Blog entry

Divide and Rule: EBRD and EC decision-making on Corridor Vc South Mostar investments should not marginalise opponents of the valley route

JP Autoceste reported on Friday that “representatives of Serb returnees from the City of Mostar expressed full support for the construction of the subsection Mostar South – Kvanj Tunnel”. This is misleading to say the least. What is worse, it deliberately excludes the view of those opposing the valley route and clearly it attempts to marginalise these people as a result. It is a textbook neocolonial technique to divide and rule (Divide et impera – the maxim thought to be conceived by Philip II the Macedon and used successfully by emperors like Julius Caesar and Napoleon.

In this day and age, especially when dealing with emancipated communities who know their rights, this technique undermines the very concepts of meaningful consultation and inclusive stakeholder engagement. But no surprise, it is just another example when the EBRD diggs deeper when it finds itself in a hole (both Nenskra and Amulsat come to mind as cases where project promoters deepen conflicts in communities instead of looking to build consensus).

Connecting or Dividing

The Bankwatch report “Connecting or Dividing?” summarizes some of the factors that might lead to tremendous impacts on the local population and the environment, such as lack of public consultation and transparency in the process of the route selection, failure to address the needs and interests of vulnerable groups, including war returnees, as well as the risks for the biodiversity of the surrounding ecosystems of the rivers Buna and Bunica posed by the route. The report is the result of the fact-finding mission to the South Mostar section of Corridor Vc conducted by Bankwatch team in October 2020 as well as the following desk research of the Environmental and Social Impact Assessment (ESIA) for sub-section Mostar South interchange to tunnel Kvanj released in July 2020.

The same issue “FBH – Part 3 – Operation Change Report” was on the agenda of the last Board meeting on 10 February but the decision on this issue was postponed. This happened not without the help of Bankwatch and local community representatives who consolidated advocacy efforts to persuade the Board to suspend the decision on the South Mostar section loan for Corridor Vc. Bankwatch released a letter to the EBRD Board members following the response from the EBRD Management regarding our report. The request is for the compliance review on the project to run its course.

Accountability and redress at work

Right now the EBRD’s Independent Project Accountability Mechanism (IPAM) is in the middle of a compliance assessment, part of a compliance review, which should analyze the current project compliance with the EBRD policies and standards.

IPAM is supposed to release its Compliance Assessment report in March and commence the review in April. The delay of the loan approval until the IPAM comes up with its recommendation is important. In case IPAM identifies non-compliance, the EBRD should take actions to deliver redress and bring the project into compliance with its environmental, social and transparency standards. In view of the alleged shortcomings of the public consultations to date, this can be an opportunity to take into account the interests of the local affected communities and conduct proper public consultations. It will also allow for a more thorough environmental and social impact assessment and mitigation planning, in order to prevent the negative impact on the critical habitat and vulnerable people.

IPAM has a clear mandate to request a pause in the decision-making, as the EBRD’s Accountability Policy states:

“at any time during the processing of a Request, IPAM believes that serious and irreparable harm will be caused by the Bank’s continued processing of the Project or disbursements in respect of the Project, IPAM may make an interim recommendation for remedial actions by the Bank, including a suspension of further Bank processing of the Project or the suspension of disbursements. ”

IPAM should warn the Board of the serious and irreparable harm that can be caused on the local communities, if the EBRD and its client will not take immediate actions to include all stakeholders in a transparent and meaningful consultation.

It is of crucial importance to restore the trust of the local community in the EU decision-making mechanisms and the safeguards of the EBRD, as the international community is contributing to the implementation of strategic projects, like Corridor Vc, and the development of post-war Bosnia and Herzegovina. European and multilateral financing should not allow the destruction of what was rebuilt with tremendous efforts of the international community and the local people’s own resources. An alternative does exist and EBRD decision-makers need to explore its viability as a way to protect local communities and nature from further harm.

Public partnership is a precondition for a green recovery

Bankwatch, together with the Green 10, have submitted an open letter to the vice-presidents of the European Commision demanding stronger guidance and enforcement of the public partnership principle by Member States during the ongoing recovery fund planning.

