Press release

Pinocchio to deliver letters to Kulczyk

‘ (…) There are two kinds of lies, lies with short legs and lies with long noses.’

C. Collodi,’Pinocchio’

This Friday, 16th May at 2.00 pm, petitions to Jan Kulczyk, appealing for his withdrawal from plans to build Elektrownia Północ (‘North’) Power Plant in Pomerania, Poland, will be passed on to Mr. Piotr Maciolek, chairman of Elektrownia Północ Power Plant company, owned by Kulczyk Investments Group. The petitions, signed by over 8200 people, will be delivered by an exceptional guest – Pinocchio.

‘Despite the fact, that the billionaire Jan Kulczyk has repeatedly stated that his mission and priority as a businessman is to care about environment, he continues to invest in fossil fuels. Does it mean that Kulczyk’s words are worth as much as Pinocchio’s?’ – Radoslaw Slusarczyk, leader of the campaign ‘Stop Elektrownia Północ Power Plant’ asks rhetorically on behalf of thousands of people from all around the world.

‘Jan Kulczyk invests in dirty energy all around the world. He also intends to build a new, huge coal power plant in Pomerania, in Poland – Elektrownia Północ Power Plant – which will contribute to climate change, pollute the region, devastate the Vistula River ecosystem, threaten health of local inhabitants and priceless monuments, including Malbork Castle’ – Slusarczyk adds.

Kulczyk, the richest Pole, chairs Board of Directors of Green Cross International – an organization which works for environmental security. He is also a member of Climate Change Task Force – a team of recognized experts, leaders and Nobel Prize winners from around the world, whose aim is to solve global climate crisis. Kulczyk has repeatedly declared his deep commitment to environmental matters. Lately, he has become famous for a statement in which he pointed out that ‘unless we start to eliminate the sources of global environmental risks today, tomorrow they will eliminate us.

‘There is no action behind those words. Reactions to our petitions show that thousands of people from all around the world are watching activities of Kulczyk Investments and notice huge discrepancy between promises and actual deeds. This is precisely why we decided that the petition will be delivered by Pinocchio. Together with the international community we appeal to the billionaire for keeping his promises and investing in clean renewable energy sources, instead of building new coal power plant’ – explains Diana Maciaga from Association Workshop for All Beings, coordinator of the petitions.

‘Stop Elektrownia Północ Power Plant’ campaign is supported by social and environmental organizations, among which are Association Workshop for All Beings, ClientEarth Polska, Eko-Kociewie, Greenpeace Polska, WWF Polska and 350.org. The petitions were published on stopep.org and campaigns.350.org websites.

Elektrownia Północ Power Plant, supplied with coal, is the biggest new investment of this type in Europe. It is to be located in the centre of valuable rural areas, ca. 23 km from Malbork, and its annual carbon dioxide emissions will amount to around 9,4 million tons. Kulczyk Investments is the main investor.

The investment is vitiated with manifest errors from the very first stage of planning. On 15th September 2011 the Minister of Environment repealed its integrated permit the application of ClientEarth. On 14th February 2012 the Regional Administrative Court in Gdańsk repealed its building permit the application of ClientEarth and Eko-Kociewie. On 15th March 2013 the General Inspector of Building Control repealed the permit for the construction of water and sewage main. On 6th February 2014 Poland’s General Director for Environmental Protection affirmed partial invalidity of the plant’s environmental impact assessment permit (EIA).

Representatives of the campaign “Stop Elektrownia Północ Power Plant” cordially invite all interested journalists to the event of delivering the petition:

16th May, 2 pm, Elektrownia Północ Ltd., 24/26, Krucza St, Warsaw

Contact:

Diana Maciaga, Association Workshop for All Beings
tel.: 501 285 417
e-mail: diana@pracownia.org.pl

Bankwatch analysis of EBRD operations in CEE at 25 years since the fall of the Berlin Wall

Warsaw – As the EBRD celebrates 25 years since the fall of the Berlin Wall and the benefits it has brought to its countries of operation in the post-socialist space, a new Bankwatch report criticises the bank for having systematically promoted a „markets above all” approach, which has often put democratic and environmental concerns on the back burner, and occasionally proved straightforwardly detrimental to the region.

