(Bucaramanga, Colombia) Late last week, the World Bank Group accepted a complaint and will evaluate its investment in Eco Oro Mineral’s Angostura mining project, a proposed large-scale gold mine located in a fragile, high-altitude wetland called the Santurbán páramo, which provides water to over 2.2 million Colombians. The Compliance Advisor Ombudsman (CAO), the independent grievance mechanism of the International Finance Corporation (IFC), will review complaints alleging that the IFC failed to evaluate the project’s potentially severe and irreversible social and environmental impacts.

The CAO’s decision was prompted by a complaint submitted last month by groups that would be affected by the project in Bucaramanga, Colombia. The complaint asserts that the IFC, the World Bank’s private-sector lending arm, ignored its own policies when it invested US$11.79 million in the Vancouver-based company’s project.

“It is outrageous that such a damaging mining initiative has the backing of the World Bank, whose mission is to advance real and sustainable development,” said attorney Miguel Ramos of the Committee for the Defense of Water and the Santurbán Páramo, a coalition of nearly 40 local groups which spearheaded the complaint before the CAO. “There could be some 20 counties whose water will be affected by this project.”

The CAO’s Ombudsman will evaluate the case before the CAO determines whether a full audit is warranted. An audit would examine if the IFC’s environmental and social policies have been violated. In May 2011, following controversial hearings and protests numbering in the tens of thousands, the Colombian Ministry of the Environment rejected Eco Oro’s initial request for an environmental license, citing environmental, constitutional and international law prohibiting mining activity in páramo wetlands.

Páramos are fragile ecosystems that supply about 75% of Colombia’s freshwater, including the drinking water of millions of people, and play a key role in mitigating and adaptation to climate change.

The Interamerican Association for Environmental Defense (AIDA), the Center for International Environmental Law (CIEL) and MiningWatch Canada supported the Committee’s request that the CAO audit the project and that the IFC withdraws its funding of the project.

“The IFC sets the standard for future investment in Colombia, and must be extra careful to avoid promoting unsustainable projects such as Angostura,” said Astrid Puentes Riaño, Co-Director of AIDA. “We are confident that this investigation will reveal that the IFC did not even ensure minimal protection for communities and the environment when it failed to require necessary impact assessments before investing.”

“Prior armed conflict in this area could further compound the deleterious impacts this project would have on communities and their water supplies. Nonetheless, the IFC invested, explicitly hoping to spur greater interest in Colombia’s mining sector,” said Jen Moore, Latin America Program Coordinator for MiningWatch Canada. “This evaluation is warranted and ultimately, the IFC should pull out.”

The CAO will review allegations that the IFC glossed over potential security issues related to Eco Oro’s project. The complaint questions the IFC’s original assessment, providing documented evidence of violence associated with guerrilla and paramilitary activity following a major military operation and the establishment of military installations in the area around 2003.

Eco Oro holds mining rights to nearly 30,000 hectares (74,130 acres) of land in the Santurbán páramo near the city of Bucaramanga in the northeastern department of Santander. Eco Oro’s project has already stimulated investments from at least five other companies in the immediate area, more than doubling the area under mining concessions in the páramo.