Member States are now drafting their recovery plans and outlining how they intend to spend EU funds for investments and reforms to deliver a green and digital recovery. These should be submitted by 30 April, after which the European Commission will assess how well these respond to the green and digital investments and reforms priorities.

Public participation will be a decisive part in delivering this green and sustainable recovery across Europe. Giving citizens a strong role in the selection and development of future investment priorities will in turn allow the public to really drive the environmental, climate and biodiversity ambition that is currently lacking. Citizen ownership of this transition will be especially important for the younger generations, who will be covering the debt and inheriting the consequences of the political choices made today.

Lacking guidance

Yet so far, the European Commission has only released unclear guidelines mentioning that Member States “should” conduct public consultations, without committing to refuse the plans if they were not properly consulted. There is also no obligation for Member States to conduct Strategic Environmental Assessment, usually required to determine whether activities and projects financed by EU funds and investments will have a significant adverse impact on the environment, a serious concern given the rushed and hasty nature of this investment programme.

Both Member States and the Commission have a political incentive to quickly greenlight projects in order to get investments flowing rapidly, thus resulting in plans which will not achieve the environment, climate and biodiversity objectives and instead result in lock-ins in the very near future.

Throughout this region and beyond, the consequences of inadequate public participation and consultation are becoming clear. The draft plans that have been released only reflect the view of a few government-aligned state actors, neglecting the broader needs of the public and the environment. For instance in Romania, the plan foresees considerable funding for the refurbishment and modernisation of existing hydropower capacities, which completely overlooks the country’s potential of other, more environmentally-friendly renewable energy sources.

Why this matters

Our analysis from November 2020 already found that the proposed plans fall significantly short of the EU’s much needed 2030 energy and climate targets, a direct result of failing to consult with the public and stakeholders. Unfortunately, there has been little improvement since then. Even though new draft plans are being constantly released, they are still not being properly consulted with the public, consequently falling short on environmental ambition.

The clock is now ticking for significant improvements to be made. The next few months will be a make or break moment; without citizen scrutiny and oversight over planning and implementation, Member States will use these funds to further finance business as usual projects, severely impeding the EU’s key environment, biodiversity and climate objectives.

We must not use the extraordinary funding now available to invest in unambitious solutions. The first step to avoiding this is by allowing citizenship and stakeholder engagement in the making of these plans to help recover from the COVID crisis while opening better and more sustainable prospects for future generations.

12 years and counting: Pollution control investment at Bosnia’s Ugljevik coal plant still showing no results

The Western Balkans’ highly polluting coal fleet needs to be phased out as soon as possible, but given coal’s high share of generation in some of the countries, interim pollution control investments are still needed in selected plants. Top of the list is the Ugljevik power plant, in Bosnia and Herzegovina, which is among the region’s most polluting plants in terms of sulphur dioxide.

Yet 12 years after the financing contract was signed, the much anticipated operation of the desulphurisation (de-SOx) equipment at the Ugljevik power plant, in Bosnia and Herzegovina, is becoming a test for everyone’s patience. It was meant to help bring the plant into compliance with the legal emission values, but it seems this is not going to happen any time soon.

Financed by a loan from the Japan International Cooperation Agency (JICA) signed as long ago as 2009, works on the de-SOx equipment started only in 2017 and test operation began in December 2019. We hoped that in 2020 SO2 emissions would finally be significantly lower, showing good use of the EUR 85 million investment.

However, in February 2020 it was revealed that there was a technical problem. The plant’s dust filters, overhauled more than three years ago by the Czech company Termochem, at a cost of approx. EUR 10 million, were faulty, and their proper functioning is a precondition for desulphurisation. The plant operator spent some additional EUR 100,000 on a study that would show how to address the problem.

In recent weeks, local media have reported that even further delays are expected, as the plant doesn’t have an operating permit for the new installation. RiTE Ugljevik, the power plant operator, is still seeking “technical assistance” to obtain the permit. This assistance would add some extra EUR 100,000 to the costs of this project, and even in the most optimistic scenario, it is not likely to happen before the end of 2021.

In 2019, the plant’s SO2 emissions breached its individual ceiling by almost 10 times, with over 88 thousand tonnes emitted, and its dust emissions were also double the allowed ceiling.

