Blog entry

Uzbekistan has 10,000 NGOs, but what do they do?

This article was originally published on opendemocracy.net

Civil society in Uzbekistan continues to suffer from restrictions to freedom of speech and barriers to the legal registration of non-governmental organisations (NGOs). Legislation that limits the right to peaceful assembly places excessive requirements on organisers of public meetings. Yet while the Uzbekistani state stifles civic space, the government boasts of the number of non-governmental organisations in the country and insists that it is implementing measures to “radically increase the role of civil society institutions in the process of democratic renewal of the country”. The reality is that many of these organisations are, in fact, in some sense controlled by the state.

How to massage statistics

According to official data, there are more than 10,000 NGOs in Uzbekistan. A closer look at the data, however, reveals that the majority are actually government-organised non-governmental organisations, or GONGOs.

As Uzbekistan’s Independent Institute for Formation of Civil Society reports, despite the rapid growth in the number of NGOs since 2014, 66% of them are government-established organisations, with almost half of them created by government decree.

As a result, the number of NGOs in Uzbekistan may be overstated more than twice. Whereas truly independent groups struggle to obtain official registration, the government establishes new GONGOs or opens branches of old ones as separate organisations, which explains the impressive presence of NGOs in the country – at least in numbers.

If the Uzbek government is to deliver on its promises of opening up and supporting the development of civil society, it needs real democratic reforms.

As of 2020, the Ministry of Justice of Uzbekistan publishes lists of registered NGOs for each region. Here, we can see that NGOs with the same name have been registered in different districts of the same region as separate organisations. For example, in the eastern Fergana region, there are 20 branches of the Mahalla Public Charitable Foundation for “good neighbourly relations”and targeted support to people in need of social protection; 20 branches of the Youth Union that supports the development of “a physically healthy, spiritually mature and intellectually advanced generation able to think independently”; and 20 branches of the Adolat Social Democratic Party.

This explains the huge number of supposedly independent NGOs in Uzbekistan. However, the Mahalla Public Charitable Foundation was established in 1992 by presidential decree – as was the Youth Union in 2017. In essence, most NGOs with branches in each region have been created by presidential decree or by other government agencies.

These GONGOs have access to resources beyond the reach of independent NGOs. For example, in 2016, the Nuroniy Foundation, which was established to support the elderly, was allocated 1.5bn som (around $140,000) from the reserve fund of the Cabinet of Ministers by presidential decree. In addition, the government allocates funds in the state budget every year to support the activities of these GONGOs – independent NGOs have no access to these funds.

Recently, the limit of money and property that NGOs can receive in one calendar year from foreign sources has been increased to approximately $2,300, although this is still a negligible amount for any organisation working on social issues such as forced labour or domestic violence. Any foreign funding above this threshold needs to be approved by the registering authority. As such, the state can restrict the flow of funds an NGO receives from foreign sources, and therefore many registered NGOs are afraid to criticise the authorities, to avoid losing crucial funding.

Zombie NGOs

The total number of Uzbekistan’s NGOs includes organisations that no longer exist or exist only on paper, including some that were officially dissolved by presidential decree. Others continue to exist in name but do not function, as is the case with numerous centres for the rehabilitation of victims of violence and attempted suicide, which were intended to work as shelters.

For example, in 2018, a presidential decree set up centres to protect people who have suffered from violence, including domestic violence; to provide urgent medical, psychological, social, legal and other assistance to those in difficult social situations; and to prevent suicide.

While the state Commission on Gender Equality reported that 197 centres had been established in Uzbekistan, three NGO employees reported, on condition of anonymity, that most either did not exist or did not function in the way shelters are supposed to. In December 2020, it became known that the hotline of the Tashkent rehabilitation centre was not working because its only employee had not received a salary for several months. One woman had been answering the hotline 24 hours a day, seven days a week.

