IF-EYE Newsletter
Issue #35
Wednesday, August 20, 2008
A publication of the Bank Information Center (BIC)
Welcome to the August 20, 2008 issue of the IF-EYE – the Bank Information Center’s monthly synthesis of key developments concerning international financial institutions. This issue spotlights the lack of a robust framework for minimizing human rights risks at the IFC and other leading international banks, as well as the World Bank's increased lending for fossil-fuel projects. Please send suggestions, contributions and subscription requests to: info@bicusa.org. Thanks for reading!
In this issue:
1. IFI Updates
2. Civil Society Highlights
3. SPOTLIGHT: IFC and leading international banks do not have a robust framework for minimizing human rights risks
4. SPOTLIGHT: World Bank lending to fossil-fuel plants undermines its pledge to fight climate change
5. Announcements and Resources
Bretton Woods Institutions send mixed messages about China’s role in Africa
8/19/2008 World Bank, International Monetary Fund
Since the Chinese economy has taken off and it has increasingly looked to Africa to provide raw materials, the World Bank and IMF have been confronted with the question of how to respond. Recent statements by the institutions have shown that these responses are careful and at times contradictory.
Read IMF to study Congo’s China deal before any accord by Pellet Kipela (Reuters website)
Learn more (BIC website)
IFIs cooperate on Central Asian road projects
8/18/2008 Central Asia Regional Economic Cooperation: Asian Development Bank, World Bank, European Bank for Reconstruction and Development, International Monetary Fund
The international financial institutions (IFIs) are set to invest billions of dollars in transportation infrastructure in Central Asia, primarily under the Central Asia Regional Economic Cooperation (CAREC).
Read more (BIC website)
IFIs respond to Georgian conflict
8/14/2008 International Finance Corporation, European Bank for Reconstruction and Development
The August conflict between Georgia, South Ossetia, and Russia has elevated tensions in the region to a level unseen since the early 1990s. The international financial institutions (IFIs) have largely avoided intervening or financing projects that could undermine any one of these entities. However, in response to the conflict, the IFIs have called for a resolution and pledged aid support.
Read more (BIC website)
Available company data for IFC required disclosures
8/14/2008 International Finance Corporation
The International Finance Corporation (IFC) requires extractive industry (EI) clients to publish all material payments to the government, as laid out in its Policy on Social and Environmental Sustainability. However, as of August 13, 2008, only six of the nine applicable projects contained activated links on the IFC's website. Of these, one provided only 2006, rather than 2007, figures. Projects without any links included Vostok in Russia, Melrose in Egypt and Bulgaria, and Pan American Energy in Peru.
Read more (BIC website)
IFC considers record mining investment in Guinea as its Simandou concession comes under dispute
8/11/2008 International Financial Corporation
The International Finance Corporation’s (IFC) $35 million investment in a Guinea iron mine is in jeopardy after the government rescinded a deal with mining company, Rio Tinto. At the same time, the IFC is exploring the possibility of a $500 million stake in a massive aluminum project in the West African country.
Read more (BIC website)
Turkmenistan’s pipeline prospects: China, Russia, India, or Europe?
8/11/2008 Turkmenistan
After years of isolation, Turkmenistan has been host to hundreds of official delegations from the world’s great powers, as Europe, Russia, China, and India pursue energy security with an eye toward the country's gas deposits. President Berdymukhamedov natural resource on multiple hydrocarbon export routes and pipeline proposals including the Caspian coastal pipeline, the Central Asia-China pipeline, the TAPI and IPI pipelines, and the Nabucco and Trans-Caspian pipelines.
Read more (BIC website)
World Bank announces countries eligible for avoided-deforestation credits
7/24/2008 World Bank
The World Bank took the next step in making its controversial Forest Carbon Partnership Facility (FCPF) a reality on July 24 when it announced the list of countries that would be eligible to receive grant funding to prepare for participation in the initiative.
Read more (BIC website)
Possible World Bank role in Azerbaijan’s privatization corruption
8/14/2008 Government Accountability Project
According to a report by the Government Accountability Project (GAP), the World Bank’s former president, James Wolfensohn, ignored staff warnings about Viktor Kozeny, a Czech businessman accused of bribing officials and stealing nearly one billion dollars from investors.
Privatization and Corruption: The World Bank and Azerbaijan (GAP website, Acrobat PDF)
Explosion along the BTC Pipeline confirms civil society concerns
8/7/2008 Various organizations
A fire on the Turkish segment of the Baku-Tbilisi-Ceyhan (BTC) pipeline has led to declined oil production, pipeline closure, and security fears. The explosion has burned 12,000 barrels of crude oil and led to a fire reaching 50 metres in height. The explosion confirms initial civil society fears and highlights the controversy around BTC.
