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Contributions from
the Column
Facts and trends
World Bank responds to the Extractive Industries Review
German Development Budget 2005
BMZ: No money for Faisabad team
KfW banking group increases development loans
WHO withdraws recommendation for two generic AIDS drugs
“Village Phone” honoured
Strengthening small private water suppliers in the South
Stiglitz: “Doha is not a development round”
8-9/2004
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[ Raw materials ]
World Bank responds
to the Extractive Industries Review
In future, the World Bank wants to be more selective when investing in projects in the energy sector. With the extraction of raw materials such as oil and coal, the interests of the population should be taken into consideration more. Also, greater importance should be given to conservation as well as to accountability of both governments and companies, according to the World Bank management response to the Extractive Industries Review (EIR). The EIR report, which an international commission drafted on behalf of the Bank and presented earlier this year, contains suggestions on how the World Bank could organise the extraction of fossil fuels in a more environmentally and socially sustainable manner. Environmental and development organisations expressed their disappointment with the World Bank response – mainly because it rejects proposals central to the EIR report.
The management dismisses the suggestion that the World Bank should phase out investments in the extraction of fossil fuels by 2008. The response states that oil and coal will remain essential sources of energy for the developing countries in the foreseeable future. Furthermore, the World Bank says it only can influence the extraction of raw materials with the aim to make projects environmentally and socially sustainable if it stays involved.
Nor does the World Bank want to follow the EIR recommendation of making projects in the resource sector dependent on the approval of the affected population. According to the Bank’s statement, there is no veto power for individuals or groups. Affected communities would be more thoroughly consulted and informed. To this end, the Bank is currently revising its guidelines on working with indigenous communities in project areas.
Moreover – as announced at the Bonn conference on renewables – the World Bank aims to increase its investment in renewable energies and efficiency measures in the next five years by 20 percent annually. In their Country Assistance Strategies for resource-rich countries, the Bank wants to assess the risks of extractive industry projects more thoroughly than it has in the past. Together with civil society representatives, indicators will be worked out for whether an extractive industry project helps alleviate poverty. In addition, the World Bank proposes setting up a group of external experts to advise the World Bank on issues of sustainable extractive industries.
In a joint statement, a group of international NGOs criticised the World Bank response to the EIR report as being inadequate. The Bank is being asked to commit unequivocally to criteria on when the extraction of resources is acceptable and when it is not. According to its critics, it is also not sufficient for the Bank to promise more transparency. The Executive Board that has to approve the World Bank response should clearly state which agreements with project sponsors will be published in future. Civil society groups also criticise the announced increase in investments in renewable energies: the initial figure given is so low that in the end, support for fossil fuels will actually grow even stronger, according to the NGO paper. On their website, the World Bank announces that it will check comments to its response and, where appropriate, will take them into consideration.
The German parliament, the Bundestag, too, calls upon the World Bank to implement the EIR proposals. In a claim approved by the coalition parties of Social Democrats and Greens, the Bundestag urges the federal government to plead for making renewable energies the World Bank’s foremost supported energy source. At the same time, the World Bank should gradually decrease its support of oil extracting projects. (ell)
Further information:
The World Bank: http://www.worldbank.org/ogmc/
Extractive Industries Review: http://www.eireview.org
The civil society view: http://www.eireview.info
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