Moreover, Uzbekistan’s Commission on Gender Equality announced that in March 2021, 782 requests for assistance had been received at centres across the country, with 154 people living in the shelters. Divided by 197, this means that each centre had received four requests per month on average and that not all centres were even accommodating people. This may indicate that the government has grossly exaggerated the number of shelters in existence, a theory given weight by the fact that 29 centres for women who have suffered from domestic violence were established by presidential decree on 19 May, replacing the 197 shelters registered as NGOs.

In any case, these statistics signal that the centres’ performance has been poor. After all, the number of complaints is growing: according to the Ministry of Internal Affairs of Uzbekistan, there has been an increase in the number of complaints related to gender-based violence, with 11,000 filed to law enforcement agencies in the first three months of 2021 alone, compared to 8,430 protection orders for victims of abuse issued between January and October 2020.

Under the control of the government

Perhaps the high number of GONGOs in Uzbekistan would not raise so many questions if independent NGOs created on the initiative of private citizens were freely registered in the country. But that isn’t the case.

For example, a group of students at the Faculty of Sociology of the National University of Uzbekistan has been trying for more than two years to register a youth volunteer centre. The Ministry of Justice has rejected the application more than 20 times. Instead of immediately pointing out all the inaccuracies in the initial submission, the registering authority highlighted only one error at each refusal. At the same time, the Association of Volunteers – a platform promoting volunteer groups in the country – was registered at the first attempt.

As Dilmurad Yusupov, a development studies doctoral student in the United Kingdom stated at the time, “It turned out that the association had several influential founding members… which confirms my suspicions that [it] is another GONGO. [But] how can we have a Volunteer Association if we still do not have a single volunteer organisation?”

As the UN Human Rights Committee noted in May 2020, there is a high percentage of refusals to register independent NGOs in Uzbekistan, a situation that hasn’t improved since the country’s election as a member of the UN Human Rights Council in 2020.

In April 2021, the Ministry of Justice denied registration to Shukrat Ganiev, the head of the Humanitarian and Legal Center, for the ninth time, due to the alleged failure to pay the full registration fee and the apparent lack of clarity regarding the centre’s board members. This occurred despite the fact that an employee carefully checks that all necessary documents are submitted and fees paid at the time of application, and that the full names of board members were filled in on the relevant form.

“I tried to unite a group of young guys who had achieved the status of national experts on monitoring forced labour for this monitoring NGO. The team would monitor cotton picking, employment of people in cotton clusters, hired workers and working conditions at construction sites across the country,” Ganiev told the author.

“Unfortunately, the ‘do not register’ system [for NGOs] has survived, as have the notorious black lists. Despite the fact that we tried to talk about constructive dialogue, about partnership, this is not happening today. The practice of developing GONGOs remains, which replaces real NGOs, a real civil society.”

In mid-February 2021, Minister of Justice Ruslanbek Davletov promised to publish a model charter for NGOs to follow, but nothing has been seen yet.

If the Uzbek government is to deliver on its promises of opening up and supporting the development of civil society, it needs real democratic reforms. So far, we’ve had statistics and promises that might look good on paper, but do not address the underlying problems of a heavily restricted public environment.

Zero hour for energy ministers to halt the expansion of Europe’s fossil gas network

Calls to curtail the expansion of fossil gas infrastructure are mounting, and on Friday (11 June) EU energy ministers have a chance to ensure Europe’s cross-border energy infrastructure is in line with the leadership role it has taken in the global effort to stem the climate crisis.

The next version of the trans-European infrastructure energy (TEN-E) regulation, the EU’s key legislation concerning priority interstate energy projects is nowadays in the works, but there is a serious risk it would end up cementing Europe’s dependence on fossil gas..

A draft released by the European Commission in December 2020, already proposed removing all support for fossil gas pipelines and liquid natural gas terminals. But a number of governments seem to be intent on stalling the desperately needed transformation of Europe’s energy system.

In particular, the governments of Bulgaria, Cyprus, Czechia, Greece, Hungary, Malta, Poland, Romania and Slovakia have been seeking to perpetuate the myth of fossil gas as a so-called bridge fuel through EU legislation, including via so-called “blending” i.e. the mixing of fossil gas with hydrogen or other gaseous fuels.

