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10 years since EU accession: less than we hoped for


Europe’s coming out of the economic crisis is murky, far-right parties across the continent are about to make significant gains in the upcoming elections for the European Parliament, and Russia is wreaking havoc at the EU’s eastern borders. Nostalgia for a European Union of the past is not uncommon: we miss the visionary politicians that founded the Union, we decry the destruction of what used to be “social Europe”.

In central and eastern Europe, we face similar problems as the entire block: most countries in the region have been hard hit by the European economic crisis; mainstream political parties have lost the trust of the electorate and fringe candidates – often with populist and even far-right stances – are gaining ground; pessimism about the direction in which our countries are headed is high, as is skepticism towards the EU.

Unlike ten years ago, we cannot hope any more that EU membership alone will do away with all our problems.

Our region has benefited enormously from joining the EU. Freedom of movement, access to labour markets in Western Europe, and easier access to educational opportunities in other countries are just some examples. We have received important sums of cash from the European budget too: Poland alone, the biggest beneficiary, has had a net benefit of 60 billion euros from EU funds since it started the accession process. Our infrastructure has improved, environmental protection standards raised, corruption issues have been brought to light, and our societies are more liberal. There are many distinctions among our countries, but we might be able to agree on these effects.

It’s probably also true that most of us would have expected more out of being members of the European Union. We would have wanted to see even less poverty in our countries, much less corruption, much better functioning economies, a better performing political class and media, less misery overall, and much clearer visions of sustainable future for our societies.

So why didn’t we get as much as we dreamed out of the EU? Not an easy question, but two things can be pointed at: we in the CEE have not tried hard enough; and the EU receiving us was never the unambiguously benign force we had imagined it to be.

At Bankwatch, colleagues from CEE countries are monitoring how the EU budget funds made available to our countries are being spent, particularly when it comes to climate and environment impacts. Right as we are marking this 10 year anniversary, our governments are negotiating with Brussels their national strategies for how to use money from the EU over the next seven years. A big chunk of the over 320 billion euro Cohesion Policy funds from the EU budget will come to CEE. In these negotiations, we can observe at play the two factors described above.

Our governments do what they can to get big allowances out of the EU, so as to have money to implement the infrastructure projects that would keep countries “modernising” and them in power. But when it comes to implementing the EU objectives that come linked to the money, such as making our economies more sustainable and less resource intensive, we see often more lip service and less internalisation of European values. We’re a bit like bad students who don’t really engage with the topics – read, don’t do a lot of reflection on what Europe really is and where it is going – but learn a few paragraphs by heart to pass the exam.

We see it with the national spending plans: the strategies were done without proper participation of interested citizens, even though that was a Brussels requirement, and without proper mainstreaming of the climate and environmental objectives of the EU. All national plans start with lip service to the values of participation, environmental protection, and commitment to the EU values, but the fine print shows it’s a lot of business as usual: big strategic decisions made far away from the citizens and benefiting more the bigger economic players than the long-term well being of our societies. Our governments are failing to develop long-term strategies for decarbonisation, in line with the general EU direction, and instead hope to be able to keep improvising.

Those national spending plans, despite their failings, will eventually be approved by Brussels – after interventions by the European Commission. And herein lies the responsibility of the EU welcoming us too. The EU is a complex animal juggling diverse interests, and some of these go against the stated European values. Lobby by big fossil fuel companies can be very effective in Brussels and capitals of member states. So to some in the EU it will be acceptable that CEE governments don’t quite care about the citizens or about the climate. Or at least they won’t be bothered by it.

We’ll be all quite ok with the compromise. Our governments will present to us the acceptance by Brussels of the national spending plans as a victory, and the money will roll in though we won’t be able to spend it all because we haven’t properly implemented the EU norms and because those in charge of implementation still won’t have all the needed expertise and honesty. And, ten years later, when we again celebrate our EU accession, we’ll probably say the same bitter “we could have done much better”.

