Lack of transparency and accountability
Although the EIB is often compared to international financial institutions (IFIs) such as the World Bank and other regional development banks, the EIB is decidedly less transparent in its activities than its sister institutions--many of which still have a long ways to go themselves before being fully open to the public. As noted above, the EIB has no official development mandate, and despite the fact that it is a public institution, very little is known about what it does or how it takes decisions, and relevant information remains unavailable to communities affected by its projects and EU citizens, alike. The EIB attempts to justify its opacity by emphasizing that its private sector focus requires confidentiality. Its website states: “the EIB operates as a bank and is subject to conventional bank-client relationships. This includes the need to protect the business and commercial interest of its clients, which may require keeping project information confidential.”
Despite increased NGO pressure, which helped prompt a 2005 review of its transparency policy, the EIB continually fails to disclose even the most basic, critical information about its projects, and disclosure of project documents remains largely at the discretion of the Bank. If at all, documents are often disclosed only after projects are approved, and even then the information contained within the brief documents is inadequate.
The opacity of the EIB is of particular concern in Africa, which has been one of the primary “beneficiaries" of projects outside the EU to date and where the EIB continues to focus greater investment. While EU citizens affected by projects in Europe can at least appeal to the European Ombudsman if the Bank withholds information, affected communities and civil society in Africa have no such recourse.
Similarly, because the EIB lacks an accountability mechanism or independent inspection function (such as the World Bank’s Inspection Panel and the International Finance Corporation’s Compliance Adviser/Ombudsman [CAO]) for non-EU citizens, it fails to provide an important avenue for affected communities to protect themselves against the impacts of EIB-financed projects.
Environmental and social impacts
The EIB has left a heavy environmental and social footprint on Africa through its large infrastructure projects, primarily in the energy and water sectors, and especially through its investment in extractive industries. Although the EIB holds among its objectives “environmental protection and improvement, including climate change and renewable energy,” it has been roundly criticized by observers such as CEE Bankwatch who claim that the EIB “does not have clear or adequate environmental and social safeguards and procedures to guide its investments outside the EU.” Instead, the EIB relies on the existing legislation in the countries where it invests—which may pose problems in the case of many African countries, where local laws are often inadequate or not enforced.
Some critics also point out that the EIB lacks the necessary expertise and staff to ensure that basic environmental and social standards are followed. Magda Stoczkiewicz, CEE Bankwatch Network’s Policy Coordinator, responded to the EIB’s leadership role in the EU-Africa trust fund, saying “the EIB does not have its own safeguard procedures on indigenous people or resettlement. There is also hardly any expertise within the EIB on development issues, poverty or especially on environmentally sustainable development. Without a decent knowledge base and stringent assessment procedures which would include the proper assessment of development and environmental impacts, as things stand EIB financed projects may actually do more harm than good in Africa.”