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EBRD President meets 60 NGOs

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Fidanka Bacheva of "Za Zemiata" (For the Earth), Bulgaria, chaired the meeting

President Lemierre meets NGOs

Hydropower was one form of renewable energy discussed

Gas pipelines cross important salmon rivers on Sakhalin Island

“It’s nice to know the EBRD gets a few things right,” quipped a smiling Jean Lemierre after his Annual Meeting wrap-up session with non-governmental organisations. Some of the 60 NGO representatives present described their concerns about various EBRD policies and projects – and delivered a few kudos as well – in the two hour meeting with the EBRD’s President in Belgrade, Serbia.

The morning meeting followed two days of dialogue with other EBRD officials on a variety of topics. The main issues were the Bank’s draft energy policy, Sakhalin Island energy development, corruption, the human rights and economic situation in Uzbekistan and the new strategy the EBRD is drafting to guide its investment programme in that country. Other topics included privatisation of KAP aluminium in Montenegro, restitution of property confiscated in Serbia by the then-Yugoslav government, human rights in Serbia, the Baku-Tbilisi-Ceyhan pipeline in the Caucasus, and the speed of progress under the new government in Ukraine.

Energy policy discussions

A number of NGOs lauded the Bank’s commitment to setting investment targets for projects in renewable energy and energy efficiency projects. They also said they appreciated the two credit lines established with local banks for financing such projects in Bulgaria’s private sector. These credit lines are supported by donor funds available to help Bulgaria replace some of the energy capacity lost by closing down some nuclear facilities. They expressed the hope such credit lines can be replicated in other countries.

A Bulgarian NGO representative said renewable mini-hydro projects were gaining in popularity in Bulgaria but should not be located on rivers in protected areas. Mr Lemierre pressed the NGOs for clarity in their views on large-scale hydro-electric projects. “I feel in many countries a growing interest in hydro – Georgia and Albania, for example,” said the President. “We cannot say hydro is part of the solution and then open a debate that goes in the opposite direction.” One speaker replied that NGOs would support projects that are in line with the recommendations of the World Commission on Dams.

Some voices reiterated a long-standing NGO demand that international financial organisations, including the EBRD, stop funding fossil fuel projects. The EBRD’s position is that revenues from such projects can, if properly managed, greatly assist in the producing countries’ economic transition and support anti-poverty and other social initiatives.

During the meeting Mr Lemierre and the NGO speakers reflected on the inordinate waste of energy by aging industrial and residential infrastructure in the former centrally-planned economies. NGOs and Mr Lemierre agreed that energy efficiency projects should be the linchpin of the new EBRD energy policy.

Sakhalin energy projects

The EBRD is considering investing in a new oil and gas extraction project offshore of Russia’s Sakhalin Island, and related onshore pipelines. The Bank, like NGOs, has been very concerned about the environmental impact of the projects on an endangered species of whales as well as on wild salmon and bird populations onshore.

NGOs focused on Sakhalin projects thanked the Bank for the resolve it has shown in not moving forward with financing new energy development there until the company “gets it right,” as one said.

A number of NGOs made presentations on the project. They are concerned about the dumping of sediments dredged from the floor of Aniva Bay to make room for the pipeline; local people have protested that sediment dumping is ruining their fisheries. Salmon-rich rivers and streams are being ruined by contractors building the pipeline, they said.

A representative of the International Fund for Animal Welfare said “it’s really, really great that (Shell Oil) made the decision to re-route the pipeline from cutting across the whales’ feeding ground,” but NGOs remain worried that the offshore platform will threaten the whales’ survival and should also be moved.

Mr Lemierre said to the NGOs that Shell deserved credit for moving the pipeline. “You and we still see many questions on the table...We have principles and policies and we will not agree on a project that doesn’t respect them or doesn’t respect commitments made” to get EBRD financing.

Fighting corruption

One person from the anti-corruption coalition Publish What You Pay said the group “is really pleased the Bank has been so supportive of the Extractive Industries Transparency Initiative”. The EITI promotes transparency in the natural resource sector by organising the publication by companies of the revenues they pay to governments, and publication by governments of such revenues received. This is considered a first step in empowering the public to monitor government use of such revenues which, in many underdeveloped countries, have been stolen by officials and used to quell dissent.

Mr Lemierre pointed out that the EBRD has “already made the commitment, going forward, that these EITI principles will be used by the Bank” in determining which natural resource projects it can finance.

A member of Serbia’s Association of Citizens for the Return of Confiscated Properties said the socialist government of the former Yugoslavia had confiscated huge numbers of properties from their rightful owners. It has been five years since the fall of the Milosevic government, he noted, “but the situation remains the same.” He claimed confiscated properties were being sold at a discount to officials’ cronies who were then re-selling them at enormous profits, and that he expected international organisations to play a role in discouraging such property acquisition by foreign investors. He called on the EBRD to push for greater transparency.

Mr Lemierre assured the gathering that, project by project, “we do our due diligence. There are projects we don’t finance because we have concerns regarding the people behind them or the way they’ve acquired assets.” He said the Bank, in its policy dialogue, addresses such issues with government while civil society, including NGOs and the media, needed to build public awareness of such issues and press for necessary change.

Uzbekistan situation and policy

“May 13 is now known as Bloody Friday,” said the participant from the Human Rights Society of Uzbekistan. On that day, Uzbek government forces opened fire on citizens in the city of Andijan following a prison break; local, diplomatic and other sources estimate several hundred civilians were killed while the government admits to fewer than 200 dead. Government opponents say the prison break was to free more than two dozen businessmen falsely accused of Islamic terrorism by rival business people in collusion with government officials; the government claims it acted in response to Islamic insurgency.

The EBRD is currently revising its 2004 strategy for Uzbekistan which established benchmarks for progress there; it is currently being revised. In 2003 the EBRD held its annual meeting in the Uzbek capital, Tashkent.

The Uzbek representative said: “For two years now, EBRD management has been very patiently waiting for democratic reform (in Uzbekistan) and you see where we are today.” The benchmarks were a result of the assessment of the country situation at the time of the 2003 annual meeting and included standards for progress in developing open markets as well as democratic principles such as press freedom and registration of NGOs. “Since then, not a single NGO or opposition party has been permitted to register in Uzbekistan,” he noted. He deplored the “flourishing of corruption and criminality” as government opponents were routinely accused of “so-called extremism and terrorism.

“Any authority that shoots at its own citizens is not worthy of moral or financial support from international institutions. I am sorry for these difficult and sad words but I am forced to make them. EBRD support for the regime is not large but you should deprive the Uzbek government of any projects.” Later, the participant from Human Rights Watch suggested that socially-important projects such as improvements to water infrastructure should go ahead, as should private sector projects that clearly did not benefit government officials, such as micro-finance.

Said Mr Lemierre: “What has happened in Uzbekistan is simply tragic. We’ve always taken very firm views on human rights, torture, democracy, openness, and the need to trade with neighbouring countries. We’ve been monitoring the benchmarks…we’ve tested the current strategy and we are not satisfied.” He pointed out that government interference has stopped the EBRD from investing in an Uzbek private bank. He said he could not anticipate what the EBRD Board would decide would be the new Uzbek strategy but a draft was already available on the EBRD website for public discussion and input.

1 June 2005