In a letter sent in late May, Bankwatch and over 50 other civil society organizations from these countries urged their governments to stop the expansion of Europe’s fossil gas infrastructure through the TEN-E regulation.

The science could not be clearer. Humanity must halve its emissions within the next nine years to have a chance of averting a full-blown climate breakdown.

The EU’s newly upgraded climate targets also require a reduction of up to 37 percent in fossil gas consumption by 2030 according to the European Commission’s scenarios. Building more fossil gas infrastructure would not only undermine this goal, it would bring us closer to the dreadful scenarios of a rapidly heating planet.

The International Energy Agency used to be a proponent of fossil gas as a transition fuel. Until last month. In a landmark report, this global energy opinion leader warned in no uncertain terms that there is no more room for investments in fossil gas if global emissions are to get to net zero by mid-century. EU energy ministers should heed this call.

The TEN-E rules define which transboundary energy infrastructure projects can be prioritized for construction over the coming decade, meaning these projects enjoy privileged access to permitting and public finance. If these projects are built in the next decade, they would either operate well beyond the time emissions should otherwise be plummeting or become stranded assets.

A Portuguse proposal for the revised TEN-E regulation offered a disturbingly weaker version to the one drafted by the European Commission. It proposed, among others, blending of fossil gas with hydrogen until 2030 although the benefits of blending are seriously contested by scientists and civil society experts. The Portuguese text also suggested that oversized gas projects already labeled as Projects of Common Interest could keep this preferential status. This would mean greenlighting controversial projects such as the EastMed pipeline and the Malta-Italy gas pipeline.

If this version of TEN-E regulation is adopted, it would entrench Europe in a system run by the fossil fuels industry while betraying EU citizens and future generations.

This experiment would also carry a hefty price tag. According to the EU energy regulator ACER, potential Projects of Common Interest under the current TEN-E could cost over EUR 75 billion if built. Money that would be better spent on boosting energy efficiency and expanding Europe’s renewable energy capacity.

In November 2019, the European Parliament formally declared a climate emergency, instructing the European Commission to ensure all relevant legislative proposals support the goal of limiting global warming to 1.5 degrees.

Eleven EU governments have already backed the exclusion of all fossil fuels, including blending, from the new TEN-E regulation. The other sixteen should now recall the climate emergency and the EU’s 2050 climate neutrality goal intended to address it.

When the EU’s energy ministers vote this Friday, they need to ensure that fossil gas can no longer be part of Europe’s energy network.

Hungary’s recovery plan – not green, just, or resilient

The final draft of the Hungarian recovery and resilience plan submitted to the European Commission is the result of a last-minute decision to shrink the plan to about 40 per cent of its originally planned budget. In order to do this, the government limited the amount requested from the EU’s Recovery and Resilience Facility (RRF) to grants, excluding all loan financing. Thus, the content of the plan also had to be reduced substantially and in a rush. Even though some concerning measures like non-refundable support to large solar power plants run by state-owned suppliers have been removed, the remaining investments fail to trigger a transition to a climate-friendly, resource-efficient, sustainable and crisis-resilient economy.

Regarding housing, the plan includes a welcome measure on community solar energy projects for social housing, which would be organised through community-level decisions about revenue distribution. However, Hungary’s housing programmes in general lack comprehensive support for renovation to improve energy efficiency, and the recovery plan will not improve the situation.

One such programme in the plan, the residential programme (a 100 per cent grant) combined with solar panels and/or electric heating is a waste of money and energy for the targeted low-income families because it is not combined with deep energy efficiency renovation. Instead, it only provides funds for the replacement of existing windows with plastic ones, a particularly poor solution. The renovation of public education buildings has been deleted from the plan, and higher education buildings are planned to have only medium-level instead of deep renovation, which will cause the lock-in of lower-quality energy efficiency measures, ignoring the potential for cost-efficiency and awareness raising that deep renovation could bring. The plan also does not address biodiversity loss in a meaningful way and fails to identify biodiversity targets and milestones. The few habitat restoration projects in the Water Management component of the plan are too small to substantially contribute to halting the loss of biodiversity. On the other hand, the large-scale real-estate investments (new buildings, renovation of old buildings, development of roads and infrastructure) which dominate the plan fail to incorporate biodiversity friendly solutions. An opaque planning process with several public drafts but without clear timelines and timely feedback forced consulting partners like Friends of the Earth Hungary (but also the planners themselves) to work in a rush. More substantial input from social stakeholders could also have improved the plan’s resilience to crises, its environmental performance and its social acceptance, but the process would have had to be more transparent.