Yet it could go another way too: it could be that this 10 year anniversary makes some of us in CEE reflect more and decide to use the opportunities provided by the EU more intelligently. That, faced with the aftermath of the economic crisis, the pressures of climate change and the challenges of social problems we need to resolve, more of us in both eastern and western Europe will get serious about the need to find truly sustainable paths for the entire continent.

The case of a ‘secret’ coal plant in Turkey suggests a polluted future for the country


Traveling back from a fact-fining mission in Turkey in March, I was just boarding the plane leaving Istanbul when I received an email announcing the EBRD’s withdrawal from the controversial Socar STAR refinery and coal power plant project in Aliaga.

Aliaga in western Turkey is a city already now plagued by countless highly polluting facilities, including the country’s largest oil refinery. According to locals, 8 out of 10 people in the village have some form of cancer, and even 2 year old children have died from throat or lung cancer. With a Board decision expected in early April, our mission to the project site in Turkey was to collect evidence and arguments for stopping the project altogether or at least the financial support from public banks.


The Aliaga industrial zone. (See more images in the slideshow below.)

Of course, as much as we celebrated the news that the EBRD’s loan was canceled, there’s a myriad of reasons why such a project should not be taken on by any financial institution – particularly one that announced tight restrictions for coal lending less than half a year ago. Even though the European Bank for Reconstruction and Development (EBRD) motivated its withdrawal with differences in the policies of the various lenders involved it is quite easy to notice why the Socar STAR project would not pass the EBRD’s conditions for financing coal.

Coming soon: New website for coal campaigners in Turkey and the Balkans

Because of some investors’ undiminished appetite for financing coal power, Bankwatch will publish a multilingual website next week that explains how to contact the investors behind a project, which policies guide their decisions and how best to influence them.

KINGSOFCOAL.ORG

The skeleton in the closet

In 2010 the project company Aegean Refinery STAR Rafineri A.S. (“STAR”) [1] received a pre-license to start developing a $5.5-billion project involving the construction of a greenfield refinery in Aliaga as well as a ‘secret’ 1350 MW coal plant associated with the Socar refinery, but not included in the environmental and social impact assessment (pdf) for the project.

While the coal plant is essentially an integral part of the refinery project, the environmental and social impact assessments have been separated, and the coal plant has been excluded from the due diligence on the refinery project. The coal plant is meant to have two phases to construct a facility with a total capacity of 1350 MW, and two separate EIAs have been done so far. These EIAs were contested by local opposition (the Ege Environment and Culture Platform), and consultation meetings about the EIAs were canceled due to protests. The approval of the EIA for phase one has been challenged in court, and the approval of the EIA for phase two is pending.

Geothermal David versus oil Goliath

Another dirty secret that the oil giant would like forgotten is that in 2009, so a year prior to its own pre-license, the local renewables energy company Buhar Enerji had obtained a license to develop a 50MW hybrid geothermal-solar power plant. As designed now, the refinery and coal power plant would restrict access to a valuable geothermal energy resource. The geothermal reservoir is owned by the Turkish state and Buhar Enerji has been granted a 30-year operating license at least one year prior to that for the refinery. The EIA makes no reference to the geothermal reservoir and no stakeholder consultations have been held on this topic.

Adding value to the project behind the scenes, Socar has undertaken heavy excavation works between August 2011 and February 2014 (carried out by a construction company owned by the son of Aliaga mayor).


The Socar excavation works may have already destroyed the geothermal source. (See more images in the slideshow below.)

Buhar Enerji has managed to get a court investigation underway that notes that excavation works of the refinery are continuing in the absence of a legal construction permit and proper health conditions for workers. Currently the excavation works contract has been terminated and a local prosecutor has opened a court case against the mayor’s son (reported in the Aliaga Express newspaper).

Even though receiving an operating license a year before STAR, the small renewables venture was first sued by Socar, which argued that the tender result was invalid. While the court rejected Socar’s request, Buhar Enerji in its turn challenged the refinery’s license itself, the EIA, and has also submitted a complaint to the EBRD’s Project Complaint Mechanism.