The Bankwatch analysis is available for download here: https://bankwatch.org/EBRD-stuck-in-market

„This report sums up our main observations and criticisms of the EBRD, coming after almost two decades of monitoring the bank as it tries to fulfill its triple mandate of promoting market economies, democratisation and sustainable development in its countries of operations,” says Bankwatch research coordinator Pippa Gallop, the main author of the analysis.

„What we note beyond doubt is that the EBRD is driven by what could be called market fundamentalism, in that it assumes that by promoting markets, privatisation and economic liberalisation, it is contributing to sorting out all types of problems in its countries of operations. While such an approach may have gone down easily in the early 1990s, it looks shockingly anachronistic today and is leading to investments of questionable value.”

The Bankwatch analysis highlights developments in the EBRD’s countries of operation that are not emphasised by the bank in its public communication. After more than two decades of EBRD loans to Central and Eastern European countries, only the Czech Republic has „graduated” from recipient status, thus being considered as having completed transition.

The EBRD to date fails to have a solid system of evaluating its human and environmental impact and chooses to rely on the assumption that markets benefit people. As a result it continues to promote privatisation even in countries with high levels of corruption while criticising socially progressive policies such as the introduction of free public transport in Tallinn, Estonia. Some of the countries that have fared best in the bank’s assessment of economic performance have also been among the hardest hit by the economic and financial crisis, which indicates that the EBRD models may ignore economic vulnerabilites and need to be significantly improved.

The bank’s focus on developing the private sector has also led it to finance companies whose need for development finance is far from proven, including several owned by billionaires, such as Kulczyk Investments, owned by Poland’s richest man, Jan Kulczyk, and Russia’s Transportation Investments Holding Ltd owned by Nikita Mishin, Konstantin Nikolaev and Andrey Filatov who are also involved in the controversial Moscow-St. Petersburg motorway which is planned to run through Khimki Forest near Moscow. Other projects such as shopping centres also attract criticism as undeserving recipients of development finance.

Democracy promotion, despite being core to the mission of the EBRD, remains a blurry area for this institution. The bank has limited its involvement with countries run by authoritarian regimes such as Belarus, Turkmenistan and Uzbekistan, but it continues to operate in Russia and has recently started lending to Egypt among other countries in North Africa and the Middle East. Stating that it is closely monitoring the situation on the ground, the EBRD keeps lending to Russia and Egypt while severe human rights abuses are being committed by the governments (including, for example, the execution of almost 600 people by the Egyptian authorities earlier this year). Moreover, despite the bank admitting to the need for a diversification of economies, significant chunks of its loans to these countries go to the energy sector, which is recognised for enabling authoritarianism as energy revenues make countries less dependent on tax incomes.

As part of its mission to enable sustainable development, the EBRD has been making major efforts to clean up its energy lending portfolio, by restricting coal lending, tightening industrial emissions provisions in its lending policies, and improving recourse mechanisms. Yet it still invests in large hydro power projects that destroy biodiversity and coal mines which negatively impact livelihoods. The bank’s stated support to sustainable energy deserves deeper scrutiny too as new coal units at Sostanj, Slovenia, and Belchatow, Poland, have been financed with money from the EBRD’s Sustainable Energy Initiative.

„In the past the EBRD has regularly claimed a leadership role in the transition success stories and recently it was cheered as an experienced transition leader to unleash its private sector finance magic on the post Arab Spring countries,” commented Fidanka Bacheva-McGrath, Bankwatch’s EBRD Co-ordinator. „Last year the bank confessed that transition got “stuck”, and conveniently blamed it on its recipient countries, on their corrupt political elites and unskilled labour force. This is incredibly hypocritical. If anyone is stuck, it is the EBRD – stuck in the market, keeping company with elites and oligarchs and foreign investors, and clearly detached from the hardship of ordinary people. It is time for the EBRD to descend from its high market ground and to catch up with its democracy and sustainability mandates.”

