New report: ‘The European Investment Bank in the South: in whose interest?’ can the EIB deliver on development?

Media Advisory
February 8, 2006
Friends of the Earth International
CEE Bankwatch Network
CRBM
GUE/NGL Group
WEED

Available online [1], the report was authored by Jaroslava Colajacomo on behalf of four sponsoring NGOs – CRBM, CEE Bankwatch, Friends of the Earth International and WEED.

‘European Investment Bank in the South. In whose interest?’ evaluates the environmental, social and development consequences of EIB operations in Africa, Latin America and Asia and presents eight case studies [2] of controversial EIB financed projects in Zambia, Chad, Cameroon, Brazil, Mexico, Philippines, Indonesia and Laos and covers areas such as mining, oil, the pulp industry, water privatisation and large hydro dams.

The European Commission initiative to launch the Africa trust fund jointly with the EIB includes a hoped for start date as early as June this year. Following tomorrow’s launch the EU executive and the EIB will need to discuss with European ministers to convince them to contribute to the fund, though it has been reported in the press that there are some doubts about the new fund among the member states.

Jaroslava Colajacomo summarises: “Our report shows that there is a lack of development strategy in the EIB’s operations in the South and that its funding is more directed towards supporting big companies in sectors such as extractive industries or water privatisation than towards poverty alleviation or environmental standards. We also propose recommendations for necessary changes in the institution and for the role of the Commission and the Parliament in ensuring supervision and coherence.”

Gabriele Zimmer MEP said: “Each of the detailed case studies outlined in this report – for instance that of a 1.25 billion US- dollar investment in a Brazilian pulp mill – are not addressing the Millennium Development Goals and are not in line with the European Consensus on Development. This indicates that EU member states, when extending the EIB’s mandate to become the Union’s development bank, will have to equip the institution with the tools – procedures and expertise – to enable it to act as one. Vienna will not be able to close its eyes to our demand during its Presidency term.”

Magda Stoczkiewicz, of CEE Bankwatch Network, said: “The EIB is currently a client-driven institution which readily finances projects where economic returns are guaranteed. The Commission wants to make the EIB a sort of European ‘World Bank’, but the institution will have to change profoundly if it is to deliver positive poverty alleviation and environmental protection outcomes.”

Luisa Morgantini, MEP stated: “The global credibility of EU is at stake if the EIB, the largest public bank in the world, undermines key European development goals and strategies on lending operations to Africa. The Commission and the Council must now strive to establish development coherence among all the European financial instruments as recommended by the Development Committee of the European Parliament last year.”

Longgena Ginting, of Friends of the Earth International, added: “In the country I come from, Indonesia, the EIB has invested in water privatisation projects among other things. These kind of projects have done nothing to improve the quality of service, but they have brought increased water costs to Indonesia’s households.”

FOR MORE INFORMATION CONTACT:
Martin Icke (GUE/NGL Press office) Tel: +32 477 47 00 31
Jaroslava Colajacomo Tel: +39 338 3279035
Antonio Tricarico (CRBM) tel: +39 328 8485448
Magda Stoczkiewicz (CEE Bankwatch Network) Tel: +32 475 86 76 37
Longgena Ginting (Friends of the Earth International) Tel: +31 6 18846365
Hannah Ellis (Friends of the Earth) Tel: +44 7952 876 929
Klaus Schilder (WEED) Tel: + 49 177 4341 642

NOTES:
[1] Copies of the report can be downloaded from: www.foei.org/publications/pdfs/eibinthesouth.pdf or www.bankwatch.org/documents/eib_in_south_3.pdf
[2] The report includes case studies regarding mining in Zambia (by Peter Sinkamba of Citizens for a Better Environment, Zambia), the Chad-Cameroon Oil Project (by Korinna Horta, of Environmental Defense, USA), the Mexico Volkswagen Project (by Domitille Delaplace, of Equipo Pueblo, Mexico), the Mexi-gas Project (by Domitille Delaplace, of Equipo Pueblo, Mexico), the Veracel Pulp Mill in Brazil, (by Chris Lang, of World Rainforest Movement), water privatisation in Jakarta (by P. Raja Siregar of WALHI/ Friends of the Earth Indonesia), water privatisation in the Philipines (by Mae Buenaventura and Bubut D. Palattao, of Freedom from Debt Coalition, Philippines) and the Nam Theun II Dam in Laos (by Gary Lee of TERRA, Thailand).