Blog entry

Guest post: Resettlement process for Kosovo Power Project does not comply with international standards

Arguments against the World Bank-financed Kosovo Power Project (KPP) often highlight the costs and negative impacts of building the 600 MW Kosovo C coal-fired power plant while investments in energy efficiency would be more feasible as Kosovo still wastes a large amount of the electricity being produced. What may be less known internationally is that also resettlement is a problematic issue connected to the project.

The Government of Kosovo is currently preparing to involuntarily displace over 7000 people to make way for an open pit lignite mine as part of the Kosovo Power Project. [1] A report [2] commissioned by the Kosovo Civil Society Consortium for Sustainable Development (KOSID) and authored by Dr. Ted Downing, president of the International Network on Displacement and Resettlement (INDR) shows that the government’s preparations do not comply with international involuntary resettlement standards, including those of the OECD and the World Bank itself that are a precondition for the project to obtain international financing.

After millions of dollars in technical assistance, this analysis shows the proposed resettlement policy framework is little more than a weakly disguised cash compensation plan that closely follows the failed patterns of the former government-owned mining company.

The World Bank management provided the Kosovo agencies with a noncompliant legal, policy, and institutional safeguarding scaffolding to guide the anticipated displacement. The Kosovo government willingly complied.

Multiple mistakes were and continue to be made, most importantly related to the requirement to prepare a full resettlement plan required by the World Bank’s Operational Policy on Involuntary Resettlement (OP 4.12). Such a resettlement plan can only in very limited situations be substituted with an abbreviated, resettlement policy framework. Yet this is precisely what has been prepared for the Kosovo Power Project.

In the report (pdf), KOSID points out that such a shortcut of a policy framework is not applicable and a resettlement plan for the entire displacement must be prepared.

Other shortcomings include:

The preparations overestimated the institutional capacities of the government.
The preparations fail to align the project with the international policy’s prime objectives of assuring involuntary resettlement is a development project, with livelihood restoration, benefit sharing, meaningful consultation and participation.
Lacking focus on the primary objectives, the costs of involuntary resettlement are seriously miscalculated and underestimated, raising investment costs, thereby delaying the profitability phase of the overall KPP. Prudent applicants for the private concessionaire, financiers, government, civil sector and those threatened with displacement should request a recalculation of a fully compliant involuntary resettlement component for the lifespan of the project. These costs should be folded into a revision of the projects’ overall investment costs.
The uncertain structure of the project financing also creates downstream, political risks for the government, potentially seeding a future exacerbation of existing civil discord and political unrest. Cost overruns to complete the resettlement will be paid through increases of electricity prices, not by the government or the private concessionaire, leading to future conflicts between Kosovo electricity consumers and those being displaced.

In sum, the World Bank management and the Kosovo government are responsible for constructing an unreliable safeguard framework that will cause delays and added costs to the KPP project. Their poor decisions have increased, rather than decreased the financial, environmental, social and health risks for Kosovars, their government, investors and, foremost, those threatened with forced displacement.

Notes:

1. The project envisages replacing the Kosovo A Power Station with a rehabilitated existing power plant (Kosovo B) and a new power plant (Kosovo C) as well as the development of a mine.

2. The report was presented today during a roundtable on resettlement organised by KOSID, unfortunately without the participation of World Bank representatives.

Visar Azemi: World Bank did not have time to join the meeting @WorldBank @visarazemi @KOSIDInfo #resettlement

— KOSID (@KOSIDInfo) February 3, 2015

Citizens of Romanian town protest against EBRD long-term “strategic” client Kronospan

On January 11 over 2 500 people took to the streets of the Romanian town of Sebes to protest against a new formaldehyde production facility to be built by Austrian wood-based panel producer Kronospan. The protestors complained that the plant will aggravate the already soring pollution and health conditions in the city of around 30 thousand inhabitants.

Any Stefan from the local initiative PrimaNatura says the pollution has worsened in the winter season:

“The air in the city is unbreathable. During the night people can’t breathe. In December about 40 children were hospitalized with laryngitis on the same day. The city has a high cancer death rate, we see young people die of cancer.”