For more information, contact:

Pippa Gallop
Research coordinator, CEE Bankwatch Network
pippa.gallop@bankwatch.org

Fidanka Bacheva-McGrath
EBRD campaign coordinator, CEE Bankwatch Network
fidankab@bankwatch.org

Planned contract for Plomin C coal plant most likely illegal state aid, says legal analysis

Zagreb, 05.05.2014 – A planned long-term power purchase agreement in which Croatian electricity company HEP will commit to buying at least 50% of electricity from the planned Plomin C power plant [1] for 20-30 years will most likely be illegal under EU state aid rules, according to a new legal analysis by Hungary’s Environmental Management and Law Association (EMLA). [2]

EMLA’s analysis finds that since HEP is state-owned, a long-term power purchase agreement would be considered state aid. State aid provided to economic actors is generally illegal in the EU, however particular aid can still be allowed in certain circumstances. In the case of Plomin C, however, EMLA considers it virtually impossible that HEP could fulfil the necessary criteria for the agreement to be considered legal. This could present a serious obstacle to the project’s implementation.

A tender process is currently ongoing to find a strategic partner for the 500 MW Plomin C coal power plant in Istria. On 1 May the Croatian government reported that three consortia had submitted bids. Although the government said it could not name the companies involved due to the tender rules, local media [3] reported that the consortia consist of Marubeni and Alstom; Daewoo and Croatian pension funds; and Edison and Samsung.

“At a time when starting new coal projects is going seriously out of fashion in the EU (4), the very fact that three consortia have submitted bids shows that HEP must be offering very generous – maybe too generous – incentives to potential investors. However EMLA’s legal analysis raises the question of whether HEP is making promises it cannot keep,” said Bernard Ivcic, President of Zelena akcija/Friends of the Earth Croatia.

“There has been no public debate about what kind of incentives HEP is offering for Plomin C, and what kind of costs this could bring to taxpayers. Considering that Plomin C will cost at least EUR 800 million, it is high time that the public gets to hear exactly what impact this will have on their bills”, concluded Zoran Tomic of Greenpeace Croatia.

*Photos from the presentation of the legal report today in Zagreb are available here: http://zelena-akcija.hr/hr/multimedija/foto/ugovor_za_plomin_c_najvjerojatnije_ce_biti_nelegalan_5_5_2014

Contacts:

Bernard Ivcic
President, Zelena akcija/Friends of the Earth Croatia
Tel.: +385 99/314 9138

Zoran Tomic
Greenpeace Hrvatska
Tel.: +385 91/234 5092

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

Notes for the editors:

1. The Croatian Electricity Company Hrvatska Elektroprivreda d.d. (HEP) is planning the expansion of the already existing so-called Plomin A and Plomin B complex with a third unit to be named Plomin C.

Plomin A exists since 1969 while Plomin B exists since 2000. The capacity of Plomin A is 120 MW while the capacity of Plomin B is 210 MW. The planned Plomin C plant would introduce an additional 500 MW electricity generating capacity by 2019.

2. A summary of the legal analysis is available at:
https://bankwatch.org/sites/default/files/PlominC-legalopinion-publicsummary-22Apr2014.pdf

The analysis was carried out on the basis of the June 2012 project prequalification document obtained by Zelena akcija. The prequalification document can now be found online here:
https://bankwatch.org/sites/default/files/Plomin-prequalification-HEP-24Jul2012.pdf

3. See for example:
http://www.vecernji.hr/gospodarstvo/tri-ponudaca-predala-obvezujuce-ponude-za-plomin-c-936037

4. For example, in Germany, plans to construct 21 power plants have been abandoned since 2007 while 5 more have been put on hold for years and only two have started operating. A report by Poyry consultants last year concluded that no new coal plants are likely to be built in Germany, Spain and the Netherlands in the foreseeable future. See 

https://www.gov.uk/government/publications/poyry-report-to-decc-outlook-for-new-coal-fired-power-stations-in-germany-the-netherlands-and-spain

Closer to Croatia, the Sostanj unit 6 project in Slovenia represents a stark example of what can go wrong with coal projects: Project costs have doubled from around EUR 700 million in 2007 to EUR 1.4 billion in 2013 and the plant is expected to run up annual losses of EUR 50 million. Added to that, investigations into potential corruption around the project are still underway.

https://bankwatch.org/news-media/for-journalists/press-releases/slovenia-continues-fall-economic-abyss-lignite-plant-sosta

Statement on Russia’s invasion of Ukraine and threat of war

CEE Bankwatch Network strongly condemns the Russian government’s military invasion and annexation of Crimea and Sebastopol. We hope that in the end the voices of those who have been demonstrating for peace in Moscow and elsewhere, in both Russia and Ukraine, will prevail.

