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Gazela reloaded: another illegal Roma resettlement in Serbia on account of an EIB funded project

Belgrade – By the end of April, one hundred Roma families are expected to be illegally resettled from Belgrade neighbourhood Buvljak to several locations including Resnik, where current inhabitants are these days protesting against their arrival [1]. The resettlement is being carried out by Belgrade authorities without a proper resettlement plan or any consideration of the needs of the Roma and potential for inter-racial conflict [2]. The move is deemed necessary as part of the Sava Bridge and adjacent road construction, financed by the European Bank for Reconstruction and Development and the European Investment Bank respectively. [3]

“As sad as it is to see the anti-Roma protests taking place over the past days in Resnik, it comes as no surprise to us, because locals there have been giving signals they do not want Roma to be moved to the area for a long time,” explains Zvezdan Kalmar from Serbian NGO CEKOR, a member group of CEE Bankwatch Network. “This kind of response is to be expected when neither local people nor the Roma families have been consulted about their needs and wishes. Unfortunately this is just one of several mistakes that have been made in this process: no Resettlement Action Plan has been drawn up, nor have any efforts been made to ensure the needs of the resettled families will be met in the new location.”

The one hundred Roma families are currently living in the Buvljak settlement and several other locations along the Belgrade-Budapest rail transport corridor, where roads meant to serve the newly constructed Sava Bridge are planned to be built with financing from the EIB.

In August 2009, 150 Roma families living in the vicinity of Gazela Bridge in Belgrade were resettled illegally as part of wider reconstruction plans related to EIB-sponsored Gazela Bridge. [4] Soon after the illegal resettlement, it was proven that the Roma families could not integrate properly in their new locations, because of lack of work opportunities and proper living conditions alongside being geographically marginalised on the far edges of the city. The EIB’s Complaints Office, which investigated the project, ruled that there had been a number of mistakes on the EIB side done which were partly to blame for the lack of Roma integration and for a significant project delay.

“Moving Roma families in the same way again, without a proper plan to ensure their long-term social inclusion, is sure to lead to failure, not least because of igniting conflicts between the resettled Roma and hostile local communities,” says Kalmar.

The activist points out that the European Investment Bank, the main financial supporter of the roads requiring this resettlement, has been warned by local NGOs about the possible negative consequences of such illegal resettlements of Roma in Serbia from as early as September 2010, to no avail.

“It is worrying to see that the EIB has learnt nothing from the disastrous Gazela resettlement that it proved powerless to control,” adds Kalmar. “The EIB should act immediately to stop any work under the project it is financing until a resettlement action plan is completed and consulted with interested Roma families, NGOs, and host communities.”

For more information, contact:

Zvezdan Kalmar
CEKOR, Serbia
Bankwatch Serbian national coordinator
vodana at gmail.com
+381 65 5523 191

Notes for the editors:

[1] Protesters said they will continue the protests until authorities give up the resettlement idea. Details about the protests:
http://www.balkaninsight.com/en/article/belgraders-protest-against-settling-of-roma (English)
and
http://www.vesti-online.com/Vesti/Hronika/216385/Resnik-Policija-sprecila-protest-protiv-Roma (Serbian)

Resnik is in the outskirts of Belgrade and next to another large infrastructural development on corridor X (a Belgrade bypass financed by the EBRD http://www.ebrd.com/english/pages/project/psd/2006/36651.shtml ).

In addition to Resnik, the Roma families are expected to be resettled to a couple of other locations around Belgrade, some of which have seen anti-Roma protests in the past, even though the precise locations have not all been made public by the authorities.