Modelled health impacts of Ugljevik’s emissions in 2016 – before any of the rehabilitation works had begun – showed the plant could be responsible for as many as 635 premature deaths per year and an estimated economic impact of up to EUR 1.45 billion a year. These numbers are likely similar today, considering the equipment is still not functional.

Governments in the Western Balkans have known since the signing of the Energy Community Treaty in 2005 that they need to take measures to limit pollution from their coal power plants. In 2018, the Large Combustion Plants Directive entered into force in the countries of the Energy Community, but a Bankwatch report from June 2020 showed that sulphur dioxide (SO2) emissions from coal power plants in the Western Balkans, which are included in National Emissions Reduction Plans, breached the combined national ceilings by 6 times, for the second year in a row.

While SO2 pollution in the European Union has significantly decreased in the last two decades, thanks to the very same legislation and strict enforcement, in the Western Balkans only baby steps have been made towards compliance. And even those are not yet delivering results.

Ugljevik’s is the second costly environmental improvement that is failing to deliver results in the Western Balkans.

Serbia took out a USD 293 million loan from the China Exim Bank for a complete overhaul of the Kostolac B1 and B2 coal-fired units in December 2011. This was meant to equip the two units with de-SOx and bring the plant’s emissions in line with the legal obligations under the LCPD. The works were declared completed in 2017, but the plants’ emissions in 2019 were still at 79,113 tonnes, ten times the legal annual ceiling. It is still not clear exactly what the problem is.

Delays in desulphurisation works at the Nikola Tesla A power plant in Serbia are also unnecessarily prolonging the plant’s health impacts. A loan for a desulphurisation project was signed in 2011, but the announcement of the start of works only came in 2019 and according to the project’s financier, Japan’s Export Credit Agency, rehabilitation would only be finalised by 2022.

Such blatant wasting of public money and disregard of laws call for decisive and immediate action. Earlier this month, the Energy Community Secretariat issued a warning to all four Western Balkan countries which operate their coal power plants under the National Emissions Reduction Plan (NERP) derogation over their failure to comply, and a formal infringement procedure is expected to be initiated soon. Those responsible for failed projects and disregard for the rule of law must be held accountable. But the pollution also needs to be cut immediately. Until the overhaul projects start delivering results, the only solution to limit these plants’ harmful health impact is to reduce working hours in order for them to remain within their annual emissions ceilings.

Poland’s recovery planning lacks public consultation and transparency

Poland will be the fourth largest beneficiary of the Recovery and Resilience Facility, as it is set to receive EUR 57 billion – an unprecedented amount of EU funds to be invested in such a short period of time, drawing comparisons to the Marshall Plan that helped lift Western Europe up from the postwar crisis. In a letter delivered yesterday to the Chancellery of the Prime Minister of Poland, campaigners urged the Polish government not to waste such an opportunity by leaving citizens out of the planning process and using the funds to support low-quality projects. Signatories of the letter include environmental CSOs, such as Polish Green Network, WWF, ClientEarth, and Climate Strategies, as well as business organisations.

All photos courtesy of WWF Poland. The letter contains proposals on how to ensure the plan complies with the “do no significant harm” principle. Campaigners also point toward important milestones the plan should address. To truly work for the people, Poland’s NRRP should include the following projects:

clean air and energy;
mobility and inclusive transport;
broadband internet;
ways to deal with drought and water pollution; and
healthy and safe food.

With the April 30 deadline for national plans’ submission to the Commission soon approaching, the Polish government has kept the content of the plan a mystery, with no dialogue with members of the public whatsoever. A survey prepared by Bankwatch and CAN Europe shows whether Member States are complying with EU rules on public participation and in Poland’s case, the answers form a resounding “no”. Poland’s NRRP draft is not available and the government is not sharing any information about its content. Works are carried out in closed working groups that do not include environmental CSOs. There is also no word on whether a strategic environmental assessment, required by the EU, will be carried out.

Read more about the survey here.

