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Rosia Montana – no improvement in sight for tarnished gold project

The recent public debate organised in Bucharest to discuss the controversial USD 500 million Rosia Montana gold mine project have been disrupted and debased by the actions of the projects sponsor, the Canadian company Rosia Montana Gold Corporation (RMGC), allege Romanian groups. The Bucharest-based TERRA Mileniul III and the Centre for Legal Resources maintain that the discussions taking place as part of the gold project’s environmental impact assessment (EIA) procedure have been tainted by RMGC’s bussing in of rowdy supporters of the project and also because of crucial missing project documentation.

Emilian Burdusel, director of the Ecological Club UNESCO Pro Natura, who participated at the public debates which concluded on August 25, stated: “As the mediation from the environmental authority representatives was far from ideal, the Rosia Montana public debates in Bucharest deteriorated into a farce, with the minimum conditions for a decent debate completely lacking. It was remarkable to witness the vice-president of RMGC, John Aston, intent on making provocative comments, answering questions in an accusatory manner which provoked the audience even more, thus generating an even greater scandal. The environmental authority should have stopped the debate and reorganised it with much clearer rules and much better mediators.”

Having assessed the risks and problems related to the RMGC project [1], the groups believe that the Romanian State will not benefit from the Rosia Montana project, which is also jeopardising 974 households in the projects vicinity, with an estimated 2,000 people threatened with resettlement.

Ionut Apostol, executive director of TERRA Mileniul III, a CEE Bankwatch Network member group, said: “The RMGC project should have been rejected a long time ago, based on a simple analysis of the costs and benefits for the Romanian State. Given the devastation in store for local communities, it’s astonishing that the potential royalty from this project for the state budget is only two percent of the annual mining production value.”

The Romanian groups have been alarmed by the ‘low-moderate’ risk assessment that RMGC has attached to the conclusions of the EIA presented for public consultation. Yet with the extraction of 13 million tonnes of ore per year, Rosia Montana would be the largest gold mine operation in Europe. Notably, RMGC is a mining company with no previous mining portfolio whatsoever.

Still missing from the public consultation are: key documentation related to the technical capacity and experience of RMGC for cyanide mining operations; the promoter’s financial capacity; explanations regarding the illegal mining operations that the promoter has conducted so far in Romania, which were sanctioned both by the Environmental Guard and courts of law; explanations about the criminal investigation regarding the establishment of RMGC SA.

Moreover, the project’s potential is being called into question. Justin Andrei, an independent geophysics expert based in Bucharest and former Head of the Geological Institute of Romania, stated that: “The gold-bearing mass containing the richest content, an average of 2 grams/tonne of gold, is due to be extracted in the first 5-6 years of the project. Subsequently the content will drop below 1.2 grams/tonne of gold, and RMGC could then be tempted to go for bankruptcy.” Mine closure and environmental and social regeneration would then be left to the Romanian government.

Detailed comments on the environmental impact assessment for the Rosia Montana project have been submitted to the Ministry of Environment. Catalina Radulescu, lawyer within the Centre for Legal Resources, stated that “for all these reasons, we asked the Romanian authorities, i.e. the Romanian Government through the Ministry of Environment, to reject RMGCs request for environmental permit”.

For more information:

Ionut Apostol
Executive Director, TERRA Mileniul III
Tel: +4021 312 68 70

Email: ionut AT bankwatch.org

http://terraiii.ngo.ro

Catalina Radulescu
Lawyer, The Centre for Judicial Resources
Tel: +4021 212 96 90

Email: cradulescu AT crj.ro
http://www.crj.ro

Notes for editors:

[1] These risks and problems include: the elimination of invaluable archaeological sites; the loss of cultural and historical heritage; the risk of dam breaching accidents within the mines tailings pond; the overflow of contaminated water from the tailings pond; the generation of acid water mobilising heavy metals which would pollute the entire area; hydrogen cyanide emissions in the tailings pond; accidents during cyanide transport (two 16 ton cyanide trucks on the road every day); the irredeemable transformation of the Rosia Montana area; the destruction of a vital Romanian community.

