finance

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

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."

The first of the protests took place on March 28 when 35,000 people marched for jobs, justice and climate with the 'Put People First' coalition of which Friends of the Earth England, Wales and Northern Ireland (EWNI) is a founding member. As part of their involvement, EWNI arranged for several climate activists to speak at the rally, including Biana Jagger, Tony Juniper and Father Joe Komakom. They spoke powerfully and eloquently about the urgency of the climate crisis and the impact of climate change on the poorest people in the world.

There were additional protests from Friends of the Earth member groups across Europe, including actions in France and Belgium under the name 'We Won't Pay for Your Crisis'.

Friends of the Earth International strongly supports the coalition's call for a fair, sustainable route out of recession and for an economy based on fair distribution of wealth, decent jobs for all and a low carbon future. The G20 summit was a meeting of the world's leaders which aimed to agree coordinated action to address the current economic crisis, as well as a blueprint for future reform of the world financial system. We demand that world leaders break with the failed policies of the past and embrace a new system that seeks to make the economy work for people and the planet.

Whilst the G20 summit itself was hugely disappointing – the world’s leaders failing to take any significant action to address climate change, the continuing global financial crisis and its impact on some of the poorest people in the world –  throughout the UK's G20 presidency EWNI will continue to call for real action on green jobs, and economic and climate justice.

• Find out more about the Put People First movement -
  

http://www.putpeoplefirst.org.uk/

• Find out more about the Stop G20 movement in France -
  

http://www.stop-g20.org/

Photos: Protesters from Friends of the Earth England Wales and Northern Ireland in London. In Paris people impersonate bankers in offshore tax havens while others march through the streets.

• December 2008: Climate talks in Poznan, Poland
  
• October 2008: World Bank annual meeting addressed in Washington, Amsterdam and Jakarta
• August 2008: FoEI at the UN Climate Talks in Accra
• July 2008:  What happened at the G8 meeting in Japan?

world oil bank

The World Bank is setting itself up to become the world's climate banker. But at the same time, the World Bank is the largest multilateral lender for oil and gas projects and a major deforester, fueling climate change.

The World Bank spends some $1 billion per year on the oil and gas industry.  And these projects don’t increase poor people’s access to energy. More than 80% of all oil projects financed by the World Bank are for export back to wealthy Northern countries. Meanwhile, pollution and social conflicts surround these projects.
 
Despite all of these controversies, the institution attempts to regain relevance in the global arena. It is now promoting itself as a major actor in the fight against climate change.  The Bank has started various initiatives ranging from carbon financing facilities and climate investment funds to a strategic framework on climate and development.

The world bank's climate funds are likely to:

1. increase the global South’s debt burden and force them to pay for the climate crisis that they are not responsible for;
2. place the last remaining forests in so called 'carbon offset schemes', which would undermine Indigenous Peoples’ land rights and do nothing to reduce emissions;
3. finance a version of “clean technology” that includes dirty coal, agrofuels and large hydro dams;
4. dramatically undermine United Nations climate talks.

read more: why the world bank's climate plans are not a good idea

• 'The Poznan Statement: World vs Bank' by  142 organizations of December 2008
• FoEI briefing paper (English and Spanish)
  

• Article on forests, trade and climate change, by FoEI's Joseph Zacune
  

• Poverty, Climate and Energy: the case against oil aid

• FoE US webpage on The World Bank's Climate Investment Funds
  

• NGO letter to Governments

• Power Failure: How the World Bank is Failing to Adequately Finance Renewable Energy for Development
  

• More on public finance for fossil fuels

• FoEI climate program

• Voices from communities affected by climate change

 
Other resources

• Third World Network: No Additionality, New Conditionality: A Critique of the World Bank's Climate Investment Funds

• Sustainable Energy and Economy Network: World Bank: Climate Profiteer

• End Oil Aid Coalition: Aiding Oil, Harming the Climate

• Bretton Wood Project: World Bank climate funds: A huge leap backwards

• Bank Information Center: World Bank’s lending for fossil fuel skyrockets as it positions itself as the “climate bank”

World Bank links

• Global Consultations: Towards a Strategic Framework on Climate Change and Development for the World Bank Group

• Proposed Climate Investment Funds (CIF)

Protest at the launch of the World Bank's forest carbon facility, Bali 2007

Read our media advisory of July 8

Friends of the Earth International believes that the G8’s final communiqué regarding their action on climate change is futile rhetoric. It will do nothing to stop the toll that global warming is taking on people and the planet.

'The bad news about the G8 outcomes, is that we are doomed if the G8 countries’ proposals become reality. The outcomes of this G8 were even worse than the usual vacuous, largely symbolic previous G8 circuses – that are held behind increasingly well-fortified closed doors. This year, the World Bank has used the G8 to launch its multi-billion climate funds, backed by the UK, US and Japan. These funds are problematic for several reasons.'

Click here to learn more about the World Bank's Climate Funds

'The good news is: there increasing resistance to these proposals from global civil society and from developing countries. This was reflected in the G5 declaration of Mexico, South Africa, Brazil, India, China. The declaration affirms the G8’s historical responsibility to reduce emissions. Activists present here in Japan feel certain that next year's G8 gathering in Italy will see hundreds of thousands of peoples going to the streets calling for it to be the last G8 meeting.'

More news:

• Read the official G8 Chair's Summary of July 9 here
  

• World Bank casts its dark shadow over G8. Read our July 7 press release with La Via Campesina and Focus on the Global South here
  
• G8 leaders urged to dump the World Bank's climate investment funds. Read our July 4 press release here
  

• Read the statement of organisations affiliated with the G8 Action Network here

• Read the 'Challenge to G8 Governments' from international civil society here

• Visit the official website for the G8 Summit here

From October 8-14, during the annual meetings of the World Bank, Friends of the Earth International and others brought a message to financial decision makers gathered in Washington DC.

The message is that the World Bank is not the right institution to manage climate change funding. It has unequal decision making structures, continues to invest massively in fossil fuels, and considers coal a potentially clean source of energy.

This was the central theme of our action in front of the World Bank headquarters on October 10th, which followed various public seminars and the launch of a new report entitled Dirty is the New Clean.

See more photos of our action in Washington here

On October 12, activists from affiliate FoEI member A SEED Europe sailed the canals in Amsterdam, The Netherlands against the way the World Bank is dealing with climate change.

Read the report here or watch a short film here (in Dutch).

On October 14, FoE Indonesia and their allies mobilised in front of the World Bank office in Jakarta, Indonesia, with the same message.

Our actions were part of the

2008 Week of Global Action Against Debt and International Financial Institutions.

Further information

• Read the Friends of the Earth US World Bank and Climate factsheet
• Read our media release: World Bank and climate funds under fire
• Read more about the World Bank's climate funds on our climate and finance campaign pages

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

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

www.bankwatch.org/

news

* 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!