[stop-imf] call to action re WB lending on oil, mining and gas

[Robert Weissman]

It's rare for me to post to this list regarding World Bank project
lending, which is a bit afield from the list's primary focus on the
IMF, structural adjustment and debt. But this initiative from Friends of
the Earth International is a particularly important one, calling for a
moratorium on World Bank and other international financial institution
lending for oil, mining and gas projects.

Please send sign-ons to: ifi@foei.org

-- 
Robert Weissman	<rob@essential.org>
Essential Information
P.O. Box 19405, Washington, DC 20036, USA
Tel: 1-202-387-8030
Fax: 1-202-234-5176
www.essential.org

Towards a Phase-Out of International Financial Institution Support
of Fossil Fuel and Mining Projects


To: all organizations and movements concerned with fossil fuel and mining
projects:


Amsterdam, July 2001

Friends and colleagues,

Friends of the Earth International is seeking your support for a campaign
that aims to phase out International Financial Institution financing for
fossil fuel and mining projects.

In the past several years, public financial institutions such as the
Multilateral Development Banks (MDBs) and Export Credit Agencies (ECAs)
have come under increasing fire for their large volume of lending in the
fossil fuel and mining sectors. As concerns about climate change escalate,
and as the development impacts of extractive industries become
increasingly dubious, citizens around the world are questioning the role
that publicly financed institutions have in perpetuating extraction-based
economies and fossil fuel dependence rather than clean energy.

Acknowledging this concern, the World Bank agreed to undertake a process
of examining its role in the fossil fuel and mining sectors. In response,
Friends of the Earth International has produced a position paper calling
for an immediate moratorium and eventual total phase-out of International
Financial Institution (IFI) investments in these sectors. This call is
directed at the World Bank, as well as the rest of the MDBs and ECAs. The
Oilwatch Network has similarly called for a moratorium on investments in
these sectors.

Friends of the Earth International believes it is imperative that the
World Bank Group, and other IFIs, receive a strong signal from civil
society around the world as the World Bank undertakes its review. As
development institutions, MDBs should be pursuing investments that
genuinely lead to improvements in people's lives and in their
environments. A shift away from fossil fuel and mining investments and
towards socially and environmentally sustainable energy solutions is one
important way of doing that.

Friends of the Earth International seeks to build a broad coalition of
citizens' groups and movements to work in solidarity to achieve such a
moratorium and subsequent phase-out. If you or your organization would
like to join as partners in this campaign we urge you to get in touch with
us.

Please find below our call for a moratorium. To endorse this call, please
contact the International Financial Institutions program of Friends of the
Earth International at ifi@foei.org. The full Friends of the Earth
International position paper is available at www.foei.org.

Appeal: Towards a Phase-Out of International Financial Institution Support
of Fossil Fuel and Mining Projects


We, the undersigned organizations, are calling for an immediate moratorium
on, and subsequent phase-out of all financing for fossil fuel and mining
projects by International Financial Institutions, including Multilateral
Development Banks and Export Credit Agencies.

It is estimated that from 1995-1999, IFIs allocated around US$55 billion
to projects in these sectors (not including fossil fuel thermal generating
plants). This financing catalyzed even more private sector financing.
Problems associated with fossil fuel and mining development include:

Environmental destruction
 Fossil fuel and mining projects threaten biodiversity and destroy
pristine lands. Toxic spills, oil flares, and mining waste destroy local
ecosystems and harm human health. On a global level, fossil fuel projects
contribute to catastrophic climate change, and worsen already increasing
temperatures, rising sea levels, and volatile weather patterns.

Human rights violations Fossil fuel and mining extraction is too often
associated with repression, violations of human rights, and suppression of
the rights of indigenous peoples. Projects have forcibly displaced
indigenous peoples and destroyed their way of life. Authoritarian regimes
use repression as a way to protect projects and their investors. These
conflicts over resources, access to land, and compensation can fuel
already volatile social situations and lead to armed conflict.

Dubious development impacts There is no body of statistical evidence
demonstrating that fossil fuel and mining investments substantially
enhance GDP for most 'developing' countries, or that these projects
automatically deliver measurable benefits to the communities that need it
most. In fact, some research shows that extraction-based economies have
lower development indices than natural resource-poor countries, partly the
result of corruption and rent-seeking.

For these reasons, we call on publicly financed International Financial
Institutions to phase out of financing fossil fuel and mining investments.
Instead they should use their scarce resources for projects that tackle
the dual challenge of combating poverty and stopping catastrophic climate
change.

This phase-out should cover all phases of the fossil-fuel and mining
cycles: prospecting, exploration, test drilling, exploitation, as well as
construction of related infrastructure such as pipelines and roads, and
any financial and regulatory advice or programs by IFIs that favor such
projects. While there could be some exceptions to the phase-out, these
should only be determined through genuine local participatory processes,
and local communities should retain the right to veto projects. This
phase-out should be complemented by a phase-in of energy investments that
meet the energy needs of the poor, and are based on renewable energy and
energy efficiency projects that should be the standard for meeting future
energy demands.

CALL TO ACTION

For the reasons set out above, the undersigned organizations call on
International Financial Institutions (MDBs and ECAs) to agree on a
moratorium for new investments in fossil fuel and mining projects. This
moratorium would allow for:

		 	The establishment of a strict ban on financing by
any IFI for any new fossil fuel and minerals exploration projects in areas
of high conservation value, territories of indigenous peoples' and
nations, areas where local communities oppose such projects, and areas
where investments will exacerbate armed conflict. IFIs should immediately
consult and work openly with civil society and governments to establish
these critical no-go zones.

		 	A detailed reevaluation of all pending projects
which have an impact on the areas mentioned above, with the objective to
find better alternatives for these projects or to cancel the project when
no such alternatives exist

		 	Development of concrete action plans for a
complete phase-out of financing for these types of projects within five
years. These plans should systematically identify policies and projects
that help phase-in a positive targeted energy lending shift, to enable
IFIs to target the dual goal of eradicating poverty and preventing
catastrophic climate change.

		 	IFIs must assume responsibility for any damage
caused by their projects to ecosystems and to the economic and social
situations of communities. It is therefore necessary to carry out a study
of the impacts that energy policies and projects of IFIs have had on
developing countries and the plight of specific communities. IFIs must
provide resources for the compensation of damage and the physical
restoration of affected areas.

		 	IFIs must acknowledge the need to limit
investments in other sectors and projects that are based on technologies
with high use of fossil fuels and oil byproducts.

		 	IFIs should respect the sovereign rights of
communities to choose their own development path, based on their own
priorities and preferences. Therefore, IFIs must establish participatory
systems through which communities to be affected by IFI financed projects
can freely establish their decisions on the project, with the capacity to
modify or veto such projects.

		 	Export Credit Agencies have been documented to
finance the environmental and social destruction of local communities and
to exacerbate long-term global climate change. ECAs must begin meaningful
transformation towards binding environmental standards and portfolio
shifts away from fossil fuels and towards renewable energy within two
years, or they should be abolished.


Signed by (organizations only):

Friends of the Earth International