Is the EIB cooling climate change or fueling it? New report sceptical about EU bank’s investments in renewables

With the European Commission sponsored Green Week underway in Brussels, a new study has found that the European Investment Bank’s commitment to investing in renewable energy is in serious doubt owing to the EIB’s opaque information procedures and its definition of renewable energy projects. “Positives undermined: the EIB’s lending for renewable energies”, published by CEE Bankwatch Network and Friends of the Earth International (FoEI), demonstrates how this European institution is part of the problem rather than part of the solution when it comes to combating climate change. [1]

At the Bonn Renewables conference in June 2004, the EIB declared that the bank’s lending for renewable energies has been significant, totaling over EUR 1.6 billion in the period 1999-2003 of which approximately EUR 300 million was lent through intermediary banks for the financing of small and medium sized renewable energy projects. Also at Bonn the EIB announced an ambitious target of increasing its funding for renewables by up to 50 percent of its financing for electricity generation in the EU by 2010.

To verify the EIB’s declarations, and as a result of the EIB’s refusal to present detailed information on renewable projects financed through its global loans to financial intermediaries, CEE Bankwatch Network and FoEI asked 386 intermediary banks to provide a list of renewable energy projects financed from EIB monies in the period 1999 to 2003.

As detailed in the new study, responses from the 73 banks which did respond revealed no evidence about a concrete renewable energy project being financed. Some of the respondents claimed no renewable projects have been financed or are in the funding pipeline, even though the EIB pointed to them as having provided financing for renewables. Other banks refused information in general based on ‘data protection’.

The study also looks at various problematic aspects of renewable energy projects financed from the EIB’s direct loans – some of them, especially large hydropower projects which the EIB clearly includes as renewable investments, are of serious concern in terms of their negative environmental and social impacts. The Nam Theun 2 Hydroelectric Project in Laos, backed for funding by the EIB in April 2005, fails to comply with six of the seven Strategic Priorities laid out by the World Commission on Dams. [2] These include the resettlement of affected indigenous people, economic unfeasibility as well as negative environmental impacts.

Magda Stoczkiewicz, leading the EIB reform campaign for CEE Bankwatch and FoEI, commented: “As this study amply demonstrates, the EIB needs profound reforms to gain credibility with the public. It urgently needs to change its access to information policy so that thorough information related to its operations and projects is available. Such non-transparent behaviour from European institutions such as the EIB is among the reasons for EU citizens deciding to turn their backs on the European Union.”

As well as having a poor record in financing renewables, the EIB remains a significant supporter of road and air transport as well as fossil fuels. Pouring more money into fossil fuel projects leaves a legacy of further harmful emissions, increasing the global threat of climate change – and leaves the EIB with a substantial carbon footprint of its own.

Stoczkiewicz continued: “The EIB must drastically reduce its support for carbon heavy sectors such as road and air transport and fossil fuels and instead focus on real investments for renewables, energy efficiency and environmentally friendly transport modes. Currently, when it comes to combating climate change, the EIB is a part of the problem rather than part of the solution.”

View this new study, at the Bankwatch website.

For more information contact:

Magda Stoczkiewicz
CEE Bankwatch/FoEI
Tel: +31 475 867637

In French:
Greig Aitken,
Tel: +420 777 847 430

Notes for editors:

1. The study was released during the first ever street exhibition of posters on the EIB entitled “EIB: Public Funds for Public Benefit”, a part of civil society’s call to the European Investment Bank’s Governors and European policy-makers to work together to make the EIB an institution that supports people and the environment in a transparent manner.

2. International Rivers Network: An Analysis of Nam Theun 2 Compliance with World Commission on Dams Guidelines, 2001.

World Bank Spins Renewable Energy Conference. Ignores Extractive Industries Review. Continues Oily Business As Usual.

Environmentalists and development advocates today decried the World Bank’s announcement of support for renewable energy as mere spin. Stating that the proposed increase is marginal at best and does nothing to address the Bank’s ongoing bias towards fossil fuels, the groups called on the Bank to adopt the recommendations of its own studies and phase out support for coal and oil while dramatically increasing its support for renewable energy.

“Marginally increasing the funding for renewables is not enough because the World Bank’s own numbers show that lending for polluting fuels is growing even faster.” said Stephan Singer of WWF International.

The targets were announced as the first public Bank response to its Extractive Industries Review (EIR), which was initiated in 2000 by Bank President James Wolfensohn. The EIR was formed to evaluate whether or not Bank support for Big Oil and King Coal contributes to the Bank’s mission of poverty alleviation. The answer, after two years of consultation and study, was that they do not. The EIR recommended phase-outs of Bank support for coal and oil, and a phase-in of renewables by increasing lending by 20% of the total energy lending portfolio each year.

