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Bankwatch co-production on Kyrgyz gold mine wins at DOK Leipzig while EBRD sights financing for company featured in the film

During last weeks internationally-renowned 53rd Leipzig Festival for Documentary and Animated Film, DOK Leipzig, Bankwatch’s most recent co-production about the European Bank for Reconstruction and Development (EBRD)-financed Kumtor gold mine in Kyrgyzstan All that Glitters collected two awards: the Mitteldeutscher Rundfunk award for an excellent Eastern European documentary film and the Healthy Workplaces Film Award for the best documentary film about the subject of work.

In making their selection the juries remarked, “A great and sensuous film about this complicated topic in the era of globalisation… with honesty, humor, empathy and respect to the protagonists the director takes us to a working site that had and could have again fatal consequences for human and nature… he has made a brilliant film.”

More good news related to the film arrived today when one of the featured protagonists, the doctor Baktygul who organised community resistance after the lethal cyanide spill at the Centerra-owned mine, was acquitted of trumped-up charges by the Supreme Court of Kyrgyzstan.

Yet beyond the silver screen many questions remain unanswered about what was achieved with EBRD money for Centerra and its Kumtor mine. And at another Centerra site in Mongolia, conflict emerged in early September in protest at mining in one of Mongolias few forested areas and the governments failure to implement environmental regulations regarding mining.

And new financing for Centerra has suddenly appeared on the radars of the banks Board without explanation of its purpose. Bankwatch discovered yesterday the “Regional: Centerra Revolving Debt” project on the Board agenda, which subsequently was moved to the Board’s November 10 meeting, yet no project summary document or information about the project had been provided beforehand to the public. For an institution that has sustainability at the heart of its agenda and declares itself dedicated to stakeholder engagement, this recent development raises the question of whether the lessons from Kumtor are being learned.

Image: Villagers demanding proper compensation for an old accident in Kumtor gold mine, Kyrgyzstan, during a blockade in August 2005.

Rotten perceptions, grim reality Turkmenistan off the agenda in European Parliament, Nabucco still nowhere near fit for purpose

Transparency International’s Corruption Perceptions Index, launched today, confirms Turkmenistan’s position as one of the world’s least democratic regimes. Promoters of the Nabucco gas pipeline project have opted to adopt a surprisingly tolerant approach to Turkmenistan’s endemic failings.

Today’s launch of Transparency International’s Corruption Perceptions Index comes as no surprise to those following the political situation in Turkmenistan. The country’s low ranking (172th out of 178 countries) confirms its position as one of the world’s least democratic regimes and backs up its miserably low scores on political rights and civil liberties as well as freedom of the press.

Promoters of the Nabucco gas pipeline project have opted to adopt a surprisingly tolerant approach to Turkmenistan’s endemic failings – it is potentially a key supplier for Nabucco, though cementing guarantees to fill the EUR 8 billion pipeline’s overall planned capacity of 31 billion cubic metres per year is proving to be a messy, highly politicised task. Even so, the project – aimed at bringing Caspian or Middle Eastern gas to Europe and on the planning table for over a decade – is now under consideration for funding by the International Finance Corporation, the European Investment Bank and the European Bank for Reconstruction and Development.

It is against this backdrop that a Partnership and Cooperation Agreement between the European Union and Turkmenistan is currently being discussed in the European Parliament, which in a resolution from April 2009 decided on concrete human rights benchmarks to be met before ratification of such an agreement and while not essential for Turkmenistan to become involved in Nabucco, an agreement would help to facilitate a supplies deal. But while human rights and corruption indices continue to paint a bleak picture, an assessment of those very benchmarks has yet to make it into the European Parliament’s discussions.

It has though recently emerged that the European Parliament has postponed its plenary vote on the agreement – previously scheduled for the end of November – until at least March 2011. Pressure from Bankwatch and other civil society organisations such as the Open Society Institute, Global Witness and Human Rights Watch has been a contributing factor to this delay.

Bankwatch urges the European Parliament to use this extra time for a more thorough discussion on cooperation with the Turkmen regime, one guided not simply by economic arguments. We also urge the international financial institutions to take note of the need for more scrutiny before considering unprecedented sums in support of Nabucco. Projects on the scale of the Nabucco pipeline, that would further help to strengthen an authoritarian government (pdf), have to be out of bounds for public development finance until tangible improvements in the human rights and governance situation in Turkmenistan have taken place.

Khimki Forest activist arrested for holding banner during picket action

Russian activist Yaroslav Nikitenko was arrested by police on Saturday during a legally permitted picket action in the town of Khimki near Moscow. The action was part of the campaign to change the route of the planned Moscow-St Petersburg motorway so that it avoids the Khimki Forest.

The arrest came as Nikitenko attempted to hold up a banner with the message: We all live in Khimki Forest. The picket action was held to distribute information about alternative routings of the Moscow-St. Petersburg motorway in advance of public hearings about the project due to take place this week.

