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Pipeline mired in controversy gets half a billion euros from European development bank

CEE Bankwatch Network * Counter Balance * Global Witness

For immediate release

With its decision, the London-based lender shrugged off the findings of two independent evaluations blasting the project’s compliance with the EBRD’s Environmental and Social Policy, the rules which place restrictions on the types of activities the bank can finance.

The first [2] details how construction on TAP has led to at least thirteen formal complaints lodged with project financiers [3] and demonstrates violations to the Equator Principles [4], the minimum standards for responsible investment and management of environmental and social risk in the project finance sector and a benchmark for those EBRD policies.

The second report from Ramboll Environ, a private consultancy commissioned by TAP AG itself, finds ‘major non-compliance’ [5] with project construction and certain aspects of the bank’s Environmental and Social Policy.

Furthermore, in the southern Italian province of Lecce where TAP makes landfall, the project is the subject of an ongoing investigation by the public prosecutor concerning the authorisation and fulfilment of its environmental impact assessment [6].  

The prosecutor is also looking into allegations that the project fails to comply with the EU’s directive on industrial risk, which may pose a serious public security threat to the four communities located near to the planned pipeline receiving terminal.

Elena Gerebizza, energy campaigner with Re:common, said, “The EBRD failed in its due diligence by refusing to properly listen to the people of Melendungo, the community on whose shores TAP arrives and who for years have resisted the devastation wrought by this unwanted project. We add our voices to those in Melendugno, calling on the EBRD to carry out a proper investigation and independent assessment of the project.”

Fidanka McGrath, EBRD policy officer for Bankwatch, said: “The EBRD has taken a long time to approve the TAP project, but the fight from locals and the major non-compliance findings of consultants show that it is not fit for purpose. The massive injection of public money in the Southern Gas Corridor, that TAP is part of, has not been enough to make right everything that is wrong with the pipeline: from fueling corrupt and oppressive regimes, the project tramples on the rights of farmers and communities, and ends by locking in Europe to fossil fuels.”

Xavier Sol, Director for Counter Balance, said, “The EBRD has taken today an unfortunate decision to fund TAP. As the mayor of Melendugno has said, the EBRD made no real effort to properly consult locals impacted by the pipeline and did not conduct a thorough and independent assessment of the project. More should have been expected from this public bank to really act in the public interest. Public funds end up supporting an imposed mega infrastructure lying on unstable ground, given the recent change of government in Italy. ”

With today’s decision from the EBRD, development banks together have funded over EUR 6 billion for the Southern Gas Corridor [7], the 2000 kilometre stretch of pipeline beginning in Azerbaijan and spanning Turkey before linking up to TAP.

 

For more information contact

Fidanka McGrath
EBRD policy officer, CEE Bankwatch Network
Email: fidankab@bankwatch.org

Elena Gerebizza
Energy campaigner, Re:Common
Email: egerebizza@recommon.org

Notes

[1] https://www.ebrd.com/work-with-us/projects/psd/trans-adriatic-pipeline-project.html

[2] https://www.banktrack.org/download/the_transadriatic_pipeline_project_identified_noncompliance_with_the_equator_principles/the_tap_project_identified_noncompliance_with_the_equator_principles.pdf

[3] The complaints have been received by the European Investment Bank, the EU’s bank that in February signed off on a loan of one and half billion euros for TAP. The EBRD will register complaints only after it has approved a project.

[4] The Equator Principles are a well-established risk management framework currently adopted by 89 of the world’s top commercial banks in order for them to assess and manage environmental and social risk when advising on or financing certain categories of projects. See http://equator-principles.com/members-reporting/

[5] https://www.tap-ag.com/assets/07.reference_documents/english/Project%20Finance%20Disclosure/Executive%20Summary%20of%20TAP%20Site%20Visit%20Monitoring%20Report%20Spring%202017_UK2222080_Issue_01a.pdf

[6] https://www.ilfattoquotidiano.it/2018/01/09/tap-la-procura-di-lecce-riapre-linchiesta-dopo-lesposto-di-otto-sindaci-salentini-unico-gasdotto-con-snam-leggi-aggirate/4082033/

[7] https://docs.google.com/spreadsheets/d/1NktFpFQY8x1Y8pxnGiEnL3i5hlKIq2GRsl5Vm3u4vt8/edit#gid=247408276

Promises for coal jobs in southeastern Europe are dangerously out of touch with reality – new study

In this analysis covering eight southeast European countries [2], CEE Bankwatch Network finds that claims that the coal industry will create or maintain tens of thousands of jobs in the region – a key argument used to justify building new coal units or prolonging the life of unprofitable, old and polluting ones – are greatly exaggerated.