As a result of the protests, the Ministry of Environment halted the environmental permit approval process.

The County Court ordered the demolition of the more than a half-constructed new plant in 2009 because it had been built without the necessary environmental and construction permits.

While Kronospan runs a 30 000 tons/year urea-formaldehyde resin plant in Sebes, it intends to open a new facility that would double production. This is the company’s second attempt to open the new plant. Its first attempt fell through after the County Court ordered it to demolish the more than a half-constructed plant in 2009 because it had been built without the necessary environmental and construction permits.

EBRD promises date ten years back

The legal breaches and poor environmental record have been at the core of the opposition campaign led by locals since the company acquired the formaldehyde plant and the related manufacturing facilities from an Italian producer in 2004. The acquisition was partially financed by a Euro 135 million long-term loan from the European Bank for Reconstruction and Development (EBRD).

When presenting the investment to the public, the EBRD reassured that the facility would be compatible with EU standards and that state-of-the-art emission control system would be in place to ensure that formaldehyde emissions are kept within the allowable level limit.

Yet, in its report published in 2008 (a year after the company repaid its debt with EBRD) the local citizens initiative contended that pieces of equipment for the new formaldehyde plant came from a run-down-facility in France and that the existing plant was discharging formaldehyde at levels exceeding the limits (pdf).

Read also

Another chip off the EBRD block – Kronospan expansion in Belarus
Bankwatch Mail artricle | December 2, 2014

Conditions for new plant’s permission

Seven years onward, Kronospan has not reconciled with Sebes citizens about the new plant and measures to minimize the emissions.

While, the draft new environmental permit issued for the formaldehyde plant in 2014 conditions Kronospan to install, within 7 months, continuous monitoring equipment for formaldehyde, locals stay firm on that the plant should be located many kilometers away from the urban areas. Based on their past experience with Kronospan, they have reasons to doubt the new monitoring will bring tangible improvements to the quality of the air they breathe.

Amateur videos clearly document the clouds of smoke over Sebes.

(See also this video.)

The EBRD and Kronospan

In the meantime, the EBRD has been struggling to fix problems surrounding its loan to the same “reputable foreign strategic investor” to build a particleboard production plant in the Russian town of Ufa. The project there has taken a very similar trajectory as the project in Sebes. The Ufa citizens have held mass protests against the fact that Kronospan began construction on the plant without having conducted an environmental impact assessment and related consultations with the public or having obtained environmental and construction permits.

There is another striking similarity between the two projects – the credit from a public financial institution intended among other things to achieve transition of the countries’ industry and to provide positive influence on the restructuring and modernisation of the manufacturing.

Violations of environmental laws by Kronospan send quite an opposite message to other enterprises, however. They also raise doubts about benefits of the EBRD’s concept of transition and the Bank’s ability to oversee its client’s implementation of benchmarks.

Overall, despite of being several years ahead, Sebes has rather dark outlooks for how the situation may turn out for the inhabitants of Ufa after Kronospan will have repaid its debt with the EBRD.

More updates

For updated information on the ongoing protests in Sebes see PrimaNatura’s website.

UPDATE 7: Juncker on the investment offensive … against Europeans, the economy and the environment

Labelled the €1.3 trillion investment offensive, more than 2000 projects have been identified by the European Commission’s new Task Force on Investment (made up of representatives of the EC, EIB and member states) for fast-tracked financing from President Juncker’s recently announced €315 billion stimulus plan. But far from being a series of economically credible, environmentally sound and shovel-ready projects, the list reads more like a fantasy of some Member States eager to promote projects that would otherwise never see the light of day, for a variety of financial, legal and environmental constraints.

Since December 2014 we are commenting on some of the projects and explain why, in our opinion, they will not help deliver the long-term strategic plan to stimulate growth and sustainability in Europe.

We invite readers to suggest their own project in the comment section below. The list of projects can be found at the bottom of this page.

