corporate power

One cause for the 2008 and 2010/11 food crises is the huge growth in financial speculation. It led to prices no longer being solely driven by supply and demand, but increasingly by the actions of financial speculators and the performance of their investments.

Read Farming Money here

Companies, investment funds and sovereign wealth funds are increasingly investing in land to hedge their price risks, driving land grabs. 

In January 2012, FoEE published the study “Farming Money”. It shows that a broad list of EU-based private financial institutions – banks, pension funds and insurance companies – are involved in trading or marketing investment products based on agricultural commodity futures or other agricultural commodity derivatives and complex instruments. Some of those which seem most involved are Deutsche Bank, Barclays, the Dutch pension fund ABP, the German financial services group Allianz and French banking group BNP Paribas. 

A significant number of financial institutions across Europe appear to also be involved in financing land grabs directly or indirectly. Allianz has a fund that invests in Bulgarian agricultural land, Deutsche Bank has a fund that invests in Brazilian farm land, and a subsidiary of the Italian insurance group Generali has purchased land in Romania. Other financial institutions have financed agribusinesses with explicit links to land grabs and human rights abuses, notably ABP in Mozambique, AXA in India and HSBC in Uganda. 

The study recommends a set of key measures to regulate EU financial markets and tighten corporate policies on financial services and investments in food commodity derivatives and land deals. In order to avoid excessive speculation influencing food prices, the de-regulation that has taken place over the last 20 years must be reversed. 

Caps on the size of the bets speculators can make, so called ‘hard position limits’, are essential to tackle excessive speculation. The EU proposals must be strengthened and improved supervisory capacities must be introduced.

Private financial institutions, including banks, pension funds and investors, should liquidate their open positions in food commodity derivatives and related funds and refrain from further activities that are not directly linked to hedging for farmers, food processing companies and related commercial traders. Fund managers and financial service providers should apply strict codes of conduct on the use and sale of food commodity products and agricultural land investment, as well as respective financial services.

Read Farming Money here

The jury prize was awarded to the British banking corporation Barclays, for its food speculation at the expense of the world’s poorest people. The People’s Award went to Vale. 88,766 people cast their votes online.

The organisers recognized two corporations that are exemplary cases of those WEF members and corporations whose social and ecological offenses reveal the downside of pure profitoriented globalization.

For its food speculation practices, the expert panel conferred the Public Eye Global Award on British banking giant Barclays. As the fastest-growing food speculator in the world, Barclays drives up food prices at the expense of the poorest. In just the second half of 2010, 44 million people worldwide were driven into extreme

poverty due to rising food prices.

“We hope this award will encourage European lawmakers to introduce tough regulations to curb food speculation and stop banks gambling with food prices while nearly a billion people go hungry. Women, children and elderly people in the Global South are often the hardest hit by food speculation,” said Amy Horton of World Development Movement, the NGO that nominated Barclays for the award.

A new record of people voted via the web for the Public Eye People’s Award. The most votes (25,041) went to Vale, followed closely by Tepco (24,245) and Samsung (19,014).

Vale is Brazil’s second-largest corporation, the world’s second-largest mining firm, and the largest global producer of iron ore. The corporation has a 60-year history tarnished by repeated human rights abuses, inhumane working conditions and the ruthless exploitation of nature. Vale is currently taking part in the construction of the Belo Monte Dam in the Amazon. The dam is likely to result in the forced relocation of 40,000 people, who have neither a voice in the matter nor will they likely receive compensation. 

further reading

• Read our case study on Vale
• Read Friends of the Earth Europe's report on food speculation

The Consumer Authority of Sri Lanka has set guidelines to the manufacturers and importers of paints regarding the lead content of their products. Sri Lanka is one of the countries which has high lead levels.

The Consumer Affairs Authority published the standards for lead in paints in response to the Fundamental Rights application filed by the Centre for Environmental Justice (CEJ) /Friends of the Earth Sri Lanka in the Supreme Court.

Speaking about the victory CEJ Executive Director Hemantha Withanage said: "The standards just established are a great achievement for consumers who get contaminated every minute due to unknown toxics in consumer products such as decorative paints at home, in the school or in the work place".

The ruling states that no manufacturer, importer, packer, distributor or trader shall manufacture, import and use or distribute, pack, store or sell or display for sale, expose for sale or offer for sale, wholesale or retail any paints unless such paints shall conform to the corresponding Total Lead Content given hereunder as specified by the Sri Lanka Standard Institution for such paints.

Permissible maximum lead content Paints for toys and accessories for children (soluble in HCI acid) 90 mg/kg, Enamel Paints 600 mg/kg, Emulsion Paints for Exterior use 90 mg/kg, Emulsion Paints for Interior use 90 mg/kg and Floor Paints 600 mg/kg.

