Real stories from communities who have filed IPAM complaints

MHP Corporate Support Loan/ MHP Biogas, Ukraine

Dispute Resolution

Compliance Review

Bank: EBRD

Complaint Office: IPAM

Context

The Vinnytsia Poultry Farm (VPF), owned by Myronivsky Hliboproduct (MHP) and located in Ukraine, is the largest poultry farm in Europe, capable of housing over 39 million chickens at a time. The farm is part of a vertically integrated agro-industrial complex that includes a slaughterhouse, manure storage, wastewater treatment plant, cropland for feed production, and a biogas plant. MHP, Ukraine’s largest poultry producer, received over $1.2 billion in international public financing, with seven loans from the European Bank for Reconstruction and Development (EBRD).

The project raised serious environmental and social concerns for local communities. Residents of nearby villages reported foul odors, dust pollution, heavy traffic damaging roads and buildings, and deteriorating water quality. Independent water testing revealed dangerously high nitrate levels in local wells, raising fears of contamination from manure storage. Despite these concerns, MHP continued to expand operations without adequate transparency or meaningful community consultation. Given MHP's dominant position as a major employer and taxpayer, local communities faced challenges in voicing concerns without fear of retaliation.

Filing a complaint with IPAM

In June 2018, community members from nearby villages filed complaints to the EBRD’s Project Complaint Mechanism (PCM, IPAM’s predecessor) and the IFC’s Compliance Advisor Ombudsman (CAO), outlining various issues, including:

Air, water and soil impacts from pollution and pesticide use.
Dust and odor impacts from the growing number of facilities.
Damage to roads and buildings from constant heavy road traffic through the village.
Declining water levels in local wells.
Poor working conditions and safety risks for employees.
Inadequate community consultation and disclosure of information about environmental and social impacts.

The villagers requested a dispute resolution process to engage directly with MHP, with the option of a compliance review if dialogue failed.

Stages of the complaint

Stage 1: Registration and eligibility assessment

In September 2018, the PCM found the complaint eligible for both dispute resolution and compliance review, with the dispute resolution phase to be attempted first.

Stage 2: Dispute resolution

In collaboration with CAO, the PCM (and later IPAM) facilitated a joint mediation process between the complainants and MHP. The process, which lasted three and a half years, included 23 meetings, where community members raised concerns directly with MHP representatives. Despite early signs of progress, MHP withdrew from the process in July 2021, abruptly ending it without a final agreement or remedy. Following the company’s withdrawal, IPAM and CAO formally closed the dispute resolution phase and transferred the complaint to their compliance review functions.

Stage 3: Compliance review

IPAM completed its compliance assessment in 2022, deciding to conduct a full investigation to determine whether the EBRD breached its social and environmental policies in its financing of MHP. The review is focusing on the environmental and social assessment process, labour and working conditions, pollution prevention and control methods, health and safety, and information disclosure and stakeholder engagement. IPAM’s compliance review is ongoing.

Stage 4: Challenges

Despite the ongoing accountability process, the EBRD has continued to finance MHP. In February and September 2023, the bank approved new loans to support MHP’s operations, despite unresolved community concerns and the ongoing compliance review.

The Russian invasion of Ukraine in February 2022 has further complicated the situation. State environmental monitoring has stopped, and martial law has limited public access to information. However, villagers continue to face many of the same impacts, and in some cases, these have worsened.

Conclusion

This case illustrates the challenges communities face when raising concerns about powerful businesses backed by international finance. The IPAM and CAO-facilitated mediation process failed due to the company’s withdrawal, leaving the community without remedy. The transition to compliance review offers hope for accountability but also highlights the limitations of IAMs when banks continue to fund projects under investigation.

The MHP case also raises broader questions about how development banks can uphold accountability, especially in conflict-affected regions. Despite the ongoing compliance review, the EBRD’s decision to continue funding MHP has deepened community concerns about the bank’s commitment to its own social and environmental safeguards.

MHP Corporate Support Loan/ MHP Biogas, Ukraine

Context

Filing a complaint with IPAM

Stages of the complaint

Conclusion

Issues and sectors

Issues

Sectors

For further information