I was thrilled to hear yesterday that the Cerro de Oro Hydroelectric Project, near Oaxaca, Mexico, has been temporarily suspended while its financier, Conduit Capital Partners LLC, addresses complaints about environmental and social impacts and a failure to consult local communities. ERI’s colleagues at the California-based organization Accountability Counsel (AC) have been representing the Cerro de Oro indigenous communities and assisting them to make their voices heard by the Overseas Private Investment Corporation (OPIC) – the US federal agency whose investment enabled Conduit to finance the project – and the Oaxacan State Government.

Accountability Counsel specializes in using the accountability mechanisms of international financial institutions and other dispute resolution forums to assist communities facing environmental harms arising out of development projects. According to AC, the Cerro de Oro project is likely to have devastating effects on surrounding communities, including the destruction of water sources and fishing grounds and the contamination of agricultural land. The communities have not been given information about the progress of the dam, and the only environmental impact assessment that has been conducted overlooked major aspects of the dam’s consequences.

It’s instructive to see how the communities attained this rare victory. After attempts to negotiate directly with the company broke down, AC assisted them to file a complaint with OPIC’s Office of Accountability, which provides “problem-solving” services to communities experiencing the adverse effects of OPIC-funded projects. While substantial assistance from OPIC has not yet been forthcoming, the information contained in the communities’ complaint formed the basis of a campaign that led the Congress of Oaxaca State to unanimously decide to investigate the project and host public hearings on their findings. Evidently the potential exposure and mounting pressure was enough to convince Conduit that it should at least consider the consequences before barging ahead with construction that could irreparably harm indigenous groups and destroy their traditional ways of life.