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Guest post: Dr. Kim’s World Bank legacy hinges on Kosovo climate test


This blog post first appeared on the Sierra Club’s Compass blog and was re-posted here with kind permission by the author


Dr. Kim, President of the World Bank, has declared the world must do more to address climate disruption. His lofty rhetoric has soared over that of previous World Bank presidents, drawing widespread support for his progressive stance. But for those who follow this institution closely, one thing has always been true – talk is cheap. That’s why all eyes are now focused on whether Dr. Kim will walk the walk by rejecting a highly controversial new coal plant in the tiny Eastern European country of Kosovo. When it comes to making decisions that test their willingness to build climate legacies, President Obama has the Keystone XL tar sands pipeline, and Dr. Kim has a massive coal plant in Kosovo.

Dr. Kim’s decision should be cut-and-dried. The World Bank recently put coal finance restrictions in place, putting the institution on the right side of history. These restrictions essentially ended the institution’s support for the most carbon-intensive and destructive fossil fuel known to man or, as Grist blogger David Roberts, calls it, “the enemy of the human race.” But rather than adhere to these restrictions, let alone his own calls to address climate disruption, Dr. Kim is allowing the World Bank to pave the way for support for yet another coal plant, this time in Kosovo.

About three years ago, the World Bank began considering a loan guarantee for the construction of a new coal plant in Kosovo on the baseless assertion that this tiny nation was a renewable energy wasteland. But that’s not the case. In fact, the Bank’s own former chief clean-energy czar, Dr. Daniel Kammen, released a study showing that Kosovo can power itself with clean energy and do so more cheaply while producing more jobs than it would by building a coal plant. But rather than listen to his own former staff, Dr. Kim, a public health champion, has made embarrassing statements about Kosovars “freezing to death” as the alternative to funding this controversial project.

Kosovars have not responded kindly to the idea that their country, on course to join the European Union, has advanced so little that their citizens are freezing and dying in the streets. That’s why local civil society led by KOSID has waged a campaign for several years demanding Dr. Kim make good on his rhetoric and help move their country onto a clean-energy path that aligns with the rest of the EU. From high profile public service announcements about the health and economic risks of this ill-advised project to illuminating their demand for “no new coal in Kosovo” on the World Bank’s building in Washington, D.C., Kosovar citizens have made their opinion abundantly clear.

The problem is Dr. Kim isn’t listening. Instead, the World Bank is moving forward by conducting an environmental and social impact assessment that is likely to be perfunctory and pave the way for a final board vote that would approve millions of dollars for the coal-burning plant. Worse, sources are saying that in addition to providing a loan guarantee, the institution might double down and invest directly in the plant since even coal-plant construction companies aren’t investing.

But it’s not over yet. Across the world, civil society groups including the Sierra Club and KOSID are banding together to draw a line in the sand. It’s no longer enough to simply make strong statements about climate. It’s time to walk the walk. So let Dr. Kim know, just like President Obama, you’re watching to see if he passes his climate test.

Join us in taking Twitter by storm today and sending him a message: All eyes now on Dr. Kim @WorldBank, will he pass his #ClimateTest & reject #coal in #Kosovo?

Eyes on different prizes – EU funds negotiations enter last lap in Slovakia


The EU funds programming process in Slovakia is gaining speed as it enters its final phase for allocating just over EUR 15 billion in the 2014-2020 budgetary period. Slovakia is keen to start drawing EU funds as soon as possible – with good reason. The state budget is spread thin, with spending gaps evident in the regions and affecting public services. Companies await new deals, and Slovak institutions and authorities have their eyes trained on new financial injections via the EU funds.

How, then, is this crucial spending planning shaping up?

The final weeks of February saw the official commenting procedure for the Partnership Agreement (the main strategic document underpinning the new Cohesion Policy) concluding after tough negotiations involving all stakeholders and an impossible time frame of five working days. At first sight the Partnership Agreement fulfils most of the formal and legal requirements set by the EU: the key words are there, the analytic sections are bursting with graphs, charts and figures, and the strategic part suggests that Slovakia has its own view on so-called ‘thematic concentration’, with almost all the thematic objectives covered.

