Extractive Industries Review critical of oil and coal and submarine tailings disposal

'World Bank Pull Out of Oil and Coal' Now Official Advice

Friends of the Earth International - Media Advisory

November 25, 2003

Washington, DC (US) - An independent review commissioned by the World Bank and released today [1] recommends the Bank to stop financing all coal and oil projects in developing countries.

Many of the recommendations of this Extractive Industries Review final report, due to be discussed only on December 11-13, point to an important shift away from traditional support to the extractive industries and are likely to meet strong resistance from the bank's shareholder countries.

"The recommendation to immediately end financing for coal and 'phase out investments in oil production by 2008' is a progressive and welcome step," said Janneke Bruil of Friends of the Earth International. "It is important that the harmful and dangerous effects of such investment are acknowledged by influential public funders," she added.

Friends of the Earth strongly encourages the World Bank shareholder countries to adopt and support this "phase out investments in oil production" recommendation without delay.

The new report also recommends to step up funding for renewable energy projects, citing the need to combat climate change and this recommendation was welcomed by Friends of the Earth International.

Similarly, Friends of the Earth welcomed the report's recommendation of 'Free, Prior and Informed Consent' for communities and indigenous people that are to be impacted by the Bank's projects.

The environmental federation also believes that the suggested phase out in coal and oil projects should be extended to large-scale mining.

The report recommends steps forward in regulating the mining industry, recognising local people's rights and implementing 'best practice'. However the devastating and irreversible social and environmental impacts of the mining industry would not be fully mitigated even if all EIR recommendations were put into practice.

For this reason Friends of the Earth International believes that the World Bank should withdraw from large-scale mining altogether. Development finance should instead be used to support job transition, mine closure, reparations payment and alternative solutions such as re-use, recycling and reducing consumption.

Funding from the World Bank's private sector arm, the International Finance Corporation, is highly influential in giving a political stamp of international approval to oil, mining and gas projects, the benefits of which are often questionable while the negative impacts are significant, as laid out clearly in the EIR report.

Despite strong opposition from civil society organisations, two of the most controversial bank projects of recent years - the Chad- Cameroon oil pipeline in Africa and the Caspian oil pipeline (Baku- Tsibilisi-Ceyan) - "have been pushed through by the World Bank's management and its shareholder countries, particularly the US," according to a recent Financial Times report [2]

The Financial Times article also states:
"The [Extractive Industries Review] consultation process was initially marked by accusations of bad faith from non-governmental organisations. NGOs such as Friends of the Earth and the Washington- based Institute for Policy Studies accused the World Bank of trying to exert undue influence over the process and of giving too large a voice to business representatives. Bernard Salomé, a bank official who was appointed as secretary to the review, recently left after repeated complaints that the process was being hijacked by the bank."

For more information:

Carol Welch, Friends of the Earth US in Washington,
+1-202-7837400 or +1-202-744-8048 (mobile)

Janneke Bruil, Friends of the Earth International in Amsterdam
+31-20-6221369 or +31-6-52118998 (mobile)

Notes to Editors:

[1] the Extractive Industries Report is available at www.eireview.org

[2] Financial Times; Nov 20, 2003 "World Bank advised to pull out of oil and coal financing" By Alan Beattie in Washington

The World Bank EIR criticises mine waste tailings

Commentary by Igor O'Neil, Mineral Policies Institute

26 November 2003

The newly released World Bank Extractive Industries Review is available at www.eireview.org.

The World Bank - commissioned report is thoroughly critical of mine waste (tailings) dumping in both rivers and oceans, known as Riverine Tailings Disposal and Submarine Tailings Disposal - STD: "STD should be avoided especially in island regions where this method of disposal may not assure people's sustainable livelihoods."

Ocean dumping of mine waste - STD - is a destructive practice planned for several new mines owned by Australian and Canadian companies including BHP-Billiton, Weda Bay Nickel, Highlands Pacific, Falonbridge and others. It is already in use by Rio Tinto, Newmont and Placer.

The outrageous process of dumping mine waste directly into rivers is still carried out by mines funded or built by Freeport, Rio Tinto and BHP-Billiton. These ocean/river waste dumping mines are found in the developing countries of the Asia-Pacific region.

Excerpts from the new World Bank Extractive Industries Review:

p59: "The WBG should apply the precautionary principle and not fund projects that would require submarine tailings disposal until balanced and unbiased research, accountable to balanced stakeholder management, demonstrates the safety of such technology. Future decisions should be based on the outcome of such research and be guided by it. The EIR further recommends that, irrespective of the final outcome of the research, STD and tailings disposal in rivers not be used in areas such as coral reefs that have important ecological functions or cultural significance or in coastal waters used by indigenous peoples and local communities for subsistence "

also p34:

"Riverine tailing disposal is considered by some companies to be a practice of the past that is no longer acceptable. Scientific evidence clearly demonstrates that this method of waste disposal causes severe damage to water bodies and surrounding environments, and at least three major mining companies-Falconbridge, WMC, and BHP-have made public statements that they will not use riverine tailings disposal in future projects. In practice, this technology is being phased out due to recognition of its negative consequences: today only three mines in the world, all on the island of New Guinea, still use this method to dispose of mine wastes. The EIR agrees with the call for a ban on riverine tailings disposal.

Submarine tailings disposal (STD) is currently the waste disposal procedure preferred by many mining companies planning large-scale operations in mountainous areas of active seismicity, particularly in Southeast Asia and the Pacific. If major projects proposed for the region receive permission to use STD, there could be a significant increase in its use in the next 10 years for already approved and proposed large-scale mining operations. This is also a critical region of maximum marine biodiversity and thus of global marine conservation significance. The effects of STD (if any) on tropical marine life, marine resource use, and ecosystem function are not well understood, and there is an urgent need to address the major gap in biological data on the possible effects of STD on tropical marine ecosystems, particularly in the Indo-Pacific deep sea.70 On the basis of the precautionary principle, since marine biodiversity has global conservation significance and since the possible effects of STD on the tropical marine ecosystem are not well understood, STD should be avoided especially in island regions where this method of disposal may not assure people's sustainable livelihoods.

Almost all STD operations worldwide, whether disposing at shallow depths or in the deep sea, have had problems, including pipe breaks, wider than expected dispersal of tailings in the sea, smothering of the benthic organism (although this is predicted) and loss of biodiversity, increased turbidity, introduction to the sea and marine biota of metals and milling agents (chemicals, such as cyanide, detergents, and frothing agents), and loss of potentially re-mine-able metals from tailings in the deep sea.

The EIR heard numerous other concerns about current as well as anticipated environmental and socioeconomic impacts of submarine tailings disposal in Southeast Asia.71 STD presents an inherent economic risk to local and export fisheries, for example, because of real or perceived contamination of marine resources. It may affect large and often endangered marine life, including whales, dolphins, and marine turtles, and it may raise the risks to human health through direct or indirect exposure to mining wastes. Mining procedures such as STD may have a negative impact on numerous other important socioeconomic and environmental factors, ranging from reduced marine tourism potential to additional, often illegal small-scale mining activities by opportunistic individuals. Environmental impact assessments of mining operations with STD as their main mechanism for waste management do not adequately assess any adverse effects in the deep sea and marine food web, and such potential impacts should be included in the scope and terms of reference for such activities."

Igor O'Neill, Mineral Policy Institute
www.mpi.org.au
Phone +62 81 286 12 286
Fax +62 21 791 816 83