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The worst company of the year – Vote for Alstom in the People’s Public Eye Awards 2013


It’s this time of year again, when the Public Eye Awards – a flagship campaign from Berne Declaration and Greenpeace Switzerland – is naming and shaming corporate scandals and bad business ethics among the biggest corporations worldwide.

Among the seven finalists is also Alstom, a company that has been nominated by Bankwatch and our colleagues from Focus Slovenia and SHERPA France for being involved in numerous corruption scandals across the globe.

To set the tone for Alstom’s nomination, we produced this “promotional” video:

Because Alstom and its subsidiaries repeatedly displayed dubious business practices, have faced or are facing corruption charges, fines, even debarment by the World Bank, the French energy and transport giant can now join the ranks of such lustrous figures as Shell, Lonmin and Goldman Sachs, other Public Eye Award nominees this year.

It is indeed a hard choice and whoever will receive the award, it will be well deserved. So if I may, please do have a look at this excellent initiative to stigmatise the world’s worst business practices and cast your vote.

We certainly hope you will vote for Alstom, who is also the construction company for Unit 6 at the Sostanj lignite power plant in Slovenia – yet another corruption case at Alstom’s heels and at the same time a disgrace for Europe’s efforts to mitigate climate change.

Make your move.

Vote now for the worst company of the year.

Financial alchemy in Slovenia’s energy sector still results in lignite, not gold


Last week the Slovene government gave the go-ahead for the signing of a state guarantee contract with the European Investment Bank on the TES 6 project (more background on the guarantee on this blog). This came after months of debate about whether the project meets the conditions the government set, such as setting a ceiling on construction costs, ensuring a stable lignite price from the nearby Velenje mine, achieving a certain level of profitability, keeping CO2 levels at a certain level etc.

In an attempt to convince everyone that these conditions will indeed be met, the Sostanj management had to come up with yet another investment plan (pdf), the fifth such document for the project.

Since the economics of TES 6 has never been convincing and are only likely to get worse with the long delays that have plagued the project, Focus and Greenpeace Slovenia have commissioned an analysis of the investment plan by economist Dr Aleksandar Kešeljević from the University of Ljubljana. The result shows, among other things, that:

  • A reduction in the electricity price by just 10 percent would cause the project to be unprofitable.
  • There is an increased risk of higher financing costs, because compared with the fourth investment plan an increased proportion of the loans for Sostanj 6 have now floating interest rates, i.e. that can change with the rest of the market.
  • A reduction in coal prices to the level planned in the fifth investment plan is difficult to achieve, especially as so far there has been no long-term coal supply contract concluded with the Velenje coal mine.
  • If the price trends for CO2 emission credits are in accordance with the EU’s long-term goals to reduce greenhouse gas emissions, the project value is strongly negative in all scenarios.
  • There is an unproven and unrealistic assumption of increasing efficiency.

In going ahead with the state guarantee, the Slovene government has recognised some of these problems and tried to solve them by moving the goalposts:

  • Where it previously said that the coal price must not go above EUR 2.25 per gigajoule (even though it already is), it has now signed a contract with the Sostanj management that says it must not go above EUR 2.73.
  • Where it previously said a discount rate of 9 percent must be used for project calculations, the contract says that there must be 9 percent capital return, which is quite a different thing.
  • And where the government previously said the total investment cost should be in line with the investment cost from the third investment plan (EUR 1,12 billion in constant prices / almost EUR 1,19 billion in current prices), the contract says it should be kept below EUR 1.3 billion.

The state guarantee contract still has to be approved by the European Investment Bank itself and ratified by the Slovene parliament, so it will be interesting to see whether either of these bodies is willing to accept the Sostanj management and Slovene government’s attempts to hide the mess they’ve created with the Sostanj 6 project.

However, one thing is for sure. As both the EBRD and the EIB are currently undertaking their energy policy reviews, they would do well to look at Sostanj and the trail of destruction – environmental and economic – and alleged corruption it is leaving in its wake and learn the lessons from it.

The EBRD, in particular, is planning to back at least two more lignite power projects in south east Europe, possibly more. Does it seriously believe that a close look will not uncover similar problems, perhaps even additional ones, to those at Sostanj?

Public action in Ukraine: Reminding the EBRD of the meaning of nuclear safety


Regular readers of our blog know that the ‘Safety Upgrade Program’ for Ukraine’s 15 nuclear reactors, for which the European Bank for Reconstruction and Development is considering a loan worth 300 million, is in fact a scheme that would allow Ukraine to prolong the operations of its reactors by another 20 years, although twelve of them reach the end of their designed lifetime between 2010-2020. [1]

To illustrate the very real danger of a nuclear accident that comes with these plans: In December 2010 the operation of the reactor #1 at the Rivne Nuclear Plant was extended by 20 years. Just one month later an incident occurred.