Read more (BIC website)
World Bank acknowledges serious flaws in West African Gas Pipeline
8/5/2008 Environmental Rights Action Nigeria, Bank Information Center
Civil society activists in Nigeria are welcoming the World Bank’s acknowledgment of a series of damaging mistakes during the building of the World Bank-financed West African Gas Pipeline (WAGP) running from Nigeria through Benin, Togo, and Ghana. But they also say the report does not go far enough in answering crucial questions.
Read more (BIC website)
The World Bank as a Knowledge Producer
7/30/2008 Manthan Adhyayan Kendra
"The World Bank as a Knowledge Producer" by Indian NGO Manthan Adhyayan Kendra examines why being a knowledge provider is so important to the World Bank, and how the Bank uses its research and knowledge services to intervene in the policy making of borrowing countries. The Bank Information Center supported the distribution of this book so as to highlight this little discussed role of the World Bank.
The World Bank as a Knowledge Producer (Adobe pdf, 1770 KB) (BIC website)
8/14/2008 Center for International Environmental Law, Bank Information Center
A new study finds that international project financiers, including the leading international banks and the International Finance Corporation, do not have a robust framework for minimizing the social risks posed by their projects. The study—"The International Finance Corporation's Performance Standards and the Equator Principles: Respecting Human Rights and Remedying Violations?"—notes that recently-adopted standards are not likely to reduce potential human rights-related conflicts that may arise in projects.
The Center for International Environmental Law (CIEL) and the Bank Information Center (BIC), with support from World Resources Institute, Oxfam Australia and Banktrack, used the Danish Institute for Human Rights' Human Rights Compliance Assessment tool (HRCA) to analyze the extent to which the International Finance Corporation's Performance Standards explicitly or implicitly address human rights concerns. These Standards have been adopted by the "Equator Principle Banks" as the "Equator Principles." The analysis determined that the Standards and Equator Principles fail to address most critical human rights adequately and fail, even, to ensure that human rights concerns are assessed.
The groups have submitted this paper to the United Nations Special Representative of the Secretary General on the issue of human rights and transnational corporations and other business enterprises, Professor John Ruggie, requesting his attention to this issue.
The Study and appendices can be found at: CIEL's website.
Also listen to Steve Herz’s audio commentary at Corporate Watchdog Media.
Read more (BIC website)
8/11/2008 Christopher Swann, Bloomberg
Drawing on statistics from the Bank Information Center, a recent Bloomberg article points out the disconnect between World Bank President Robert Zoellick's pledge to "significantly step up our assistance" in fighting climate change, and its actual lending practices.
In April, the World Bank approved the provision of $450 million from its private sector arm, the International Financial Corporation (IFC), to fund the Tata Ultra Mega Coal Plant in western India. Once fully operational, in 2012, the plant will join the list of one of the world's largest greenhouse-gas emitters. In fact, lending to Tata Power Ltd., India's largest private sector electricity generator is counter productive to the pressure that the U.S., which holds the largest voting share on the Bank's Board, is trying to exert on developing countries, including India and China, to do more to combat climate change. Further, as the article points out, Tata Power Ltd., is the largest power company in India and is one of the largest multi-national corporations in the world; it certainly does not need public funds from the IFC to go forward with the project.
In fact, Tata is just one of several fossil fuel-based energy projects, which the Bank is helping to fund. As BIC's research shows, the World Bank's financing for coal, oil and natural gas projects increased by 60% in FY 08, compared with a nine percent boost in funds for alternatives to carbon-based power. IFC's lending for fossil-fuel projects skyrocketed by a staggering 165% in the same period. The Bank's lending record certainly does not match its rhetoric.
Zoellick Fossil-Fuel Campaign Belied by World Bank's Tata Loan by Christopher Swann, August 11, 2008 (Bloomberg website)
World Bank's lending for fossil fuel skyrockets as it positions itself as the "climate bank" (BIC website)
BIC's "Tools for Activists" is now available in Bahasa Indonesian and Hindi!
BIC has put the finishing touches on its Hindi and Bahasa Indonesian versions of its World Bank - Tools for Activists!!
Download the full Bahasa Indonesian version (Acrobat pdf, 20423 KB)
Download the full Hindi version (Acrobat pdf, 4479 KB)
Visit BIC's Tools for Activists page to view all of BIC's toolkits.