According to Bankwatch estimates, while proponents of coal have overall claimed that 10,030 jobs would be maintained and 17,600 new jobs created, a reduction of workplaces by around 5,170 is more likely.

The planned 500 MW Kosovo e Re power plant is the regional prize winner in terms of exaggerated employment claims. Media statements by the concessionaire suggest that 10,000 jobs would be created during the construction phase and 500 during operation. Yet the Bankwatch analysis shows that no more than 1,200 workers should be required during the construction stage – and many of them are likely to be imported specialists – while no more than 190 should be required during operation.

At the same time, overstaffed coal mines in the region will see large reductions in employee numbers whether new coal power plants are built or not.

‘Governments in the region which pretend the coal industry can be kept afloat are merely deceiving people. The industry is dying and the promises of job creation are keeping workers and communities trapped into an altered reality,’ says Ioana Ciuta, Bankwatch energy coordinator and co-author of the study. ‘Meanwhile, employment in renewables has reached 1.5 million in the EU alone and it’s growing. There are alternatives for people, if only governments would put as much effort into promoting them as they put into saving coal.’

‘That the coal age is coming to an end is a fact and southeastern Europe is not immune to this trend,’ says Pippa Gallop, Bankwatch research coordinator and co-author of the analysis. ‘Resources that governments now waste on propping up a dying business need to be invested in helping regions transform away from coal from today, as many mines have been laying off workers for years already.’

 

Notes to editors:

[1] The study can be found HERE.

[2] The countries covered in the study: Bosnia and Herzegovina, Bulgaria, Greece, Kosovo, Macedonia, Montenegro, Romania and Serbia

 

For further information please contact:

Ioana Ciuta
Energy Coordinator, CEE Bankwatch Network
ioana.ciuta@bankwatch.org
+40724020281
Skype: ioana.ciuta
Twitter: @unaltuser

Pippa Gallop
Research Coordinator, CEE Bankwatch Network
pippa.gallop@bankwatch.org
+385 99 755 9787
Skype: pippa.gallop

Over 120,000 petition development banks to Save the Blue Heart of Europe and drop destructive hydropower in the Balkans

For immediate release

Delivered to the London headquarters of the European Bank for Reconstruction and Development [2], the petition targets the funding of the EBRD, the World Bank and the EU’s European Investment Bank, which together have funded at least 82 hydropower plants across the Balkans – of which 37 are located in protected areas – with EUR 727 million in total investments [3].

As economic trendsetters for activities in the region, the development banks have been followed into hydropower investment by commercial lenders, including, among others, Austria’s Erste and Italy’s Unicredit, which have funded at least 158 hydropower plants.

The campaign is calling on banks to immediately stop funding for projects that are located in protected areas and other valuable rivers stretches, apply more stringent green conditions to loans in the sector and increase funding for energy efficiency and other renewable energy sources, whose potential in the region remains largely untapped.

The Save the Blue Heart of Europe campaign is an initiative of nongovernmental organisations EuroNatur and Riverwatch, together with green groups from southeast Europe, Bankwatch and activist company Patagonia in order to save the pristine rivers of the Balkan from destruction brought by dams and diversions.

Fidanka Bacheva-McGrath, EBRD policy officer for Bankwatch, said: “120,000 signatures represents the largest petition response that the EBRD has ever received on energy issues. The EBRD prides itself on moving markets, so we hope the bank will take the public’s call to heart and drive investments in a more diverse mix of renewables, while also applying strict environmental and social safeguards.

Theresa Schiller, Coordinator of the Blue Heart Campaign at EuroNatur, said: “International banks such as the EBRD must face up to their responsibilities in times of climate change and overexploitation of natural resources. We call on the EBRD to withdraw from financing hydropower on Balkan rivers in order to preserve this unique European natural heritage.”

