Manufacturing Consent - World Bank to Keep Funding Oil, Mining and Gas

manufacturing consent

world bank to keep funding oil, mining and gas

johan frijns , coordinator, foei international financial institutions programme

far from controversy
Picture Copacabana beach, Rio de Janeiro. It seems a rather odd place for the World Bank Group to ponder whether it should withdraw from the oil, mining and gas (OMG) sector. But the secretariat of the World Bank Extractive Industries Review (EIR) did not think so. For the first of four regional consultation meetings they choose this venue over more logical –- but perhaps too close for comfort -– locations in Peru or Bolivia, regions where communities have been devastated by Bank-funded OMG projects.

In fact, the location was so far out of the way that no representatives from of mining-affected communities in South America, other than those invited by the Bank, ever made it to the “open testimonial meeting” that began the deliberations. Civil society representatives (some of dubious authenticity) were outnumbered three to one by OMG industry representatives, mining-friendly governments hungry for World Bank loans, and Bank staff directly involved in financing the digging of holes and the drilling of oil.

hear no victims, see no problem
No wonder the press release after the meeting concluded that “the closed meeting of representative stakeholders here gave a qualified support for the World Bank Group remaining in the [OMG] sectors.” The Bank admitted the need to include social and environmental concerns in its lending operations, and concluded rather hopefully that: “One role for the World Bank Group would be to take the lead and appropriately support all stakeholders so that they could work together in social harmony for mutual benefit.”

The EIR was the World Bank's answer to the challenge posed by FoEI and other organizations, who at the Bank's October, 2000 annual meeting in Prague demanded the institution's complete withdrawal from the OMG sectors. At that time, Bank president James Wolfensohn responded to FoEI chair Ricardo Navarro that he was willing to engage in an exercise to evaluate the pros and cons of the Bank's activities. One year later, after endless procedural quarrels between NGOs and the Bank, the EIR began with a meeting in Brussels, followed by the Rio event just described.

answers aplenty -- to the wrong question
With three more regional meetings to go, the formula seems set. The EIR facilitates a meeting where, at best, communities affected by Bank-financed projects present their grievances to understanding Bank staff. The staff in turn expresses much willingness to avoid such problems in the future through their soon-to-be renewed policies. Their recommendations go into a final report, some of which the Bank board will consider turning into policies.

Members of the EIR secretariat, in private conversation, have already indicated that they see the EIR process as a means of reforming Bank operations in the OMG sector. Yet they skip the fundamental question of whether OMG funding is an appropriate role activity for the World Bank. This question has effectively been banned from conversation as unrealistic.

Yet this exit from the oil, mining and gas sector is precisely what FoEI demands. The World Bank's stated goal is “a world free of poverty”, yet we have a plethora of arguments to show that OMG projects do not alleviate poverty. Instead they often push communities into poverty, while forming a direct and massive threat to the environment.

foei's goals
This is why FoEI is seeking a moratorium on any new lending, immediate adoption of “no go zones,” acceptance of communities' rights to veto any project that threatens their well being, and an investigation into Bank-accumulated ecological debt for its decades of OMG lending. (For details on all this see FoEI's position paper "Phasing Out IFI Financing for Fossil Fuel and Mining Projects" at www.foei.org/publications/financial/index.html).

If FoEI intends to use the EIR to pursue the above-stated goals, we must make better use of upcoming EIR meetings in Budapest (June), Johannesburg (September) and Bali (October). We must present our call for a phase-out and base it on accounts from affected communities all over the world. Examples of Bank-financed disasters are everywhere. They include the Chad-Cameroon pipeline, the Grande Carajas complex in Brazil, the Bolivia Brazil gas pipeline, the Kumtor gold mine in Uzbekistan, and the Yanacocha mine in Peru, to name just a few.

public pressure essential
There is an urgent need for FoE groups to develop public education campaigns that expose these scandals. This will help us ensure that the final report of the EIR does not go unnoticed, and that public pressure on the World Bank Board is strong enough to deal with the matter. The one lesson to emerge from two decades of reform is that the Bank has never made any changes of its own volition; it has only done so under pressure from civil society.