So far, despite Socar’s heavy maneuvering at governmental level (see below), the outcomes are encouraging: the STAR refinery’s opening date has been pushed back to 2017, although most observers believe 2019 or 2020 are more likely.

The “SOCAR Law”

A law passed in February 2014 makes it quite obvious that the Turkish government is intervening to resolve the four-year-long legal dispute between Socar and Buhar Enerji – in SOCAR’s favor. The act, called the “SOCAR law” by Turkish media, gives a panel of three government ministers the right to cancel geothermal licenses that interfere with infrastructure or energy projects “in consideration of the public good and the needs of the economy.”

Invoking an allegedly ‘greater national purpose’ to push through big projects against the interest of locals or other stakeholders is something we have seen in other projects as well. Very often, however, vested interests are closely connected to those projects.

The Investment Incentive Scheme and its perverse effects

In early 2013, Turkey introduced an investment scheme to incentivise the coal power sector with the doubtful logic of justifying these “[a]s a part of its energy diversifying efforts” (Source).

The Turkish government has granted developers a very favourable form of corporate income tax allowances through investment participation rates, exemptions from customs duties and VAT, and support for employers’ contributions to insurance premiums. Investors that use domestic sources of coal to generate power have “the right to benefit from Region-5 level support instruments [2], the second most beneficial in the whole regime, regardless of the actual investment location (Source).

In other words, you don’t necessarily need to prove that there is a real need for the electricity you produce, to enjoy the benefits of being an energy producer in Turkey.

Moreover, the government also helps by providing favorable terms for the allocation of state-owned land near domestic lignite production sites or can expropriate privately owned land for energy generation projects which are considered of national interest.

There was something else….Oh, yes, the people!

Following intense public protests in the Aliaga-Izmir region in the early 1990s, plans for intensive industrial development were dropped by the local government. In the same year, Turkey’s Supreme Court forbade any further industrial development in the region due to the already high pollution levels at the time.

Although the Decision has not been revoked, the industry claims that the technology has improved and that pollution levels and health and environmental risks are much lower.

Outlook

After both the EBRD and the World Bank’s International Finance Corporation (IFC) announced their withdrawal from the planned USD 150 million loans each, SOCAR Turkey’s chief executive told Reuters that the firm had agreed with a commercial bank over fresh financing of $500 million to replace the EBRD and IFC loans. He refused to name the commercial bank, but sources close to the deal said it was Turkey’s Denizbank, owned by Russia’s Sberbank.

Other important players that would still power the project with significant amounts of money are the Italian UniCredit Bank, more precisely their German subsidiary, HypoVereinsbank, with the pivotal role of financial advisor and Deutsche Bank.

The export credit agencies involved are the U.S. Ex-Im Bank, the Japan Bank for International Cooperation, Export-Import Bank of Korea, and those of Italy, Canada and Spain.

Because there are still some investors with an undiminished appetite for financing coal power, Bankwatch will publish a multilingual website next week (focused on the Western Balkans and Turkey) that explains how to contact the investors behind a project, which policies guide their decisions and how best to influence them.

See it next week at KINGSOFCOAL.ORG

Slideshow


See this set on flickr >>

Notes

1. In 2007, when the Azeri state Oil Company “SOCAR” purchased the Petkim petrochemical plant from the Turkish Government, a star was born – Aegean Refinery STAR Rafineri A.S. (“STAR”), a joint stock company incorporated under the laws of Turkey. The joint venture is now 81.5% owned by SOCAR TURKEY Enerji A.S. (100% subsidiary Aerbaijan’s oil company) and 18.5% owned by TURCAS Rafineri Yatirimlari A.S (99.6% subsidiary of Turcas Petrol A.S.).