Yvon Chouinard, Founder of Patagonia, said: “It’s a waste of money and a moral travesty that some of the world’s largest financial institutions have embraced this outdated and exploitative technology and are financing dams in some of the last wild places in Europe.”

Ulrich Eichelmann, CEO of Riverwatch, said, “It is a shame that the EBRD and other financial institutions are fuelling the destruction of the most valuable rivers in Europe, leading to biodiversity loss, social grievances and deterioration of protected areas. They must stop investing in the dam tsunami and rather act as a role model for other investors by funding more actual renewables – such as solar – instead of hydropower.

For more information contact

Fidanka Bacheva-McGrath, CEE Bankwatch Network
EBRD policy officer
Email: fidankab@bankwatch.org
Mobile: +359 899 876 095

Notes for editors

[1] https://www.balkanrivers.net/

[3] For more information see https://bankwatch.org/publication/financing-for-hydropower-in-protected-areas-of-southeast-europe-update

Images for download

Photo credit: Jason Alden, Patagonia, 2018

At 60, EU public bank needs fundamental reform – civil society groups

Prague, Budapest, Warsaw, Bucharest, Sofia – On Friday (June 22), EU finance ministers will convene in Luxembourg for the annual meeting of the board of governors of the EIB, also marking the bank’s 60th anniversary.

On this occasion Bankwatch and 20 other civil society groups have sent today (June 18) a letter [1] to EU finance ministers in their capacity as governors of the EIB. In the letter, the groups stress the need for the EU’s house bank to undergo “fundamental reform and reconsider its investment focus” in order to “address structural problems linked both to its business model and practices.”

The letter lists nine key steps the EIB needs to take if it is to make a genuine contribution to the much needed transformation of the European economy and society. Among these are aligning the bank’s policies and investments with the Paris climate accord, and specifically to cease support for fossil fuels; enhancing the bank’s transparency and public participation; and making the protection and promotion of human rights a priority.

Bankwatch and its member groups across central eastern Europe have been monitoring the social and environmental impacts of EIB operations and policies since 1995. The experience gained through these years has shown both the risks and potential that EIB financing carries for EU citizens. Now, we urge our finance ministers to make the 60th anniversary of the world’s largest lender a turning point that would help put Europe on a truly sustainable path with the public interest at its heart.

Alexa Botar, climate, energy and EU Funds coordinator at NSC-Friends of the Earth Hungary, says: “In 2013-2017 energy efficiency and renewable energy sources each received no more than 2% of the EIB’s total investments in Hungary. We at NSC-Friends of the Earth Hungary believe these figures need to increase significantly, and it can be done through the use of new EFSI projects and investment platforms. To enable the EU meet its commitments under the Paris Agreement, the EIB must shift its lending from fossil fuels to energy efficiency and small-scale, local renewable energy projects.”

Izabela Zygmunt, Bankwatch’s national coordinator for Poland, says: “We’re asking the EIB for bolder leadership on climate and for more participatory and democratic governance, which are two sides of the same coin. Especially in countries like Poland, where the government’s climate ambition lags behind what the people and local governments want, the Bank should not hesitate to tap into the creativity, insights and ingenuity of people in cities, regions and local communities.”

Laura Nazare, national coordinator at Bankwatch Romania, says: “With its 60th anniversary, EIB reaches a turning point. It is the proper occasion for the EU’s lending arm to entertain more the fact that an economic transformation requires good governance, responsible finance and a clean and sustainable vision for the future. It is indispensable to enhance the bank’s transparency and accountability towards EU institutions and, more importantly, towards EU citizens. It is time for an essential, qualitative transformation of the EIB’s business model and practices.With a presence in Romania for over 25 years and investments exceeding EUR 13 billion, the EIB must make room for more investments in climate action with a focus on projects for energy efficiency and renewable energy sources.”

