EIB external lending mandate needs safeguards to avoid controversial projects

Following a report in today´s Financial Times [1] about expected EU agreement on a wider lending programme for the European Investment Bank (EIB) outside the EU, NGOs have warned that if such a move takes place without the rapid phasing in of better procedures and safeguard policies at the EIB then there is a real risk of an increased number of controversial projects outside the EU.

The proposal for the extension prepared by the European Commission and the EIB envisages the bank´s external lending to be as much as EUR 33 billion for the 2007-2013 period, though the Council is likely to reduce this figure to EUR 27.8 billion.

NGOs who have scrutinised the EIB´s activities for more than ten years argue that for the EIB to deliver on development and help countries outside the EU the bank needs to undertake profound reforms and establish clear and transparent procedures and safeguards. They are calling for the EIB to:
Adopt a human rights approach in order to respect human rights, food security, labour rights and indigenous peoples´ rights in accordance with relevant international laws and conventions while ensuring that all projects adhere to best practice international environmental standards and procedures; this entails the establishment within the EIB of proper monitoring tools, control mechanisms and potential sanctions to ensure that the EIB´s clients follow these requirements.
Establish clear procedures on public consultations with affected people and civil society in the very first phase of project screening as well as during preparation and implementation , in accordance with international best practices.
Ensure that all future financed projects contribute to meeting the Millennium Development Goals of the UN while prohibiting support for projects that are inherently incoherent with poverty alleviation and sustainability, including those such as:
Projects that involve the significant conversion or degradation of critical natural habitats, support the destructive exploitation of natural resources, or involve the production of substances that are banned or scheduled to be phased out of production; oLarge dams that do not comply with the World Commission on Dams criteria;
Extractive industry projects and nuclear power plants;
Water projects involving multinationals when opposed by local communities;
Large scale industrial tree plantations.
Adopt an independent accountability and compliance mechanism, which provides equal access for people in all regions where the EIB operates to voice their concerns, where necessary, directly to the EIB.
Increase EIB experts human resources to deal with the growing lending outside EU.

Magda Stoczkiewicz, Policy coordinator of CEE Bankwatch Network, said: “For the EIB to deliver on development issues and support EU goals such as sustainable development or poverty eradication it needs to implement a range of vital measures to ensure quality projects with positive impacts for people and the environment. If it doesn´t then this new injection of EU money will be rather a blank cheque from taxpayers to support European companies expanding into Latin America, Asia and the Mediterranean. Some of these companies, for example Spanish construction companies, are already licking their lips in expectation.”

For more information, contact:

Magda Stoczkiewicz
CEE Bankwatch Network
Tel: +32 475867637

Antonio Tricarico
Campagna per la Riforma della Banca Mondiale
Tel : +393288485448

Majda Bouchanine
Les Amis de la Terre/ Friends of the Earth France Tel : +334 902 532 04

Longenna Ginting
Friends of the Earth International
Tel : +31 618846365

NOTES FOR EDITORS:

1. “Wider lending role for EIB supported”, Financial Times, November 21, 2006

2. In particular, Goal 1: Eradicate extreme poverty and hunger; and Goal 7: Ensure Environmental Sustainability.