According to the plans, partnership in implementation is limited to one-way communication with the public. While the monitoring committees of Cohesion and Structural Funds are planned to also track the implementation of the Recovery and Resilience Plan, the competence of each monitoring committee needs to be clarified towards the partners and the public. Proper and timely public consultation on the implementation documents, calls for proposals, etc., would also be crucial.

Below, we provide further insight into the problematic topics identified above.

The plan preserves wasteful energy practices in building management

Energy efficiency first

The plan does not contain broad, non-reimbursable (or non-reimbursable combined with reimbursable) support for the energy renovation of domestic residential buildings. There have been no calls for EU grant funding of proposals that would exploit the huge potential for this renovation in the last 10 years (only for limited loans). Based on the 1.4 million houses/flats that a recent study of the Hungarian Energy Efficiency Institute (MEHI) suggests should be renovated in the next five years, a broad energy efficiency housing renovation subsidy scheme with a 30 to 40 per cent non-reimbursable grant is required to make sure these renovations really happen. Such a grant scheme would have multiple benefits for the national economy, the study by MEHI revealed. If only about half of these, i.e. 650,000 flats, underwent cost-optimal renovation in five years, about 7.5 PJ of energy per year and nearly 420,000 tonnes of CO2 could be saved. The state budget would also benefit (the revenue per unit of state aid would be 1.01 units for a 40 per cent grant and 1.35 units for a 30 per cent grant), and the additional employment generated by the increase in investment demand could exceed 100,000 people. Along with public demand, the EU Recovery and Resilience Facility’s Technical guidance (January 2021) and the EU Renovation Wave strategy, as well as the country-specific recommendations for Hungary, called for an increase in the energy efficiency of buildings. Still, the energy efficiency programme outlined in the draft Operational Programme for Environment and Energy Efficiency (EEEOP+), linked to energy suppliers as beneficiaries (Energy Efficiency Obligation Scheme), is not likely to deliver the necessary large-scale and deep renovation for residential energy efficiency improvements.

Electrification of heating – inefficient and does not reduce air pollution or emissions enough

Without improving buildings’ insulation, the electrification of heating to combat energy poverty is not efficient or cost-effective and its climate protection impact is negligible. Combining electricity with solar panels for heating is also not a good solution, as sufficient quantities of solar electricity are not produced during the winter when heat is needed most. This forces residents to use more expensive grid electricity, mostly based on fossil fuels, for their heating panels. The possibility to store this energy for short periods of time would not help the situation. With the primary objective to reduce heating energy demand, efficient clean alternatives for heating modernisation are heat pumps, solar collectors and in some cases wood gasification boilers. The recovery plan includes a measure requiring that before and after the investment there must be an energy certificate verifying the energy consumption performance of the house, which we welcome. However, the ‘before’ certificate should be the clear guide for the most cost- and energy-optimal investment decision for that particular house – it should determine what energy efficiency and renewable heating technology should be applied for. (In most cases, the best option is not infrapanels or electric heating panels.) Also, the implementation documents need to clarify how the target group (low-income households, who cannot afford loans) will have proper access to the grant and how the grant will be distributed in a fair way. Deep retrofit of schools and university buildings needed While upgrades of public education buildings (Component A, Demographics and Public Education) have been taken out of the final plan, those of universities (Component B, Highly Educated, Competitive Labour Force) should not fall into the trap of supporting only shallow renovations or only renewable energy installations, which would lock in energy wasting operations for decades. Instead, deep refurbishment, potentially combined with renewable energy installations, are needed, with energy certification before and after the investment to verify the positive impact achieved. These would serve as good examples with the potential to raise climate and energy awareness among visitors, students and teachers.