“They’re not even close to the EIR recommendation. They’re pledging 20% of a cent when they were asked to give 20% of a dollar” said Steve Kretzmann of the Institute for Policy Studies (IPS). According to IPS’ analysis of the Bank’s lending, over the past decade (1994 to 2003), the World Bank Group approved over $24.8 billion in financing for fossil fuel extractive and power projects. At the same time, the World Bank Group approved just $1.06 billion in renewable energy projects. They preferred fossil fuels over renewables by a 23:1 ratio. [1]

The new targets announced by the World Bank today are far short of the EIR recommendations, and would only increase the very small renewables and efficiency portfolio by 20% of itself annually – or about 1% of the total energy portfolio, which is less than projected global growth in demand for energy. “At this rate, it will take the Bank Group nearly twenty years before their renewables portfolio reaches current levels of funding for fossil fuels – it’s absurd” said Janneke Bruil of Friends of the Earth International.

“While we welcome the World Bank at least setting a target here in Bonn, the money is not enough and to be credible the Bank must phase out support for fossil fuels by 2008” said Daniel Mittler of Greenpeace International.

“The $200 million that the Bank is pledging for renewables is roughly the cost of their contribution to just one of the many fossil fuel projects they support annually” said Petr Hlobil of CEE Bankwatch Network.

Disturbingly, Bank Group figures for renewables include support for large dams, which are widely criticized for their high costs and social and environmental impacts. “The World Bank Group includes in its renewables portfolio some of its most controversial large hydropower projects. If it continues to perversely define large hydropower as renewable, this could consume the bulk of the Bank’s pledged increase in renewables support” said Patrick McCully, of the International Rivers Network

Contacts in Bonn:

Stephan Singer,
WWF International,
32-496-550 709
(English, German)

Daniel Mittler,
Greenpeace International,
49-171-876 53 45
(German, English)

Steve Kretzmann,
Institute for Policy Studies,
1-202-497-1033 (English)

Regine Richter,
Urgewald,
49-170-29 30 725
(German, English)

Petr Hlobil,
CEE Bankwatch,
420-603-154 349
(Czech, English, Russian)

Janneke Bruil,
Friends of the Earth International,
44-795-287 69 29
(Dutch, German, English, Spanish)

Antonio Tricarico,
CRBM,
39-328-84 85 448 (Italian, English)

Patrick McCully,
International Rivers Network,
1-510-213-1441 (English, Spanish)

Sebastien Godinot,
Les Amis de la Terre,
33-6-68 98 83 41 (French, English)

Notes

[1] Analysis by Institute for Policy Studies, www.seen.org. Note that the World Bank Group’s figures seem
higher for renewables support because of their inclusion of large hydropower projects, efficiency (both supply and demand side) and a 14, rather than 10 year timeframe.

Georgians demand action to save their homes from oil pipeline. Official complaint to IFC reveals shocking BTC negligence

Residents of Rustavi, Georgia’s third city, have today submitted an official complaint to the International Finance Corporation (IFC) concerning the potentially disastrous construction of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline only 250 metres from a settlement of high-rise buildings. [1] The residents are taking this step following a prolonged period of uncertainty for them and their homes, a lack of information and response from officials in Georgia and violent intimidation from the regional police force.

In November 2003, the IFC, the World Bank’s private lending arm, agreed to provide a USD 250 million loan to the controversial BP-led BTC project. The residents’ complaint alleges that World Bank Group policies and procedures have not been complied with on four counts. [2]

In January this year, people in Rustavi learned for the first time exactly how close the pipeline would come to their homes when heavy construction equipment and pipeline workers arrived without warning. There was no mention of such proximity (180-250 metres) in the available project documentation and maps. The BTC Company (BTC Co) indicates in its project literature that there should be a 500 metre ‘security zone’ around the pipeline. It turns out that the pipeline will run along the nearby Mtkvari river bank, a high level erosion zone, with potentially destructive impacts on the most affected homes and the 700 families living there.

Since learning of their plight, the Rustavi residents have sent letters to and attempted to engage in dialogue with all the relevant parties – the mayor of Rustavi, local representatives from BTC Co. and the IFC – and have also taken their case to the Georgian parliament. Their appeals have been either ignored or dismissed on the grounds that the pipeline will comply with the highest western standards.