Todor Draganov Todorov, Energy Transformation and Just Transition Coordinator at Za Zemiata/Friends of the Earth-Bulgaria, says: “Nearly ten years ago, Bankwatch assessed EIB’s financing for waste management – two thirds of this portfolio went to waste incineration. Then a new waste framework directive was introduced, setting 50% recycling targets for the EU. Ten years later the targets were increased as part of the circular economy package. The EIB’s 2018 decision to finance a waste incinerator in Sofia does not in any way help to achieve these objectives.”

Juraj Melichar, Energy transformation coordinator at Friends of the Earth-CEPA, says: “An independent complaints mechanism is a crucial tool for cooperation with civil society. The EIB needs to protect public spending with a complaints mechanism which really works for the citizens. The Bratislava Bypass project shows the disconnection between EIB finance and the real world. On the one hand, promoted as a great combination of the various financial tools. On the other hand, it shows that the complaints mechanism in the EIB is too slow to stop fossil fuel infrastructure or just to secure efficient public spending.”

Anna Roggenbuck, Policy Officer at CEE Bankwatch Network, says: “An implementation of a long-term vision, rather than crisis management, is needed for the next decades of the EIB’s operations. A transition to sustainable energy in the EU would entail high social and economic costs, and the EIB must support this process. As an EU public institution, the EIB clearly lacks democratic control and accountability which Europe desperately needs for its all institution to overcome its identity crisis.”    

 

For additional information please contact:

Alexa Botar
Climate, energy and EU Funds coordinator
NSC-FoE Hungary
alexa@mtvsz.hu
+36 70 340 8997 / +36 1 216 7297
Skype: alexa_mtvsz

Izabela Zygmunt
National coordinator for Poland
CEE Bankwatch Network
izabela.zygmunt@bankwatch.org
+48 502036987
Twitter: @IzabelaDZygmunt

Laura Nazare
National coordinator for Romania
Bankwatch Romania
laura.nazare@bankwatch.org
+40 770209187

Todor Draganov Todorov
Energy Transformation and Just Transition Coordinator
Za Zemiata/Friends of the Earth-Bulgaria
t.todorov@zazemiata.org
+359 2 943 11 23 / +359 887122801

Juraj Melichar
Energy transformation coordinator
Friends of the Earth-CEPA
melichar@priateliazeme.sk
+421 903 473 816

Anna Roggenbuck
EIB Policy Officer
CEE Bankwatch Network
annar@bankwatch.org
+48 918315392 / +48 509970424

 

Notes

[1] The letter can be found here.

 

CEE Bankwatch Network member organisations

  1. Magyar Természetvédők Szövetsége: 60 éves az Európai Beruházási Bank – alapvető reformját várják a szakmai civilszervezetek
  2. CDE-Hnuti Duha: Šedesáté výročí EIB: nastal čas ukončit investice do fosilních paliv
  3. Polska Zielona Sieć: 60. urodziny EBI – europejskie NGO wskazują niezbędne zmiany

Charges brought against development banks over half a billion euros for Ukraine’s largest agribusiness firm

For immediate release

With the support of Kyiv-based Ecoaction, Bankwatch and the Accountability Counsel, the parties are seeking a resolution [2] from the Compliance Advisor Ombudsman (CAO) of the International Financial Corporation, the World Bank’s private sector lending arm, and the Project Complaints Mechanism (PCM) of the European Bank for Reconstruction and Development.

Since 2003, MHP has received nine loans totalling more than half a billion euros from both the International Finance Corporation and the European Bank for Reconstruction and Development for its operations in the fertile agricultural region, making it the country’s largest exporter of poultry products [3].

The complaint alleges that since the start of MHP operations in Vinnytsia in 2010, continuous odor and dust from a significant and growing number of facilities and the application of manure on nearby fields has made local life untenable. MHP activities have also led to a drastic increase in heavy vehicle traffic through villages, resulting in damage to roads and nearby residences, and risks from pollution to air, water and soil have not been studied properly, the complaint says.

The CAO and the PCM are responsible for reviewing complaints from parties affected by bank investments and can initiate mediation between bank clients and impacted communities.

Vladlena Martsynkevych of Bankwatch and Kyiv-based Ecoaction, said “MHP wants to be the biggest poultry exporter to Europe, but it does not want to respect European and international standards. We hope that the banks will bring the company to the negotiating table, so that those who have been impacted receive the solutions they seek and the information they need to make sound decisions about how their lands are used.”

