Nobel Laureates, More than 300 NGOs, Urge Wolfensohn To Reform World Bank Policies on Oil, Coal and

Nobel Laureates, More than 300 NGOs, Urge Wolfensohn To Reform World Bank Policies on Oil, Coal and Mining Wolfensohn discusses issues with NGOs in Australia

Environmental Defense – Friends of the Earth - Institute for Policy Studies - Oxfam America

February 12, 2004

Contacts: Steve Kretzmann, IPS, 202-497-1033
Bruce Rich, Env. Defense, 202-387-3500
Carol Welch, FOE, 202-222-0719
Keith Slack, Oxfam, 202-496-1308

As evidence of a mounting campaign to reform the World Bank’s support of the oil and mining industries, Archbishop Desmond Tutu today joined four other Nobel Peace Prize winners and over 300 organizations from 72 countries in calling on Bank President James Wolfensohn to accept and adopt the recommendations of a review that he commissioned. A draft copy of World Bank management’s response, leaked last week, indicates that the Bank has not yet embraced and committed itself to adopting the important and necessary changes to ensure poverty alleviation and local communities benefit from the World Bank Group’s investments.

The Extractive Industries Review (EIR) was initiated at the World Bank Annual Meetings in Prague in 2000 by Bank President James Wolfensohn, who pledged to evaluate how much (or whether) extractive industries contribute to poverty alleviation. Wolfensohn met with civil society representatives today in Melbourne Australia, and pledged to ensure that “justice is done to the work that has been done on the EIR” and to not be constrained by “bureaucratic processes in the Bank”. He also distanced himself from Bank management’s draft response to the EIR, which was leaked last week.

The Final Report validates many of the concerns that communities and civil society organizations have been raising with the Bank Group for more than two decades. Human rights groups, environmental organizations, development agencies, community and indigenous peoples representatives, have welcomed the Report. Even the Bank’s own data show that countries which rely on oil as their primary export are more than 40 times more likely than other nations to be involved in civil war.1

“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.” wrote Tutu and the other Laureates in their letter to Wolfensohn “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.” Nobel Peace prize winner Jody Williams released the letter, which was also signed by Rigoberta Menchu Tum, Sir Joseph Rotblat, Betty Williams, and Mairead Maguire.

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 good governance enabling conditions outlined in the Report 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 sustainable development, and thus that the World Bank Group should phase-out its financing for these types of projects and reallocate its funds towards renewable energy.

“This process clearly concluded that World Bank support for the oil and mining industries has not contributed to significant poverty reduction, and that there have been serious problems in protecting communities’ basic rights and the environment,,” said Keith Slack of Oxfam America . Will the World Bank Group keep its commitment to own up to these failures and make the necessary changes? We hope that the answer is yes, and that Mr. Wolfensohn delivers on the good faith that he showed by initiating this process.”

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 increasing renewable energy lending by 20% a year;
-ensuring the establishment of indigenous peoples’ land rights as a condition for project finance;
-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/labor 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 tailings disposal not be used in World Bank Group supported mining projects;
-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 weakening of implementation of key environmental and social protection policies.

For more information on the EIR, view http://www.eireview.org/

Copies of the Nobel Laureates Letter and the International NGO letter can be viewed at http://www.eireview.info/

[1] Collier, Paul, and Anke Hoeffler, "Greed and Grievance in Civil War". Policy Research Working Paper 2355, Development Research Group, World Bank, May 2000