Share this

Thursday, January 22, 2015

Slatinka water plant, Slovakia

Contribution by Martina Paulíková, Združenie Slatinka (Slatinka Association)

Opposition to the Slatinka project – Image from a Facebook campaign by the Slatinka Association

What: The Slatinka dam in the Slatina river valley (central Slovakia) with a reservoir capacity of appr. 27 million m3
Who:: The state-owned company Vodohospodárska výstavba
How much: EUR 114 million, of which 83 million to be spent in 2015-2017

Verdict: The Slatina valley, host of numerous natural habitats and home to a small local community, is to be sacrificed to provide a nuclear power plant with water. Already in 2013, the European Commission made clear that the project would counteract relevant biodiversity policy and the objectives of Slovakia’s very own Operational Programme for Cohesion Policy funding. The project’s cost estimations are based on extrapolations and its economic feasibility seems to rely on a 400 year long operation period.

Very (!) long-term economics: Official estimates put construction costs of the Slatinka dam at EUR 80 million to 113 million. This number, however, is based on the extrapolation of costs from 1997 and is not based on studies. The return on investment of about EUR 100 million was calculated for about 400 years.

Unsurprisingly, the costs for the destruction of habitats (which has not yet been calculated), the amenity value of more than 100 000 trees (approximately EUR 18 million) and the property of local people are not included in the total costs.

Purpose contradicts legislation: Since 1956 when the dam was first proposed officials have come up with a variety of purposes for the project including adaptation to climate change, recreation, irrigation, flood control, or water retention for the industry. For decades none of these reasons was sufficient to justify the construction. Most importantly, however, the collected water is primarily to be used for the Mochovce nuclear power plant located 100 kilometres downstream. Yet national legislation and water directives only permit water abstraction/drowning from rivers which do not damage aquatic ecosystems.

In negotiations over the Slovak Operational Programme for the EU funding period 2014-2020, the European Commission made the Slovak government exclude the Slatinka dam from its plans. DG Environment stated in July 2013 about WP Slatinka (and another controversial project in Tichy Potok):

“For the case of Slatinka in particular, the main objective as the Commission understands is providing water supply for the Mochovce nuclear power plant. In both cases, unique natural habitats will be destroyed which are also subject to the Habitats Directive. This counteracts not only the objectives of this OP but also the Biodiversity policy supported by the Commission.” (Own translation of the European Commission’s comments to a complaint against both projects.)

Biodiversity: The Slatina valley hosts preserved forests, wetlands and wet meadows with critically endangered species of plants and animals. Slovak scientists, citizens and NGOs have been trying for almost 20 years to enforce statutory protection of the river Slatina valley. In the past, experts have proposed the addition of the Slatina valley to the list of sites with European Importance (NATURA 2000). Unfortunately the Ministry of the Environment (sic) overturned this decision. The European Commission has warned the Slovak government for failing to protect important habitats in the past, including the Slatina valley, but Slovak authorities still refuse to protect Slatina and other habitats.

Monday, January 12, 2015

Czeczott coal power plant, Poland

Contribution by >Marek Jozefiak, energy expert at Polish Green Network

The Czeczott mine – Image by wikipedia user 54t0rii (CC BY-SA 4.0)

What: Construction of the Czeczott hard-coal-fired power plant with up to 1000 MW capacity in the Slaskie Voivodship (Silesia), one of the EU’s most polluted areas.
Who: : The state-owned Kompania Weglowa, the largest hard coal-mining company in the EU (10% of equity) and a Japanese investor Mitsui & Co. Ltd (90% of equity)
How much: TBD, current estimates are EUR 1.5 billion in total

Verdict: Polish coal-mining giant – currently on the verge of insolvency – is trying to secure sales of its increasingly uncompetitive hard coal. By consuming 3 million tonnes of Kompania Weglowa’s coal per year, the Czeczott power plant would be a lifeline for the state-owned company. However, local inhabitants will not be among the beneficiaries.

The investor has failed to perform a thorough Environmental Impact Assessment. As a result, the so-called environmental decision was recently abrogated. The environmental report i.a. did not properly assess the impact of the investment being planned in one of the EU’s most polluted regions – five of the ten most polluted cities in the EU are close to the Czeczott power plant site.

