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New report: institutionalised corruption in Romania’s third largest company

Counter Balance and its partner Bankwatch have launched a new report exploring corruption cases in Romania’s third largest company. The Oltenia Energy Complex (OEC) is a key player in the energy sector in Romania and today operates ten lignite mines and four power plants. Supposed recipient of a EUR 200 million loan from the European Bank for Reconstruction and Development (EBRD), OEC stands out for a long list of corruption scandals collected in the last decade.

Focusing mainly on the dodgy contracts signed by the company with the Șova and Associates law firm, the report shows a repeated history of state capture practices, involving prominent figures of the Romanian political panorama such as Dan Șova and Victor Ponta, members of the national Parliament, but also local officials.

Although, after fierce protests by civil society, the EU public money did not reach the Romanian company, it is worth remembering the Oltenia Energy Complex case as one to draw some lessons from. Alexandru Mustață, author of the report, claims: “It is crucial that large infrastructure financiers better investigate companies before doing business with them, and monitor them from that moment onwards”.

Xavier Sol, director of Counter Balance, underlines: “Such cases of state capture should alert infrastructure financiers like the EBRD to aim for transparency of both the loaner and the loaned as an essential part of the due diligence practice public banks have to conduct”.

Read the report in English here.

For further information contact:

Xavier Sol, Director Counter Balance
xavier.sol AT counter-balance.org
+32 2 893 08 61

Alexandru Mustață, Bankwatch Romania
alexandru.mustata AT bankwatch.org
+40 726 770 808

EU budget review must enhance European climate action

The European Commission must listen to the European Parliament calling for an EU budget that works for people and planet – according to CEE Bankwatch Network, Friends of the Earth Europe and Climate Action Network (CAN) Europe.

The demand follows the adoption of a report by the European Parliament on the EU budget today [1], that will inform the European Commission’s review of the current 2014-2020 EU budgetary period. In light of the Paris Agreement, the European budget must tackle the causes and impacts of climate change. This includes full integration of climate action across the budget – so-called climate action mainstreaming. It also includes increasing the current 20 percent climate action target of the EU budget to at least 30 percent, and a phase out of fossil fuel subsidies or spending on fossil fuel infrastructure, according to the organisations.

Markus Trilling, EU Policy Officer at CEE Bankwatch Network and Friends of the Earth Europe, said:

“The European Parliament asks to bring the EU budget in line with the Paris Agreement. This would mean an immediate end to funding for fossil fuels and a greater imperative to tackle the climate crisis. It would also mean that measures to reduce greenhouse gas emissions are integrated into all investment decisions in Europe – incentivising the smaller scale, decentralised and community-owned sustainable solutions we need.

“More than ever, not least in the wake of the results of the Brexit referendum, the benefits of EU spending for European citizens must be made clear. Using EU funds as blanket financial support for government budgets has not worked. We need an EU budget that works for people and planet, which means including essential EU objectives like the ‘circular economy’ and which supports clean energy investment plans that are expanding sustainable energy in Member states.

Wendel Trio, Director of Climate Action Network Europe added:

“The Paris Agreement explicitly states that our governments need to change how money is spent so that it enhances climate action, not hinders it. The review of the EU’s budget is an ideal moment to scale up funding for climate action. Aligning the EU’s budgetary spending with the Paris Agreement is an opportunity not to be missed, if the EU wants to be a front-running investor in the transition towards a zero emissions economy.”

For more information contact:

Caroline Westblom
CAN Europe Communications Officer
caroline@caneurope.org
+32 484 566 239

Wendel Trio
CAN Europe Director
wendel@caneurope.org
+32 473 170 887

Markus Trilling
EU Policy Officer
CEE Bankwatch Network & Friends of the Earth Europe
markus@bankwatch.org
+32 484 056 636
Twitter: @SustEUfunds

Notes to editors

1. REPORT on the preparation of the post-electoral revision of the MFF 2014-2020: Parliament’s input ahead of the Commission’s proposal, (2015/2353(INI)):

Follow up of the international agreements on environmental changes

60. Notes that the COP 21 agreement reached in Paris is a universal, dynamic and differentiated agreement aimed at facing the challenge of climate change; underlines that, under this agreement, EU funding needs to be allocated for supporting climate action in developing countries; stresses that any funding for the possible measures originating from COP 21 should be additional to the current spending on climate actions, and calls on the Commission to present its implementation strategy and first evaluation of the possible impact of the COP 21 agreement on the EU budget in due time for the revision; underlines, moreover, that the revision of the MFF creates an excellent opportunity to ensure that the 20 % target of spending on climate-related actions is reached and to provide for a possible increase of this threshold in line with the EU’s international commitments taken during the COP 21; calls on the Commission to ensure that the mechanism of climate action mainstreaming is fully operationalised and that the current method of tracking of such spending is improved; recalls, furthermore, that the EU is also committed to implement the United Nations convention’s Strategic Plan for Biodiversity, and underlines that it should dedicate sufficient resources to fulfil its commitments in that respect;