Yet herein lies one of the key difficulties: the finalised Partnership Agreement commits to a wide range of investments into all areas, contrary to European Commission intentions to concentrate and focus funding for key strategic areas.

Now is the time to finish what has been started and put on the table clear statements, concrete mechanisms and credible financing numbers to cover everything that is envisioned within this key strategic document. If not, Slovakia will face the very familiar, dreary implementation of business as usual projects with questionable results.

The measures included in the spending blueprint are, nevertheless, fairly progressive, with attention given to climate and the environment, the low-carbon agenda, civil society and partnership, bottom-up implementation, an integrated approach to regional development, and more. The horizontal (or cross-cutting) principle of sustainable development will be enshrined in new EU spending thanks to cooperation between the authorities and NGOs during negotiations. Equally, the inclusion of Community Led Local Development (CLLD) was celebrated as a success of many stakeholders as the government reversed its original decision not to apply the approach. And a survey, carried out by Bankwatch in 2013, of how well climate change initiatives feature in national EU spending plans revealed Slovakia as the best scoring among CEE new member states.

The key, though, is the translation of these good intentions into real concrete measures and actions – and financial allocations.

The CLLD tool is one example. A large chapter in the Partnership Agreement describes all the development disparities, investment priorities, benefits, mechanisms for implementation, requirements for new capacity building and management systems that will need to be taken account of in the advancement and realisation of community-led local development initiatives.

However, the same chapter reveals that the allocation for this vast area of intervention is a mere EUR 130 million. This is a major funding shortfall, and Slovak NGOs continue to call for 10 percent of the total allocation of EU funds – roughly 1.5 billion euros – to go towards CLLD. And why not? If Slovakia really believes that this bottom-up approach to EU funds is the right way to go for the regions, there has to be an appropriate commitment of resources.

The same issue is hampering the currently proposed allocation of ‘global grants’. This is a potentially very useful tool for specific micro and small beneficiaries such as small municipalities, community initiatives, micro businesses or NGOs. The tool is mentioned in a very short paragraph of the Partnership Agreement, But, again, there is no tangible financial commitment despite previous positive experience with this kind of instrument via Norwegian and Swiss funds. Experts I’ve spoken with suggested that as much as five percent of Slovakia’s total allocation of EU funds could be distributed in this way and make a significant difference for small economic stakeholders and local economies.

Finally, regarding ‘sustainable development’ matters, Several excellent proposals have made it into the Partnership Agreement, including green public procurement, a climate performance evaluation, sustainability criteria for the use of biomass in energy and instruments to steer the application of the ‘polluter pays’ principle. However, it will be crucial in the coming days for the state authorities to show willingness to finish what they have started, by both underpinning these concepts with concrete mechanisms and instruments, and ensuring their translation into the implementation documents of Slovakia’s individual operational programmes.

The Partnership Agreement is the place to state not only intentions but commitments, yet the latter are missing in Slovakia’s EU funds blueprint for now.

Recent experience during negotiations and dialogue with some representatives of the state has seen a positive change of attitude that has lead to some promising outcomes. Now is the time to finish what has been started and put on the table clear statements, concrete mechanisms and credible financing numbers to cover everything that is envisioned within this key strategic document. If not, Slovakia will face the very familiar, dreary implementation of business as usual projects with questionable results.

The programming process is now entering a phase of official negotiations with the European Commission, where a final round of comments and demands should be settled before the Commission’s approval of the Agreement. This should take place as soon as possible as the Slovak authorities are eager to get the spending going already in 2014. However, the European Commission is proving to be a hard partner to bargain with, and will no doubt continue to insist on clear, well defined and quantifiable outcomes from the plans.

