Oct 25, 2007

world vs bank: a public hearing

by DebraBroughton — last modified Oct 25, 2007 12:05 PM
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Convened by the World Bank Campaign Europe, under the auspices of the Permanent Peoples’ Tribunal in The Hague, Netherlands, 15 October 2007 to provide a forum to assess the performance of the World Bank in the last 15 years.


Photos, transscripts of the testimonies and more available at www.worldbankcampaigneurope.org



wb  hearing panel

DECLARATION of the expert panel

Upon request from the World Bank Campaign Europe, a Public Hearing was convened on October 15 in The Hague, The Netherlands under the auspices of the Permanent Peoples’ Tribunal to provide a forum to assess the performance of the World Bank in the last 15 years.


The Permanent Peoples’ Tribunal (PPT) in continuity with the Russell Tribunal supported by the Lelio Basso Foundation, has the stated goal of giving public profile and a juridical qualification to violations of fundamental rights that do not find a proper redress at the institutional level. It bases its actions on the Universal Declaration of Peoples’ Rights of Algiers, 1976.


The PPT held specific sessions in Berlin in 1988 and Madrid in 1994 to assess World Bank and International Monetary Fund activities and roles against their impact on peoples’ rights. Other sessions have also taken place that are relevant to the specific area of work and analysis of this Hearing, addressing the challenges posed by the globalized economy to peoples' rights and self-determination.


The latest session held in Vienna in May 2006 within the Enlazando Alternativas 2 process, dealt with the responsibilities of European Transnational Companies (TNCs) in Latin America. It analysed cases of the privatisation of public utilities and the extraction of natural resources. It pointed out the “complicity of European governments that support their TNCs“ and the role of international institutions such as the World Bank, the WTO (the World Trade Organisation) and the International Monetary Fund. The last of a series of hearings held by the PPT Chapter in Colombia, focusing on the oil sector, acknowledged the relevance of the concept of ecological debt when dealing with the responsibilities of European transnational corporations (TNCs).


At the end of September 2007, an Independent People’s Tribunal on the World Bank took place in India. Finally, a few days before the The Hague Hearing, another PPT session was held in Managua, Nicaragua, on the Spanish Company Union Fenosa.


The Public Hearing in The Hague was an important opportunity to continue developing new approaches to the current area of activity, by deepening the analysis of the World Bank’s role in various countries of the Global South.


It took place on the first day of a Global Week of Action on Debt and the World Bank, launched by a broad platform of NGOs and social movements across the globe calling for a substantial change in World Bank policies and practices, an end to public financing of fossil fuel projects, an end to the imposition of strict conditionalities that instead of leading to poverty alleviation lead to further impoverishment, and a commitment by governments to launch public audits on foreign debt. It developed along two areas of work, namely the human, social and environmental consequences of the World Bank’s role in imposing economic and policy conditionalities, and the role of the Bank in support of fossil fuel extraction and use.


The expert panel was chaired by Francesco Martone, an Italian Senator in representation of the Permanent Peoples' Tribunal and was further composed by Charles Abugre, development economist and head of policy and advocacy for Christian Aid from Ghana, Maartje Van Putten from The Netherlands, former member of the World Bank’s Inspection Panel, Marcos Arruda, development economist and author from Brazil, member of PACS and the Transnational Institute and Medha Patkar, from India, Founder of the Save Narmada (River Valley) Movement and National Convenor of The National Alliance of People’s Movements.