The public is still paying, hydropower operators are still profiting

In September 2019, Bankwatch and partners published the Who Pays, Who Profits? report. It showed how renewable energy incentives have driven the rampant development of hydropower plants smaller than 10 megawatts (MW), drying up rivers and streams, often leaving local people without water for their crops and livestock.

Hydropower, the report also showed, has been systematically privileged over other energy sources. In 2018, small hydropower received 70 per cent of renewable energy incentives in the Western Balkans, yet generated only 3.6 per cent of electricity overall.

Civil society organisations have therefore been calling for an end to subsidies for this disproportionately destructive form of power generation, and for an overall change in the countries’ incentives schemes, in line with EU rules.

Under the Energy Community Treaty, the Western Balkan countries must apply EU state aid rules in the energy sector, including the Guidelines on State Aid for Environmental Protection and Energy (EEAG). The EEAG is already undergoing revision in the EU, but most Western Balkan countries still do not comply with it, particularly in the hydropower sector.

Among other things, the EEAG stipulates that – with the exception of the smallest renewable energy plants – support can only be granted through premiums paid on top of the market price, not through feed-in tariffs as in the past. In addition, a competitive auction procedure is required in order to set the level of the premiums. This model tries to ensure more affordable and proportionate incentives, after the previous system became too expensive.

The EEAG also allows state aid only for projects developed in line with EU environmental legislation, and specifically requires that any hydropower receiving incentives must be in line with the Water Framework Directive.

But a new Bankwatch briefing published today shows that the countries have moved at very different speeds to change their legislation in line with the EEAG, and that hydropower subsidies remain an issue.

New renewables law planned in Serbia

At the end of 2020, the Serbian government announced the development of a Renewable Energy Law. The draft Law foresees feed-in tariffs for hydropower up to 500 kW, and eligibility for hydropower up to 30 MW to take part in auctions.

In theory, this is in line with the EEAG, provided that the hydropower plants are in line with EU environmental legislation. But, given the damage wrought so far by small hydropower plants and their negligible contribution to Serbia’s electricity generation – 0.7 per cent in 2019 – halting feed-in tariffs for hydropower altogether seems wiser.

Likewise, premiums for hydropower plants up to 30 MW would not be useful. Hydropower is a mature technology, and there is limited potential for such plants in Serbia, so incentivising will not bring the price of the technology down for future investments.

Little progress in Bosnia and Herzegovina and Kosovo, despite pledges

In 2019, hydropower received almost 90 per cent of renewables support in Republika Srpska, and other renewable energy sources were effectively excluded from the system.

In the Federation of BIH (FBIH), no report was published on incentive payments for the year, and figures obtained on request by the Center for Environment were unclear and much lower than would have been expected. This may have been partly due to upheaval in the Federation of BIH’s Operator za OIEiEK agency, which distributes incentive payments. In 2019 the FBIH government forced the agency to suspend payments to producers, and in December 2020 the Director was dismissed.

In November, the Minister for Energy pledged to stop incentives for small hydropower from the beginning of 2021, but no legislative changes have taken place yet.

A proposal for reforming the renewables support schemes in Bosnia and Herzegovina, of which an overview was published in August 2019, would abolish feed-in tariffs for all but the smallest hydropower plants – though the exact threshold remains to be decided. Worryingly, however, the published information indicated plans to award premiums for hydropower plants larger than 10 MW, despite the current low level of environmental enforcement. Since 2019 there has been little visible progress with the proposals.

Kosovo is in a similar situation, having recognised for several years already that it needs to change its feed-in tariff system. The European Bank for Reconstruction and Development has been providing assistance to develop an auctions scheme, and in late 2020 it was announced that the first auctions would be launched in 2021. However, this seems ambitious considering that legislative changes are needed and that there will be elections in February.

Hydropower still privileged despite new laws in North Macedonia and Albania

Even in the countries which moved earlier to introduce auctions and premiums – Albania and North Macedonia – hydropower has continued to receive special treatment.

In North Macedonia, solar and wind plants need to participate in auctions and are eligible for premiums, while an unlimited number of hydropower plants up to 10 MW can receive feed-in tariffs. This imbalance between the conditions for different energy sources is currently being reviewed by the Energy Community Secretariat.