Cold shower for Czech incinerator plans – no EU funding, says European Commission

The Czech Republic’s long-standing difficulties in realising major waste incinerator schemes via EU funds investments have taken a turn for the worse in recent weeks as the European Commission has poured cold water on the country’s incineration plans, both as they apply to the 2007-2013 EU funding period and to the forthcoming 2014-2020 period now entering the final stages of negotiations.

First off, a municipal waste incinerator project planned for EU funds support in 2007-2013 in Plzen, Czech Republic’s fourth largest city, has been flatly rejected by the European Commission. One media report quotes Joe Hannon, spokesman for European environment commissioner Janez Potočnik, as saying:

“We can not fund this incinerator because the Czech Republic can not explain how it relates to the [country’s] waste management system, designed to meet the objectives of the [European Waste Framework] Directive.”

A further recent pronouncement confirms wider Commission scepticism about the preparedness of and rationale behind ongoing incineration plans in Czech Republic. The Commission commented in late January on a near final draft of Operational Programme for the Environment (OPE), one of several key blueprint texts that will shape and dictate how the country spends its EUR 20.5 billion of EU funds in 2014-2020.

And the Commission’s verdict on the OPE waste proposals wastes no time in getting its point across, kicking off with this:

“The analysis presented and the specific objectives proposed to be met do not correspond to actually existing problems with the waste management policy in the Czech Republic … The presented OP is, according to p. 61 (CZ version), based on the existing National Waste Management Plan (from 2003), which is not in compliance with the European Waste Framework Directive and should have been replaced in 2013 by an updated plan. Therefore, the Commission cannot agree with the assertion of the Czech authorities that the National Waste Management Plan correctly addresses the obligations of the Waste Framework Directive.”

Turning specifically to waste incineration, and continuing its roasting of the Czech authorities, the Commission verdict effectively ‘locks out’ Czech incinerators from EU funding support:

“According to the latest discussion with the Czech authorities, there is no clear strategy including the number of the incinerators actually needed in the short or long-term perspective. Therefore, there is no justification for large and costly waste incinerators. Moreover, the higher levels of the waste hierarchy [eg, reuse and recycling] within the Waste Framework Directive should be supported by the EU funds. In order to avoid a ‘lock-in’ situation leading to the burning of waste which discourages waste prevention and recycling (as also raised during the meeting between Commissioner Potočnik and the Minister of the Environment in January), these investments should not be supported from the OPE.”

So, the current EU programming period (2007-2013) has seen no EU funding support for any municipal waste incineration project, and there is not going to be any such support in this period – indeed the poorly conceived incinerator plans (in Plzen, and too in the towns of Karvina and Most) have lead to around EUR 180 million being reshuffled unstrategically across Czech Republic’s EU budget lines, when such money could have been deployed effectively and prudently for sustainable waste management initiatives in the first place. A great deal of the failed incinerator money may in fact end up being sent back to Brussels.

In my view, if the benefits of concentrating our waste planning on much greater waste prevention and recycling were not already blindingly obvious, then the European Commission’s concerns surely underscore the pressing need to do something rather different in the Czech waste sector.

Yet the Czech ministry of environment remains intent on ‘recycling’ the same old thinking for 2014-2020 EU spending.

The Plzen and Most incinerator projects are back in the most recent EU funds spending drafts, with a potential overall EU subsidy of EUR 77 million. The same money could support providing waste bins for full waste separation that would benefit 380,000 Czech households. It would also mean a lot less messing around and time wasted trying to develop these pie in the sky, ‘landfill in the sky’ incinerator projects that are so unpopular with communities. But it seems, despite recent history and all the warnings, that the Prague authorities are determined to bring about another fine EU funds mess.

Promoters of mega-dam in Georgia use front group and PR campaign and discredit local community


Local communities that are demanding fair treatment when faced with a large infrastructure projects often hear promoters justifying the project with an alleged paramount national interest. It’s another way of saying: “Get out, or we will lose our patience.”