[2] Read about long-term efforts by local NGOs to get local authorities and banks financing the project to promote a proper resettlement plan here:
https://bankwatch.org/news-media/blog/deja-vu-belgrade

[3] The European Investment Bank is offering 160 million euros for the construction of Sava Bridge and access roads:
http://eib.europa.eu/projects/loans/2009/20090526.htm

The European Bank for Reconstruction and Development financially supported the construction of the Sava Bridge:
http://www.ebrd.com/pages/project/psd/2005/34913.shtml

[4] Read more about the Gazela resettlement and its negative consequences:
https://bankwatch.org/our-work/projects/gazela-bridge-rehabilitation-belgrade-serbia
and
http://outofsight.tv/

[5] See an Amnesty International petition against the illegal resettlement of the one hundred Roma families:
http://www.amnesty.ie/content/roma-families-immediate-risk-eviction

EBRD: New president – new direction for the bank?

With the European Bank for Reconstruction and Development (EBRD) in the process of selecting a new president [1] as the term of current office holder Thomas Mirow approaches its end, CEE Bankwatch Network, an NGO that has been monitoring the EBRD for over a decade, makes a call on the bank’s shareholders and new president to reassess some of its past – faulty – approaches:

  1. Despite its name, the EBRD to date has not created means to measure the development impacts of its operations even though sustainable development is core to its mandate and the bank is supposed to contribute to poverty alleviation in its countries of operation classed as developing countries; Bankwatch calls on the EBRD to:
    • set measurable human development and environmental goals in country and sectoral strategies, not only market-oriented ones
    • ensure that its transition indicators measure social (including employment), development and environmental outcomes, not just privatisation and liberalisation of the economies
    • report annually to the EU how it is contributing to the EU’s goals for external action, particularly on poverty eradication
  2. Via its loans, the EBRD promotes unsustainable economic models, for instance, economies over reliant on natural resource exports in Central Asia or growth driven by unsustainable consumer credits and foreign currency borrowing in central and eastern Europe; Bankwatch calls on the EBRD to:
    • review its portfolio to avoid promoting dependence on the export of commodities in transition countries and instead foster the development of higher value-added economic activities
    • ensure that its loans to small and medium enterprises done via financial intermediaries actually reach the intended beneficiaries; avoid financing of financial intermediaries (including private equity funds) that make use of tax havens; generally improve disclosure on its financial intermediary (FI) operations
    • tighten up its due diligence and public disclosure requirements on the value for money and budget burdens incurred through public-private partnership projects (a model that the bank heavily promotes)
  3. While claiming to promote the transition to low-carbon economy in its countries of operation and making some commendable efforts in this direction, the EBRD continues to lend to fossil fuel projects; Bankwatch calls on the EBRD to:
    • develop a climate policy that will set clear and ambitious CO2 reduction goals to guide the bank’s investments across all sectors
    • phase out loans for fossil fuels – especially coal – and aviation and increase energy efficiency and sustainable new renewables investments
    • adopt a robust set of sustainability criteria for renewable energy to ensure that promotion of renewables does not conflict with the EU’s other policy commitments such as halting biodiversity loss by 2020
    • introduce sustainability indicators as part of the bank’s transition indicators system
  4. The EBRD currently cooperates with undemocratic regimes in countries such as Kazakhstan, Azerbaijan and Russia while also expanding its operations into North Africa and the Middle East, a region on which it has virtually no expertise; Bankwatch calls on the bank to:
    • refrain from lending to Egypt, Morocco or Jordan until these countries have legitimate, democratically elected governments that respect human rights
    • conduct in-depth consultations with a wide variety of local stakeholders in North African and Middle Eastern countries planned for expansion about whether and/or how they want the EBRD
    • regularly revise its policies in relation to existing countries of operation such as Kazakhstan, Azerbaijan and Russia where democratic and pluralist principles are clearly not implemented

See the letter Bankwatch sent today to the bank’s Board of Governors here (pdf)

Notes

[1] For the first time since the EBRD was established 21 years ago, the new president of the bank will be selected following a “contest” between several candidates that have expressed an interest in the position: current president Thomas Mirow, Suma Chakrabarti (nominated by the UK government), Philippe de Fontaine Vive Curtaz (currently a vice-president of the European Investment Bank), Jan Bielecki (nominated by Poland), and Bozidar Djelic (Serbia). The new president is expected to be chosen at the bank’s annual meeting, which will take place May 18-19 in London.