In Albania, hydropower plants up to 2 MW are still eligible for feed-in tariffs – exceeding the 500 kW threshold from the EEAG – and plants up to 15 MW can participate in auctions.

Continued subsidies for hydropower are particularly incomprehensible in Albania, which is almost totally hydropower-dependent. In 2018, its incentives for hydropower under 15 MW cost EUR 93.5 million and in 2019 around EUR 87 million, due to lower generation – by far the highest costs in the region. Yet this has failed to address its need for electricity imports in most years due to its greatly fluctuating electricity generation, which heavily depends on rainfall.

Montenegro at a crossroads

Montenegrin legislation stipulates that no renewables incentives will be granted if the country meets its renewable energy target. Montenegro met its 2020 target several years ago, but numerous previously licenced plants are still in the process of being built.

In 2020 the Law on Energy was adjusted to allow for auction-based incentives even if renewable targets are met. The provisions now appear to be roughly in line with the EEAG’s requirements on renewable energy, but are not clear enough to prevent environmentally harmful subsidies from being granted. The Law also contains a worrying clause declaring renewable energy projects to be of ‘public interest’, which may be used to cut corners in permitting.

In December, Montenegro’s new government initiated a commission to review all the hydropower concession contracts signed so far and approved the termination of concession agreements for seven plants. On 14 January it also agreed to refuse a construction permit for the Slatina plant, built by a company part-owned by President Milo Đukanović’s son, and to refrain from permitting any more plants until all the current concessions have been reviewed.

What still needs to be done

Our briefing provides country-specific recommendations, depending on their state of play, but what all the countries have in common is that they need to review the ongoing hydropower projects and take action against any which were not developed in line with environmental or other legislation.

Those countries which have not moved away from feed-in tariffs for new plants clearly need to change their legislation, so that it is at least in line with the EEAG, and preferably so that it abolishes incentives for hydropower altogether.

In doing so, they need to pay attention not only to technical issues like auction thresholds, but also to the environmental aspects of the EEAG. This also applies to the countries which have already made some changes towards EEAG compliance – Albania, Montenegro and North Macedonia – which still need to provide clearer instructions on how the environmental compliance of projects will be checked before awarding incentives and stipulate that any plant later found to be violating environmental legislation will have its incentives cut. Even if hydropower incentives are cut, this is still a necessary requirement for other technologies.

Looking at the wider picture, all the countries are currently developing National Energy and Climate Plan processes. These need to be used to clarify their future renewable energy plans. In particular, projects which have been around for decades need to be critically reassessed for their relevance and feasibility in today’s conditions, in which hydropower is becoming less and less competitive and less reliable due to fluctuating rainfall.

Pulling the ‘cotton’ over Uzbek eyes at latest EBRD investment

According to the bank, the project is expected to strengthen competitiveness and enhance economic inclusion, especially for young people and women in rural areas. Moreover, it “helps the company achieve higher environmental standards” similar to the Better Cotton Initiative for sustainable cotton farming in Uzbekistan, whose industry is notorious for violating the rights of workers. However, the expected transition impact of the project is not even Good (ETI score: 57), while the investment is quite significant. And what does a reality check show? Confiscations of farmers’ land, poor working conditions and job cuts, unfair payment, harmful technologies and ongoing reprisals against staff for voicing their complaints and whistleblowing give cause for alarm.

Centralisations vs competitiveness

In 2018 Indorama Corporation, a Singapore-based multinational, established Indorama Agro to grow the cotton. The intention is to produce its own cotton for Indorama Kokand Textile, operating in Uzbekistan since 2011. Moreover, Indorama Kokand Fertilizers and Chemicals is expected to start production of fertilisers for cotton farming in 2021. Thus, Indorama will be one of the largest vertically-integrated cotton farms in Uzbekistan, operating 75 000 hectares of land and dominating the export of spun yarn, including to Europe.

In 2020, the EBRD approved USD 22.5 million loan to JSC Indorama Kokand Fertilizers and Chemicals, and now it considers approving another US$70 million to the same corporation. While the bank has rejected concerns about monopolistic trends in agribusiness in Uzbekistan raised by local Radio Free Europe subsidiary Ozodlik, EBRD investments in Indorama Agro alone will exceed the overall EBRD funding for agribusiness in Uzbekistan.