In its opinion to the above report, the Committee on the Environment, Public Health and Food Safety calls on the Commission to:

3. Calls on the Commission to ensure that Union financial resources contain neither subsidies that are harmful to the climate or lock in fossil fuel infrastructure or support activities which damage ecosystems and biodiversity nor fossil fuel subsidies; also calls on the Commission to introduce an effective method of tracking biodiversity spending in the Union budget

Less is more: Romanian energy trajectory shows potential for low carbon economic growth – report

Romania could well be on path to a sustainable, prosperous economy if decision makers acknowledge growing GDP in tandem with dropping energy demand, a report released today by Bankwatch Romania argues.

See graphs below >>

An English version of the executive summary can be found at:
https://bankwatch.org/sites/default/files/decoupling-execsummary-05Jul2016.pdf

The full report in Romanian can be found at:
https://bankwatch.org/sites/default/files/decoupling-RO-05Jul2016.pdf

The EU has already committed to a long term transition into a decarbonised economy, primarily in light of the urgent need to tackle the climate crisis. Yet, some governments have not.

The report tackles the common assumption that continued economic growth necessarily entails a rise in energy consumption. In fact the new analysis shows that this is not what happens in reality, in Romania and in other EU countries.

Since the 2011 UN report that first introduced it, the concept of decoupling GDP growth from energy consumption is gradually being incorporated into more and more development policies.

In Romania, however, policy makers are yet to recognise this increasingly mainstream paradigm. Official estimates still see energy consumption in the country growing by 20%-100% by 2030. At the same time, the Romanian energy ministry acknowledges that since 2009 the country’s GDP has been growing while energy consumption has been falling, but it has so far failed to factor this trajectory in the ongoing development of a new national energy strategy.

Romania has one of the highest rates of economic growth in Europe. Nevertheless, given that energy intensity in the country is twice as high as the EU average, Romania also has a very high potential to cut its energy consumption, particularly in the housing and transport sectors, the report authors state.

Alexandru Mustață, campaign coordinator at Bankwatch Romania and coordinator of the report, says:

“That Romania has virtually already met its 2020 target for greenhouse gas emissions reduction with no special effort only shows there is still a vast potential to deepen these emissions cuts while ensuring prosperity for society now and in the future. Romanian decision makers need to recognise and embrace the trend of a lower carbon economic growth.”

Realising this potential would require a change of mindset in government ministries and a long term vision. The report lists a number of recommendations for ways to put the decoupling trend into motion including prioritising investments in energy efficiency, reducing transport sector emissions, and boosting the deployment of renewable energy sources.

For more information contact:

Alexandru Mustață
Campaign Coordinator, Bankwatch Romania
alexandru.mustata@bankwatch.org
+40 726 770 808

Graphs

Croatia to drop controversial coal plant project, confirms minister

The Croatian Minister for Economy, Tomislav Panenić, yesterday confirmed that the 500 MW Plomin C coal plant project has been stopped.

The announcement comes after months of media reports that the European Commission considers the project to involve incompatible state aid due to the involvement of heavily politicised state electricity company HEP (Hrvatska Elektroprivreda) [1]. This was confirmed by Panenić, who also cited low electricity prices as rendering the project uneconomic.

The news was welcomed by environmental campaigners who have led a five-year campaign against the project due to its expected climate and health impacts, as well as its high cost.

Coal in the Balkans

Find out more

“This project has proven to be a major distraction for HEP and the Croatian government and has diverted them away from developing a cost-effective and sustainable energy strategy”, said Bernard Ivčić from Zelena akcija/Friends of the Earth Croatia. “We now need to make up for lost time and ensure that Croatia develops a new strategy based on energy efficiency and sustainable renewables.”

“Croatia has excellent but under-used solar and wind potential and we hope to see a rapid turnaround in the fortunes of these resources during the next few years”, added Zoran Tomić of Greenpeace Croatia.

“Plomin C is the latest in a whole series of coal projects being cancelled across Europe and beyond, as renewables become more and more affordable,[2]“ said Pippa Gallop of CEE Bankwatch Network. “Governments across the Balkans who are largely ignoring this trend need to start paying attention if they are to avoid being left with a series of expensive mistakes on their hands.”