Community renewable energy production and use

To be fair, we also have to highlight a partially positive element of the Hungarian recovery plan. MTVSZ proposed several times since January 2021 that the plan eliminate electric heating (this has only partially been taken into account: in the Energy component, it was unfortunately kept in). We also proposed that the plan specify what the community solar plants for social housing would mean. Later, in April, we pushed for wider-scale support to various community energy projects, also with the potential to remedy energy poverty. In the final submitted version, this part has been improved, under the Settlements / Local/Rural development component: low-capacity solar power plants will be financed, and the profits from electricity sold would be used for housing and the upgrading of heating in the residential buildings, based on community-level decision-making. Electric heating is not specified. There are two indicators included: the capacity of community renewable energy production and proposals for legislation on energy communities.

Components lend themselves to easy-to-achieve biodiversity targets, yet the government has failed to include any of them

Components of the plan lack substantial biodiversity conservation aspects, investments rarely incorporate nature-based solutions and there are no guarantees that conservation objectives will be met. A major shortcoming of the plan is that it allocates a meagre amount for awareness-raising and capacity-building. Shaping people’s views and teaching them how to work with nature, not against it, is paramount if we want the envisioned green infrastructure (new buildings, urban green spaces, waste management and water management infrastructure) and digital solutions (e.g. precision agriculture) to be used for what they were meant: the green recovery. Regarding water management, thanks to intensive lobbying by CEE Bankwatch and its member group MTVSZ, the Hungarian government abandoned the idea of using RRF sources for irrigation. Hungarian conservationist experts pointed out that irrigation is harmful for biodiversity while sustainable landscape management based on water retention has a thousand-year tradition in the country. There are many successful examples of the agricultural use of flood basins in Hungary, like orchards, extensive fishponds, grazing, etc. These models sustain several ecosystem services while creating considerably more jobs than intensive farms. Farmers should be encouraged to farm in a way that is appropriate to the land by means of strong awareness-raising programmes and a reorientation of agricultural subsidies. Based on our suggestions, water retention elements received more emphasis in the final plan, but safeguards for their implementation are still lacking. The ‘do no significant harm’ assessments (or at least what has been made public from them) in the plan are not consistently detailed. Some are simple declarations, lacking substance and in-depth analysis of alternatives. Others include a more detailed analysis but need to be amended significantly. The involvement of public institutions and civil society organisations active in nature conservation, even in the elaboration of funding schemes and calls for proposals, could significantly expand the green dimension of the plan and prevent damage to nature at a low cost. The use of vegetation for shading and temperature control, rainwater retention and sustainable rainwater management, wildlife-friendly solutions, increasing green areas, community composting are just a few examples of missed opportunities.

Nevertheless, the government could still improve the biodiversity angle of the plan by:

developing and incorporating robust biodiversity targets and milestones;

ensuring the meaningful involvement of civil and public nature conservation organisations in implementation and monitoring; and
assuring that the adept non-governmental organisations are involved in the awareness raising campaigns about water retention.

Without ensuring proper public participation, implementation will also fail

A more meaningful consultation process could have improved the plan’s quality

Despite the fact that the plan’s drafting process, should be subject to the Aarhus Convention, its public consultation did not meet the legal requirements of the Convention, as there was no public and predictable timetable for planning and consultation and no timeframe for expressing views on the various drafts. Unfortunately, this opaque process forced both the planners and the partners who gave their comments, including the Friends of the Earth Hungary, to rewrite their inputs in a rush. Public control of implementation is questionable The planned measures of ‘public consultation‘ in the implementation of the plan are inadequate and insufficient as they are limited to one-way communication with the public. The implementation documents of the recovery plan should undergo public consultation. Based on the Commission Staff Working Document Guidance to Member States on the Recovery and Resilience Plans, MTVSZ / Friends of the Earth Hungary recommends that the monitoring committees of the operational programmes of cohesion policy funds be involved in the drafting of implementation documents, calls for proposals and in the monitoring of the implementation of the plan. Public participation and partners’ involvement in policy-making should be strengthened Contrary to the EU’s country-specific recommendations for Hungary, which called for ‘effective involvement of social partners and stakeholders in the policy-making process’, the reforms included in the plan itself will do little to strengthen social partners’ participation in policy-making, focusing instead on giving one-sided information and making the government’s decisions understood.