Health impacts: The external costs of Polish coal-fired power plants are estimated at EUR 3.0-8.2 billion per year. Poland along with Bulgaria has the lowest air quality in the EU. Only 3% of Poles can breathe air which complies with the standards of the WHO. According to the estimates by the European Commission, some 45 000 Poles die prematurely each year due to air pollution (Cost-benefit Analysis of Final Policy Scenarios for the EU Clean Air Package, EC, 2011).

One of the main reasons which lie behind this dramatic situation is the dependence of the Polish energy sector on coal. According to a study by the EEA, in 2011 six out of ten most polluted cities in the EU were Polish cities. Five of them lie within 30-70 km radius from the Czeczott power plant. Moreover, the planned investment lies almost on the boarder of two most polluted and at the same time most densely populated Polish regions: Slaskie (Silesia) and Malopolskie.

Delays: The project was planned to be finished by 2019. Currently, Kompania Weglowa hopes to finish construction by 2021.

Monday, December 20, 2014 (last entry in 2014)

Turceni, Rovinari and Isalnita coal power plants, Romania

The Turceni power plant

What: Rehabilitation and modernisation of thermal power plants in Turceni, Rovinari and Isalnita.
Who: Energy Complex Oltenia (CE Oltenia), the biggest Romanian coal company, majority state-owned.
How much: EUR 777.35 million, of which EUR 770.15 million to be spent in 2015-2017 – more than the company’s annual turnover (EUR 650 million in 2012).

Verdict: The installations in Turceni, Rovinari and Isalnita were made between 1967 and 1987 and are nearing the end of their designed lifespan. CE Oltenia is trying to stay alive while market conditions for coal are toughening. The first three quarters of 2014 saw a total loss of RON 290 million (EUR 65 million) for the company. With more than 18.000 workers, the company is dominating the economy of an entire Romanian region. Rather than prolonging the lifespan of largely inefficient and polluting thermal power plants, investing in the development of other industries and services would make the Romanian economy more resilient.

Nuclear Power Plant, Poland

Contribution by Jan Haverkamp, Greenpeace expert consultant on nuclear energy and energy policy

The proposed site for Poland’s first nuclear power plant in the Lubiatowo Dunes is protected under the Habitat and Bird Directives – Image (c) Greenpeace / Jan Haverkamp

What: Construction of Poland’s first nuclear power plant with a capacity of approximately 3000MWe. This is half of the total 6000 MWe capacity planned for the Baltic coast, north-west of Gdansk.
Who: State utility PGE with (forced) participation of the state owned companies Tauron, Enea (utilities) and KGHM (copper)
How much: EUR 12 billion for the 3000MW, of which EUR 600 million planned for 2015-2017

Verdict: A small political elite in Poland is determined to enter the nuclear market, but these plans are highly unrealistic. Official cost estimates are lower than current costs for new nuclear programmes, environmental and safety risks are structurally underestimated in Poland’s nuclear strategy and one of the two proposed construction sites is protected under the Habitat and Bird Directives. Independent polls show that the majority of Poles opposes nuclear energy. Instead of supporting an outdated understanding of progress, investments should be made in realistic alternatives that are economically, socially and environmentally more beneficial.

Underestimated costs: According to the list of projects proposed for EFSI funding, the Polish government estimates that constructing the first 3000 MW of nuclear capacity will be possible for EUR 12 billion. This is less than half the amount estimated for the UK’s controversial Hinkley Point C nuclear power plant (GBP 24.5 billion) with a similar capacity (3200 MW). While Hinkley Point C can only be realised with a 35 years price guarantee of twice the current market price for electricity and a set of other guarantees that all but cover the entire financial risk for the operator, the Polish government does not even have a financing plan for its project.

Delays: The Polish government plans with constructions to start in 2019 and the first reactor to come on-line in 2024. Recent experiences with new build nuclear reactors in Finland, France, Slovakia and the US suggest that a five year construction time is over-optimistic at best. It is therefore highly likely that delays will bog down the project further – hardly a “kick-start” for Europe’s economy.