For more information, contact:

Fidanka Bacheva-McGrath
Bankwatch EBRD coordinator
fidankab at bankwatch.org

Pippa Gallop
Bankwatch research coordinator
pippa.gallop at bankwatch.org

Bankwatch report: EU supports nuclear life time expansion in Ukraine


Money from Euratom and the European Bank for Reconstruction and Development is to be used to finance the life time expansion of Ukrainian nuclear reactors, 12 of which had initially been scheduled to close down no later than 2020, according to an expert report published today by CEE Bankwatch Network (1).

Ukraine’s national energy strategy for 2030 envisages that all of the country’s 15 nuclear reactors will have their life time expanded allowing the country to become an important source of electricity imports for the European Union. 12 of Ukraine’s 15 reactors were designed to finish operations before 2020; two of these 12 were supposed to be taken off the grid in 2010 and 2011 respectively but have already seen their licenses extended to operate for an additional 20 years each.

A plan for the safety modernisation of the 15 reactors to be implemented by 2017 is outlined in a „Safety Upgrade Project” (SUP) worth a total of over 1.45 billion euros and currently considered for financing by both the EBRD (up to 300 million euros) and Euratom („with the loan of a similar size”) (2). However, while the two European public institutions claim that they would be supporting the modernisation of the reactors, the expert study published by Bankwatch today shows that some of the measures included in the SUP for financing are necessary for the lifetime expansion of the plants and not for their regular functioning until the initially planned term.

„Our analysis has revealed that most of the modernisation measures included in the SUP, such as those related to component integrity and reactor protection systems, are conditions for the lifetime extension of the reactors,” comments nuclear expert Patricia Lorenz, one of the authors of the report. „Reactors that are scheduled for closure in 2012 or 2014 would normally not need the upgrades called for in the SUP unless there is a plan to use them past their original design life time.”

Iryna Holovko, Bankwatch national coordinator in Ukraine, adds: “What is particularly worrying is that this life time expansion is being done in total secrecy, without neighbouring countries and the European public in general being informed about these plans as would be required by international legislation such as the Aarhus Convention.

The EBRD and Euratom had initially requested assessing the SUP via a Strategic Environmental Assessment (SEA) but ended up accepting a much narrower Ecological Assessment that does not analyse either all the risks posed by this lifetime expansion or alternative scenarios. Even more, the SUP was prepared prior to the nuclear disaster at Fukushima, and before the EU called for rigorous stress tests to be conducted at all nuclear plants inside the union and in its neighbourhood.

“It is not acceptable that two European public institutions go ahead with considering this project before the Ukrainian stress test report is peer reviewed and accepted by the EU and before its results are made known to citizens whose lives could be directly affected by it,” adds Holovko.

According to Bankwatch, instead of supporting a very risky prolongation of Ukraine’s nuclear reactors beyond their design life time, the EU and the EBRD should help prepare these reactors for safe closure and decommissioning, while at the same time actively supporting alternatives to nuclear power: the development of local renewable energy sources and utilising Ukraine’s enormous potential for decreasing the energy intensity of the economy.

Notes for the editors:

1. Read the report online at:
https://bankwatch.org/sites/default/files/Ukraine-SUP-review.pdf

The report was commissioned by Bankwatch and authored by Austrian nuclear energy consultants Antonia Wenisch and Patricia Lorenz.

2. The European Commission plans to decide on the EURATOM loan in May 2012, the EBRD in September 2012. Read more about European public banks’ support for nuclear safety in Ukraine at:
https://bankwatch.org/our-work/projects/nuclear-power-plant-safety-upgrades-ukraine

and download report about EU support for nuclear expansion in Ukraine at:
https://bankwatch.org/publications/ignoring-chernobyls-lessons-how-eu-energy-security-expands-nuclear-energy-ukraine

List of design life time of Ukrainian reactors

For more information, contact:

Iryna Holovko
Bankwatch Ukrainian national coordinator
iryna at bankwatch.org
Tel.: +38 050 647 67 00

Patricia Lorenz
Nuclear energy consultant
patricia.lorenz at foeeurope.org
Mobile: 0043 676 44 64 254

The dirty French-Slovenian connection

Slovenian state anti-corruption body claims ALSTOM could have benefited from corrupt acts to get deal to build new lignite plant at Sostanj.