The expert panel heard testimonies by:

  • Gonzalo Salgado, of the National Consumer Defence Network (Nicaragua) on the liberalisation of electricity services;
  • Collins Magalasi, of Action Aid Malawi, on the issue of food security;
  • Temo Tamboura, of CAD Mali, on the liberalisation of the cotton sector;
  • Miguel Palacin of the Coordinadora Andina de Organizaciones Indigenas (CAOI), from Peru on reform of the mining laws in Peru;
  • Svetlana Anasova, of the Berezovka Initiative Group, Kazakhstan on "The Karachanak Oil & Gas Field" (as she was unable to attend the Hearing in person, her submission was read aloud);
  • And Michael Karikpo, of Environmental Rights Action, Friends of the Earth Nigeria on the West African Gas Pipeline



The World Bank came into existence after the World War II in order to rebuild Europe and with the purpose of creating new markets, mobilizing resources while supporting infrastructure and productive capacity. Notably after the creation of the International Development Association (IDA) it has repositioned itself in support of poverty alleviation, its avowed goal, while advancing a global free trade agenda through its lending and conditionalities. A parallel and unofficial history of the World Bank unveils years of resistance at the local and global level by social movements and communities eager to reclaim their right to self-determination and control over their resources.


The testimonies presented to the Panel in The Hague indicate that the World Bank’s policies have effectively eroded the role of the State and the public sector in borrowing countries. Its interventions have gone way beyond its formal limited role of a lending agency and went into policy-making, prioritizing, budgeting and planning in every sector of governmental action. This has enabled the Bank to generate and force a development paradigm that is market- and growth-oriented rather than aimed at meeting basic human needs while attaining social and environmental justice. Its lending conditionalities led to the conversion of life-supporting natural resources such as land, food, air, seeds and energy into merchandise.


In the case of Nicaragua the panelists listened to an extensive explanation of the developments in the energy sector which in brief showed a failure of the privatization process of public utilities in guaranteeing full and broad access to electricity for the poor majority of the country, while generating huge profits for the Spanish monopoly Union Fenosa while at the same time creating indebtedness for the State and high tariffs for the population.


In the case of Mali the Panel was told that Mali was forced to privatise the cotton sector in order to meet World Bank conditions with the purpose of receiving a debt reduction of 70 million dollars and eligibility for the Enhanced Indebted Poor Countries Initiative. As a result, according to the witnesses, the cotton prices were liberalised. The consequence was a decrease in cotton prices by 20%, cotton being the principal source of the country’s revenue. It is significant for the panellists that the timing of World Bank programs in Mali coincided with the cotton liberalisation negotiations at the WTO.


The Panel noted the remarks made by the witnesses as to how the World Bank is imposing conditions on countries negotiating a loan, leaving little or no room for these countries to choose their own development path. In at least two cases, the Panel noted that access to the HIPC debt reduction processes was conditioned to the implementation of structural adjustments and liberalization of economies, thereby producing a vicious circle of forced payment of increasing volumes of debt. An uneven distribution of resources and benefits resulted in a massive drain of national resources away from the imperatives that could ensure poverty reduction, distributional and social equity and sustainable self-reliance. In this process, the traditional, customary, cultural and territorial rights of local communities and indigenous peoples are compromised and sacrificed. International conventions and UN covenants such as ILO 169 on the rights of indigenous populations have been either ignored or violated.


The panel acknowledges the relevance of the concepts of ecological and social debt when dealing with the consequences of such a development paradigm. Additionally, evidence of odious and illegitimate debt - such as in the cases of Peru and Nigeria – has been presented, whereby foreign debt accumulated during dictatorial regimes is still being paid off by the victims of the past. Notwithstanding, the legal frameworks that can be applied to the concepts of illegitimate, odious and ecological debt need further articulation and development.


In many cases, the Panel noted the points made about violations of peoples’ right to be pro actively engaged at all levels of the decision-making process as is laid down in several of the World Bank’s own policies. Besides the Panel notes this is not in free agreement with the principle of ‘prior informed consent’ in any policy or decision affecting their own lives, and territories.


 Hence, through its policy advice, the Bank has prevented the full exercise of participatory and direct democracy, thereby widening the gap between governments and peoples, creating a fictional political space where genuine interests are overlooked if not ignored. In this context, the role of the national parliaments has frequently been undermined if not denied by imposing on them decisions already made by governmental authorities and Washington-based officials.