In the application Hemantha Withanage sought the Consumer Affairs Authority and others to formulate suitable regulations to compel the manufacturers and distributors to comply with the international standards relating to the presence of lead in paints considering the serious health impacts caused by adding lead to decorative paints.

Lead in paints is highly toxic. It is especially damaging to children. It impacts over 40 million children worldwide, more than 97 per cent of those live in developing countries.

Campaigners singled out prominent EU lobby group and summit organiser, BusinessEurope, for blocking ambitious climate action. BusinessEurope presents itself as the voice of the business  community when in fact it favours the most polluting industries and  denies there are economic benefits for Europe of early action against climate change.

Friends of the Earth is calling on European policy-makers to reject the skewed arguments of BusinessEurope.

Sonja Meister, climate campaigner for Friends of the Earth Europe, said:

“BusinessEurope has been resisting tougher emission reduction targets and obstructing the climate action we desperately need. BusinessEurope speaks on behalf of the most polluting sectors of industry and ignores its members which have realised ambitious climate policies can be good  for our economy and create millions of jobs. BusinessEurope is pushing  Europe into the role of laggard in the fight against climate change and  decision-makers should stop accepting their arguments.”

The European Business Summit is Brussels' biggest lobby forum and is attended by business leaders and prominent EU decision-makers. This year ten European Commissioners, including Commission President Barroso, will participate. The theme of the event is ‘Europe in the world: leading or lagging?’.

Summit organisers claim, ‘EU decision-makers should put companies first for Europe to maintain a leading position in the world’. Friends of the  Earth Europe believes that it is exactly this approach that is fuelling the climate crisis, and has led to Europe’s most severe financial crisis in the last 80 years.

Read European Noise here

The Robin Hood Tax is a tiny tax on banks and other financial institutions that would raise billions to tackle poverty and climate change, at home and abroad.

It can start as low as 0.005 per cent - and average 0.05 per cent . But when levied on the billions of dollars, pounds, euro and yen sloshing round the global finance system every day through transactions such as foreign exchange, derivatives trading and share deals, it can raise hundreds of billions of pounds every year.

• Take action now!
  
  

What would it cover?

It would include transactions involving stocks, bonds, foreign exchange, and derivatives (including trade of futures and options related to stocks, interest rate securities, currencies and commodities).

It would cover all transactions traded on exchanges as well as off-exchange or "over the counter" (OTC).

It would be limited to transactions between financial market actors. Ordinary consumer transactions such as payments for goods, paychecks and cross-border remittances would not be subject to the Robin Hood Tax. Short-term inter-bank lending and central bank operations would also be excluded from the Robin Hood Tax.

Who's in?

Angela Merkel (the German Chancellor) and Nicolas Sarkozy (the French President) have all spoken out in support of a tax on financial transactions.

Plenty of business bigwigs are on-board too. Lord Turner (from the UK Financial Services Authority), George Soros (the philanthropist) and Warren Buffet (US businessman extraordinaire) have all backed transaction taxes. And then there are the hundreds of economists who have backed the idea, too.

This isn't some crazy pipedream. It's a simple and brilliant idea which transcends party politics and which - with your support - can become a reality.

Take action!

Please sign the petition on the Friends of the Earth Europe website calling on the The Group of Twenty (G-20) Finance Ministers and Central Bank Governors to support the tax.

Activists gathered outside the meeting at which bankers, EU officials, industry representatives and other stakeholders were discussing the future of the bank’s energy lending. They staged a peaceful 'black comedy' and handed out dirty contracts for so-called 'clean coal' to expose the disastrous impacts of the bank’s financing on climate change and the world’s poorest people. Civil society representatives later went inside to participate in the consultation.

The World Bank has ear-marked massive funds for investment in fossil fuels, especially large coal projects. Between 2007 and 2009, the World Bank increased funding for fossil fuels by 22%. Since 2007 the World Bank Group has provided $6.6 billion for coal-based energy development. This strategy locks developing countries into carbon intensive energy models for decades instead of helping developing countries to make the transition to sustainable energy production.

The latest illustration of the bank's climate-damaging lending is the Eskom project in South Africa, to which the World Bank approved a $3.75 billion loan in April. Most of the money will be used for the building of the Medupi power plant, one of the largest and dirtiest coal fired plants in the world. Over 165 civil society groups and some governments were opposed to the World Bank loan to Eskom, because of its disastrous environmental and climate impacts, and as it will mainly benefit large foreign multinational corporations to the detriment of South Africans, perpetuating a serious energy apartheid in the country.

