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“It’s a waste of money and a moral travesty that some of the world’s largest financial institutions have embraced this outdated and exploitative technology and are financing dams in some of the last wild places in Europe.”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

European Ombudsman requests more lending transparency from European Investment Bank

A group of NGOs has welcomed the decision, published yesterday, but regrets the weak language used, which only makes suggestions and encourages the Bank to adopt certain levels of transparency.

The decision was adopted following a complaint from NGOs ClientEarth, CEE Bankwatch Network and Counter Balance, challenging the non-compliance of the transparency policy of the EIB with international and EU standards applicable to access to information.

The Ombudsman did not conclude that there was maladministration but highlighted two key areas where the EIB should raise the bar: transparency of its investigations and of its operations via financial intermediaries – typically commercial banks and investment funds.

Senior lawyer at ClientEarth, Anaïs Berthier said: “The EIB should take on board the suggestions of the Ombudsman and bring about its transparency regime in line with international and EU law on access to information so that it ensures that it is accountable for every Euro of public money spent.”

Director of Counter Balance Xavier Sol said: “We welcome the Ombudsman’s recommendations for the EIB to raise the bar on transparency. It is now time for the EIB to start disclosing more information about its internal inspections, investigations and audits on fraud and corruption cases. In recent cases such as controversial loans to Volkswagen or infrastructure projects in Italy, the EIB has systematically hidden behind these restrictive provisions in its transparency policy not to disclose the outcome of its investigations. The culture of secrecy prevailing at the EIB needs to reach an end, as it is key for European taxpayers to know that European funds are spent in the public interest“.

Anna Roggenbuck, Policy officer at CEE Bankwatch Network, said: “We welcome the Ombudsman observation that the current Transparency Policy is misleading to the public in regards access to information on operations through the financial intermediaries. We regret the Ombudsman did not review the EIB’s actual practice which contradicts even the current disclosure requirements, as Banwkatch recent research showed. As this practice of confidentiality of projects significantly impacting environment may not be acceptable, we will lodge a new complaint tackling an issue of confidentuiality of financial intermediary operations.“

The EIB, which invests around €80 billion in projects annually, has a huge impact on the environment in the EU and beyond. This calls for the highest standard of transparency and accountability on how these funds are used.

While the language of the decision is quite weak on certain points, the Ombudsman, Ms O’Reilly, made several recommendations to improve the policy – confirming key demands raised by civil society in recent years.

She encourages the EIB to remove from its transparency policy the presumption of non-disclosure related to information and documents collected and generated during inspections, investigations and audits on fraud and corruption, including once these have been closed.

This is welcome, as the huge amount of funds lent to companies, States and national banks have already led to corruption cases.

The Ombudsman also suggests the EIB modify the wording of provisions related to its intermediated loans – which imply financial intermediaries between the EIB and the beneficiaries – in order to clarify that the transparency regime for these indirect financial operations should be similar to the one applicable to direct loans.

For more information:

Anaïs Berthier
Senior lawyer, ClientEarth
aberthier@clientearth.org
+32 2 808 34 68

Xavier Sol
Director, Counter Balance
xavier.sol@counter-balance.org
+32 2 893 08 61
Twitter: @xavier_sol

Anna Roggenbuck
Policy Officer, CEE Bankwatch Network
annar@bankwatch.org
+48 509970424
+48 91 831 5392

Post 2020 EU budget: Commission proposal promises sustainability but continues funding contradictory policies

For immediate release

The Commission’s proposed framework for the post-2020 EU budget acknowledges the need for Member States to spend in line with the objectives of the UN Sustainable Development Goals.

But the People’s Budget campaign cautions that references to the Sustainable Development Goals are not enough to ensure genuine reform of the EU budget. Equal considerations for social, environmental and economic aspects are essential for a future EU budget based on a set of sustainability principles [2] advocated by the People’s Budget campaign.

European decision makers now must bring more substance and ambition into the EU budgets’ legal texts, and ensure that spending plans strengthen European values, like democracy, the rule of law and protection of civil space.

Raphael Hanoteaux, EU Policy Officer, CEE Bankwatch Network: “The Commission’s proposal is a loud and clear signal to Member States that spending priorities need to change. Signaling less money for countries of central and eastern Europe, governments in the region need to ensure that spending is targeted and the focus is on quality. Now more than ever, transparency over the budget must be stepped up to ensure that taxpayer money best serves people, the environment and the economy. One of the easiest ways to do this is by eliminating wasteful and harmful subsidies for fossil fuels.”

Klara Hajdu, SDG Watch Europe: “The future EU budget should finally stop funding unsustainable development. Giving some money for saving nature, eradicating poverty or fighting climate change will not solve any problems, if we continue to fund fossil fuel investments, intensive agriculture or favour the rich beneficiaries in the funding rules undermining social equality.”

Dr. Raphael Weyland, NABU Brussels: “Shockingly the direct payments under the Common Agricultural Policy, widely recognised as the most dysfunctional part of the EU budget, are being protected against broader cuts. There is no real reform towards a more sustainable agriculture and land-use policy. The Budget commissioner ignores the collapse of biodiversity by failing to properly allocate within the CAP money ring-fenced for nature and by shifting money to the more sustainable second pillar. The tiny increase of LIFE will not bring back bees and insects back to life.”

Sergio Aires, President of EAPN Europe: “While we welcome the increased budget, the explicit focus on the Sustainable Development Goals and crucially, the European Pillar of Social Rights, we are worried about the potential impact of the proposed 7% cut in EU Cohesion Funds, traditionally a strong tool in the fight against poverty. We will be closely monitoring further announcements this month to understand the impact of this 7% cut. We count on Member States and the Parliament to ensure that the new  ‘ESF+’ ringfences a minimum of 30% to the fight against poverty and social exclusion, thus showing a clear political and financial commitment to the fight against poverty and social exclusion.“

Johannes Trimmel, CONCORD President: “With adopting the 2030 Agenda for Sustainable Development and the Paris Agreement, Europe has taken serious commitment towards global solidarity and a more sustainable world. By suggesting to increase the external action allocation in the new EU budget proposal in comparison to the previous framework, the EC reinforces this general commitment. Yet, the EU as a whole – including bilateral budgets from Member States – needs to take further significant steps to live up to giving itself the means to confirm its engagement.”

 

NOTES

[1] The People’s Budget campaign (www.peoplesbudget.eu) brings together more than 70 European and national civil society organisations from different sectors, calling for a sustainability reform of the EU budget. The campaign is supported by SDG Watch Europe (https://www.sdgwatcheurope.org/)

[2] Principles for sustainability reform are outlined here http://www.peoplesbudget.eu/wp/wp-content/uploads/Position_MFF_1December_2017.pdf