Nobel Laureates and 300 NGOs Urge Changes in World Bank Practices

A draft copy of the World Bank management’s response to the recommendations was leaked last week. It indicates that the Bank is veering away from accepting the recommendations. The implementation of these recommendations would be an important step towards ensuring that World Bank Group investments alleviate poverty and benefit local communities.

At a meeting today in Melbourne with Australian campaign groups, President Wolfensohn expressed his regret that the response had been leaked before he had seen it and committed to taking as much time as required to ensure that justice is done to the three year review process.

Wolfensohn initiated the Extractive Industries Review (EIR) at the World Bank Annual Meetings in Prague in 2000. The underlying aim was to evaluate to what extent the extractive industries contribute to poverty alleviation.

The Final Report validates many of the concerns that communities and civil society organisations have been raising with the World Bank Group for more than two decades. Human rights groups, environmental organisations, development agencies, community and indigenous peoples representatives, have welcomed the Report.

Archbishop Tutu and the other four Laureates write in their letter to Wolfensohn : “War, poverty, climate change, greed, corruption, and ongoing violations of human rights – all of these scourges are all too often linked to the oil and mining industries. Your efforts to create a world without poverty need not exacerbate these problems. The Review provides you an extraordinary opportunity to direct the resources of the World Bank Group in a way that is truly oriented towards a better future for all humanity.”

The EIR concluded that if the World Bank Group intends to pursue its mandate of poverty alleviation, then it should not support extractive industries unless the broad set of enabling conditions outlined in the Report’s recommendations are in place first. Furthermore, the EIR found that support for coal and oil, as well as projects in critical natural habitats and areas of conflict, does not represent the best use of public World Bank money to promote and support sustainable development. Thus the EIR recommended that the World Bank Group should phase-out its financing for these types of projects and reallocate its funds towards renewable energy. [1]

“The key question of the EIR was whether World Bank investments benefit people in poverty,” said Petr Hlobil of CEE Bankwatch. “The EIR report provides a clear answer – without major changes in World Bank investment policies the poor are still not going to be better off, human rights will continue to be violated and environmental damage will increase.”

Janneke Bruil, of Friends of the Earth International, added, “We hope that President Wolfensohn will take the results of this wide-ranging consultation into account and that he will deliver on the good faith which he showed by initiating the EIR in the first place.”

CONTACTS:

Carol Welch, Friends of the Earth US, +1 202 491 31 97 (USA) International Program Director, Friends of the Earth US. www.foe.org

Petr Hlobil – + 420-2-7481 65 71 (Czech Republic)

International Oil and Climate Coordinator CEE Bankwatch Network www.bankwatch.org

Janneke Bruil – +31 20 622 13 69 (The Netherlands), Coordinator International Financial institutions Program Friends of the Earth International

NOTES TO EDITORS:

[1] 94 per cent the World Bank’s energy portfolio currently supports fossil fuel projects; 6 per cent goes to support renewables projects.

The recommendations of the EIR include:

• obtaining prior informed consent of local communities and indigenous peoples affected by extractive projects as a precondition for financing
• phase out lending in support of oil and coal and to invest its scarce development resources in renewable energy by setting lending targets of renewable energy lending by 20% a year
• respect for indigenous peoples’ land rights
• ensuring that revenues of Bank-financed projects benefit all affected local groups
• requiring that freedom of association be present in Bank financed projects as a basic human/labour rights requirement
• ensuring that good governance structures are in place before project finance and implementation occurs
• protecting biodiversity through establishing “no go” areas for internationally recognized critical habitats
• requiring that submarine and riverine tailings disposal not be used in World Bank Group supported mining projects
• no more financing of extractive industries in areas of armed conflict
• increasing revenue transparency and improving public disclosure about projects; and promoting overdue key institutional reforms to deal with the long documented “pressure to lend” in the World Bank
  that has resulted in weak environmental and social protection policies
• ensuring that World Bank group policies and operations concerning extractive industries must be, at a minimum, consistent with its obligations, as a subject of international law, in relation to international human rights law.

For more information on the EIR, go to www.eireview.org