World Bank undermining its own ambitions for extractives, finds new report

World Bank undermining its own ambitions for extractives, finds new report

by CEE Bankwatch Network

13th December 2005

PRESS RELEASE: CEE Bankwatch Network

Washington D.C., U.S -- A new report released today finds that the World Bank Group's implementation of its Extractive Industries Review (EIR) in Europe and central Asia is neglecting a significant number of commitments which the Bank's managment signed up to in October last year. [1] Uneven EIR implementation has been evidenced in on the ground investigations into World Bank Group supported extractive projects, where far too often 'business as usual' continues to result in negative social, environmental and human rights impacts rather than poverty alleviation.

"Grounded in Washington", produced by CEE Bankwatch Network in cooperation with Bank information Center, is based on research into six projects [2] financed by the World Bank Group since the October 2004 release of the EIR report. It coincides with the release of a World Bank management report [3] on the implementation of the EIR, but offers contrasting conclusions:

"There have been no significant qualitative shifts in the implementation of extractive projects in the Europe and central Asia region."

"The EIR recommendations and commitments have not yet been institutionalised across the World Bank Group."

Petr Hlobil, Campaign Coordinator of CEE Bankwatch Network and in Washington this week along with other researchers to present the report to World Bank Group staff and Executive Directors, said: "Our research on the ground throughout Europe and central Asia should be a wake-up call to the Bank's Washington people. Regretably we have found that violations of the World Bank Group's own policies are commonplace rather than exceptional and that the Bank has hardly advanced in its efforts to achieve positive, development oriented leverage on the extractive projects it chooses to get involved in."

Andrey Rudomakha, of Environmental Watch on the North Caucasus, Russia who prepared one of the case studies, commented: "Not only did we find that the Russkiy Mir II oil and gas terminal project in Russia ignores the EIR conclusions, but we also realised that the project violates several International Finance Corporation Safeguard Policies. The construction of this terminal is directly impacting the local fishing industry and tourism. We hear in Washington that the World Bank is fighting poverty but in reality the Bank's USD 100 million support for Russkiy Mir II is increasing social and environmental problems."

For more information, contact:
Petr Hlobil (in Washington D.C)
CEE Bankwatch Network
Tel: +420 603154349
Email: petrh@bankwatch.org

Notes for editors:

1. "Grounded in Washington: Extractive Industries Review Implementation in Europe and Central Asia (2004-2005)" is available to view at: http://aa.ecn.cz/img_upload/2a47e698cb07569dfd0ebe077b6aad99/grounded_in_dc_web.pdf

2. The projects assessed in the report are: - Mine Closure, Environment & Socio-Economic Regeneration Project, Romania - Hard Coal Social Mitigation Project, Poland - Hard Coal Mine Closure Project, Poland - Mayskoe Gold Mine, Russia - Russkiy Mir II (oil and gas terminal), Russia - Poverty Reduction Support Credit (PRSC), Azerbaijan

3. The World Bank Group Report on the Implementation of the Management Response to the Extractive Industries Review, a review of progress since October 2004, is available at http://www.worldbank.org/ogmc