An action we held today together with Greenpeace (see images below) reminded of these dangers and reflected the growing opposition to financing the prolonged operation of outdated nuclear reactors in Ukraine with European public money. We called on the EBRD to reconsider its involvement as long as the ‘Safety Upgrade Program’ is not truly and exclusively designed for safety measures – which above all must include the decommissioning of old reactors.

The action was also part of ongoing efforts by Bankwatch and our member group National Ecological Centre of Ukraine (NECU) to make sure Ukraine’s nuclear plans do not remain as opaque as the government would like to have it. [2]

And as expected, disapproval in Ukraine and abroad is increasing with more people knowing about Ukraine’s intentions to rely heavily on nuclear energy [3] even though it hasn’t made any investments into the infrastructure that is necessary for the long-term storage and the disposal/reprocessing of used nuclear fuel and nuclear waste – and although safe low-carbon alternatives are available.

If the EBRD takes nuclear risks more seriously than Ukrainian authorities and really wants to improve the safety of Ukraine’s reactors it should work together with Ukraine on the decommissioning process of its oldest nuclear units.

Images from the action

See more photos here

See more photos here

Notes

1. The Energy Strategy of Ukraine until 2030 clearly implies the extension of operation of all nuclear reactors by 20 years.

2. The Government adopted the lifetime extension programme without discussing it with its citizens and without properly estimating its impact on the environment, which contradicts the requirements of the UNECE Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters” (Aarhus convention).

3. According to the Energy Strategy until 2030, the Ukrainian Government plans to cover over 50% of the country’s electricity needs with nuclear energy.

Doing more than just spotting the elephant: a new resource for campaigning on China, dams and finance


In April early this year, after Chinese Prime Minister Wen Jiabao announced a USD 10 billion credit line for infrastructure in central and eastern Europe at the China-Central Europe-Poland Economic Forum in Warsaw, China’s preeminence in the region’s hydropower market was given a major boost. Since then a number of projects with potential Chinese involvement have been announced in countries such as Bosnia and Herzegovina (Ulog), Macedonia (Vardar), Montenegro (Moraca and Komarnica) and Ukraine (Kaniv). The companies involved include Sinohydro, the world’s largest dam company, and CWE – China Water and Electricity corporation, with the China Development Bank and China ExIm Bank as the potential financiers.

With a track record of serious social and environmental impacts at numerous Chinese dams in Africa, Asia and Latin America, and the linguistic and cultural difficulties in communicating with Chinese investors, it might seem easy for a campaign organisation just to throw up one’s hands and assume that nothing can be done. But a new guide published today by International Rivers offers some tactical insights for civil society about how best to influence the projects and policies of Chinese dam builders and advocate for social and environmental interests. Using lessons learned from previous campaign experience, the report provides an overview of the relevant actors, laws and standards in the Chinese dam building sector.

In recent years, civil society groups have found ways to engage with and influence the projects and policies of Chinese dam builders and after protests by local communities and NGOs, Chinese companies and financiers had to suspend projects in Burma and Gabon, and withdrew from operations in Cambodia. Chinese government agencies have also issued guidelines for foreign investors to protect the environment and respect local communities in their host countries. Perhaps most surprisingly, Sinohydro has prepared an environmental policy that puts it at the forefront of the international hydropower industry.

The part that particularly caught my eye is that Sinohydro has committed to avoid projects in national parks, World Heritage-listed sites, habitats of threatened species and Ramsar-listed wetlands. This no-go commitment, if properly implemented, is stricter than the EBRD’s current Environmental and Social Policy, which merely requires an Environmental Impact Assessment for such projects!

All of this adds up to a highly useful and motivating guide showing that addressing the environmental and social impacts of Chinese investments is possible. “The New Great Walls”, is available for download from the International Rivers site.

For further information about the report please contact Grace Mang at International Rivers.

Time to iron out the EU budget differences – with a green shirt!


Here’s Alexander Stubb, Finnish Minister for Foreign Affairs, tweeting on his way to the summit in Brussels:

These are not mere sartorial concerns, alas. Several weeks ago, Herman van Rompuy himself tweeted that this summit was shaping up to be the first ‘three shirter’ under his presidency. By this he was referring to the possibility that the scheduled two day summit – Thursday and Friday – would stretch into Saturday, requiring an extra shirt for strung-out summit participants.

Now there is intense speculation that, because of the huge differences of opinion ranged around the budget (how much total funding should be made available being the main obstacle), this budget summit could well become a ‘four-shirter’, ie stretching into Sunday. Apparently the building hosting the summit has instructed its restaurant to be ready for business on Saturday night.