Nikitenkos arrest is the latest in a series of unfounded detentions of Khimki Forest campaigners, who have also been subjected to various legal obstacles as well as physical attacks. Tree felling in the forest began in July this year without all the relevant permits, yet the EUR 1.5 billion first section of the motorway is still under consideration for financing by the European Investment Bank and the European Bank for Reconstruction and Development

Both banks have expressed their commitment to free speech but to date there is little evidence of their supposedly benign influence having any effect as a string of controversies surrounding the project over the summer months shows no signs of abating. As the European Commission considers granting a European Community guarantee to the motorway project that would act as insurance for the EIB’s potential EUR 200 million investment, how many more crackdowns against law-abiding Khimki Forest campaigners will it tolerate?

A recent article from The Christian Science Monitor explains how power politics and corrupt practices are overlapping to squeeze the defenders of the ancient Khimki Forest.

In Moscow, thousands protest destruction of Khimki Forest

In spite of heavy policing, several thousand people yesterday rallied at a concert in Pushkin Square to voice opposition to the destruction of the Khimki Forest to make way for the EUR 1.5 billion first section of the Moscow – St. Petersburg motorway, a project that may receive financial blessings from the European Bank for Reconstruction and Development and the European Investment Bank.

Organisers had to overcome numerous obstacles, as the city authorities had claimed that a permit had only been granted for a ‘rally’, not a ‘concert’. Additionally, unknown motorcyclists attempted to puncture the tyres of the sound equipment van, which the police also prohibited from entering the square; attendees were required to pass metal detectors, causing long queues; and one man attempted to cut off the electricity supply. Singer-songwriter Yury Shevchuk had to entertain the crowd “unplugged” with only a megaphone to amplify the sound, while other artists due to attend were not allowed into the square at all.

“In spite of all the difficulties, the rally was a great success”, said Mikhail Mateev of the Movement to Defend Khimki Forest. “The fact that so many people were willing to stand up and say “No!” to destruction of Khimki Forest is a strong message, and we hope that the European banks and project concessionaire Vinci are listening.”

EIB complaints office confirms shortcomings on Belgrade resettlement


Responding to a complaint (pdf) lodged by Bankwatch and Serbian member Centre for Ecology and Sustainable Development (CEKOR) the Complaints Office of the European Investment Bank has, in an unprecedented step, determined that unless the EIB tidies up its financing performance of the project by the end of this year, the bank will have to fully recall its EUR 25 million loan for the project.

The complaint (pdf) was submitted to the EIB’s redress mechanism last September, alleging the banks mishandling of repeated requests for information and its flawed appraisal of the vastly complex social risks of the project. Many people from the former settlement still lack adequate housing or provisions for employment.

The report confirms Bankwatch’s allegations that the EIB did not pay sufficient attention during the project assessment: “the severe social impact of the project should have led the EIB’s competent services to exercise a cautious and targeted social assessment with a view to pro-actively identifying (and therefore promptly addressing) the major social concerns during the appraisal of the projects”, while EIB documents do not contain “any documental evidence of an appropriate identification of the social issues at stake”.

It also concludes that this was a reason that the EIB added little value to the resettlement action plan or the work of the Serbian authority to carry out satisfactory resettlement solutions.

The report further recommends drawing up an Action Plan to bring the resettlement conditions into compliance with EIB’s policies and properly address the “improvement in housing and related conditions and livelihood restoration”. Most urgently, the project promoter should “bring current temporary housing and related conditions (including access to education) to a standard acceptable by the EIB (…)”.

Finally, the report concludes that further disbursement of the loan may only take place if an audit confirms that all the conditions have been fulfilled. If this does not happen by the end of 2010 the loan will fully be recalled.

Sounding the potential of a European budget “for the people and the climate”


The potential to invest European Union (EU) funding into projects that actually benefit the environment has already been recognised (pdf) during the decision making for the EU budget for 2007-2013. Since then, however, it has become evident that theory and practice can diverge significantly.

With this in mind, Bankwatchers in Bulgaria, the Czech Republic, Latvia and Poland have spent the last six months immersed in energy scenarios, efficiency potentials estimates, national and EU strategies, and have interviewed more than 50 government officials, industrial association representatives, academics and other experts in the field of public finance to find out how the next EU budget for the 2014-2020 period can effectively support a low-carbon economy with benefits for people and nature.

The research outcomes will be published in the coming weeks, but to give away some of the results already now: thermo-insulation of buildings, sustainable heat production, development of smart grids and efficient industrial technologies have been identified as top priorities for public funding in central and eastern Europe.

Today, Bankwatch invited experts from the new EU member states, and representatives from the European Commission, the European Parliament, the European Investment Bank and the European Bank for Reconstruction and Development to supply them with our experience from the ground to discuss how the future EU budget can help decrease the dependency on fossil fuels, ensure climate and environmental protection, boost green innovation and increase the quality of life.