Respect Human Rights, Pull Out of Coal and Oil Financing

Dec 8, 2003

World Bank Official Review Advises

Bank Information Center – CEE Bankwatch - Defensa y Conservación Ecológica de Intag – Environmental Defense – Environmental Rights Action - Institute for Policy Studies – Friends of the Earth – Forest Peoples Programme - Mineral Policy Center- Oxfam America – Philippine Indigenous Peoples Links

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December 2, 2003

World Bank Official Review Advises: Respect Human Rights, Pull Out of Coal and Oil Financing

Development & Environmental advocates praise report, challenge Bank to implement Capping a two year long review of the development impacts of the World Bank Group’s support for oil, mining, and gas projects worldwide, the Extractive Industries Review (EIR) has recommended that the World Bank adopt significant reforms, including doing more to reduce poverty, immediately ceasing funding for coal projects worldwide and phasing out its support for oil production by 2008. The Bank-sponsored review also recommended enhanced human rights protections, prior informed consent for affected peoples, and an end to support for destructive mining technologies Carlos Zorrilla of the Ecuadorian organization Defensa y Conservación Ecológica de Intag (DECOIN) expressed the hope of many that the EIR would facilitate a shift in priorities at the World Bank. “The World Bank’s extractive industry projects have only worsened poverty, created enormous social conflicts, violated fundamental human rights, and contributed directly to the destruction of ancient cultures and to the devastation of our natural resources. They have benefited the countries of the North, their transnational corporations, and a handful of the elite and corrupt class of our countries. We who have had to live with the burden of World Bank development projects can only hope that the Bank will be forced into a different path by the findings and recommendations of the EIR.” At the World Bank Annual Meetings in Prague in 2000, President James Wolfensohn initiated the EIR by pledging to evaluate the poverty alleviation impacts of the extractive industries. The Bank appointed Dr. Emil Salim, the former Indonesian Environment Minister under Suharto and a Director of Indonesia’s largest coal company to direct the review. Although Dr. Salim subsequently resigned from the Board of PT Kaltim Prima Coal, the EIR was beset from the outset by critiques of bias and meddling by industry and the Bank. “The process designed by the Bank was indefensible, but the truth is undeniable” said Steve Kretzmann of the Institute for Policy Studies. “Against all odds, Dr. Salim and his team have done an excellent job. The oil and coal industries increase poverty, human rights abuses, and environmental degradation locally and globally, and the World Bank has no business using our tax dollars to support them.” The final report, issued last week, was strongly critical of the record of the extractive industries in development, human rights, and environmental terms. Now that the final report has been issued, a variety of interest groups will meet in Lisbon, Portugal in mid-December to discuss ways to ensure that the Bank implement the EIR’s recommendations. The results of that final consultation will be attached to the report as an appendix, and Dr. Salim will formally present his findings to World Bank President James Wolfensohn in late December. “One of the report’s important recommendations is that the Bank should not fund oil or mining projects without the consent of indigenous communities,” said Marcus Colchester of the Forest People’s Programme. “The Bank should move promptly to adopt this principle in its new policy on indigenous peoples and should encourage its private sector clients to do so as well.” “I applaud the report’s call to bar mining companies from dumping waste in rivers and oceans,” said Payal Sampat, international program director at Mineral Policy Center. “The Bank can demonstrate leadership by refusing to lend to projects that employ these incredibly destructive methods.” The final report also importantly recognized the role of the World Bank’s IFC and MIGA departments and their client corporations in promoting and protecting human rights. The EIR recommends “adoption of and demonstrated compliance with human rights principles should be a prerequisite for companies seeking WBG support for extractive industries.” “Such a requirement would certainly pose a problem for oil companies like Shell, ChevronTexaco, and ExxonMobil who face ongoing judicial investigations for their role in human rights abuses” asserted Oronto Douglas, a lawyer with the Nigeria-based Environmental Rights Action. In October of 2001, James Bond, then the head of the World Bank’s mining department, pledged on behalf of James Wolfensohn that “if the review determines that certain policies or programs have detracted from our goal of poverty reduction, we are committed to implementing changes to redress those problems." “The review has indeed demonstrated that the Bank’s support for the extractive industries and their structural adjustment programs have substantially undercut their goal of poverty alleviation” said Keith Slack of Oxfam America. “The EIR has put forward some strong recommendations to try to address the problems, but the proof will be in the pudding. We’ll all be looking to James Wolfensohn and the staff of the Bank now to implement these changes”.

CONTACTS:

Keith Slack, Oxfam America, 1-202-496-1308

Payal Sampat, Mineral Policy Center, 1-202-247-1180

Andy Whitmore, PIPLinks 44 1865 242264 Emily Caruso, Forest Peoples Programme, + 44 1608 652893

Steve Kretzmann, Institute for Policy Studies, 1-202-234-9382 x210

The final EIR report is available on www.eireview.org