Accidents and radioactive waste brushed aside: In the Strategic Environmental Assessment (SEA) of the Polish Nuclear Energy Programme, no consideration was given to severe accidents with emissions of radioactive substances. The Polish government has only general plans for how to deal with high-level radioactive waste. While commentators of the SEA procedure pointed out the potential costs and health hazards connected to these omissions, the Polish government refused to take them into account.

Alternatives neglected: Poland’s energy strategy for 2030 and the Polish Nuclear Energy Programme introduce nuclear power as a given factor without comparing it with non-nuclear energy policies that focus for instance on the development of energy efficiency and renewable energy sources. Environmental organisations and many economists argue that nuclear power is an unnecessary economic and environmental risk for the country but the Polish government refuses to consider alternatives. The Polish Nuclear Energy Programme is currently being challenged in court for downplaying serious risks and neglecting alternative energy scenarios.

Thursday, December 18, 2014

Lipno-Aschach hydro power plant, Czech Republic/Austria

Image taken from the project sponsor’s website.

What: The pumped-storage hydroelectric power plant Lipno-Aschach that would connect the rivers Vltava and Danube via a 27 km long and 10.5 m wide tunnel between Lipno in the Czech Republic and Aschach in Austria.
Who: Lipno – Aschach s.r.o., a private company specifically created for this project
How much: EUR 1.5-2 billion, of which 500 million to be spent in 2015-2017

Verdict: In order to fully appreciate the offensive beauty of this project you need to understand the modern Czech dictionary. The word tunneling is now most frequently used as an expression for channeling (ideally public) funds into private (ideally anonymous) accounts.

With a capital of merely CZK 840 000 (EUR 30 500) the project sponsor is puzzling at best and it is not surprising that “insufficient political support” and lack of financing are listed as the project’s barriers. Both is now sought via Juncker’s investment offensive, but it will not change that the 2 billion euros for this 27 km cross-border tunnel are buried money. For the same amount 270 000 or 16% of all homes in the Czech Republic could be equipped with photovoltaic generators (including phase shifters and consumption regulators) – providing about half of their annual electricity consumption.

Wednesday, December 17, 2014

Antwerp Ring Road, Belgium

Original image by M.M.Minderhoud (CC BY-SA 3.0).

What: A road project to complete the Antwerp Ring Road running through an area in the city of Antwerp where 150 000 people live less than 500 meters away.
Who: Beheersmaatschappij Antwerpen Mobiel (BAM)
How much: EUR 3.5 billion, of which EUR 1 billion to be spent in 2015-2017

Verdict: Every aspect of the completion of the Antwerp Ring Road is controversial. While the project costs continue to grow, serious health and environmental impacts and the lack of financial viability have been exposed. Perhaps most importantly the current project won’t be able to cope with the mobility challenges of the future. The project is not only damaging, it is also unwanted, being fiercely rejected by a majority of Antwerp’s citizens in one of the biggest mobilisations against an infrastructure project in Belgian history. Should the Antwerp Ring Road receive EFSI financing, Europeans would have every reason to wonder for which team the EU institutions play that are behind the investment offensive.

Costs and financing woes: Originally planned as a public-private partnership, the price tag of the project has increased from the initial EUR 600 million to EUR 3.5 billion today. Experts have advised not to finance the project through the currently proposed public-private partnership structure, but instead to consider a cheaper regular loan for the more sustainable route supported by the citizen committees.

Health and pollution: With 137 000 cars every day (of which 25 000 are lorries) the Antwerp Ring Road absorbs more traffic than any road in Belgium. Air quality in Antwerp is already four times the European average and among the worst in Europe. According to the project’s Environmental Impact Assessment, 400 000 people will be exposed to fine dust amounts surpassing European limits, while 17 000 will be exposed to unhealthy amounts of Nitrogen Oxides.