2. Region 5 and 6 (out of six regions altogether) are the least developed regions in Turkey and accordingly receive the most investment incentives. For more information see detailed information on the web site of the Investment Support and Promotion Agency of Turkey: http://www.invest.gov.tr/en-US/investmentguide/investorsguide/Pages/Incentives.aspx

Serbian NGO presses criminal charges against Kolubara mining company over landslide


It’s almost one year ago that in May 2013 the overburden of field B of the Kolubara lignite mine in Serbia collapsed and caused a landslide that destroyed seven houses and one road in the town of Junkovac (Bankwatch reported). Until now, the mining company’s investigations have not yielded any results. Neither have responses been made to the requests for information by residents and by Serbian Bankwatch member group CEKOR (Center for Ecology and Sustainable Development).

Instead of continuing the apparently futile efforts to communicate with the Kolubara mining company or the European Bank for Reconstruction and Development (one of the company’s financiers), CEKOR pressed criminal charges on March 28 against the company for endangering public safety in Junkovac. Our case is based on a statement by the Department for Mining Inspection in the Ministry of Natural Resources, Mining and Spatial planning that confirms the Kolubara company has overloaded the dump field that caused the landslide.

Already years before the incident, residents of Junkovac had been warning their municipality and the Kolubara company that cracks were occurring in their houses. Yet no adequate reply was forthcoming.


An image from last year’s devastation.

When the landslide happened, CEKOR quickly alarmed relevant institutions about the incident:

  • We approached the Department for Mining Inspection in the Ministry of Natural Resources, Mining and Spatial Planning requesting urgent investigations and the identification of responsible persons (see results below).
  • We requested the Serbian Ombudsman Saša Janković to visit Junkovac but did not hear back from him.
  • We alarmed the state electricity company EPS, the parent company of Kolubara mining, without receiving a reply.

We also approached the EBRD on several occasion, but although the bank reacted, it did so slowly and without any concrete outcome so far that would put pressure on the mining company, let alone offer comfort for the people in Junkovac (see more details below).

Mining inspection confirmed misconduct

On August 1 the head of the department for mining inspection, Mr. Siniša Tanacković, stated in the report from the investigations [rs] (own translation)

“The deposit of material in the eastern part of the dumping site of field B was not in accordance with the [dump site] project, it was deposited above limit.”

Answering to our subsequent question whether the Ministry of Natural Resources will further investigate, state secretary Tomislav Šubaranović answered on September 2 that the mining company itself is leading the ongoing investigation. He added that further steps will be taken but nothing has happened since.

In the meantime the people in Junkovac are afraid that more landslides might occur. Since we have no reason to believe that the Kolubara mining company has taken steps to rectify the situation and reduce further risks, CEKOR saw no other alternative than to take legal steps. Maybe the threat of legal consequences will make the company consider more carefully the way it treats affected communities around its mine fields.

Little reaction from the European Bank for Reconstruction and Development

The EBRD is supporting EPS and its subsidiary the Kolubara mining company for a long time already and has had ample opportunities to witness conflicts between the company and local residents. The EBRD also finances a project on mining field C, adjacent to and almost not physically separated from field B (the field from which the overburden of the landslide originated).

With regards to the landslide in Junkovac, we approached the EBRD on several occasions.

In a response letter from November 4, 2013, the EBRD assured it was monitoring the situation and urging the mining company to help locals.

“The company has also informed us that they took action to re-house the 13 families directly affected, and are now arranging for the permanent relocation and compensation of these households along with a further 24 households in the vicinity. EBRD will request updates on the situation, and will continue to urge Kolubara management to ensure that affected families are treated fairly and that steps are taken to avoid any re-occurance.”

Four months later, the mining company has paid for the destroyed houses but a number of families living close to the landslide are still in fear and it is unclear how many of them will be relocated or when this will happen. In the meantime, the mining company is apparently further increasing the risk of another incident. According to a source in the company that wants to remain anonymous, the company increased the number of bulldozers that are dumping soil in the Junkovac perimiter from one to three: bulldozers No. 6 and No. 9 dumping materials from field D, bulldozer No. 5 from field B.

–

Although the EBRD is not affected by our criminal charge agains Kolubara, we hope to provoke more commitment by the bank to this and other cases. So far it is entirely unclear at what point – if at all – the EBRD begins to question the legitimacy of a client and withdraws from further cooperation.