The Panel learnt however interestingly, that in certain cases, such as in Malawi countries might be able to find their own route to social justice, food sovereignty and food security, by rejecting World Bank conditionalities and continuing to subsidise local agriculture and markets, while fostering the inclusion of the poor. The Panel was told that the parliament of Malawi was forced to accept the closure of 400 local rural markets that according to the witness led to a dramatic loss of thousands of jobs including those of rural farmers, who lost access to markets. This decision in a later stage was turned over and the markets were re-opened. As a consequence, the food situation in rural areas improved substantially.


The cases of mining in Peru and oil and gas extraction in Nigeria and Kazakhstan show the link between World Bank developmental priorities and the advancement of the interests of transnational companies. Pollution resulting, from fossil fuel extraction has, according to the witnesses, resulted in the violation of peoples’ rights to health, a clean environment, and water. No compensation of losses or replacement of livelihoods was ever ensured either by the Bank or the government despite evidence of social strife and environmental destruction produced by the Bank itself.


More generally, the continued support of the World Bank to fossil fuel extraction and use, with the associated greenhouse gas emissions, rather than to small scale renewable energy, raises serious questions about the Bank’s role in and commitment to the Post-Kyoto process and support for eco-friendly technologies. It is yet another case of “institutional amnesia” considering that the Extractive Industries Review, 2004, published by the Bank itself, recommended a phase-out of Bank financing of fossil fuel projects, the adoption of the principle of free, prior informed consent and compensation for affected communities.



Drawing from the testimonies and its own experience and analyses, it is the Panel's conviction that:


 a. There is an urgent need to build upon local resistances and struggle for alternatives to the dominant economic free-trade and growth oriented paradigm, in order to strengthen alliances and movements, while confronting World Bank culture and ideology, challenging its political and economic role;


 b. Commons are for the common good and not for corporate profit. Therefore, the Bank should abstain from supporting - or recommending - the privatisation of the commons and of life-supporting resources such as public energy services and drinking water systems;


 c. Social-environmental and economic audits and impact assessments of the World Bank should be carried out in a participatory, transparent and timely fashion, so as to include the people that could be directly or indirectly affected by the projects funded by the World Bank. Moreover, a moratorium of projects causing conflict should be considered in order to allow for a meaningful assessment and compensation measures to be developed and implemented;


 d. The recommendations of the 2004 Extractive Industries Review, the outcome of a multi-stakeholder exercise in global policy making, on the request of the World Bank itself, are still valid and cogent and should be implemented in letter and spirit as a matter of urgency;


e. Parliaments and governments should initiate independent debt audits in order to identify historical responsibilities, the social, economic and environmental, as well as juridical implications of debt for peoples’ rights and self-determination and the legitimacy of the claim for reparation. Parliaments and governments should take the opportunity of the ongoing negotiations for the replenishment of IDA (International Development Association) to condition any new replenishment to a significant and urgent change in World Bank’s practices and conditionalities currently aimed at fostering a pro-growth, pro-free trade agenda rather than social, economic and environmental justice;


f. No violations of UN conventions and covenants in any development project can be accepted, with or without bilateral and multilateral funding;


g. Any investment or operation by the World Bank must respect community rights by practising the principle of ‘free prior informed consent”.



Francesco Martone, Chair

Charles Abugre

Marcus Arruda

Medha Patkar

Maartje Van Putten

Apr 20, 2007

clashes with corporate giants

by admin — last modified Apr 20, 2007 12:45 PM

Examples of small communities up against the corporate might.

Canadian polluter forced to pay

by admin — last modified Apr 20, 2007 12:20 PM
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A major victory in the Canadian courts in 2003 upheld the ‘polluter pays’ principle.

In an attempt to dodge costs, Imperial Oil took the Quebec Minister of Environment to the Supreme Court of Canada alleging conflict of interest over a clean-up order.


While strongly supporting the polluter pays principle found in almost every environmental law across Canada, the Supreme Court decision also addressed the importance of inter-generational equity.


"This decision will affect how the more than 30,000 contaminated sites in Canada will be dealt with," said court intervenor Bea Olivastri of Friends of the Earth Canada.


Read about more campaign victories in our annual reports.