Contacts

Pippa Gallop
CEE Bankwatch Network
pippa.gallop@bankwatch.org

Bernard Ivčić
Zelena akcija
bernard@zelena-akcija.hr

Zoran Tomić
Greenpeace Croatia
zoran.tomic@greenpeace.org

Dušica Radojčić
Zelena Istra
dusica.radojcic@zelena-istra.hr

Notes for editors

1. No official EC decision has been published yet.

2. A recent report by Sierra Club and CoalSwarm found that the number of cancelled coal projects across the world has outstripped those completed at a rate of two to one since 2010. The highest failure rate has been in Europe at 7:1.

More coal plants are being cancelled than built

 

Find out more

The EU house bank is holding back Europe’s shift to sustainable energy

On the occasion of the EU Sustainable Energy Week, a new Bankwatch analysis shows that the European Investment Bank (EIB) has been effectively hindering Europe’s energy transition.

The full briefing can be found here >>

The EIB has so far followed through most of the priorities set in its 2013 energy strategy, but a closer look at the European investments of the world’s largest public bank in energy efficiency, renewable energy vis-a-vis fossil fuels reveals that its contribution to the global effort to tackle the climate crisis remains insufficient at best.

Most notably, during 2013-2015, EIB lending to renewables in Europe has dropped whereas its lending to fossil fuels has modestly but consistently increased.

Moreover, while EU leaders have repeatedly emphasised the ‘energy efficiency first’ principle, the EIB has been lagging behind with only 3.6% of its lending across sectors going to energy conservation projects.

According to EIB data, in the years 2013-2015, electricity transmission and distribution projects were the main benefactors of the bank’s loans to Europe’s energy sector, receiving approximately 40 percent of the bank’s total EUR 27 billion energy lending.

At the same time, the EIB’s financing for renewables from its energy portfolio has been just slightly higher than for hydrocarbons – EUR 8 billion compared to EUR 7 billion, respectively.

Among renewable energy projects, the EIB has prioritized support for wind power, allocating a total of EUR 4.5 billion to this sector, compared with less than half a billion euros for solar energy.

Yet, by 2015 EIB investments in wind energy have fallen sharply, even though industry data show this was a record year for investments in new wind energy projects.

These trends are even more pronounced in the EU’s newer member states. Over this three year period, the EIB has extended only six loans to renewable energy projects in EU-13 countries. So far, only three countries – Sweden, Bulgaria and Estonia – have met their 2020 renewable energy targets.

Anna Roggenbuck, EIB Policy Officer at CEE Bankwatch Network, says:

“The EIB appears to have failed to grasp the magnitude of climate crisis and the opportunity for Europe to take a truly sustainable energy path. Bankwatch’s analyses have repeatedly shown that if Europe is to meet its climate and energy objectives, as part of the global effort to stem climate change, the EU’s bank has to up its game.”

For more information contact:

Anna Roggenbuck
EIB Policy Officer, CEE Bankwatch Network
annar AT bankwatch.org
Mobile: +48 509970424
Office: +48 91 831 5392
Twitter: @RoggenbuckA

Response to statements regarding CEKOR in the Serbian media

CEKOR, as a non-governmental watchdog organisation, has since 1999 strived to promote sustainable development in Serbia and has a strong track record in supporting local communities harmed by development projects to advocate for their rights.

Both CEKOR and CEE Bankwatch Network, of which CEKOR is a member, are non-profit, non-partisan organisations who work to prevent negative consequences of international public development financing. As part of this work, CEKOR and CEE Bankwatch has assisted communities affected by the Gazela Bridge reconstruction in Belgrade and the operations of the Kolubara coal mine to use their rights guaranteed by either the Serbian consititution or international treaties or policies.

These experiences have shown that even the involvement of experienced international institutions such as the European Bank for Reconstruction and Development is no guarantee that projects will not cause harm to local people and the environment, and CEKOR and CEE Bankwatch have acted as a bridge between local communities and the international financial institutions to bring public grievances to light and seek satisfactory solutions.

Within the last year or so, it has become clear that many people in Drmno are in danger of suffering a similar fate to those in Vreoci and other villages in the Kolubara basin. Some of these people have for years been promised resettlement while others have received no assurances at all that action will be taken to ensure that they no longer have to endure a constantly noisy, dusty and dangerous environment. A number of people from Drmno have therefore requested assistance from CEKOR in asserting their right to a healthy and safe environment.

People from Drmno have every right to organise themselves to achieve their goals, with or without CEKOR’s help, and through formal channels or informal channels. This is called Freedom of Expression and Freedom of Assembly, and it is enshrined in the UN Convention on Human Rights.

CEKOR, as any other civil society organisation, has every right to raise its concerns about the situation in Drmno. This is the whole point of civil society: to draw attention to the issues left behind by governments and companies and work towards adequate solutions. Only through accepting that every process has flaws and that inclusion of more points of view leads to better decision-making will our countries become more pleasant and sustainable places to live.