Anne-Sophie Simpère of Friends of the Earth France said:

"The World Bank should use its energy strategy review to stop financing fossil fuels and to redirect its investments to renewable energies and energy efficiency. The World Bank must make the needs of local communities and the global need to fight climate change paramount in its lending policy."

Similar demonstrations have taken place in South Africa and the United States.

further information

Read a full press release from Friends of the Earth Europe here
Read a report on the World Bank involvement with the South African energy company Eskom

Pressure is on high-level representatives from the EU and Canada to discuss the issue of tar sands and Europe’s aim to limit greenhouse gas emissions from fossil fuels through its Fuel Quality Directive. Political attention currently focuses on Canada as the major producer of oil from tar sands, but the new report reveals that investment by European oil companies – such as BP, Shell, Total and ENI – is expanding with developments around the world including in the Republic of Congo, Venezuela, Madagascar, Russia, Jordan and Egypt, with potentially disastrous consequences for the climate and local communities.

Darek Urbaniak, extractives campaigner for Friends of the Earth Europe said: 

“Europe risks becoming a climate villain if it does not take effective action to prevent the entry of oil from tar sands into European markets. The environmental damage caused by tar sands may be outside the EU, but the trail of destruction leads to its door.”

The report reveals that the current EU proposal for the implementation of the Fuel Quality Directive does not penalise oil products from high-carbon sources, treating oil produced from tar sands as conventional oil. This could allow an influx of oil from tar sands – heavily criticised for its poor environmental and social record – into Europe.

Paul de Clerck, economic justice campaigner for Friends of the Earth Europe said: 

“The Fuel Quality Directive is supposed to benefit the climate, but the latest proposal from the European Commission leaves the European market wide open for energy-intensive fuels produced from tar sands. The EU should be a global standard-setter, and should refrain from giving political or financial assistance to tar sands projects, instead incentivising low carbon projects like renewables.”

The vast infrastructure and capital requirements of tar sands (estimated around US$ 379 billion in the next 15 years in Canada alone) would be better spent financing the shift towards a low-carbon economy, and on efforts to meet the Millennium Development Goals, the report says.

• Read the report here

After legal battles lasting nearly fourteen years, oil giant Royal Dutch Shell has been forced to pay a $15.5 million out-of-court settlement. Plaintiffs from the Ogoni region of the Niger Delta have successfully held Shell accountable for complicity in human rights atrocities committed against the Ogoni people in the 1990s, including the execution of writer and activist Ken Saro-Wiwa. The legal action is one of the few cases brought under the U.S. Alien Tort Statute that have been resolved in favour of the plaintiffs. The settlement includes establishment of a $5 million trust to benefit local communities in Ogoni.

“Shell could not stand the damage of bad publicity around this human rights case. Global campaigners have helped to highlight Shell's abuses and we share in this historic victory” he continued. 

Han Shan from the ShellGuilty campaign said: “This case should be a wake up call to multinational corporations that they will be held accountable for violations of international law, no matter where they occur,”

This settlement though will not put an end to the daily struggles people throughout the Niger Delta face as a result of Shell's activities in the region. Despite this victory, justice will not be served in Ogoni and throughout the Delta until the gas flares are put out, the spills cleaned up, and the military stops protecting the oil companies and starts serving the people. This issue will not be solved until these legitimate grievances of the community are addressed.

the fight goes on

The next phase of the struggle continues with another case with an Ogoni plaintiff pending in the New York District Court, and a further legal action in The Hague, Netherlands, where Royal Dutch Shell is headquartered. The company faces a legal action there for repeated oil spills, brought by residents of the Niger Delta, with support from Friends of the Earth Netherlands and Friends of the Earth Nigeria.

“Shell will be dragged from the boardroom to the courthouse, time and again, until the company addresses the injustices at the root of the Niger Delta crisis and put an end to its environmental devastation,” says Anne van Schaik from Friends of the Earth Netherlands.

“Communities, human rights lawyers and activists will continue to demand justice with the same determination and hope shown by Ken Saro-Wiwa and the Ogoni people.”

• Call on Shell to stop gas flaring in Nigeria
• Find out more about the case on the ShellGuilty website
  

Currently, more than 15,000 professional lobbyists are present within the halls of the EU institutions, a large majority of these representing business interests.  Many of these corporate lobbyists are being granted privileged access to EU-decision-makers, often resulting in delaying, weakening or blocking urgently needed progress on social, environmental and consumer protection regulation.  

• Pin down your candidate now

The Commission’s existing voluntary lobbying register is inadequate: most lobbyists have not registered or fail to provide crucial information such as the names of individual lobbyists, what issues they lobby on, and how much money is involved in their lobbying operation.  Moreover, the current laws do not address the influence of lobbyists over EU decision-making and raise serious concerns over the EU’s impartiality and democratic principle.

