs at Licadho, characterized the situation as a “sad end to the World Bank’s disgraceful work,” noting that the institution’s dismissal of its own oversight body has eroded all credibility with the affected communities.

The World Bank Group maintains that the IFC did not breach its sustainability policies and remains committed to addressing concerns through debt restructuring and mediation. A spokesperson for the group stated that while they respect the complainants' decision to decline the offer, the IFC remains open to future dialogue and is currently evaluating appropriate next steps for those who rejected the proposal.

Source: CamboJA News