Environmental groups challenge IFC's gold loan policy

Environmental groups challenge IFC's gold loan policy

New York (Platts)--19Sep2006

Various environmental groups have joined together to challenge the track
record of the International Finance Corporation (IFC), the private-sector arm
of the World Bank that provides loans and equity investment in projects to
"reduce poverty and improve people's lives." In a report entitled "Tarnished
Gold: Mining and the unmet promise of development," the authors have critized
the IFC's record of accountability as well as its inability to monitor the
environmental impact on communities of projects it helps finance.

"Despite its stated mission, the IFC refuses to systematically report
upon the actual impacts of its projects on poverty reduction," said the
report. "On this golden birthday, we challenge IFC to prove its development
impact and account for its ongoing investment throughout the past five decades
in one of the world's most socially and environmentally destructive industries
-- gold mining." The IFC was set up 50 years ago.

The report noted that mining does not have a good record of contributing
to sustainable development or poverty reduction. "The World Bank's own
research has indicated that mineral extraction is neither necessary nor
sufficient for sustained economic growth, and that it has not helped
developing nations," the report noted.

The authors of Tarnished Gold are: Radhika Sarin of EARTHWORKS, Nikki
Reisch of Bank Information Center, Jennifer Kalafut of Bank Information Center
and Keith Slack of Oxfam America--all environmental groups.

"We are trying to hold the IFC accountable for its impact on poverty,
when its stated mission is poverty reduction," Reisch told Platts. "Their
choice of helping mining company has not contributed to that goal. The impact
on the ground has been mainly negative." She said most of the IFC-financed
projects "leave behind a detrimental legacy."

The report cires several mines that were financed with IFC mnoney and
have environmental problems. "A typical modern gold mine creates a large open
pit and uses cyanide to extract the ore. These vast industrial operations
often irreversibly alter landscapes, displace communities, contaminate
drinking water, harm workers, and destroy pristine ecosystems or farm lands,"
said the report. "Given widespread evidence of the negative economic, social
and environmental impacts, why does IFC continue to invest in gold mining
projects?"

--Ovid Abrams, ovid_abrams@platts.com

For more news, request a free trial to Platts Metals Week at
http://plattsmetals.platts.com or subscribe now at
http://www.platts.com/infostore/product_info.php?cPath=28_37&products_id=68

Please visit: www.platts.com

Their coverage of energy matters is extensive!!.