Ljubljana – The Slovenian government today announced its conditional support* for granting a state guarantee for a loan from the European Investment Bank for the construction of a new 600 MW block at the lignite plant at Sostanj [1]. The government’s announcement came in spite of serious warnings issued this week by the State Commission for the Prevention of Corruption that acts of corruption could have influenced the awarding of the contract to French company ALSTOM and that the law on the state guarantee itself was initially drafted by employees of HSE, the owner of the Sostanj power complex [2].

“The Commission for the Prevention of Corruption sent a strong signal to our government not to continue promoting TES 6 until corruption and unlawful lobbying allegations are cleared and proper safeguards are in place to avoid such practices in the future,” comments Lidija Živčič from Slovenian group Focus [3]. “Considering the seriousness of the concerns raised by the Commission, any responsible decision-maker should support putting a moratorium on the construction of the new plant until the propriety of the management of TES 6 is properly investigated by official bodies.”
 
The Slovenian Commission for the Prevention of Corruption concludes that “the project (TES 6) is designed and implemented in a non-transparent manner, lacks supervision and is burdened with political and lobbying influences, and as a result there has been (and still is) a high risk of corruption and conflict of interest.”
 
The Commission notes that both the technical commission implementing the public procurement for TES 6 and the group negotiating the contract included employees of CEE Inženiring za energetiko in ekologijo d.o.o., which has close business links with ALSTOM. As a consequence, „conditions for corruption” were created, as ALSTOM „could have had access to complete information about the offer of the competitive supplier”. The main competitor possibly disadvantaged by these circumstances was German company Siemens [4].
 
Additionally, the report states, Slovenian lobbying regulation has been breached as the authors of the proposed law on state guarantee for an EIB loan for TES 6 are members of economic entity HSE, the owners of the Sostanj energy complex. A state guarantee law needs to be passed by the Slovenian parliament in order for TEŠ 6 to cash in EUR 440 million our of the EUR 550 million loan from the EIB needed to cover a part of the 1.3 billion euros cost of the new block [5]. 4/5 of the EIB loan is to be guaranteed by the Slovenian state, with the remaining one fifth guaranteed by private banks.
 
„The two European public banks, EIB and EBRD, who plan to finance half of the costs of TES 6, cannot turn a deaf ear to the call of the Slovenian Commission for the Prevention of Corruption,” says Bankwatch’s Piotr Trzaskowski. „Not deferring their loans at this moment would mean that the EIB and the EBRD are not interested in checking whether the allegations of corruption are true. In fact, they should use this opportunity to withdraw from a project which, apart from being based on possible unlawful actions, also stands in blunt contradiction with the EU long-term climate policy both banks must support.”

Investigations into the possible unlawful acts at TES 6 have already been opened at the National Investigations Office and at the Police in the town of Celje. The Commission for the Prevention of Corruption has also called on the Slovenian Prosecutor General to establish a special group for further investigating this case.
 

For more information contact

 
Lidija Zivcic
Senior expert, Focus association for sustainable development
tel: +38641291091
lidija at focus.si
 
Piotr Trzaskowski
Energy and climate coordinator, CEE Bankwatch Network
Tel:  +48 509162988      
piotr.trzaskowski at bankwatch.org
 
 

Notes for the editors

 
* The Slovenian government announced its support for the state guarantee law if the list of conditions below is met (referring stricly to the economic viability of the project and respecting terms from the investment plan):

  • The investor must negotiate with all suppliers with the aim to lower the costs from NIP 4 (4th investment program; 1.302.747.010 euros);
  • PV Coalmine Velenje and TEŠ must sign a contract on the long-term supply of lignite at the maximum price of 2,25 EUR/GJ before the state guarantee is issued;

    • The investor must ensure the project will be finished in accordance with the agreed timeline;

  • The investor must ensure all the conditions are met for achieving an internal rate of return of the project in line with the sectoral energy policy;
  • The investor must limit the CO2 emissions in line with investment program (NIP 4).

