united states: following the money to end environmental destruction
Over the decades, Friends of the Earth US has worked to strengthen and hold the Bank accountable to their standards, while working with local activists and project-affected communities, to improve conditions on the ground. In the mid-90s, while working with Chinese activists to halt the Three Gorges Dam, they noticed that the Chinese government was deliberately avoiding the World Bank – and its standards – by seeking funding from Export Credit Agencies (ECAs). They successfully campaigned to stop the US Export Import Bank (Ex-Im) from funding the dam, but sadly, this project was built, displacing more than one million people, destroying cultural landmarks and causing significant environmental damage.
Over the years, their advocacy work on the US Ex-Im Bank led to a set of common environmental standards among 20 international ECAs. They soon expanded their campaign to US Ex-Im’s sister organisation, the Overseas Private Investment Corporation (OPIC), which backed controversial projects such as the Freeport McMoRan mine in Indonesia and Enron/Shell’s Cuiaba pipeline in Bolivia. In 2002 the group filed a groundbreaking lawsuit against these agencies for not considering the climate impacts of the fossil fuel projects they financed; this was the first lawsuit in the US to open the courtroom doors to those impacted by climate change.
As these financiers adopted more stringent environmental standards, project developers turned to Wall Street banks for money, in another effort to evade standards. Friends of the Earth US built an international network of campaigners to target these new players, and in 2003, public pressure led international banks to launch the Equator Principles, a set of common project finance standards that has now been adopted by 60 financial institutions.
Today, the new power players in development finance are based in developing countries themselves, posing a new advocacy challenge. Five years ago Friends of the Earth US began working with environmental groups in China to promote sustainable lending practices at internationally active banks such as the China Export-Import Bank. By partnering with groups inside and outside China, Friends of the Earth US has been able to win some victories, such as China Ex-Im’s decision to indefinitely suspend its loan for the giant Belinga iron ore mine in Gabon, which would have affected one of the country’s premier national parks.