[A-List] US imperialism: World Bank & fossil fuels

["Michael Keaney" <michael.keaney@xxxxxx>]

World Bank chiefs reject oil and coal proposals
By Alan Beattie in Washington
Financial Times: February 4 2004

The World Bank's management has rejected the key proposals of an independent
review it commissioned that recommended the bank pull out of financing all
oil and coal projects in the developing world.

A draft copy, seen by the FT, of the bank's response to the Extractive
Industries Review (EIR) - a two-year review of the bank's role in financing
oil, gas and mining - shows the management declining to propose several of
its key recommendations to the bank's executive board for adoption.

Environmental campaigners reacted angrily to the management response, saying
it showed the bank was not serious enough about protecting the environment.

The management response, prepared on behalf of James Wolfensohn, the bank's
president, flatly rejects the ambitious proposal that the bank and its
private sector arm, the International Finance Corporation, should phase out
its involvement in oil projects within five years and shift its financing to
renewable energy.

"Adopting this policy would not be consistent with the World Bank Group
mission of helping to fight poverty and improve the living standards of
people in the developing world," the management report said.

Attempting to use the bank as a lever to achieve reduction in fossil fuel
emissions, as the review proposed, was counter-productive, it said.

Such a strategy would contradict the proposals of the Kyoto initiative,
which stressed the importance of sharing the burden of reduced carbon
emissions, the report added.

Ending the financing of oil projects "would unfairly penalise small and poor
countries that need the revenues from their oil resources to stimulate
economic growth and alleviate poverty". The report cited as an example Chad,
where the bank has financed an oil pipeline against the vociferous
complaints of environmentalists.

The EIR, led by Emil Salim, a former Indonesian environment minister, also
proposed that local indigenous peoples should be required to give "free
prior informed consent" before an oil, gas or mining project went ahead. The
bank said this could violate local laws.

Though the management did accept that the bank should work to increase the
transparency of oil revenues, environmental campaigners said they were
disappointed with its response.

They said they would continue to press their case when the proposals went to
the bank's executive board, though admitted that the management proposals
were very likely to be accepted.

"The World Wildlife Fund feels very strongly that all the recommendations
from the EIR should be adopted," said Francis Grant-Suttie, director of
private sector initiatives for WWF. "We are disappointed that the draft
World Bank management response seems to reject out of hand some of the most
critical recommendations in the report. However, we look forward to working
with Mr Wolfensohn and the World Bank Group in making the case why these
reforms need to be instituted."

The EIR involved consultation with industry, government and pressure group
representatives around the world but drafting of the recommendations was
left entirely to Mr Salim.