Democracy is nobody’s business – MEPs pledge to stand up for people over profit


This article was cross-posted from the Corporate Europe Observatory website with kind permission.

CEO, as part of the Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU), has launched a campaign asking election candidates to take a pledge: “to stand up for citizens and democracy against the excessive lobbying influence of banks and big business”. Many current MEPs from across the political spectrum have already done so, and with the help of organisations and activists from all corners of Europe, we aim to have hundreds of future MEPs joining them.

The opening preamble of the Lisbon Treaty confirms the “inalienable rights of the human person, freedom, democracy, equality and the rule of law”. Fine words of course, but too often and on too many issues, the European Union’s so-called democracy works for business, not for people.

Increasingly, the corporate lobby in Brussels is large, active, well-funded, well-connected and, as a result, is able to leave its fingerprints over a large proportion of the legislation that comes out of the EU. And if you consider that as much as 50 per cent of our domestic laws now originate in Brussels, the direct impact on our lives of corporate Europe is considerable.

Through the pledge campaign, more than 65 groups from approximately 20 European countries are working together to make sure that in the next Parliament MEPs will not only be aware of the problem of corporate lobbying but will take action to curb it. Citizens will be able to ask their future MEP to sign the pledge via the new website – www.politicsforpeople.eu – which will be available in 11 languages. As well as case-studies on how corporate lobbying has undermined public interest policy-making, it will also provide regular graphic visualisations of who has and hasn’t signed the pledge across Europe.

Local groups are organising all sorts of activities at national level to raise public awareness in the run up to the elections, including debates with candidates, speaker tours and media stunts. Having candidates sign the pledge can create a quorum of MEPs in the next parliament committed to tackling corporate lobbying, but ensuring the influence of corporate lobbying in Brussels and its negative impact on democracy becomes a national election topic means these MEPs are far more likely to turn their pledge into action. And perhaps more importantly, it links local or national movements and struggles to the seemingly-technocratic EU and breaks through what sometimes feels like an impenetrable barrier between the Brussels bubble and issues affecting communities on the ground. Fighting new fossil fuel projects, austerity policies or the push by agribusiness for genetically modified organisms (GMOs) are all influenced by corporate lobbying in Brussels.

The recent proposal from the European Commission to tackle climate change has been gutted by lobbying from the fossil fuel industry, providing a serious barrier to local efforts to move away from dirty fossil fuels and transform our energy system and society. Instead the plans give a green light to the socially and environmentally damaging practice of ‘fracking’, the process of extracting hard-to-reach natural gas through hydraulic fracturing that is being championed by Big Oil as the new energy frontier (a view unfortunately also shared by many governments).

While Europe is still in the middle of economic crisis, new banking regulations that could protect us from such future occurrences continue to be prevented by the financial industry, with tactics such as packing important advisory groups (pdf) with industry-friendly lobbyists.

And if further proof was needed of how European institutions in Brussels are putting corporate interests before those of its citizens, look no further than the ongoing trade negotiations between the EU and the US (called ‘TTIP’, the Transatlantic Trade and Investment Partnership). Negotiated in secret between governments and business, they intend to weaken social, environmental and economic standards on both sides of the Atlantic (to create an ‘enabling environment’ conducive to business); give corporations the right to sue governments who try and legislate in the public interest, e.g. by banning GMOs, fracking or other socially and environmentally harmful practices; and give business a huge say in all future regulations. In short, TTIP will undermine democracy and the role of elected governments while further empowering the rights and role of corporations.

As well as being the lobby capital of Europe, Brussels is also a key place to tackle the the excessive lobbying influence of banks and big business, which is why we are asking MEPs who sign the pledge to take concrete actions. Steps such as demanding a mandatory lobbying transparency register, so we can see who our policy-makers are meeting; or tackling the corporate domination of the Commission’s advisory groups by freezing their budgets until they reform; or demanding full transparency in the trade negotiations; or championing strong rules to ensure the ethical behaviour of MEPs and Commission staff.