The European Investment Bank

by admin — last modified Apr 20, 2007 12:50 PM
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The European Investment Bank is a public bank that many have not heard of, though this is slowly changing. Each year the EIB lends far more than the better-known World Bank. The EIB finances projects in environmentally and socially sensitive areas like fossil fuels and transport, without the clear guidelines or standards used by other banks.


Established in 1958 as the funding arm of the then European Economic Community the European Investment Bank was set up to finance physical infrastructure linking the national economies of the member countries, and to provide investment in less-developed regions.

Now the EIB's total lending is more than 40 billion a year and the bank finances projects outside the European Union: in South Africa, Asia, South and Eastern Europe, the Middle East, and Latin America.

The EIB finances, the environment pays the price !

The EIB's legal status remains unclear. It is bound by EU legislation, but not for its projects in borrowing countries like Chad or Cameroon.

The EIB employs only one environmental expert and the Board meets 10 times a year, approving 30 or more projects in a one day session.

The Bank hardly spends any time monitoring those projects. As the EIB communications department said: 'You can't monitor hundreds of thousands of projects and remain economic. We just don't have the staff. There would cease to be a point to the EIB.'

Friends of the Earth International wants the world to know about the institution. It urges the Bank to become publicly accountable and responsible and to serve people and the environment.

There is an urgent need for fundamental reforms in:

  • public access to information;
  • environmental guidelines;
  • recognition of a development mandate;
  • supervision and accountability.

This campaign is coordinated by Friends of the Earth International and the CEE Bankwatch Network and supported by more than 30 NGOs from all over Europe.

find out more



* October 2005: eib poster contest

A poster exhibition calling for profound changes within the European Investment Bank (EIB) greeted participants at the EIB’s Annual Meeting in Helsinki in October.

Activists from Friends of the Earth Finland and CEE Bankwatch Network, who organized the exhibition of posters designed by Central and Eastern European artists, called for long overdue institutional innovation within the EIB.

* eib's investments outside the european union revealed
Friends of the Earth International, the CEE Bankwatch Network and Campagna per la Riforma della Banca Mondiale have launched a new tool for exposing the activities of the European Investment Bank (EIB), because the EIB, the house bank of the European Union, remains one of the most secretive international financial institutions. The new web-based database describes all projects financed by the EIB in Africa, Asia, Latin America and the Caribbean from 1994-2004.

read the new publication :  the european investment bank in the south in whose interest?
foei, bankwatch, weed, crbm 2006
read as pdf

Invisible Hands:
New film reveals Europe's hidden financial powerhouse

check out our new campaign – EIB: Public Funds for Public Benefits launched at the EIB Annual Meeting June 2nd 2005

fact sheets on the eib
EIB Annual meeting 2nd June 2004

briefing: undermining lives in laos
objections to the sepon project 2 copper mine expansion of oxiana ltd in lao pdr

something smells around here …european investment bank ignores right to know

June 3rd 2003 action at EIB annual meeting : Monkey Business at the EIB- More transparency is essential!

non agricultural market access

by admin — last modified Apr 20, 2007 12:50 PM
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Governments including Japan, Korea, Mexico and the United States are planning to use new World Trade Organization (WTO) negotiations to dismantle a wide range of national laws protecting the environment, social well-being and health. Legislation covering food, fisheries, timber and petroleum production, energy efficiency, chemical testing, recycling and standards in the electronics and automobile industries have all been raised as potential barriers to trade under the Non- Agricultural Market Access (NAMA) negotiations.

Should governments succeed in eliminating these non-tariff barriers' they would undo a wealth of legislation designed and implemented to protect people and their environment around the world.



EU uses WTO to blackmail developing nations

Full scale of WTO challenge to health and environment revealed (press release 24 May 05).

Environmental laws lined up for removal by new trade talks (press release 18 April 05).