1. Slovenia plans to build a new 600 MW unit for the Sostanj lignite power plant (TES6) which would replace the power plant’s existing units 1-4 and possibly 5. Its promoters argue with increased efficiency, but in fact, this one lignite power plant alone will swallow up almost the country’s entire carbon budget by 2050. Read more about the project at:
https://bankwatch.org/our-work/projects/sostanj-lignite-thermal-power-plant-unit-6-slovenia

2. The commission report can be downloaded (in Slovenian) at:
http://www.kpk-rs.si/download/t_datoteke/2724

An unofficial English translation is available at:
https://bankwatch.org/sites/default/files/StateCommissionReport-corruption-TES6-23Feb2012.pdf

3. Already in November last year the European Commission was informed by Focus about irregularities in the procurement procedure for the project. The full text of the complaint can be found here:
https://bankwatch.org/sites/default/files/Complaint-EC-SostanjPublicProcurement-02Nov2011.pdf

4. Consortium SIEMENS AG, which included Hitachi Power Europe GmbH and SIEMENS d.o.o.

5. Loans from the European Investment Bank (EUR 550 million) and the European Bank for Reconstruction and Development (EUR 100 million) add up to more than 50% of the overall costs of the investment.

Romania: New coal plants to be built with EU aid for greening economy

Bucharest – One of the eight Member States applying for EU help consisting of free of charge GHG emissions allowances from 2013 to 2019, Romania intends to implement investments which will lead to maintaining or even increasing the high share of coal in the country’s electricity production, thus contradicting the goals of the EU aid scheme.

Under the EU Emissions Trading System (ETS) legislation [1], new member states will continue to be allowed to give out a limited number of free emissions allowances to domestic eligible power plants until 2019 in order to help these countries cope more easily with the high costs of transitioning to a low-carbon electricity sector. The free allowances are supposed to contribute to the de-carbonisation and diversification of the national electricity production systems.

An analysis published today by CEE Bankwatch Network and Greenpeace Romania [2] shows that, contrary to the goals of the EU ETS Directive for reducing greenhouse gas emissions, the Romanian national plan submitted in September 2011 to the European Commission proposes investments almost exclusively in fossil fuel facilities. Coal facilities alone would have an installed capacity of 2,000 MW, representing 36 percent of the total new capacity proposed for support [3]. Romania is already producing more than 40 percent of its electricity from coal. Out of the total number of 24 investments the Romanian government intends to support, only two [4] are not new fossil fuel capacities. Moreover, the national plan does not include a single wind, hydro, solar or geothermal power plant.

„The Romanian government should have used this opportunity provided by the Commission to propose a national investment plan that truly contributes to greening our energy sector, but instead it has chosen to support the development of new fossil fuel power plants,” comments Bankwatch campaigner in Romania, Diana Popa. „When deciding over whether to accept this national plan or not, the European Commission should reject prolonging Romania’s dependency on coal and instead provide strong guidance to the country to promote the renewables sector.”

The NGO analysis further points out that the Romanian proposed national plan favours three of the biggest national energy companies [5]. Furthermore, the elaboration of the national plan has been done without a Strategic Environmental Assessment of the expected impacts of this plan as well as without a proper engagement of the civil society and general public.

Notes for the editors

1. EU ETS is considered by the European Commission as one of the most important tools in the EU’s strategy to combat climate change and it is a system meant to gradually reduce the total emissions levels of the block using market mechanisms. In its third phase (2013-2020), emissions allowances can no longer be granted for free to power plants and these would have to instead purchase them through auctions or on the secondary market. Only new member states are exempted from this rule until 2019. Romania was one of eight new EU member states to apply to the European Commission for free allowances in September last year.

