16-08-04

The UK government has sent a letter to the World Bank stating its views on the future of World Bank lending for oil, mining and gas. The World Bank group is partially financed by UK tax payers. The government has stated that the World Bank has not gone far enough to implement recommendations of the Extractive Industries Review (EIR) -- a three year review of the Banks lending for oil, mining and gas projects.

Hannah Ellis, Friends of the Earth’s International Financial Institutions Campaigner said that the body welcomed with caution the government’s agreement that the World Bank is not doing enough for the people and the environment it is supposed to serve. The government is yet to make clear what exactly the World Bank must do now and how the UK government, as a major shareholder of the Bank, is going to make them do it, she added.

The EIR concluded that in most cases, World Bank investments in oil, mining and gas was not alleviating poverty or promoting sustainable development. The EIR recommendations included that the World Bank must phase out lending for oil and coal by 2008, not lend for extractive projects in scientific or spiritual areas or places of civil unrest, ensure free prior and informed consent of affected communities.

In a position paper sent to Friend of the Earth, the UK government described the World Bank’s response to the EIR recommendations to increase bank lending for renewable energy as "insufficient".

"The World Bank needs to make a greater and more urgent commitment to renewable energy, cleaner energy technologies, natural gas and improved energy efficiency."

Friends of the Earth, along with a range of other environmental and development groups have been pushing the UK Government, represented on the World Bank Board and a major shareholder of the Bank, to ensure full implementation of the review. The EIR has been endorsed by 100s of Indigenous groups, European Parliamentarians and religious leaders all over the world.

Hannah Ellis, Friends of the Earth’s International Financial Institutions Campaigner added that it is very disappointing that it only now, when the final decision has already been made, that the UK government has made its views regarding the Extractive Industries Review public.

“Now that the review process is over, how is the government going to take this forward? It is all very well coming out with the right words after the event but it is time the UK demanded the World Bank make poverty alleviation and sustainable development a reality."

Hilary Benn, the international development secretary, says the bank should pay more attention to its mandate of poverty reduction, and insists that proposed reform of its management is "critical".
In 2001 the bank employed Emil Salim, a former environment minister for Indonesia, to look at the issue. He recommended an end to further investment in the extractive industries of coal, oil and gas, and a transition to investing in renewable energy. His report also called for the prior informed consent of poor people affected by mining and extraction, and for a ban on projects in areas of civil unrest, or of high biodiversity, scientific or spiritual value.

The bank has given no firm commitment to reform, although it has agreed to consider changes.

Source: The Peninsula