Trade negotiations threat to environment and development: new FoEI briefing on NAMA (pdf, 540kb).

wto deal endangers environment, development
e.u. and u.s. demanded high price for empty concessions

FoEI's Analysis of Notifications of Non-tariff barriers in Non-agricultural Market Access (NAMA) negotiations of the WTO can be viewed at: www.foe.co.uk/resource/media_briefing/ntbsanalysis.pdf (in spanish)
and the Database of Selected Notifications which can be viewed at: www.foei.org/trade/NTBs.xls (use this to search the database)
www.foe.co.uk/resource/evidence/non_tariff_barriers.pdf (use this to print the database)
Environmental laws lined up for removal: Analysis of Notifications of Non Tariff Barriers in Trade Talks
New! website NAMA Watch

Costa Ricans take to the street to protest against CAFTA

by HelenOlney — last modified Apr 20, 2007 12:20 PM
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On September 30, 2007, members of Friends of the Earth Costa Rica joined between 100,000 and 150,000 people on the streets of San José in a peaceful march that stretched for over a kilometer. The aim: to encourage people to vote against CAFTA (the Central American Free Trade Agreement with the US) in the referendum on October 7.

CAFTA protest in Costa Rica

Similar uprisings were seen earlier this year in February and last year in October. In a small victory for anti-CAFTA demonstrators, Costa Rica's Supreme Elections Tribunal (TSE) decided to call a referendum on CAFTA instead of putting it to vote at the National Assembly, where pro-CAFTA forces have a majority. This referendum will be the first time any population has voted on a free trade agreement. Costa Rica is the only signatory who has not yet ratified the agreement.


The goal of CAFTA is the creation of a free trade zone. If passed, tariffs on about 80% of US exports to the participating countries will be eliminated immediately and the rest will be phased out over the subsequent decade. There are worries that CAFTA will force local businesses to close. It´s predicted that poverty will increase as Central American countries prematurely open markets to US agricultural goods which are subsidized, making local farmers unable to compete with imports. These countries simply do not have the resources to support even short-term unemployment.


CAFTA also faces opposition due to provisions outlining "test data exclusivity" for pharmaceuticals. Test data exclusivity could enable multinational pharmaceutical companies for a limited time to hold an effective market monopoly on various medicines, including those used to treat AIDS, malaria, and tuberculosis. Critics say that this provision would prevent many poor people from receiving life-saving medications.


In 1948 Costa Rica became the first country in the world to constitutionally abolish its army and instead dedicated the military budget to security, education and culture. The CAFTA agreement includes importing war weapons and arms, tax-free in Costa Rica.


¨Next Sunday we will reject the CAFTA and continue building the country that we want¨ asserted Isaac Rojas, Friends of the Earth, Costa Rica.


No Public Money for Corporate Power

by admin — last modified Apr 20, 2007 12:20 PM
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International Finance Corporation (IFC) aims to weaken its environmental and social policies

The International Finance Corporation (IFC - the private sector arm of the World Bank Group) is in the process of revising its environmental and social policies, its technical pollution standards and information disclosure requirements. The revised standards will become the new benchmark for international financial lending practices for other private commercial banks, such as the Equator Banks, as well as Export Credit Agencies and other International Financial Institutions. Three different revision processes are underway, each with a different time frame. More information (www.grrr-now.org).


The IFC's policies were intended to protect people and the environment against the harmful impacts of IFC investment. Although the policies have improved over the past years, implementation has been feeble, with the policies being regularly violated.


But rather than addressing these fundamental deficiencies, the IFC opted to launch a review that would recognize and institutionalize this failure to implement standards.

The proposed Performance Standards would be only be voluntary, with the new proposal backsliding from existing inadequate policies.


The IFC review process itself is questionable for several reasons. In September, a letter was sent by 180 NGOs, including a number of Friends of the Earth groups, demanding:

  • more time,
  • more translation,
  • more explanation,
  • and more clarity.