More information:   29 April 2021: announcement of the results of the EUCashAwards campaign of the Climate Action Network (CAN Europe), where national spending plans, including recovery plans, ‘competed’ for readers’ votes: https://www.cashawards.eu/  29 April 2021: CEE Bankwatch Network press material on recovery plans in Central and Eastern Europe. The detailed analysis of the recovery plan and the above summary was compiled by Ákos Éger (executive president), István Farkas (co-president), Alexa Botár (climate&energy), Teodóra Dönsz-Kovács (EU Funds, participation), Bence Kovács (community energy) and Zsuzsanna Ujj (biodiversity) at FoE Hungary. Contact: info@mtvsz.hu

Cancellation of Serbia’s Kolubara B coal plant opens space for decarbonisation

On Monday, Serbian media reported that the Ministry for Mining and Energy had sent a letter to state-owned utility Elektroprivreda Srbije (EPS) asking it to halt activities on the planned Kolubara B coal power plant.

This is not the first time the plant has been shelved. Construction of the plant was started in the late 1980s but halted in 1992 while Serbia was under international sanctions. The plans were revived in 2012 when the EBRD briefly considered financing it, but did not go ahead.

For several years, Kolubara B appeared to be history. Then in 2018, the project was again revived and in early 2020 a preliminary construction agreement was signed with PowerChina. However, it did not pass the spatial planning stage before this week’s cancellation.

While legally and administratively easy, halting Kolubara B was nevertheless politically courageous and hugely symbolic in a country where coal supplies around 70 per cent of electricity.

For years, EPS has largely defined the state’s energy policy, rather than the other way round, while successive governments have depended on electoral support from its more than 27,000 workers, their families and those who benefit from sub-contracts to perform works for the company.

Only a year ago, prior to parliamentary elections, President Vučić was, irresponsibly telling miners at Kolubara that the government would invest EUR 500 million in the mine and that it would supply coal for the next sixty years.

But since the new Minister for Mining and Energy, Zorana Mihaljović, took office in October 2020 it has been obvious that she would take a different approach and try to address the numerous problems plaguing Serbia’s energy sector. In the last few months, she has repeatedly vowed to move Serbia’s energy transition forward and has overseen the adoption of several new laws, including on energy efficiency and renewable energy.

Cancelling Kolubara B is a strong step towards coming out into the open and stating clearly that Serbia needs to decarbonise. Taking this step was certainly not easy, but it needs to be followed up promptly.

The Minister has emphasised in a statement that energy transition is not about closing coal plants overnight, but about investments and opening new workplaces and that planning up till 2050 is needed. This is right, and Serbia has a lot to do to catch up for years of inaction, for example in developing a National Energy and Climate Plan and starting a participatory process to plan the just transition of Serbia’s coal mining regions.

It is clear that Serbia is finally starting to do more to increase investments in solar power, for example, but still some difficult decisions need to be taken quickly to stop carbon lock-in closing the space for future maneuvering.

A particularly burning example is the 350 MW Kostolac B3 lignite power plant, which is currently under construction by the China Machinery Engineering Corporation. Very little information is publicly available on how it is progressing, but in March, Minister Mihaljović announced that neither the speed nor – worryingly – the quality of the equipment was up to scratch.

The project’s own feasibility study found that it would generate losses with a carbon price of just EUR 5 per tonne. Today’s price in the EU is around EUR 50 per tonne.

Serbia may not have carbon pricing in place today, but it will need to introduce it in the next few years as a prospective EU member. Failure to do so may also see it hit by the EU’s planned carbon border adjustment mechanism, aimed at preventing imports from countries with no carbon pricing from undercutting EU producers.

A combination of falling renewables prices, higher pollution control standards and carbon pricing has made coal uneconomic in the EU.

