Home Complaints database Forum Suape et al. vs. Atradius Dutch State Business
Complaint

Forum Suape et al. vs. Atradius Dutch State Business

Adverse impacts of Van Oord’s dredging operations in Brazil

Date filed
1 June 2015
Keywords
Countries of harm
Current status
No resolution
Sectors
NCP

Allegations

Communities of fishermen and shellfish collectors in the Brazilian state of Pernambuco, along with Brazilian and Dutch NGOs, allege that the Dutch dredging company Van Oord and the Dutch export credit agency Atradius DSB have failed to comply with the OECD Guidelines related to a dredging project in north-eastern Brazil. Van Oord has been active in the Port of Suape since 1995. Its most recent projects include dredging for the Promar Shipyard and the dredging of an ocean access channel to the Port of Suape. In November 2011, the official export credit agency of the Dutch government, Atradius DSB, provided Van Oord with an export credit insurance for its operations in Suape. The complaint is the first under the revised OECD Guidelines to be directed against an export credit agency.

According to the complainants, Van Oords dredging operations have caused numerous adverse human rights and environmental impacts. Extended sections of rocky ocean bottom have been blown up with explosives as part of the dredging process. Coral reefs, and mangrove forests have been destroyed seriously affecting local fish populations. Local water management systems are affected in such a way that people living in the port area increasingly suffer from floods. Traditional fishermen and small-scale farmers lost their homes and livelihoods, for which they have received insufficient compensation. The complaint further alleges that Van Oord and Atradius DSB, in collusion with the Suape port authority, failed to conduct appropriate human rights due diligence in order to prevent and mitigate human rights impacts, failed to provide local stakeholders with timely information about the projects adverse impacts, and failed to meaningfully engage stakeholders on business decisions that directly impacted them.

The complainants request that the Brazilian and Dutch NCPs jointly handle the case and that they facilitate a dialogue with Van Oord and Atradius aimed at bringing the activities of both companies into line with the OECD Guidelines. Specifically, the complainants request that Van Oord remediate the damage it has caused by rehabilitating damaged areas and ensure protection for other areas endangered by the dredging operations. The complainants also request that the loss of local livelihoods be remediated by establishing protected fish reserves. Finally, the complainants demand that both Van Oord and Atradius DSB undertake and communicate publicly about a process of due diligence to identify, prevent, mitigate and remedy impacts that they cause, or to which they contribute or are linked.

Relevant OECD Guidelines

Outcome

The complaint (in Portuguese) was filed simultaneously with the Brazilian and Dutch NCPs. Both NCPs have confirmed receipt. The Dutch NCP translated the complaint from Portuguese into English. The NCPs decided that the Brazilian NCP would take the lead in the cases against Van Oord and Complexo Industrial Portuário Eraldo Gueiros, whereas the Dutch NCP would take the lead in handling the complaint against Atradius DSB.

In December 2015 the Dutch NCP accepted the complaint against Atradius DSB. Between January 2016 and July 2016, Atradius DSB, the Ministry of Finance, and Both ENDS, et al. underwent mediation. Based on the discussions held between the parties, it was clarified by the Dutch NCP in its Final Statement that, despite objections made by ADSB and the Dutch State, export credit services are part of a business relationship within the scope of the Guidelines and as such are responsible for complying not only with national and regional laws, but also international norms and standards, including the Guidelines. The Dutch NCP also clarified that Atradius DSB’s business relationship means that while it has not “contributed to or caused” possible adverse impacts, it is “directly linked” to impacts and therefore has a responsibility to use its leverage on its business relationships to prevent and mitigate the harms caused by the dredging activities. It was also clarified in the discussions that despite the limitations faced by insurance companies to use leverage after issuing an insurance policy, insurance companies should give its full attention to ensuring effective ex ante due diligence on all aspects of the transaction with consideration of all issues referred to in the Guidelines.

In its Final Statement, the Dutch NCP also stated that its possible that CIPS and Van Oord could have done a better with its due diligence activities (including with affected stakeholder conclusions) and that Van Oord perhaps could have done better to use its leverage over CIPS to ensure that these responsibilities were fulfilled by CIPS, while also fulfilling its own responsibility. While the Dutch NCP confirmed that adverse impacts did occur, it will be the responsibility of the Brazilian NCP to assess the alleged breaches made to the OECD Guidelines by CIPS, Van Oord and Atradius DSB, as well to make ascertain the roles and responsibilities of each of the actors.

Finally, the Dutch NCP recommended that:
-Both ENDS share its “Gaps between the Common Approaches and the OECD Guidelines” with the OECD and others as an important document aimed at promoting improved alignment between the two benchmark international standards that should be reflected upon;
-Atradius DSB should use its leverage over Van Oord to encourage that the proposed stakeholder dialogue actually occurs in Brazil and that they should monitor the results of the consultation;
-Atradius DSB should publish its complaints procedure, along with its proposed timeframe; adn that
-Atradius DSB, the Dutch State and Both ENDS should continue to engage with each other over the next year.

In October 2017, the Dutch NCP will evaluate the outcomes of this Specific Instance process, in terms of the agreements made by the parties and the NCPs recommendations, as well as the concrete cases of non-compliance, that were discussed.

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Meanwhile, in August 2015, the Brazilian NCP accepted the complaint against Van Oord, but rejected the complaint against Complexo Industrial Portuário Eraldo Gueiros arguing that it is not a multinational enterprise. Since the NCP was not able to host such a dialogue in the vicinity of the affected fishing communities, Van Oord and the complaining parties decided to set up such a dialogue themselves under the guidance of a professional mediator. Over the next five years, three different meaningful two-day mediation meetings were held with representatives of Van Oord present in Pernambuco, each time with the participation of members of the affected communities. In the last such meeting also a representative of the Brazilian NCP participator as an observer.

On the 5 June 2020, following the common ground developed in this independent mediation process, the NCP decided to close this specific instance with the issuance of its final statement. The final statement takes note of the agreements already achieved via the independent mediation process on some of the demands raised in the original complaint, such as the exploration of the feasibility of artificial reef systems, the feasibility of a public health system for local fishing communities, the improvement of the anchoring areas for vessels off the coast, and the availability of safety equipment on the boats of local fishermen. The final statement also recommends continuation of the private mediation process to address remaining issues of contention that remain unsolved. Though the Brazilian NCP decided to close the case, it indicated that it remains interested in obtaining progress reports on this mediation process if and when they become available.

More details

Defendant
Other companies involved
Complainants
Affected people
Date rejected / concluded
30 November 2016

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