The European Union has already responded to the Crimean declaration of independence by announcing travel bans and bank account freezes for 48 individuals from Russia and Ukraine linked to the Crimean breakaway.

Bankwatch argues that, as a part of the EU response, the two European public banks, the European Investment Bank and the European Bank for Reconstruction and Development, should suspend lending to Russia at least until a solution that is acceptable to both Ukraine and Russia is negotiated for this crisis.

Both institutions have been lending to Russia for years, with the EBRD currently dedicating almost a third of its portfolio to this country.

If the two banks are to resume lending, they should do so after having reviewed their lending practices in such a way as to ensure that the public financing they are channeling to Russia is used to address the concerns of the poorest. Too much of the banks’ lending at the moment serves instead the business interests of Russian elites or foreign corporations without ever trickling down and on occasion even propping up the authoritarian regime.

Over 40 MEPs from across the political spectrum pledge to stand-up for citizens and democracy against excessive corporate lobbying

Today, the Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU), AK EUROPA (Brussels office of the Austrian Chamber of Labour) & ÖGB Europabüro (Brussels office of the Austrian Trade Union Federation), together with a broad coalition of civil society organisations from across Europe, are launching their campaign to urge candidates for the upcoming European elections to “stand-up for citizens and democracy against the excessive lobbying influence of banks and big business”. [1]

Prominent MEPs have already signed-up to the Politics for People campaign. These include: Ska Keller, joint European Commission President candidate for the Greens; Gabi Zimmer, leader of the GUE-NGL bloc; Evelyn Regner from the Socialists Group; Monica Macovei from the European People’s Party; and Corinne Lepage from ALDE; with over 40 MEPs signed-up in total. [2]

“Seven out of 10 European citizens are concerned about the excessive influence of industry lobbying on EU decision-making here in Brussels, and rightly so. Too many of our laws have the fingerprints of big business lobbyists all over them – from climate to public health to trade. We need MEPs who will defend the public interest and stand-up for people over profit”, said Olivier Hoedeman from Corporate Europe Observatory, a steering committee member of ALTER-EU. [3]

“Lobbying will be a hot topic both during and after the elections, which is why it’s encouraging to see a wide range of MEPs already committed to tackling the issue. We hope that more candidates from across the political spectrum will join the Politics for People campaign, sign the pledge and agree to take strong action, if elected, to defend the public interest against excessive lobbying” , points out Pam Bartlett Quintanilla of Access Info Europe, another Steering Committee member of ALTER-EU.

The centrepiece of the campaign is an interactive website www.politicsforpeople.eu which any EU citizen can use to directly contact their European candidates and invite them to sign the pledge. The website features case studies explaining how excessive industry lobbying impacts upon the daily lives of ordinary EU citizens, as well as information about how MEPs can stand-up to it. A campaign video will explain the problem of corporate lobbying and feature four MEPs endorsing the pledge. [4]

The Politics for People campaign has partners in 19 member states; a full list is available on-line. [5] Across Europe, members of the Politics for People coalition will be holding election debates, speaker tours and other activities to raise the issue of excessive and untransparent lobbying in the EU and to propose solutions.

“It is essential that we tackle the problem of excessive lobbying from banks and big business in Brussels. In the past few years we have seen big banks avoid effective regulation after the financial crisis!”, said Amir Ghoreishi of AK EUROPA, one of the supporting organisations behind the campaign. “In addition, the processed food industry defeated proposals for health labels on packaging; climate policies have been downgraded; and EU trade deals (like the current proposed EU-US deal) consistently put profits before people,” said Max Bank of LobbyControl in Cologne, another steering committee member of ALTER-EU.