Caitlin Daniel, Global Communities Attorney with Accountability Counsel, said, “The complaint describes longstanding and significant concerns, but community members are still hopeful that a solution is possible. MHP has touted its commitment to social and environmental sustainability, publicly and with its international lenders. This complaint provides a clear opportunity for it to demonstrate that commitment through genuine engagement in a dialogue process.”

 

For more information contact

Vladlena Martsynkevych, Ukraine campaigner
Bankwatch/Centre for Environmental Initiatives “Ecoaction”
Email: vladlena@bankwatch.org
Mobile: +380667312657

Caitlin Daniel, Global Communities Attorney
Accountability Counsel
Email: caitlin@accountabilitycounsel.org
Office: +1 415 500 8214

 

Notes

[1] “Vinnytsia Poultry Farm LLC”, MHP website https://www.mhp.com.ua/en/operations/op-vinnitskaja-ptitsefabrika-oao-mkhp

[2] The complaints to the CAO and PCM are available at https://bankwatch.org/publication/complaints-ifc-ebrd-investments-in-mhp

[3] For more information about the operations of MHP in Ukraine, see here https://bankwatch.org/project/myronivsky-hliboproduct-mhp-ukraine and here https://www.accountabilitycounsel.org/client-case/ukraine-agro-industrial-poultry-farm/

Commission rules for spending 300 billion euros in Cohesion funds misses opportunity to push for protections to climate and the rule of law

For immediate release 29 May 2018

In today’s release of the regulation on the Cohesion Policy and European Regional Development Funds, the Commission failed to earmark enough funding to meet its target of 25 per cent in climate action spending across the whole EU budget, approximately EUR 320 billion in total. [1]

The regulation also does not make obligatory two elements – the Partnership Principle and the European Code of Conduct – that have proven crucial [2] to safeguard against violations to the rule of law.

By not making legally enforceable the Partnership Principle and the European Code of Conduct, which prescribe how Member States should include stakeholders in the programming, spending and monitoring of EU funds, the Commission has denied itself room to maneuver if it decides to take a government to task for failing on its responsibilities to uphold democracy.

Izabela Zygmunt of Bankwatch member Polish Green Network said, “EU leaders rightly view European funds as a strong bargaining chip to deal with those governments that have been backsliding on the rule of law. But the Commission’s approach is misguided.

By suspending funds on the grounds of rule-of-law deficiencies, it will effectively punish the people for the actions of the governments, which is a risky political gamble that may ultimately strengthen the hand of populists. The Commission should guarantee more people power and control over how the EU money is spent with stronger and enforceable provisions like the Partnership Principle and Code of Conduct.

Such an approach would be politically safe and would undermine the potential for EU funds being used for corrupt purposes.”

Raphael Hanoteaux, EU policy officer with CEE Bankwatch Network said, “Cohesion Policy has a track record of positively supporting the transition to a low-carbon energy system, so it is disappointing to see the Commission not tapping this potential.

With less Cohesion funds available, the margin for error is smaller than ever for Member States to get spending plans right. Now more than ever ensuring transparency, democratic oversight and accountability over how funds are spent is essential.”

 

For more information contact

Raphael Hanoteaux
EU policy officer, CEE Bankwatch Network
Email: raphaelh@bankwatch.org
Mobile: +32 496 205 903

Izabela Zygmunt
Campaigner, Polish Green Network
Email: izabela.zygmunt@bankwatch.org
Mobile: +48 502 036 987

 

Notes for editors

[1] See for instance the climate mainstreaming scenarios for the EU budget after 2020 here  http://www.caneurope.org/docman/fossil-fuel-subsidies-1/3352-annex-1-climate-mainstreaming-scenarios-mff-2021-2027-can-europe-may-2018/file

[2] More information about linking the suspension of EU funding, the rule of law and why strong provisions for the partnership principle and European Code of Conduct are needed is part of Bankwatch’s submission to the Commission’s consultation on the Future Cohesion Policy in the EU budget post-2020 https://bankwatch.org/wp-content/uploads/2018/04/Post2020-Cohesion-Policy-consultation-response.pdf