European citizens need to know who is influencing EU decision-making and how much money is involved.  For the sake of democracy and transparency, it is essential to create a mandatory lobby register to which all lobbyists have to sign up and that gives clear information on the interests represented and how much money is involved.

We need strong Members of the European Parliament (MEPs) ready to fight for the ambitious social and environmental policy targets we know we need. In order to put corporate interests in their place, lobbying transparency and high ethical standards for EU policy makers are essential.

Take action now! 

EU readers should go to Friends of the Earth Europe's Election Campaign Website and ask their parliamentary candidate to end corporate dominance in the EU today.

Global Europe: The tyranny of "free trade", the European way

Read our new analysis of the EU's 'Global Europe' strategy. This strategy is set out to support the profit of European corporations instead of people and the environment. Find out more.

On April Fools day 2009 Brussels-based environment, development, farming and transparency campaign organizations denounced the EU's continuing contribution to the financial crisis and the limited solutions it advocated at the G20 with a theatre spectacle in front of the European Council.

Politicians and citizens battled their way out of the financial crisis, to the backdrop of a stock-exchange on stilts - all part of "Financial Fools Day", a global day of action on the eve of the G20 meeting in London.

Alex Wilks from the European Network on Debt and Development said:

"The ostrich approach to regulation -- put your head in the sand and hope for the best -- has been exposed as a sham, as many protesters have said for years. European companies and governments bear a big responsibility for the current crisis. Yet EU proposals for the G20 offer little for ordinary citizens in Europe, and the pledges for the world's poorer regions to be announced tomorrow will be a mere drop in the ocean compared to the dramatic impact of the crisis."

Friends of the Earth Europe and the other groups involved are concerned that European governments are bailing out the banks responsible for the crisis without demanding significant regulatory concessions in exchange. European governments are relying on the advice of controversial bankers, continuing to promote further financial services liberalization in trade negotiations, and failing to regulate European-based hedge funds.

Developing countries are being hard hit by the financial and economic crisis, but are being given no additional support by European governments.

Paul de Clerck from Friends of the Earth Europe said:

"We are witnessing not just a financial crisis, but a global systemic crisis with environmental, social, economic and democratic dimensions. Banks need to be held fully accountable for the impacts they have on the environment, food prices, destruction of biodiversity, climate change. To tackle this crisis we need a radical departure from the current economic and social model."

Environmental Rights Action/Friends of the Earth Nigeria (ERA) received an award this year from the 2009 Bloomberg Awards for Global Tobacco Control at the 14th World Conference on Tobacco or Health in Mumbai, India. The group was applauded for monitoring and publicizing tobacco industry activities intended to increase tobacco use and undermine tobacco control efforts.

ERA has extensively monitored and exposed the marketing activities of the tobacco industry. They have faced the industry's numerous attempts to undermine tobacco control policies in Nigeria head-on by exposing the front groups used by the industry to carry out its activities. Furthermore, they have highlighted unfair practices towards tobacco farmers and indifference to child labor.

The award for excellence in monitoring was accepted by Mr. Akinbode Oluwafemi, Programme Manager, ERA.

"Sadly, Africa is the newest frontier for tobacco companies," Mr. Oluwafemi said.

"Tobacco companies have mapped out the tender lungs of our youth and women as enormous profit  opportunities. This is what ERA is dedicated to resisting."

On February 25, Friends of the Earth Europe, in conjunction with Corporate Europe Observatory, SpinWatch and LobbyControl, protested against the fact that an EU committee, set up to advise European leaders on the economic crisis, is largely made up of financial industry insiders.

Activists dressed as sheriffs made their protest outside the European Commission by carrying 'Unwanted' posters with pictures of the 'cowboy' bankers who make up the committee.

Paul de Clerck of Friends of the Earth Europe said:

"Most of these guys have acted like wild cowboys. They have brought misery to millions of people. Their one-sided advice is not wanted. They are part of the problem, not part of the solution. The Commission should not rely on a group with such close ties to the financial industry."

The protest was in support of a new report, entitled 'Would You Bank on Them?', which examines the track records of the committee members and argues that, instead of repeating mistakes of the past, the European Commission should investigate how financial industry lobbying contributed to the present crisis, and employ entirely new consultation methods.

Read the full report here

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

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

FINDINGS AND OUTCOMES OF TESTIMONIES

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.

RECOMMENDATIONS AND NEXT STEPS

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”.

PANEL MEMBERS

Francesco Martone, Chair

Charles Abugre

Marcus Arruda

Medha Patkar

Maartje Van Putten

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 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.

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.

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.