Global Policy Forum

By Bob Burton

Five Nobel Peace Laureates, including Archbishop Desmond Tutu, are urging World Bank President James Wolfensohn to endorse recommendations contained in a new review that proposes a dramatic overhaul of Bank policies on lending for the oil, gas, and mining industries. "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, who was awarded the 1984 Nobel Peace Prize for helping to resolve the problem of apartheid in South Africa, and the four other laureates.

Also signing the letter endorsing strict limits on lending to extractive industries are: Sir Joseph Rotblat, 1995 Peace Prize awardee for his work to diminish the threat of nuclear war; Jody Williams, 1997 Peace Prize winner for her leadership of the International Campaign to Ban Landmines; and Betty Williams and Mairead Maguire who jointly received the 1976 Peace Prize as founders of the Northern Ireland Peace Movement.

"Your efforts to create a world without poverty need not exacerbate these problems," they wrote. "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." Dated February 9, the laureates' letter was presented to Wolfensohn late Thursday at a meeting with community development and environment groups in Melbourne. "We urge you in the strongest possible terms to embrace the spirit of the report and accept the recommendations in their entirety when devising a strategy for moving forward," they wrote.

The Extractive Industries Review (EIR) was initiated at the 2000 World Bank Annual Meeting in Prague by Wolfensohn, who appointed a team headed by former Indonesian Environment Minister Emil Salim. On January 15, Salim submitted his final report. It embraces many of the concerns raised by environmental and community organizations, who have been critical of destructive lending practices of the World Bank.

Key recommendations include a phaseout of World Bank lending to oil and coal projects, and protection of biodiversity through the establishment of "no go" areas for internationally recognized critical habitats. The review also casts doubt on the practice of submarine mine tailings disposal. The recommendations are bitterly opposed by the mining, oil and gas industries. If implemented, they mean a very limited role for World Bank financial support of extractive industries unless much stricter pre-conditions are met by companies and governments.

Kate Walsh, a campaigner with the Sydney based watchdog group Aidwatch who attended the Melbourne meeting, says Wolfensohn distanced himself from a leaked internal memo in which bank staff sought to dismiss Salim's proposals to overhaul bank support for the oil, gas and mining industries. "He is clearly critical of the management report, which he said was poorly written and not very well researched," Walsh said.

A World Bank spokesman confirmed that Wolfensohn has given a commitment to further public consultation on the Extractive Industries Review and has dismissed an internal draft response to the review prepared by World Bank staff. The staff review, which was leaked last week, revealed opposition to many of the key recommendations of the Extractive Industries Review and reflects the views of extractive industry executives.

The global mining industry lobby group, the International Council on Mines and Metals (ICMM), which represents companies including Alcoa, Placer Dome, Newmont, Freeport-McMoRan Copper & Gold, BHP-Billiton and Rio Tinto, in mid-December dispatched a submission to Salim in the vain hope of ensuring his final report was watered down. In its submission ICMM opposed blanket bans on the practice of dumping tailings in the ocean or rivers, preferring that the World Bank negotiate conditions under which the practices may be acceptable.

"The WBG [World Bank Group] should encourage and play an active part in a process for developing a list of criteria for tailings placement for all mining projects," the mining companies wrote. "Site specific analysis of alternative technologies, benefits and impacts of the project should be undertaken, on a case by case basis, for all projects that would require riverine and submarine tailings disposal."

Mine tailings may contain mercury, cadmium, nickel, chromium and arsenic. During submarine tailings disposal, mines pipe their waste to the ocean, then run another pipe out into coastal waters, where the tailings spill out over the sea floor, and may disperse in coastal currents. Cheaper than other tailings disposal methods, submarine disposal is used increasingly by mining companies from rich countries in their operations in developing countries, where they may be able to circumvent environmental restrictions and are not accountable to local communities. Off the island of Sumbawa in Indonesia, for instance, an enormous pipe releases 160,000 tons of tailings per day into coastal waters. Submarine tailings disposal has been linked to toxic contamination in fish, and result in declining catches and local incomes. Toxics in the tailings wipe out bottom dwelling fish and poison coral reefs.

In his review, Salim also advocated that the World Bank take a strong stand on excluding funding for projects in existing and potential future protected areas. "The WBG should not finance any oil, gas, or mining projects or activities that might affect current official protected areas or critical natural habitat or areas that officials plan to designate in the future as protected.: "Clear "no-go" zones for oil, gas, and mining projects should be adopted on the basis of this policy," Salim's final report stated.

The EIR recommendations have drawn strong support from a coalition of 11 U.S. environmental groups - including the Friends of the Earth, the Mineral Policy Center, the National Wildlife Federation and the Sierra Club - who wrote to Wolfensohn in late January urging he adopt the recommendations as written. "We urge you, therefore, to adopt the EIR report in its entirety. Endorsement of only some parts of the EIR report would fail to address important root causes of extractive industries' destructive effects on broad-based poverty alleviation and sustainable development. As such, it would not constitute a credible response to this significant work," the U.S. groups wrote. "We support the recommendation to update and implement fully the World Bank's Natural Habitats Policy as a basis for designating "no go" areas where extractive industry projects are incompatible with vulnerable ecosystems and species," they wrote.

However, at the meeting in Melbourne Thursday Wolfensohn made it clear that the Salim's recommendations would be cherry-picked. "He said it would be virtually impossible to implement all the recommendations, and so we shouldn't be bothering to push that they should all be accepted," Walsh recounted. While Salim recommended a phaseout of funding for coal and oil projects, Wolfensohn has rejected that proposal. "He was really opposed to the idea of a phaseout of coal and oil," according to Walsh. "He said that recommendation is going to be very contentious."

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