More than 40 MEPs from across the political spectrum have already signed up, including Ska Keller, joint European Commission President candidate for the Greens; Gabi Zimmer, leader of the GUE-NGL bloc; Evelyn Regner from the Socialists Group; Monica Macovei from the European People’s Party; and Corinne Le Page from ALDE.

Come the end of May we want to see as many MEPs fighting to make sure politics is about people not profit, as well as strong voices coming from citizens at national level to to ensure this an issue not just in Brussels but across Europe. There is no quick fix for the problem of corporate capture in EU policy-making, but this can at least start us on the long journey towards dismantling corporate Europe and creating a genuine people’s Europe. Because democracy is nobody’s business.

To ask your MEP candidate to stand-up for citizens and democracy against the excessive lobbying influence of banks and big business, go to www.politicsforpeople.eu

You can also follow the campaign via social media, using @altereu, #pforp and #EP2014 on twitter, and the ALTER-EU facebook page.

Threat posed by hydro to Mavrovo National Park under the spotlight at Skopje conference

On Thursday in Skopje, over 100 people attended the first public conference [mk] regarding the two planned hydropower plants in the Mavrovo National Park, one of the oldest and most valuable protected areas in the country. A petition to save the park that was launched one day earlier has already gathered over 13 000 signatures.

Last week’s meeting constituted the first time ever when representatives of the Ministry of Environment and Physical Planning, experts, civil society organizations and local communities gathered together to debate about the controversial hydro power projects “Lukovo pole” and “Boskov most”.

No dams in Mavrovo National Park – Sign the petition


A petition by Rainforest Rescue is calling on the EBRD and the World Bank not to finance the project.

Sign the petition now

Bankwatch member group Eko-svest, together with Front 21/42, the Macedonian Ecological Society, international partners and the two largest environmental coalitions in Macedonia, “Ecology – priority” and “Natura 2000” which together have 20 environmental organisations as members, have been for years advocating for the protection of Mavrovo National Park according to the guidelines of IUCN (the International Union for the Conservation of Nature, the largest global professional conservation network).

On Thursday, we appealed again to our political leaders that Mavrovo National Park continue to be protected, as part of only 9 percent of Macedonian lands which today receive official protection.

One of the biggest threats to the park is posed by the 68 MW Boskov Most project which involves the construction of a 33 m high dam and reservoir and is threatening the integrity of the park ecosystem as well as the habitat of the Balkan lynx, a threatened species.

Andrey Sovinc, the Regional Vice-President for Europe from the International Union for Conservation of Nature (IUCN), explained that hydro power plants do not belong in national parks. According to the IUCN, the essence of the idea of a protected natural area is to ensure the long-term protection of the natural ecosystem from the negative impacts of humans. As such, these areas are no-go zones for the construction of dams or any other type of destructive commercial activities.

Andrej Sovinc added that constructing hydro power plants in national parks represents a “disregard for the recognised values of national parks” and “sends a negative message to the international community” as it is contrary to European legislation, Natura 2000 and the Water Framework Directive.

The Macedonian Law on Nature Protection was prepared in line with the IUCN guidelines and system of categorisation for protected areas. According to the IUCN, most of the Boskov Most project area would fall into category II of protected areas – National Parks – in which it is not allowed to implement any kind of commercial activity, even those deemed “viable”, if it has been established that there will be a negative impact on natural ecosystems and living organisms that are characteristic of the area. Only traditional activities such as farming, ecotourism, traditional fishing and the like would be allowed to take place in National Parks under the IUCN guidelines.

Despite warnings from international experts and provisions in the national legislation, investors including public banks have been willing to finance the two hydro power plants. The European Bank for Reconstruction and Development has provisionally approved financing for Boskov Most, while the International Financial Corporation (IFC), the private lending arm of the World Bank Group, is considering lending for the construction of Lukovo Pole.

