Blog entry

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.

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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.

Where’s Plan B for Kosovo’s energy sector?

Jeta Xharra from the Kosovo NGO KOSID contributed to this article which will appear in the upcoming issue 58 of our quarterly Bankwatch Mail 58 with a focus on the Energy Community Treaty.

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Ideas about the construction of a new lignite power plant in Kosovo have existed since the end of the 1980s, and even the current Kosova e Re proposal – scaled down to 600 MW from the original 2100 MW – has been around since 2009. It is being touted by the Kosovo government, the World Bank, USAID and the European Commission among others as the only realistic option to replace the ageing and heavily polluting Kosovo A power plant.

So imagine our surprise when at KOSID’s recent International Conference on Sustainable Energy Options for Kosovo none of the decision-makers present – including from the World Bank, KfW, USAID and the EBRD – was able to tell us the most basic information about the planned, highly controversial new plant.

Among the burning questions people continue to have about Kosova e Re – how much will electricity prices for households rise as a consequence of the project? Kosovo’s Minister of Economic Development, Fadil Ismajli, was not able to say, explaining that it depends on the production costs. How much are they? It is not yet known. What will be the plant’s efficiency level? Again, not known – the exact technology will be defined only in a later stage of the tender procedure.

For a plant that has been planned for more than four years, astonishingly little seems to be known about it other than that a World Bank environmental and social impact assessment is inching forward, and that a ‘request for proposals’ might be launched next month in April to shortlisted bidders for the project. But why should we care? As we oppose the construction of a new lignite plant in Kosovo, shouldn’t we be glad to see that the project is going so slowly?

In fact, since the debate about Kosova e Re can not be separated from the wider question of securing a sustainable and affordable energy supply for Kosovo, we’re extremely concerned.

Institution after institution has been putting most of its eggs in one basket – the increasingly shaky ‘new lignite’ basket – and no one seems to have a Plan B. Even the project which more or less everyone agrees needs to be carried out – the rehabilitation of Kosovo B to bring it into line with the EU’s Industrial Emissions Directive – is not being given as high priority as the construction of an expensive new plant.

When we’ve warned that Kosovo needs a diversified and environmentally sustainable energy supply with massive efforts put into energy efficiency, we’re told that we’re being unrealistic – even though about 40 percent of Kosovo’s energy produced today goes unaccounted for through ‘technical and commercial losses’. But now who’s unrealistic? It’s 2014 already, and how is a 600 MW plant with unspecified technology and production costs going to be built by 2018, when the Kosovo government has committed to close the Kosova A plant?

With unknown costs to households, and with electricity tariffs already a highly sensitive issue in Kosovo (as witnessed by lively protests last spring related to poor metering), it seems that the assumption that the project will go ahead is on shaky ground. Such considerations seem to represent a blind spot for those promoting Kosova e Re.

Developing a Plan B will require political will, resources and dedication, but there are more and more resources available to do this. A wind atlas of Kosovo has been developed and investors have put forward a range of viable wind projects. The prices of utility-scale solar are dropping rapidly, and increasing regional integration offers opportunities for greater grid flexibility and exchange of electricity with neighbouring countries like Albania.

If as much time and money is put into Plan B as has been put into the Kosova e Re lignite project, we firmly believe it can be done.

Georgian Ministry of Energy orders use of force against local protesters who fear landslides from hydro construction

On Saturday, March 8, about 500 villagers staging a road block in the Adjara region were violently dispersed by an equal number of policemen and special forces. Deputy Minister of Energy, Ilia Eloshvili, stood by after ordering the intervention even though the reasons for his presence at the scene are unclear.

The incident has been recorded on video and reported in Georgian media. A representative from the Georgian Young Lawyers Association (GYLA), Gia Kartsivadze, said in an interview with netgazeti.ge:

“Based on what I have seen in videos filmed by the people there I can say that the police used violence against the protesters. GYLA is planning to provide legal assistance to the people.” (own translation)

The currently available video footage only depicts the scene after the police has taken control of the road.

The villagers blocked the road to prevent the construction of a tunnel for the 185 MW Shuakhevi hydropower plant (HPP) which the European Bank for Reconstruction and Development is considering to finance with a loan of up to USD 86.5 million (EUR 63.7 million). The tunnel, to be drilled under the village Ghurta, is one of three planned diversion tunnels as part of the project.

The locals say the territories of their villages are characterised by landslides and worry that the construction of a derivation tunnel and a reservoir may activate them. People still remember when in 1971 the worst of the landslides cost 22 people’s lives. The project company, Adjaristsqali Georgia LLC [*], denies these risks yet at the same time refuses to sign warranty contracts to offer compensation should the constructions cause damages.

The exact role of the Ministry of Energy in all this and the reason for Eloshvili’s presence is so far unclear. The construction permit for the plant was issued by the Ministry of Economy and partly based on expertise of the Ministry of Environment. The Ministry of Energy only initiated the project and signed a “Build, Operate and Own” agreement with Adjaristsqali (censored version available here) which should have ended its involvement.

Risk assessment

In order to decide between these contradicting claims a proper investigation into the landslide risks is needed, especially in the area where said tunnel will be constructed. In principle, the project’s environmental impact assessment (EIA) from September 2013 could offer this, but the study was by far not detailed enough. The Georgian version (pdf) describes this in chapter 6.9.4:

“[T]he geomorphologic and landslide hazard maps have been prepared from aerial photo interpretation supplemented by data from the ground and are not the result of detailed field mapping with full ground coverage. Both maps should therefore be used to indicate the general condition of the land surface over large areas.

Detailed ground investigations may be necessary for assessment of small areas and specific sites.” (emphasis added, our translation)

The ESIA report does not contain detailed geological surveys on the ground and for this reason alone cannot rule out negative impacts such as landslides. (Interestingly, this information is not to be found in the English version of the EIA report (available on the EBRD’s website (pdf)) which lacks the entire chapter 6.9.)

The report acknowledges this on page 392 (again, only in the Georgian, not the English version):

“[…] unexpected ground conditions may be encountered during the course of the construction works”.

The lack of geological survey data is especially true for the area near Ghurta, where the Skhalta Transfer Tunnel is planned to be constructed. It is covered in chapter 5.3.6.5 of the EIA report (equally only in the Georgian version):

“Skhalta Transfer Tunnel – No mapping or intrusive work has been undertaken along the Skhalta to Didachara transfer tunnel.”

The environmental impact assessment therefore clearly states that the project promoter has no knowledge whatsoever of the geological conditions around the village of Ghurta and the damage that the Shuakhevi HPP project may cause there.

Improved standards with the EBRD?

The project company Adjaristsqali Georgia LLC and the was very well aware of the EIA’s shortcomings. We had raised them in our comments to the report (pdf) [ka]. Yet, instead of taking the necessary precautions and undertaking a thorough geological assessment, the company ignored our comments but still received a construction permit.

Ironically, the EBRD’s rationale for considering a loan for the Shuakhevi project includes the following expected transition impact:

(iii) Setting standards for corporate governance and business conduct from the project’s potential for setting improved standards for HPP implementation in Georgia through the application of international best practices. (Source: EBRD)

Neither the project’s incomplete impact assessment, nor the government’s treatment of locals show the way towards “improved standards”.

The EBRD has not yet approved the loan and should not do so before at least the reasonable fear of landslides in Ghurta has been dispelled with geological data or locals will be resettled with prior and informed consent.

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[*] Adjaristsqali Georgia LLC is owned by the Norwegian Clean Energy Invest AS (40%), India’s Tata Power (40%), and IFC Infraventures (20%), an investment fund created by the International Finance Corporation.

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