Around a decade ago, despite warnings from NGOs and others, Slovenia made the mistake of starting to build the Šoštanj 6 lignite unit, which ended up twice as expensive as planned, with 12 people being charged with offences including money laundering.

The unit started commercial operations in 2016, and every year since then, the Šoštanj plant has made huge losses. In April it was reported that this year’s losses may top EUR 150 million if carbon prices remain high.

Greece failed to learn this lesson and started building the Ptolemaida V lignite plant several years ago. Despite having spent EUR 1.4 billion on construction so far, coal is now so unviable that the Public Power Corporation has decided to phase out all coal use by 2025, leaving the plant’s future uncertain.

All this means that the Serbian government needs to seriously examine whether it is still worth going ahead with Kostolac B3. It is clearly a more complicated case than Kolubara B due to its more advanced development. But given the Minister’s comments on the speed and quality of the works, it may pay off to stop digging right now.

Last call for EU bank to uphold UN treaty on transparency

Transparency practices at the EIB have been lagging behind many other development finance institutions. In the 2020 Aid Transparency Index the EIB ranked 28 out of 47 institutions.

But that’s not all. According to a Politico report earlier this month, the secretariat of the Aarhus Convention contends that the EIB’s draft transparency policy “isn’t fully in line” with the UN treaty.

The Aarhus Convention Secretariat’s position, submitted in March as part of the public consultations on the EIB’s next transparency policy, states that “the European Union is a Party to the Aarhus Convention, and its institutions and bodies, including the European Investment Bank, are legally bound to ensure access to information, public participation in decision-making and access to justice meeting the requirements of the Convention in the context of their activities and operations.”

It goes on to point out issues in the EIB’s draft transparency policy and, among others, repeatedly warns against “too sweeping” use of so-called commercial interests as grounds for refusing access to information.

The Secretariat also referred to the provision insinuating that sometimes the Bank would not be publishing on its website summaries of projects it considers financing, and suggests the new policy clarifies under which circumstances this could happen.

In addition, the Secretariat expressed concern about proposed amendments to the policy which stipulate that information about some projects would not be published before they are approved by the EIB’s board of directors or even until after the loans are signed “in order to protect justified interests.”

The Secretariat’s comments also stressed that “it is important that EIB makes a clear and visible commitment to publish environmental impact assessments whenever they exist for its financed projects.”

A legacy of opacity

Bankwatch shares much of the concerns expressed by the Aarhus Convention Secretariat about the draft new policy, not least after encountering the EIB’s poor transparency standards on multiple occasions.

The EIB, which is co-financing the Nenskra hydropower project in Georgia, had turned down Bankwatch requests to disclose an expert report into the status of the local communities affected by the project. The EIB argued that making the report public could compromise international relations.

In 2020, in response to a Bankwatch complaint, the European Ombudsman requested that the EIB discloses information from that report.

In many other cases of questionable projects, even the involvement of EIB money is not public. As Bankwatch has shown, between 2010 and 2014, the EIB provided over EUR 22 million through financial intermediaries – mostly commercial banks – for the construction of at least 19 small and mini hydropower plants in Bosnia and Herzegovina, Croatia, Macedonia and Serbia. Some of these projects are even situated inside protected nature areas.

When a project is supported through financial intermediaries, information about them is often effectively hidden behind the curtain as it falls under the EIB’s exemption to information disclosure.

Landmark ruling reaffirms public oversight

The EIB has so far failed to recognise the Aarhus Convention as an important component of its institutional framework. But even before the Aarhus Convention Secretariat filed its comments, in January, the EU’s Court of Justice had ruled that the EIB must revisit its financing decisions when it receives a lawful request regarding breach of its own policies or EU environmental law.

This case was brought by ClientEarth after the EIB refused its request to review a EUR 60 million loan to a biomass project in Spain. But in an important precedent, the court overturned the Bank’s decision, confirming that the Bank is legally bound by the Aarhus Convention which grants civil society the right to request that decisions by EU bodies are reconsidered.