Breach of EBRD safeguard policies

After the EBRD approved the project in November 2011 and signed the finance contract the same year, Bankwatch member group Eko-svest from Macedonia submitted a complaint to the EBRD’s Project Complaint Mechanism, arguing that by granting this loan the bank was failing its own environmental and public participation standards. Indeed, the EBRD internal body verifying such complaints found that the bank had indeed breeched its own standards with this loan.

Despite this decision, the EBRD failed to take further action. Even more, as the bank is currently revising its Environmental and Social Policy (ESP), it is taking the opportunity to actually weaken its environmental and social criteria in order to allow for these projects to pass more easily (according to the draft currently on the table, to be approved in May). And this while at the same time claiming to implement international standards for safeguarding nature.

The changes in the ESP draft that raise the greatest concern are the weakening of the safeguards for “critical habitats”, an increasingly vague and flexible approach towards EU law and a loophole allowing the bank’s board to first approve projects and only then for studies about the project’s social and environmental impact to be carried out. This was exactly the case in the Boskov Most project where bio-monitoring was commissioned only after board approval, in breach of the bank’s current policy.

The weakening of the ESP is highly controversial, as issues which are serious enough to potentially prevent projects from going ahead must be fully addressed before board approval; if projects are given a finance green light before these studies are conducted, project promoters are being encouraged to treat them as a mere formality.

Last but not least, once the project passes a certain stage, the EBRD keeps receiving so-called ‘commitment fees’ from the project promoter until the loan is disbursed, , which ensures that the bank does not lose money if it approves projects prematurely. But the fact that the bank wins anyway should not be an excuse for failing to do proper due diligence and rushing decision-making on controversial projects like Boskov Most.

UPDATE: Danube dam-busting – Under the radar EU funds grab spotted in Slovakia


Bankwatch’s EU funds campaigner in Slovakia Miroslav Mojzis contributed to this article.

Following publication of this blog, a meeting was requested and convened by the Slovak Ministry of Transport with the Slovak NGO Green Coalition on March 28. With more information now coming to light about this project, please see the Update at the end of this blog post.


As part of their ongoing participation in the programming process for the allocation of EU funds money in the 2014-2020 period, a group of Slovak organisations – including Bankwatch member Friends of the Earth Slovakia-CEPA – has uncovered the presence of a highly problematic Danube dam project that, the organisations fear, has been sneaked into investment proposal documentation at the behest of the Slovak dam lobby.

The project in question, going by the name of ‘Bratislava-Pecniansky les’, is primarily intended to enhance inland navigation. The proposed dam would raise Danube water levels in the vicinity of the Slovak capital Bratislava and the Austrian border by roughly ten metres to enable large cargo ships to pass through difficult river sections during periods of low water levels. The dam would also be used for electricity production, with proposed installed output of 135 megawatts, providing an annual average production of 900 gigawatt hours.

However, both the project’s expected impacts – involving the potential flouting of EU law – and the way in which it has wound its way into Slovakia’s draft ‘Operational Programme for Integrated Infrastructure’ have become the subject of a mini-scandal in recent weeks, with Slovak media picking up the case [sk] following the initial raising of the alarm by NGOs.

The potential environmental impacts are various, and have also been raising concern in the village of Wolfsthal on the Austrian side of the border that would be affected by a change in the water regime if the project moves forward.

EU protected NATURA 2000 habitats in both Slovakia and Austria would be adversely impacted, with certain fish species also under threat due to fundamental changes in the river habitat that would result. From what Friends of the Earth Slovakia-CEPA can discern at this stage, the dam project would contravene the EU habitats directive and potentially also the water framework directive. Moreover, drinking water sources that serve a substantial area of Bratislava would also be affected – such drinking water impacts could be mitigated, though probably at vast expense and with no guarantee of success.

In Austria, with the Donau Auen National Park also within the project’s scope, opposition is emerging, with the mayor of Wolfsthal speaking out on behalf of residents not enthusiastic about the prospect of a large wall having to be constructed to protect property and land from a significantly higher river level.