A lot of talk about shirts, then, and so far the first sign of summit ‘shirtiness’ came this morning from UK prime minister David Cameron as he arrived for a bi-lateral ‘confessional’ (more EU summit jargon, alas, but ‘confessional’ just means ‘talks’ – there could, though, be connotations of divine inspiration being sought to ensure a budget deal) with van Rompuy.

That’s why today we’re encouraging Mr Cameron and Europe’s other leaders to make life easier for themselves – not to mention also for people living in Europe and our collective environment – by donning a green shirt.

Bankwatch and our campaign colleagues are calling for 25 percent of the EU budget for 2014-2020 to go to tackling climate change and securing green economic dividends for all in Europe.

No less a figure than Jacques Delors, the former president of the European Commission, this week set out the case for significant green spending to feature in the next round of EU spending – it’s well worth a quick read. The gains to be had from better green spending are many and, crucially, they are sustainable.

Adding extra urgency to the need for a rigorously green budget deal this weekend has been a string of highly alarming reports that have been published by major international bodies in the last week.

The International Energy Agency, the World Bank and the United Nations (as well as separately the UN Environment Programme) have all issued dire warnings about the rising rate of global carbon emissions and atmospheric warming. In tandem they have issued strong calls for major new investment money to be targeted especially at energy efficiency measures and clean renewable energy technologies.

For Europeans, the starkest warning comes this morning, just as the EU summit gets underway. The BBC reports that climate change is evident across Europe, citing a new report from the European Environment Agency out today.

The agency’s director, Jacqueline McGlade is quoted – in black and white terms – thus:

“Every indicator we have in terms of giving us an early warning of climate change and increasing vulnerability is giving us a very strong signal … It is across the board … it is in human health aspects, in forests, sea levels, agriculture, biodiversity – the signals are coming in from right across the environment.”

This is grim news. But just fancy – there is an investment tool designed to serve Europe that is under discussion right now. It too goes across the board, covering EU agriculture, transport, energy, health and a host of other sectors. It’s called the EU budget. Now is the time for Europe’s member states to set aside their budget differences and at least come together on ensuring that the future budget has green, climate-friendly spending at its heart.

You can get up to date info and gossip from the EU summit via @ceebankwatch and @SustEUfunds. If you’re using Twitter yourself, look out for the hashtags #euco and #MFF , and of course you make a good green case yourself by using #wellspentEU.

European public development money for Monsanto? Whatever next?!


Amidst the media frenzy around the US Presidential election last week, the news that Californians would at the same time be voting whether to introduce labelling of genetically modified food in their state – so-called Proposition 37 – hardly reached this side of the Atlantic. In the event, even though polls show no less than 91 percent of American voters (pdf) back labelling of GMO food, Proposition 37 narrowly failed to gain a sufficient number of votes to pass into law.

Why? Possibly something to do with the initiative’s opponents having five times as much money to spend on their campaign as its supporters… And top of the list of ‘No’ donors was none other than Monsanto, which managed to find no less than USD 8.1 million to help prevent Californians from having the right to choose what they eat.

Monsanto lead the charge against GMO food labelling in California (Source: Food Democracy Now)

This particularly caught my attention because the very same company, which is incidentally the world’s largest seed company, the fourth largest agrochemical company and a Fortune 500 company, is at this very moment waiting to see whether it will receive USD 40 million worth of support from the European Bank for Reconstruction and Development . Quite why a company that can afford to throw USD 8.1 million at depriving people of the right to choose what they eat deserves backing with public development money is unfathomable to me.

The proposed support involves unfunded risk participation (ie. a kind of guarantee, rather than the usual loans or share investments made by the EBRD) for cases where farming companies cannot pay for seeds and agrochemicals that they have signed contracts for with the company. The target audience for the investments are medium-large farmers and a small selection of key distributors in Bulgaria, Hungary, Russia, Serbia, Turkey, and Ukraine.

According to the EBRD, there will be no GMOs involved, but I wouldn’t bet on it. In July-August 2011 Hungary had to destroy 8500-9000 hectares of corn due to GMO contamination from seeds originating from Monsanto and earlier this year Greenpeace Switzerland found Monsanto’s GT73 (also called RT73) GM oilseed rape (Canola) – which is illegal in Switzerland – growing wild in Basel’s port area.

In any case, Monsanto’s record of corporate social irresponsibility is breathtaking, and that alone would be reason enough to disqualify it from backing by public development institutions. In the last two years alone, in addition to the California vote and Hungarian seed contamination mentioned above, the company has been involved in a series of controversies, including:

The EBRD has already offended at least 109 organizations this year with its promotion of mass-scale industrial agriculture and derisive attitude towards small farmers. So rather than digging itself into a deeper hole by supporting Monsanto, it’s time for the EBRD to take a long hard think about whether it exists to help the 99 percent or the one percent.