Kaishi, a town in the Georgian mountains of Svaneti, is in this very situation right now. The Khudoni mega-dam is planned to be built where now 800 people live and the land that was theirs by custom was given to the opaque investor Trans Electrica Ltd. for one dollar.

Among the project promoters is also Georgian vice Prime Minister and Minister of Energy, Kakha Kaladze who last week suggested that only a very small group of people are against the project:

“It should not been imagined that the whole population of the region is against the construction of Khudoni. There is a group of people who have a radical approach towards the matter.” (Source: medianews.ge [ka], own translation, emphasis added)

Yet, the people of Kaishi are far from being a small group of radicals who are blocking the region’s development for sentimental reasons. Last week, after a meeting of the representatives of all Svaneti communities, the Kaishi community published an open letter to the government that reiterates the commitment of Kaishi as a whole to protect their village against a project that is unnecessary:

“Thus we are stating that the village of Khaishi will continue to exist and develop normally and will stay loyal to the oath that was given in front of God and our nation against the Khudoni HPP project.” (own translation)

The mentioned oath is a traditional vow taken in the local church. The 200 families who have taken the oath pledge to protect Kaishi from flooding and accept that a curse will haunt them and future generations of their families. (The oath includes some colourful descriptions of the curse.)

A PR campaign to change public opinion

Also public opinion in Georgia is far from seeing the Khudoni dam as a project of utmost national interest. In a recent poll on Netgazeti.ge 63 percent of the 1300 participants voted against the project (one vote per IP address was allowed).

Public opinion poll of Netgazeti – 63.07% of participants voted against Khudoni HPP #greenfist http://t.co/4IUVwTlGvh pic.twitter.com/6cAtoSnh7p

— Dato Chipashvili (@DatoChipashvi1) February 20, 2014

The lack of public approval has brought the Ministry of Energy and the investors to run an intensive PR campaign to change public opinion. The campaign includes a range of TV ads with biased or distorted facts and a facebook fan page that miraculously gathered 16 000 likes practically overnight.

Even a front group called Georgian Infrastructural Project Initiative (SIPI) appeared out of nowhere in the beginning of this year with the following mission:

“[…] to inform society with facts and arguments on ongoing and planned infrastructural projects in order for the latter to be correctly interpreted by the people.” (emphasis added)

Although claiming to conduct studies and evaluations of infrastructure projects, the initiative mostly posts news articles to their website and the CNN’s iReport platform (none of the articles vetted by CNN). Almost all articles so far have been weakly veiled promotions of the Khudoni dam or of the project promoters’ activities.

A look at SIPI’s public registry file leaves no doubt that the organisation is nothing but another way of promoting Khudoni. The head of the organisation, Levan Kalandadze, is a close friend and party ally of businessman Irakli Iashvili. (Both are members of the New Rights Party). Iashvili is 50 percent shareholder of Trans Electrica Trading. The other half is owned by none other than Khudoni investor Trans Electrica Ltd. (The purpose of Trans Electrica Trading is not becoming clear from the registry. It only mentions that the company will deal with energy issues in general.)

–

The claimed openness of Kaladze and other project promoters to discuss with Kaishi and the rest of the Svaneti community will be put to another test tomorrow. Georgia’s Ombudsman Ucha Nanuashvili has invited all interested parties (including the ministry and the investor) for February 28 to discuss the human rights dimension of the Khudoni project. We’ll see who shows up.

The EIB’s double standard for human rights in Ukraine and Egypt


Reacting to the bloodshed in Ukraine, the European Investment Bank announced to freeze its lending in the country last week (while the European Bank for Reconstruction and Development only paid half-hearted lip service). Yet, Mika Minio-Paluello from Platform rightly points out that the EIB’s determination to uphold human rights seems to have a huge blind spot in Egypt.

Mika’s blog post was orginally published on Thursday 20 on the Platform blog and is cross-posted here .


Western governments threatened sanctions and the President of the European Investment Bank (EIB), Werner Hoyer, announced a halt to activities in Ukraine, “I think it would be completely the wrong signal to appear as being the ones who do business as usual in Ukraine while the people on the streets of Kiev, by whom and whyever, are being slaughtered.” The sentiment seem solid – the state crackdown in Ukraine has escalated horribly.