An unwanted project: For over 15 years the project has been contested by citizen committees such as stRaten Generaal, Ademloos and Ringland. In a referendum in 2009, 60% of the voters rejected the project. The committees proposed alternative routes and a covering of the ring road. Yet the voices of citizens have been largely ignored so far. In the summer of 2014 citizen and expert group stRaten Generaal, published a book of 190 pages collecting all objections made against the project. The book argues that partiality and knowledge gaps led to premature policy decisions and that as a result the project won’t survive all the necessary procedures including juridical ones.

More information is available at:

Citizens of Antwerp fight back in epic battle over highway versus health

Tuesday, December 16, 2014:

Zagreb waste incinerator, Croatia

A protest action against the Zagreb waste management plan. (More photos available on the Zelena akcija website.)

What: A huge 400 000 tonnes-per-year waste-to-energy plant that would burn municipal waste and sewage sludge in Resnik on the outskirts of Croatia’s capital.
Who: City of Zagreb
How much: EUR 300 million, of which EUR 150 million to be spent in 2015-2017

Verdict: Resurrected after being cancelled six years ago, the Zagreb waste incinerator is planned with a capacity far bigger than Zagreb’s declining waste production warrants – and this even though currently almost no measures for recycling and waste reduction are being taken. Measures to fulfil EU waste recycling targets in Croatia will further reduce the demand for incineration. Locals have fiercely protested both the incinerator and potential landfill sites for the ash produced by it. If the intention behind Juncker’s investment package was to burn money, then the Zagreb waste incinerator would fit the bill perfectly.

Straight from the rubbish heap: Plans for the incinerator had been cancelled already in 2008 following fierce local resistance and after both the European Investment Bank and the European Bank for Reconstruction and Development did not proceed with financing the project. Six years later, the project was resurrected as the centrepiece of a waste management plan for Zagreb that foresees hardly any money for recycling and waste reduction measures. With estimated costs of EUR 300 million for an incinerator the likelihood of prevention and recycling getting a piece of the cake are very low.

Overcapacity: Zagreb’s annual residual waste has dropped to around 270 000 tonnes annually for 2009-2013, in spite of a very low percentage of recycling and no serious efforts to reduce the waste production. Even with waste sludge from the Zagreb wastewater treatment plant, importing other people’s waste seems like the only way to justify the plant’s size.

EU regulations: As per EU targets, Croatia must recycle 50 percent of its waste by 2020. With almost a quarter of the country’s population living in Zagreb, massive efforts are needed to increase the city’s recycling rate.

Ash disposal: The incinerator would create around 100 000 tonnes of ash annually, but there have so far been no realistic proposals of where this could be landfilled, as all suggested locations have been met unsurprisingly with fierce local resistance. It is also unclear where the hazardous fractions of the waste eg. the filter residues, would be disposed of and how much this would cost, as Croatia has no such facilities and would have to export them.

Monday, December 15, 2015:

Gubin lignite mine and power plant, Poland

In the summer of 2014, thousands of people formed a human chain across the Polish-German border to oppose the expansion of the Gubin mine and of its German counterpart. (Original image by Greenpeace Poland.)

What: A new open-pit lignite mine and a new 2.7 to 3 GW power plant in the Łużyce region in Western Poland. The mine would cover an area of 35-45 square kilometers and provide 17 millions tonnes of lignite annually and 870 million tonnes overall.
Who: PGE SA, the largest Polish state-owned energy company
How much: EUR 5 billion, of which EUR 10 million to be spent in 2015-2017

Verdict: Given the economic outlook for coal mining in Europe, the project may not be the promised boon of growth. The project lacks the necessary permits, requires relocating thousands of people and can result in significant environmental and climate impacts. Financing the project relegates some of the EU’s most important environmental and social standards to “significant regulatory and non-regulatory barriers” to be overcome with this investment offensive.

Licencing: The project has no licence for extraction yet. An environmental impact assessment for both mine and power plant is being prepared at the moment. Consequently no environmental permit has been granted yet.

