From Policy to Practice: Is the Industrial Development Corporation a Responsible Investor?
In 2020, the Centre for Environmental Rights produced a report assessing the finance and investment policies of two South African Development Finance Institutions (DFIs). The report, entitled Financing Fairly, examined the extent to which the finance and investment policies of the Development Bank of Southern Africa (DBSA) and the Industrial Development Corporation (IDC) comply with social, environmental, and human rights standards and support the realisation of sustainable development in South Africa.
This case study builds on the Financing Fairly report by interrogating the IDC’s investment practices, determining whether it is a responsible investor. It considers these practices in relation to the IDC’s financing of MC Mining Limited (formerly Coal of Africa Limited), a coal producer with operations primarily located in Limpopo.
As this case study shows, the IDC’s recent investment in MC Mining is indicative of its continued funding of unsustainable, climate-risky projects. In addition, the study indicates that the IDC’s Responsible Investment Policy and its due diligence processes are inadequate, resulting in a lack of proper consideration of social, environmental, climate, and human rights concerns. As a result, the IDC’s investment in MC Mining does not only harm the environment and local communities, but its failure to interrogate the impacts of MC Mining’s activities exposes the corporation to risk.
Changing Corporate Behaviour: The Mapungubwe Case Study, A Research Report, Centre for Applied Legal Studies
Full Disclosure 2016: The truth about corporate environmental compliance in South Africa – Coal of Africa Limited, Centre for Environmental Rights
Green Finance Mechanisms in Developing Countries: Emerging Practice, Palesa Shipalana (South African Institute of International Affairs)