You can follow the campaign on twitter (@altereu) and via the hashtag #pforp. To find out more about the campaign, please visit
http://www.politicsforpeople.eu

Contact details:

Pam Bartlett Quintanilla, Access Info Europe (Madrid)
pam at access-info.org
Tel.: +34 699 354 215

Olivier Hoedeman, Corporate Europe Observatory (Brussels)
olivier at corporateeurope.org
Tel.: +32 474 48 65 45

Max Bank, LobbyControl (Cologne)
m.bank at lobbycontrol.de
Tel.: +49 (0) 221 169 6507

Notes for editors:

[1] ALTER-EU is a coalition of about 200 civil society groups, trade unions, academics and public affairs firms campaigning against the increasing influence exerted by corporate lobbyists on the political agenda in Europe. The official Politics for People campaign website is: www.politicsforpeople.eu

[2] The list of MEPs who have signed (as of 10 April) is as follows: Jan Philipp Albrecht, Martina Anderson, Margrete Auken, Sandrine Bélier, Victor Bostinaru, Nessa Childers, Dennis De Jong, Martin Ehrenhauser, Bas Eickhout, Saïd El Khadraoui, Sven Giegold, Ana Gomes, Roberto Gualtieri, Mikael Gustafsson, Karin Kadenbach, Ska Keller, Jurgen Klute, Jean Lambert, Jörg Leichtfried, Corinne Lepage, Ulrike Lunacek, Monica Macovei, Martina Michels, Paul Murphy, Younous Omarjee, Ioan Mircea Pascu, Sirpa Pietikäinen, Cristian Dan Preda, Evelyn Regner, Michèle Rivasi, Rina Ronja Kari, Judith Sargentini, Helmut Scholz, Bart Staes, Catherine Stihler, Theodor Dumitru Stolojan, Keith Taylor, Helga Truepel, Claude Turmes, Kathleen Van Brempt, Josef Weidenholzer and Gabi Zimmer.

[3] The EU Citizens Opinion Poll, January 2013

[4] The campaign video can be viewed here:

[5] CEE Bankwatch Network is one of the supporters of the campaign. A full list of the Politics for People supporting organisations is available here:
http://politicsforpeople.eu/en/about-us/

New Balkan lignite plants may breach EU pollution legislation before they even operate (legal analysis + video)

Brussels, April 2 — A series of at least five new lignite power plants planned in Western Balkan countries which aspire to European Union membership [1] risk violating Energy Community pollution legislation before they even start generating electricity, warns a new legal briefing [2] by EU-based legal organisation Frank Bold, published today.

Bankwatch’s Pippa Gallop explains the findings of the legal analysis. (Link to video)

As a result of commitments made under the Energy Community Treaty in October 2013 [3], new power plants in the Western Balkans, Moldova and Ukraine will have to comply with the latest EU pollution control legislation – Chapter III of the Industrial Emissions Directive [4] – by 2018.

Due to the fact that it takes around four years to construct a power plant, any plants that have not started construction yet will enter operation only after 2018, and need to have the appropriate pollution control technology built into the planning and permitting process in order to avoid unexpected extra costs to retrofit the plants later.

The Frank Bold expert analysis shows, however, that at least five plants across the Western Balkans — notably in Bosnia and Herzegovina, Serbia and Montenegro – may not be in line with the relevant parts of the EU Industrial Emissions Directive if constructed as planned today.

“What this means in practice is that there is a high risk of unforeseen additional costs to the investors in these plants as well as consumers of electricity, as developers may have to scramble to make last minute technological adaptations to ensure compliance with the IED as we get closer to 2018,” commented Kristína Šabová of Frank Bold.

“What governments in the region need to understand is that there is no option of going around the IED requirements for new plants after 2018, and that failure to plan ahead now may cost heavily later.”

The most stark example of non-compliance with the IED is EFT’s Stanari lignite power plant in Bosnia and Herzegovina – currently under construction – whose environmental permit allows it to emit 2-3 times more SO2, NOx and dust than even the currently binding legislation adopted by the Energy Community (the IED implies a tightening of current standards). This led to an official complaint being submitted to the Energy Community Secretariat by Banja-Luka-based Center for Environment in January this year. [5] The complaint is currently under examination.

