Global Policy Forum

As part of a mounting campaign aiming to change World Bank support to the oil and mining industries, Archbishop Desmond Tutu today joined five other Nobel Peace Prize winners and over 300 international organisations in calling on Bank President James Wolfensohn to accept and adopt the recommendations of a review that he commissioned. A draft copy of the World Bank management's response [1] to the recommendations leaked last week. It indicates that the Bank is veering away from a commitment to adopt necessary changes which would ensure poverty alleviation and that local communities benefit from the World Bank Group's investments. However, at a meeting today in Melbourne with Australian campaign groups, President Wolfensohn expressed his regret that the response had been leaked before he had seen it and committed to taking as much time as required to ensure that justice is done to the three year review process. Wolfensohn initiated the Extractive Industries Review (EIR) at the World Bank Annual Meetings in Prague in 2000. The underlying aim was to evaluate to what extent the extractive industries contribute to poverty alleviation The Final Report validates many of the concerns that communities and civil society organisations have been raising with the World Bank Group for more than two decades. Human rights groups, environmental organisations, development agencies, community and indigenous peoples representatives, have welcomed the Report. Archbishop Tutu and the other Laureates write in their letter to Wolfensohn, "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. 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 Sir Joseph Rotblat, Betty Williams, Rigoberta Mench Tum, and Mairead Maguire. [2]

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 enabling conditions outlined in the Report's recommendations 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 and support sustainable development. Thus the EIR recommended that the World Bank Group should phase-out its financing for these types of projects and reallocate its funds towards renewable energy. [3] "The key question of the EIR was whether World Bank investments benefit people in poverty, said Petr Hlobil of CEE Bankwatch. "The EIR report provides a clear answer - without major changes in World Bank investment policies the poor are still not going to be better off, human rights will continue to be violated and environmental damage will increase." Janneke Bruil, of Friends of the Earth International, added, "We hope that President Wolfensohn will take the results of this wide-ranging consultation into account and that he will deliver on the good faith which he showed by initiating the EIR in the first place."

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 renewable energy lending by 20% a year
• respect for indigenous peoples' land rights
• 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/labour rights requirement
• ensuring that good governance structures are in place before project finance and implementation occurs
• protecting biodiversity through establishing "no goareas for internationally recognized critical habitats
• requiring that submarine and riverine tailings disposal not be used in World Bank Group supported mining projects
• no more financing of extractive industries in areas of armed conflict
• increasing revenue transparency and improving public disclosure about projects; and promoting overdue
• key institutional reforms to deal with the long documented "pressure to lendin the World Bank that has resulted in weak environmental and social protection policies
• ensuring that World Bank group policies and operations concerning extractive industries must be, at a minimum, consistent with its obligations, as a subject of international law, in relation to international human rights law

NOTES:

1) View the leaked World Bank draft response
2) View the letter from the Nobel Laureates
3) 94 per cent the World Bank's energy portfolio currently supports fossil fuel projects; 6 per cent goes to support renewables projects.

For more information on the EIR see the official website of the Extractive Industries Review.