Economics: Polish state owned mines have been systematically losing money and burdening the Polish economy. While lignite mines are doing better than hard coal mines, a range of factors including the high costs of mining, the EU’s emission reduction targets and European environmental legislation are likely to further reduce their economic viability in the coming years.

Social and environmental impacts: To construct the mine, around 15 small villages would have to be destroyed and 2-3 thousand people resettled. Apart from the obvious climate and health impacts of burning 870 million tons of lignite, the project is feared to cause significant environmental degradation of the region. According to a Greenpeace briefing [pl] there are two natural reserves, areas protected as parts of the European Natura 2000 network and a landscape park within the affected communes.

Local opposition: The vibrant local opposition is organised in the association NIE Kopalni Odkrywkowej (NO to the Open-pit Mine). 90% of the voting citizens voted agains the mine in local referendums in the two affected municipalities (Gubin and Brody) in 2009. In the recent local elections, both municipalities elected mayors who are outspoken opponents of the mine.

Guest post: Mongolian herders file complaint with EBRD about Mongolian iron ore company

Anne Schuit is a researcher at the corporate watchdog SOMO. Her work focuses on grievance mechanisms.

The independent accountability mechanism of the EBRD, which has invested in the company, accepted the complaint last week. You can download a pdf version of the complaint.

The complaint, filed by seven individuals on 29 December 2014 at the EBRD’s Project Complaint Mechanism (PCM), alleges that the environmental and social impacts of Altain Khuder’s mine are inconsistent with EBRD’s policies. Herders have brought these impacts to the attention of the company on numerous occasions but rather than solving the problems the company has reacted with intimidation and legal action.

Displacement

While the herders have a nomadic lifestyle and migrate with their livestock and ger (traditional tent), they have customary grazing arrangements and a fixed winter location to which they return to survive the harsh weather conditions. Contrary to the requirements of the EBRD, the mining company has not provided them with suitable alternative resettlement sites. Some herders have received monetary compensation but this has not enabled them to access new land.

Sukhgerel Dugersuren from the Mongolian NGO OT Watch explains:

“In many places in Mongolia land is held and managed as common property, meaning that resettled herders cannot use the compensation to purchase new land with adequate pasture and a winter camp so crucial to their survival.”

Amibuh, one of the complainants states:

“There are no vacant fertile pastures with adequate water resources. All of the viable pasture is already occupied so there is nowhere else for us to go. Migrating to occupied pastures has negative implications for other herders and livestock already inhabiting the area. Land areas not in use are of inferior grazing quality, and would result in loss of herds and reduced quality of animal products, which are at the basis of our livelihoods.”

More materials

Read and watch the multimedia story >>” /></a></p>
<p><a href= When the dust settles – How an iron ore mine threatens nomadic herders’ livelihoods in Mongolia
Multimedia story | December 9, 2014

Dust, displacement, intimidation – Mongolian herders are under pressure by iron ore mine
Blog post | December 9, 2014

Fact-finding mission report: Impacts of the Tayan Nuur iron ore mine on nomadic herders’ lives in Mongolia (pdf)
Study | December 9, 2014

Impacts of the global iron ore sector – Case study: Altain Khuder in Mongolia (pdf)
SOMO case study | December 17, 2014

Images from Gobi Altai, Monoglia
Flickr photo set

Background

Mining boom in Mongolia
Background, updates, publications

Pollution

Altain Khuder exports the iron ore from the Tayan Nuur mine to China. The gravel roads that are used for the transportation of the ore generate significant environmental pollution. Dust from the road pollutes pastureland and allegedly causes illnesses to herders and their animals. Herders, whose livelihoods depend on their livestock, claim they have lost up to several dozen animals, mainly goats and camels, due to dust-related illnesses. Pollution of air, water and food also creates risks for the health of the herder families.

A paved road is currently being constructed, but herders have not been included in planning of the route and the location of passageways for people and livestock despite the fact that this road cuts through the grazing lands and leads to road safety risks and pasture fragmentation.