Economic exclusion

2,897 cotton farms operated in the area of project footprint before.

Indorama Agro claims that the acquisition of 1,068 farms happened via voluntary termination of land lease agreements. Farmers interviewed by Ozodlik have claimed that some lease terminations were not voluntary. The EBRD, in its response to Ozodlik, said that no evidence has been found that the land lease agreements were terminated under duress, and the company offered jobs to all farmers.

However, the NGO Uzbek Forum found that land was transferred to the company with no regard for the long-term leases that farmers had with local administrations and without any compensation from the state for the unilateral termination of their land leases. In cases where farmers were able to reclaim the right to lease their land through the courts, the local hokimiyat refused to implement the court’s decision, acting solely in the interests of Indorama.

For rural people in Uzbekistan, land is the only source of income, food and employment. Below are excerpts from interviews conducted by Uzbek Forum with former farmers and Indorama employees. People requested anonymity due to fear of reprisals, as many of them are still employed there.

Increasing social ails

According to a local official in the Kasbi district, the number of unemployed people and those in need of social assistance had tripled in the last two years. Many farmers lost their land when it was transferred to Indorama following the apparently ‘voluntary’ land lease terminations.

Indorama forbids the use of small plots of land for cultivation by the local community. Local people who annually rented a small plot of land from farmers to grow vegetables for food and sale have lost valuable income and sustenance as a result. Indorama also does not permit cattle to be grazed or the collection of cotton stalks for firewood. Combined with a loss of income, the official believes that the most vulnerable in the rural population are at risk of starvation.

Moreover, the entire project aims at the mechanisation of the cotton sector, which will result in massive job losses. According to the limited data of Indorama, around 4 337 permanent and 9 070 seasonal workers may have been affected in Nishon, Sardoba, Kasbi and Oqoltin districts. As a way to compensate the livelihood loss, the company proposed to plant mulberry trees as part of a Community Asset Programme, with a view to improving local income by generating opportunities in silk cocoon production.

However, the silk sector remains highly controlled by the government, which questions the benefits to farmers and rural communities. Uzbek Forum has in the past reported on abusive practices in the silk sector, which depends highly on forced labour and exploits the vulnerability of farmers and the rural poor. In many cases, Uzbek Forum monitors found that the government underpays or fails to pay producers upon delivery of cocoons.

Poor working conditions

Indorama Agro confirmed hiring 2 720 people out of 13 407 who might have lost the jobs. However, there is a range of evidence of poor working conditions, unfair payment, gender discrimination, fraud and corruption. Indorama employees, interviewed by Uzbek Forum, told us that the workers are forced to stay in the fields in all kinds of weather with no shelter from freezing cold and scorching heat or a place for workers to rest. They report that they are forced to work over and above their contractual obligations with no extra pay.

Moreover, people complain that they have been retained on seasonal employment contracts even though they are employed year-round.This effectively means that they are not eligible for sick or holiday pay and have no security of employment. Multiple cases of bribery requested from people in order to ensure employment at Indorama were also reported.

Ongoing complaints and retaliation

In June 2016 a coalition of NGOs on behalf of Uzbek victims of human rights abuses submitted a complaint to the Office of the Compliance Advisor Ombudsman (CAO) at the World Bank related to Indorama Kokand Textile. The claim raised concerns about the existence of forced labour in IKT’s supply chain.

In April 2018, CAO received another complaint related to the operation of Indorama Eleme Fertilizer and Chemicals Ltd. in Nigeria from its employees raising a series of concerns regarding the company’s labor and working conditions and use of security forces.

Uzbek Forum has documented other cases where Indorama employees have been fired or received threats for speaking out about labour rights violations. One recent case involves Roza Agaidarova, who worked as a materials accountant in the company’s warehouse. She claims she was fired after she discovered a shortage of chemicals worth approximately USD 3 million and a violation of reporting procedures. After informing management, she became the target of allegations of theft and received threats that she would be sued. Indorama Agro has since filed a lawsuit against her for allegedly stealing diesel and disclosing information about fraud in the company in an interview she gave to Ozodlik.