When the IFC did not meet these requirements, Friends of the Earth and others decided not to participate in the review and called a boycott.

news :

foei involved in ifc safeguards review (december 2005)
The controversial review of the International Finance Corporation (IFC) environmental and social safeguard policies or ‘performance standards’ is drawing to a close. The IFC, the World Bank’s private sector arm, is attempting to dilute its environmental and social standards to make them easier for private companies to implement, and to encourage private banks to sign up to the Equator Principles. FoEI Chair Meena Raman has written to World Bank executive directors outlining FoEI’s concerns with the proposals. Of particular concern to FoEI, aside from the weakening of the standards, is the continued lack of coherence of World Bank policy with on the ground project practices, and until this is addressed, policy details are of little value.

IFC review drags on (26-02-2005)
In response to a boycott, the International Finance Corporation has extended the timeline for public consultation on the review of social and environmental safeguards and the information disclosure policy. The revised timetable was to see the publication of an guidance notes end January. Public comment on the disclosure policy will be received until 31 March, and on the safeguard policies until 29 April. The IFC expects the performance standards, which will replace existing Bank safeguard policies, to come into effect in January 2006.
In spite of high-profile boycotts carried out by FoE groups and others in Rio, Washington, Manila, London, Paris and Nairobi, the IFC claims to have received "substantial and diverse input" from various stakeholders throughout the consultation period since September. FoE groups are taking up the importance of the IFC policies with their government representatives. Groups have sent letters to the Executive Directors, Ministries and the IFC heads and met with ministry officials, who were often surprisingly unaware of the debates. Documents were also distributed to other national organizations, explaining the risks and threats of the current review, and making ambitious proposals.


Many private banks and ECAs cite World Bank and International Finance Corporation safeguard procedures in their efforts to avoid or mitigate environmental and social impacts. Read the civil society demands at www.grrr-now.org and read about FoE groups’ activities at www.foei.org/ifi/ifc_boycott.html .

world bank's new lending safeguards still weak (october 2004)

World Bank draft environmental standards for private sector activities are still too weak. The World Bank's International Finance Corporation (IFC) guidelines are relevant for all its lending activities, including risky pipelines, mines and large dams. Pressure from commercial banks to relax the standards has led to a review process. But in a recent consultation in Rio de Janeiro , civil society walked out in protest at the IFC's new proposals.


'The environmental and social guidelines were established to protect people and the environment from negative impacts generated by the institution's projects… But the new draft standards seem to be geared at protecting private sector profits rather than anything else' said FoEI's Longgena Ginting.

ifc under fire (november 2004)

More than 200 civil society organisations and socially responsible investors called on the International Finance Corporation (IFC), the private sector arm of the World Bank, to protect the interests of the poorest and the public when setting rules governing global private investment. The “Platform for Rights, Rules and Responsibilities” was released as groups boycott the IFC's latest public consultation on its “safeguard policy review” in Paris . The consultation is seen as ill-prepared, rushed and untransparent, “The revision process has no credibility and we do not wish to participate in such a flawed consultation here in Paris . Friends of the Earth and other groups boycotted this process worldwide over the past few months, including in Brazil , in the Philippines , in the US , in the UK , in Germany and in Ghana ,” said Sebastien Godinot of FoE France . The IFC is in the midst of a major revision of its environmental, social and disclosure policies, moving from binding rules to flexible and subjective standards. The IFC process has been criticized for both the direction of the new policies and the problems with the consultation process by civil society, investors, and even industry. Delegates representing hundreds of organizations have chosen to boycott and walk out of the consultations in protest.

world bank group responds to ngo boycott (december 2004)
After months of civil society protest, the International Finance Corporation (IFC) is reportedly planning to significantly revise its consultation process on new social and environmental standards. According to a reliable source, various demands made by NGOs on the timeline and available information will be complied with. The decision comes after a three-month civil society boycott of IFC consultations in Brazil , Manila , London , Nairobi and Istanbul by groups from around the world. “These developments are a welcome signal that the IFC took note of our concerns. The institution agrees now that policies that took years to develop cannot be discussed through a rushed process where relevant information is not available. It is curious however that these issues could only be resolved after a boycott,” said Janneke Bruil, FoEI IFIs programme co-coordinator.