Complaint

The herders, supported by OT Watch, the Centre for Research on Multinational Corporations (SOMO) and CEE Bankwatch, request that the Project Complaint Mechanism convenes a dialogue between them and the company to try to resolve issues. The herders request Altain Khuder to fully assess, disclose and adequately address the negative impacts of the mine, including the swift completion of the paved road with adequate overpasses, restoration of degraded and polluted land, and the implementation of a comprehensive livelihood restoration program in consultation with all stakeholders involved. They also request proper compensation for the loss of animals and provision of suitable resettlement locations.

Additionally, the herders request that the Project Complaint Mechanism conducts an investigation into the EBRD’s compliance with its own standards. The social and environmental standards that are included in its investment strategies make the EBRD distinctly different from mainstream investors. The fact that problems of the herders have not been solved suggests that either the EBRD’s environmental and social standards are inadequate, or that their implementation is weak.

The complaint was officially registered on January 15th and will now move on to the next phase. The Project Complaint Mechanism will now consult with all relevant parties in order to determine if it will facilitate a dialogue between the complainants and the company, and if it will conduct an investigation into the EBRD to determine whether the Bank has complied with its owns standards.

Given the severe negative impacts of the mining project on the herders’ lives we hope the PCM will move swiftly so that their concerns can be adequately addressed and livelihoods restored. This is also an opportunity for the PCM to show that independent accountability mechanisms of international development finance institutions play an important role in the field of business and human rights and have the ability to provide remedy for people who otherwise are left without justice.

[Campaign update] Kostolac B3 lignite plant loan agreement bypasses public debate and contains unacceptable conditions

The Serbian parliament will on Monday vote on the ratification of a USD 608 million loan agreement from the China ExIm Bank for the construction of the 350 MW Kostolac B3 lignite power plant by Chinese company CMEC.

Serbia’s latest addition to its huge debt burden is being presented as a great success, but a new lignite plant is more likely to end up as a weight around our necks as we move towards the EU and apply EU climate policies.

The choice of contractor – China’s CMEC – without any tender is most likely in conflict with EU legislation and raises questions about the value for money of the project. Even more concerning is that the contract stipulates that any conflicts are to be resolved under Chinese law and in a Chinese arbitration court. How can this be a good deal for Serbia?

Find out more

Serbia should develop an energy strategy before making such major commitments, and the fact that the extraordinary session to ratify the contract was announced less than twenty-four hours in advance is an outrageous attempt to bypass public debate at cosmic speed.

Last year’s European Parliament resolution on the EC’s progress report criticised Serbia’s lack of progress with renewable energy, while this year’s draft resolution, due to be discussed in the Foreign Affairs Committee on 19th January also expresses concern that most laws in Serbia are adopted under the fast-track procedure, not always allowing for sufficient stakeholder consultation.

Bankwatch’s Serbian member group CEKOR is calling on Parliamentarians to delay the vote on the contract until a new Serbian energy strategy is adopted and there has been a proper opportunity for public debate.

[Campaign update] Ekotim files lawsuit on poor quality environmental permit for Banovici thermal power plant

Bosnia and Herzegovina NGO Ekotim has filed a lawsuit against the Federal Ministry of Environment and Tourism in relation to an addendum to the environmental permit for the planned 300 MW Banovici lignite power plant near Tuzla.

While analysing the original environmental permit for the plant issued in November 2012, Ekotim noticed that no limits had been stipulated for emissions to air of SO2, NOx and dust and alerted the Ministry in a letter sent in October this year. In response the Ministry issued an addendum to the permit on 24 November which however is not in line with the regulation on emission limit values for large combustion plants issued by the same Ministry. The addendum wrongly categorises the capacity of the plant and as a result sets less strict emissions limit values than legally required. Since there is no right to challenge such a decision directly, Ekotim is using the only means of addressing this mistake, through an administrative court procedure.

“The Federal Ministry of Environment and Tourism has been issuing more and more environmental permits recently, and this is not the first time mistakes have been made”, points out Rijad Tikvesa of Ekotim. “Environmental permits can be a useful tool when drawn up by experts and well enforced, but quality must come before quantity”, he added.

« Previous Page