This landmark ruling, together with the position of the Aarhus Convention Secretariat, should compel the EIB to acknowledge the applicability of this treaty to its operations and ensure its new transparency policy is finally aligned with it.

It is not only about the EIB’s credibility. At the end of the day, transparency is a condition for accountability of a public institution in a democracy. This might sound like a truism, but in reality the EIB has too often been preventing public oversight of its operations and the way it uses European public money.

It is not just failing to voluntarily put information that is in the public interest in the public domain. In more than one case the Bank has either been slow to respond to requests for information, disclosed just part of it, or rejected such requests altogether.

This needs to change. As the EIB is now reviewing its transparency policy, it has an opportunity to turn the page and show it is indeed an EU institution that is accountable to the public.

Czechia, Greensill and why more openness is needed from its export agencies

Export credit agencies emerged after the first World War, when the first ECAs were established in the UK, Belgium, Denmark and other European countries. Their role has changed over time, but the basic goal remains the same: to help domestic export companies succeed in the international market.

Czechia’s export agencies – the Export and Guarantee Insurance Company (EGAP) and the Czech Export Bank (ČEB) – began in the 1990s and have since experienced their share of controversial investments, most recently through their enhanced role in addressing the economic fallout from the coronavirus pandemic.

EGAP has supported domestic exporters affected by the pandemic, notably through loan guarantees to the air carrier Smartwings (CZK 2 billion), the global airline broker Kiwi (CZK 1.2 billion) and the steel manufacturer Liberty Steel (CZK 2 billion).

Liberty Steel in Ostrava has featured in the news recently, as it is a recipient of funding from Greensill, the bankrupt UK financial firm at the centre of controversy. We can only assume that Greensill provided a loan that EGAP guarantees. Czech media speculates that the loan to Liberty has not been drawn, but no one knows where the CZK 2 billion from EGAP is to be found. The Czech political opposition (STAN and Piráti) has asked to investigate this guarantee.

Police are also investigating whether EGAP was defrauded by an organised crime network through its involvement with its steel business. Our requests for more information from EGAP have not been answered.

Liberty Ostrava decided at the end of April to sell a billion crowns worth of EU emissions allowances to a sister company in Romania, in spite of promises made to Czech politicians not to do so. The Gupta steel group, which includes Liberty, is now in a difficult financial situation and is struggling for survival. Without these emissions allowances, its Galati unit in Romania could no longer continue production.

While EGAP should publish information on its website about investments with significant environmental risk, none of these transactions are listed on the pages, and EGAP did not justify why this is the case in response to our information request.

Far less can be heard about the Czech Export Bank. Loans with ČEB participation have been declining, totalling CZK 7.6 billion in 2019 and CZK 1.1 billion in 2020. According to CEB, its strategy is to finance industries that have limited access to finance due to the corporate policies of commercial banks, especially in the energy, aviation and the security and defense industries.

CEB has particpated in suspicious transactions, including its loan of CZK 12 billion for the unfinished Turkish lignite power plant at Adularya. The Czech state lost money in funding the project that posed great environmental risk in Turkey, but no one was found culpable.

According to the OECD, CEB should survive without state subsidies. Yet In 2016, CEB’s capital was increased by CZK 1 billion to a total value of CZK 5 billion. At present, the state holds an 84 per cent share and EGAP 16 per cent. In November 2016 the government approved a request from CEB for a subsidy of CZK 3.82 billion to cover losses from in the fourth quarter of 2015 due to the failure of the Poljarnaja combined cycle gas power plant in Russian. So, if the government wants to subsidise the agency and has no legal grounds for doing so, there is nothing easier than changing the law.

The Czech export agencies are required by EU and national legislation to report on the projects they financed. On the websites of CEB and the EGAP all mandatory data like annual reports can be found . EGAP also publishes news of its operations in a magazine, which features projects that are positive, such as hospitals in Ghana .

Seven European countries have recently committed to stop ECA funding for fossil fuels. Why does the Czech Republic stay behind? As long as export agencies continue to spend money to support unsustainable projects, there will not be enough money for projects in the public interest

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