Perhaps the most worrying aspect of this case is the attempt by the ‘Bratislava-Pecniansky les’ promoters – at this stage principally the Slovak ministry of transport, that is responsible for the conceiving of the draft OP Integrated Infrastructure – to circumnavigate the EU funds process and European Commission efforts to tighten the requirements for dam financing in the new seven year spending round.

To understand the context we have to look back in time.

The consultancy, design and construction companies involved in the Slovak water sector – in particular dam-builders – no longer have it as good as they once did in the early 1990s when they enjoyed the favour of a generous government. In part this is due to new economic realities, with limits now on the state budget deficit compelling the government to channel public finances to projects that can bring bigger and quicker effects both in economical and political terms – in short, and in the Slovak context, this means motorways are the favoured subsidy sector at the present time.

The dam lobby may have moved down the national budget pecking order, but they have maintained their influence at least at the national level. And new hope duly arrived with the preparation in the last 18 months or so of EU Structural funds programming for the upcoming 2014-20 period. With the European Commission keen to promote investments related to climate change adaptation in 2014-2020, the dam constructors took this as an opportunity to push their old business but with a coat of new green paint applied.

However, the European Commission stuck to its guns and, in mid 2013, rejected the Slovak proposal to finance dams, as had been presented in the draft ‘Operational Programme Quality of Environment’ as part of climate change adaptation measures .

However, it would appear that the environment was not the only sector in which the dam promoters wanted to play the game for EU money. Within the proposed Operational Programme for Integrated Infrastructure we recently spotted the innocuous sounding project title “Implementation of technical measures to remove obstacles and improve the navigability of the Danube river”. Only the statistical classification gave the game away – the number ‘2152’ appended to the project title signifies, in the Slovak classification, ‘dams’.

When confronted last week by journalists inquiring about Friends of the Earth Slovakia-CEPA’s and the Slovak Green Coalition’s recent alarm letter (pdf) to the European Commission outlining our concerns about the Bratislava-Pecniansky les project, the ministry of transport replied that it has not decided what these “technical measures” will be exactly, nor even if the main activity will be the dredging of the Danube bottom to enable ships to pass through the river bottlenecks.

Such a response may have been credible, but not when we’ve been reading about and actually hearing from dozens of dam promoters and engineers who are clearly advocating for the construction of the dam as the key measure for improving navigation in the first place. A further question relates to whether dredging activities and moving gravel in several places along the Danube would, on their own, require over EUR 75 million, the lower threshold figure for large projects that are to be included in the EU funds project list. The actual costs involved in realising the dam would easily exceed EUR 75 million. There is thus potentially a lot of EU money at stake here, and the project waters are muddy to say the least.

Meanwhile, the precious nature of the Danube, as well as drinking water sources, remain the priceless values at issue in this case. The potential losses cannot be justified by the standard, generalised reasoning regularly trotted out by the ministry of transport and the dam building lobby – namely that inland waterways are ‘the most ecological transport means’ that exist.

Slovak NGOs have thus alerted and are calling on the European Commission to fully scrutinise the proposed “Implementation of technical measures” project. With final agreement on Slovak spending lines for the 2014-2020 to be negotiated and arrived at in the next six months, the Commission needs to keep asking the Slovak authorities the right questions about dam construction ambitions. Hopefully we will see no flagrant use of EU money for the unnecessary destruction of ecosystems.


Update – March 28, 2014

The ministry of transport called Green Coalition to a meeting a few days after this blog was posted. During the meeting, ministry representatives assured us that, while the Danube dredging project is moving forward, it will not involve a dam.

It was explained to us that there had been some confusion regarding the statistical classification number referred to above in the blog. The ministry representatives confirmed to us that the use of the reference number ‘2152’ was in fact in line with newly required EU (ie Eurostat) project classification, and it corresponds to various categories of project, including dams, and dredging.

We are happy to make this clarification. For now it would appear to be the case that the controversial dam project is not being promoted by the ministry of transport, and will not be proposed for EU funding in the 2014-2020 budgetary period.

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