Yet it’s tempting to wonder how much EU geopolitical interests contributed to the rapid decision-making, rather than just the violence in the streets.

Not least given that EIB President Hoyer has no problem conducting “business as usual” in Egypt, where over 1,300 have been slaughtered – “by whom and whyever” – since July. Close to 1,000 were killed on a single day in August. Since then, there have been repeated massacres by state forces. On the third anniversary of the revolution, police attacked those marking the anniversary, killing at least 64 and hounding protestors through the streets. The jails are full with thousands of prisoners, with intense torture becoming routine. The “virginity tests” used to abuse women revolutionaries in 2011 have begun again. Political party members were arrested for displaying “No” signs prior to the constitutional referendum, and schoolchildren imprisoned for making handsigns or carrying the wrong ruler.

What is the EIB’s response to this? Rather than freeze lending, the bank made loans worth €392 million to the Egyptian power, air traffic and banking sector, just since December.

I looked for statements by Hoyer or other EIB officials on Egypt and human rights, democracy – or even just explaining what sig nal they think they’re sending by working closely with a military-appointed government and signing deals in the absence of a Parliament. All I found was the EIB Vice-President’s claim that “Our aim is to support the new Egypt’s social and economic transition by financing projects encouraging growth and employment.”

Which sounds like “business as usual” despite a context where 26 people being killed on one day is so routine that it is barely news anymore. Quite literally. A friend who works for a British paper here in Cairo was told by the editors that stories of massacres in Egypt would only be run if more than 25 people were killed.

Is it just simple racism? Does the EIB weigh up deaths on the scale, and calculate white lives in Ukraine as counting more than brown lies in Egypt? 40 times more?

Or is it also the geopolitics – that the EU is taking a stand to limit Russia’s role in Ukraine? After all, President Hoyer last summer explained that “the European Investment Bank is not a development bank, it is an investment bank designed to support EU policies, including external action.” Hoyer said that just days after the military took power in Egypt.

While in Ukraine, EU foreign policy priorities mean standing up for democracy protestors, in Egypt the protestors are sacrificed on the altar of business as usual. Hoyer explained that he didn’t want to lend in Ukraine “because we need to know in what political environment we are going to be able to move in the future.”

In contrast, in Egypt the political environment is very clear – the military aims to continue running matters from behind the scenes, with some semblance of democracy. The political takeover by General Sisi and the military doesn’t threaten EU business and energy interests. Quite the opposite – Sisi is promising a return to “stability”, albeit enforced by extreme violence.

It’s not surprising that the EIB is comfortable in this environment. The bank was relaxed co-operating with the Mubarak regime right up until the 2011 revolution. Sometimes too relaxed, with evidence that the EIB invested in shadowy private equity funds connected to Gamal Mubarak. So we shouldn’t be too surprised by the bank’s hypocrisy.

–

None of this is to invalidate the intense violence that is taking place in Ukraine, or to imply that the EIB should ignore the crackdown. Instead, we should hold Hoyer to his new-found commitment to human rights, and his aversion to people being slaughtered in the streets, while challenging the noxious combination of EU’s structural racism and business-driven foreign policy priorities.

In Albania, oil’s history casts long shadows over locals


I first visited Albania in 2007. I went there to dig a bit more into a thermal power plant financed by both the World Bank and the European Bank for Reconstruction and Development near the coastal town of Vlore, a popular tourist destination. In spite of fierce opposition from locals and formal grievances lodged with the investors (pdf), the power plant was constructed anyway, and now sits unused, collecting cobwebs and interest on the country’s outstanding debt repayments.

Things have changed rapidly though in and around Vlore: haphazard construction continues unabated, with once towering beachfront hotels demolished to make way for equally large yet apparently unused condominiums. The shift, I’m told, coincides with the shifting political landscape and the subsequent patronage to the favoured property developers of the moment.