It is important to underline that the entire public consultation process on the environmental and social impact assessment for the Indorama project took place during the ongoing COVID-19 pandemic . But the company decided to engage stakeholders online, which is very limiting especially for rural communities due to limited internet access and project documentation.

Harmful technologies and pesticides

Farmers and employees reported that cotton yields on farms operated by Indorama have fallen significantly in the last two years. They believe that this is due in part to the overuse of chemicals and pesticides coupled with a basic lack of understanding on the part of Indorama’s management of the ecology of the land.

‘Before Indorama got land in our area, the land yield was at least 20 centners of cotton per hectare. In 2019, the yield rate on Indorama land was 11 centners per hectare. This was explained by the fact that the company is new and that they do not have specialists who understand local conditions. In 2020, the yield was only 8 centners per hectare. Now they justify low yields through flooding. But yields also fell sharply on those lands that were not affected by the flood.’

According to Indorama Agro, the company intends to apply over 1.5 million liters of pesticides, some of which are not approved or highly restricted in the EU.

Moreover, the use of glyphosate at such scale raises serious concerns in light of recent scientific literature confirming its carcinogenic, endocrine-disrupting and genotoxic properties. Several epidemiological studies have linked exposure to glyphosate with non-Hodgkin’s lymphoma, hairy cell leukaemia, multiple myeloma, DNA damage, parkinsonian syndromes, autism, etc. In 2015, the World Health Organization’s International Agency for Research on Cancer (IARC) classified glyphosate as ‘probably carcinogenic to humans’, which means that there is sufficient evidence of carcinogenicity in experimental animals but limited evidence in humans.

Although glyphosate is an authorised product in the EU and globally, many countries impose restrictions on its use in public spaces or have committed to do so in the near future. Italy and France have already introduced such restrictions, as have local authorities in Belgium, Canada, the UK, New Zealand, the USA, Spain and Australia. Moreover, there is a range of ongoing revisions of existing regulations due to newly received evidence of health risks or gaps in previously made risks assessments. Despite the fact that glyphosate is currently approved for use in the European Union until the end of 2022, Germany and France announced that they will begin phasing it out. In 2020, Luxemburg announced it would terminate the use of glyphosate in 2021.

There is also an increasing social movement to stop the use of glyphosate. In 2017, over one million citizens called on the European Commission ‘to propose to Member States a ban on glyphosate’. Moreover, thousands of people have filed lawsuits against the Monsanto Company (now Bayer) alleging that exposure to the glyphosate-based herbicide Roundup caused them or their loved ones to develop non-Hodgkin’s lymphoma. In June 2020, the company announced that it would pay over USD 10 billion to resolve these claims. In 2018 and 2019, Monsanto was ordered to pay USD 2.2 billion to people that got cancer after using Roundup.

Apart from glyphosate, other pesticides, including propargite and chlorpyrifos, are not approved for use in the EU mainly due to the risks they pose to the environment and human health. Imidacloprid is approved only for use in permanent greenhouses, particularly due to its high risks for bees.

Such impacts of pesticides are already present in Uzbekistan: after the depletion of the Aral Sea, pesticide and fertiliser residues left on the dried surface are blown into the surrounding region in toxic dust storms. An investigation made by the Environmental Justice Foundation in 2005 discovered that in some areas of Uzbekistan, around 50 per cent of deaths were from respiratory illnesses such as pulmonary tuberculosis, obstructive lung disease and bronchial asthma. Moreover, cancer rates in these areas were abnormally high, with residents of the Karakalpakstan region, located close to the sea, suffering the most.

For these reasons Uzbek Forum and CEE Bankwatch Network are calling on the EBRD to suspend approval of the loan to Indorama Agro until the company ensures the protection of human rights, and to prevent retaliation against current and former employees of Indorama Agro based on their right to raise concerns.

On 10 February, the EBRD approved the loan to Indorama Agro. Bankwatch will continue to monitor the project and support the rights of local communities.

An earlier version of this post incorrectly used an illustrative photo from China. The post has been updated.

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