Pippa Gallop of CEE Bankwatch Network commented: “Despite the clear European trend of moving away from coal, Balkan governments still have big plans in this sector. If these projects go ahead, compliance with the Industrial Emissions Directive is now the legal minimum condition that needs to be adhered to for anyone still considering coal investments.”

“Balkan authorities had better be advised that the IED is not the end of the story: countries wanting to join the EU can expect further environmental and climate legislation changes which will almost certainly affect their coal investment,” adds Gallop. “In this region too, governments and investors need to understand that building new coal plants is no longer a good investment option, considering the climate and health costs and the high failure rate of such projects.” [6]

The Frank Bold legal briefing is available here: https://bankwatch.org/sites/default/files/FrankBold-briefing-EnCom-IED-02April2014.pdf

Contacts

Kristína Šabová, Frank Bold
kristina.sabova at frankbold.org
Tel.: +420 720 565 672

Pippa Gallop, CEE Bankwatch Network
kristina.sabova at frankbold.org
Tel.: +385 99 755 9787

Notes for editors

[1] The plants which have reached a stage where information is available about their potential pollution levels are:

Tuzla 7, Federation of Bosnia and Herzegovina, Bosnia and Herzegovina
Banovici, Federation of Bosnia and Herzegovina, Bosnia and Herzegovina
Stanari, Republika Srpska, Bosnia and Herzegovina,
Ugljevik III, Republika Srpska, Bosnia and Herzegovina,
Pljevlja II, Montenegro
Kolubara B, Serbia
Kostolac B3, Serbia

The plants most likely to be non-compliant with the Industrial Emissions Directive are:

Tuzla 7, Federation of Bosnia and Herzegovina, Bosnia and Herzegovina
Banovici, Federation of Bosnia and Herzegovina, Bosnia and Herzegovina
Stanari, Republika Srpska, Bosnia and Herzegovina,
Pljevlja II, Montenegro
Kolubara B, Serbia

Ugljevik III and Kostolac B3 have pledged compliance although no adequate examination of the proposed technology’s ability to meet the pollution limits has been published.

[2] Read the briefing here:
https://bankwatch.org/sites/default/files/FrankBold-briefing-EnCom-IED-02April2014.pdf

http://frankbold.org/en/

Frank Bold is a legal organisation operating six branches in three EU countries. Since 1995, Frank Bold serves individuals, municipalities and businesses. It promotes corporate and governmental accountability, and provides legal support to civil society in human rights, environmental and anti-corruption cases.

[3] http://www.energy-community.org/portal/page/portal/ENC_HOME/AREAS_OF_WORK/Environment/LCP

[4] DIRECTIVE 2010/75/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 24 November 2010 on industrial emissions (integrated pollution prevention and control),
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:334:0017:0119:en:PDF

Summary of Industrial Emissions Directive:
http://ec.europa.eu/environment/air/pollutants/stationary/ied/legislation.htm

[5] https://bankwatch.org/news-media/for-journalists/press-releases/bosnia-and-herzegovina-breaches-energy-community-treaty-co

[6] The Western Balkan countries have not yet adopted greenhouse gas emissions reduction targets, which will make it tougher for them to catch up with the EU’s decarbonisation goals. In addition the EU’s reference documents on Best Available Techniques is currently being updated and this is likely to bring stricter standards on emissions from coal power plants when it is finalised, possibly in 2015.

In Germany alone, plans to construct 21 power plants have been abandoned since 2007 while 5 more have been put on hold for years and only two have started operating. A report by Poyry consultants last year concluded that no new coal plants are likely to be built in Germany, Spain and the Netherlands in the foreseeable future. See 
https://www.gov.uk/government/publications/poyry-report-to-decc-outlook-for-new-coal-fired-power-stations-in-germany-the-netherlands-and-spain

Closer to the region, the Sostanj unit 6 project in Slovenia represents a stark example of what can go wrong with lignite projects even without legislative changes involved: Project costs have doubled from around EUR 700 million in 2007 to EUR 1.4 billion in 2013 and the plant is expected to run up annual losses of EUR 50 million. Added to that, investigations into potential corruption around the project are still underway.
https://bankwatch.org/news-media/for-journalists/press-releases/slovenia-continues-fall-economic-abyss-lignite-plant-sosta

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