2. Link to online version of study: https://bankwatch.org/sites/default/files/ETS-Romania-21Feb2012.pdf

3. The Romanian government applied for approx. 75 million tonnes of free allowances in the value of 1.3 billion euros, which it intends to use for 36 installations operated by 31 companies.

4. A biomass cogeneration plant at CET Govora and the rehabilitation of the coal power plant at Turceni.

5. Rovinari CEN, CEN Craiova and Termoelectrica.

For more information, contact:

Diana Popa
Romanian campaigner, CEE Bankwatch Network
diana.popa at bankwatch.org

Kyrgyz lawmakers endorse NGO’s environmental complaints over Kumtor Gold Mine

Bishkek – Both the Kyrgyz government and the parliament took on board this week concerns expressed by environmentalists that the Kumtor gold mine operated by Canadian Centerra Gold Corporation poses serious threats to livelihoods and the environment, including causing the melting of two glaciers in the area.

The Kyrgyz officials were responding to a report prepared by a commission made up of state officials and NGOs exploring water quality around the gold exploitation published in the end of January (1). The commission report included an annex very critical of Centerra, accused of contaminating local waters and glaciers while hiding evidence of such negative impacts from public oversight, authored by US based independent expert Robert Moran (2).

“Our expert commission identified a whole set of problems and risks at the Kumtor mine so we provided many recommendations and even advised to temporarily suspend operations until further analyses are conducted and the problems are solved,” says Kalia Moldogazieva, deputy head of the state commission and director of HDC Tree of Life, a Bankwatch partner in Kyrgystan (3). „We were very happy to see that during a meeting between our government and NGOs taking place February 14, the Vice Prime Minister basically agreed to the necessity of all our recommendations and even added clear deadlines for their implementation.”

On February 15, deputies in the Kyrgyz parliament have even called for a revision of the 2009 contract between Centerra and the Kyrgyz state quoting explicitly environmental concerns raised in the state commission report, alongside worries about the limited economic benefits accrued to the Kyrgyz people from the gold exploitation.

The Kyrgyz officials’ stances come in the midst of a worker strike at the Kumtor mines begun on February 7 as workers fight against contributions for the national social fund to be deducted from their pay-checks. Centerra officials announced yesterday that the strike has led to the halting of Kumtor operations apart of basic maintenance levels (4).

“The authorities’ response to environmental concerns is very much welcome,” says Bankwatch’s Central Asia officer Vladena Martsynkevych. „We are also hoping that these recent developments will make the European Bank for Reconstruction and Development – which in November 2010 offered Centerra Gold a 150 million US dollars three-year revolving debt facility – reconsider its approach to investments in mining projects: support for fast-profit gold operations, as in this case, may be very tempting, but a public bank should rather focus on helping resource-rich countries diversify their economies. At the same time the EBRD should steer away from mining projects that bring considerable risks, but do not demonstrate significant additionality in terms of addressing environmental and social problems.”

Notes to the editors:

1. The Interagency Commission – made up of Kyrgyz NGOs and state agencies’ representatives and created by governmental decree – conducted a site visit and sampling of water quality in September 2011. Read the state commission report at: http://treelife.org.kg/index.php/ru/kumtor

2. Last fall, Robert Moran was invited by Kyrgyz environmental NGOs to join the state commission visiting the mine but was finally refused entrance to the mine without an explanation. Read Moran’s report at: https://bankwatch.org/sites/default/files/Kumtor-MoranReport-31Jan2012.pdf

and Robert Moran’s resume at: http://www.mineriaysociedad.unsj.edu.ar/descargas/cv_expositores/8_20100…

3. See the website of Kyrgyz NGO “Human Development Center (HDC) Tree of Life”: http://treelife.org.kg/

4. Kumtor is the biggest gold mine operated by a Western company in Central Asia and gold extracted here accounts for approximately 90 percent of Centerra’s annual output.

For more information, contact

Vladlena Martsynkevych
Bankwatch Central Asia officer
vladlena AT bankwatch.org