But the more things change, the more some things stay the same. Fast-forward more than half a decade, and both the EBRD and IFC are at it again, financing another controversial energy project near Vlore: the extraction of oil at the Patos Marinza fields by the Canadian company Banker’s Petroleum.

Patos Marinza is one of the largest, and oldest, onshore oil fields in Europe. Oil was first discovered in 1928, and because of this long history of extraction, the area around Patos Marinza suffers from heavy pollution. That’s why a portion of the loan from the banks is intended to clean up the area (and typical of the EBRD, its loan is called the ‘Patos-Marinza Environmental Remediation and Development’ project, even though just USD 6 of 100 million extended to the company is to be used for remediation, and hardly any of that has even been drawn).

Our visit highlighted that while Banker’s had done quite a bit to improve its facilities for extracting oil, it wasn’t immediately clear what was being done to benefit both the environment and the locals living in the immediate proximity of the oil wells.

Making the unseen visible

Just as in the case of the power plant at Vlore, locals have lodged a formal complaint at the World Bank, alleging among other things that Banker’s drilling activities have led to increased seismic activity. An investigation by the IFC’s Compliance Advisor Ombudsman is ongoing, and in the meantime, a formal working group has been established to investigate the source of the increased seismicity.

But what struck me most about the attention being paid to issues happening underground (and for the most part, unseen) was the conditions it created for inaction on the very visible unemployment and pollution blighting the residents of Patos-Marinza, issues that residents repeatedly raised during the trip. And if Banker’s security had had its way, the issues would have remain unseen, as shortly after arriving, we were unwelcomingly escorted out of the area by a caravan of security vehicles.

Unemployment

Prior to the heavy-handed guards removing us from the villages, we spoke with about twenty residents in the nearby village of Kallmi, all of whom were unemployed. A former employee of the state-owned oil company Albpetrol, from whom Banker’s is taking over the oil fields, explained that men who had technical training and worked in the fields could not find work with Banker’s, complaining that ‘hundreds’ had sent CVs not only to Banker’s but also the different subcontractors building things like roads.

When it was noted that Bankers has a hiring policy in place to give preference to former Albpetrol employees, the man dismissed it, reiterating that he knew not one of his former colleagues that was now employed by Bankers. Another migrant worker explained that upon returning from Greece, he had nowhere to send his children because the school was in such disrepair.

These types of investments – roads, schools and the like – came up often as the kinds of social programmes that Banker’s should support. As one man put it, social programmes ‘that made sense.’ He referred to his arrangement with Banker’s, where he rents the company land of oil extraction, and they in turn teach him how to care for tomatoes. The programme is of little use however, since the man already knows how to care for tomatoes, and he no longer has any land on which to grow the tomatoes. Along with other projects like the recently-constructed health centre and a programme for pruning trees, what the community wants and what why company constructs are entirely two different things.

Slideshow


There is no god that could live here

Even after just a few hours on site at Patos Marinza, the effects of breathing polluted air were noticeable: discomfort in the throat, a slight irritation resulting in eyes watering. For those who call the area home, the situation is taking its toll. Locals in Kallmi complained that there are significant amounts of air pollution, particularly early in the morning, and in the neighbouring village of Jagodina, others confirmed that ‘heavy’ air in the mornings, leading to problems with breathing. Locals say that an inoperable pipeline leaks methane, and the slag pits evaporate in the summer, further deteriorating the air quality. When asked about the conditions of the slag pits, one man alluded to an Albanian saying, ‘There is no god that could live there’.

Lessons learned for the future policy

This week in Sofia, the EBRD will hold its penultimate public consultation about the future of its safeguards policies. Colleagues from Albania who were present during our trip to Patos Marinza will present the mission, and we hope that this case will provide some lessons learned for the bank as it moves forward in revising in its safeguard policy. Otherwise it is possible that the next trip to Albania will be to visit another environmentally and socially-destructive EBRD energy investment.

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