Merabi Vacheishvili, one of the residents named in the complaint, said, “We are told to shut up, stop wasting the company’s time and trust the high standards of the project promoters. Yet local people have been kept completely in the dark about this pipeline. How can we start trusting now?”

Frustrated by officialdom, last month 400 residents took part in a demonstration that interrupted the pipeline construction for one hour. The demonstration, consisting mainly of women and children, was violently broken up by the police. A police representative declared that the orders had come directly from the government.

Eleonora Digmelashvili, another resident, commented, “We have applied to the IFC Ombudsman as a last resort. There needs to be an independent expert analysis of BTC impacts on our homes as well as strong guarantees for our and our children’s security. If there are no such guarantees then the pipeline route must be changed or we should be resettled.”

Contacts:

Merabi Vacheishvili
Tel: + 995 24 17 34 58
E-mail: rustavihome at yahoo.com

Eleonora Digmelashvili
Tel: + 995 93 91 77 05
E-mail: rustavihome at yahoo.com

Notes for editors:

1) The official complaint to the IFC’s Compliance Advisor/Ombudsman (pdf) is available at the Bankwatch website.

2) The four World Bank Group policies and procedures cited in the official complaint are:

  • Procedures for public disclosure
  • IFC Operational Policy 4.01 on environmental assessment
  • World Bank Operational Policy 4.30 on involuntary resettlement
  • Procedures for preparation of Resettlement Action Plan

Background information on the BTC project is available at the Bankwatch website.

Religious leaders urge World Bank president to support Extractive Industries Review

Over 100 Jewish and Christian leaders sent a letter to World Bank President James Wolfensohn today urging him to support full implementation of recommendations in the recently released report Striking a Better Balance: The Extractive Industries Review.

“We hold the World Bank Group as a global financial institution accountable for serving the common good, alleviating poverty and preserving the natural environment. This report identifies essential steps in that direction that must be taken by the World Bank,” said Marie Dennis, director of the Maryknoll Office for Global Concerns.

Signers of the letter, including Alan Whaites (World Vision), Rabbi Jaqueline Tabick (World Congress of Faiths) and Jim Winkler (United Methodist Church), emphasized to President Wolfensohn that just economic policies and programs must 1) respect and enhance human dignity, gender equity and the integrity of creation; 2) be flexibly designed and implemented with the consent of the people expressed through authentically participatory and democratic processes; and 3) be held accountable to international human rights standards and treaties.

Striking a Better Balance: The Extractive Industries Review is a bold statement coming at a time in the life of the global community when a dramatic shift in business as usual is urgently needed, and social, economic, and environmental priorities must be re-visioned.

Dr. Emil Salim, leader of the review process, has said, “Since the WBG is committed to alleviating poverty through sustainable development, it has a moral obligation to change its priorities, working arrangements, and internal incentive systems and to use all the power it possesses, including convening power, to meet the challenge of leadership to reach for a new global balance.”

The Review’s final recommendations are derived from extensive field study and skilled research and reflect the sound judgment of a partnership of stakeholders, including most especially the voice of the poor. The Review team was willing to listen to and hear the many witnesses of grave human and ecological consequences of misguided World Bank Group projects, programs, and activities. These consequences are also understood by religious congregations and missioners around the world, whose leaders wrote todays letter to Wolfensohn.

“In today’s letter”, the leaders write, “We urge President James Wolfensohn and the World Bank management to adopt the recommendations of the Review, to embrace the challenge of radically impacting the Earth’s carrying capacity for the peoples of today and tomorrow.”

Download the letter here (pdf).

BTC pipeline court case in Tbilisi, Georgia on January 20

The democratic values of Mikhail Saakashvili’s Georgia will come under scrutiny next week when Georgian environment group Green Alternative brings legal proceedings against the Georgian government and the Baku-Tbilisi-Ceyhan Pipeline Company (BTC Co).

The court action will focus on the controversial environmental clearance granted by the Georgian government on November 30, 2002 for the construction of the BTC pipeline’s Georgian section.

“We do not know why there has been such a lengthy delay in this case coming to trial,” commented Manana Kochladze of Green Alternative. “However, we fully appreciate that the previous government responsible for issuing the environmental permit was uncomfortable with a truly independent court revision process. We are hopeful that those days are over now in Georgia.”

Following heavy pressure from the BP led BTC Co on the former president, Edward Shevardnadze, and his Minister of the Environment, the routing of the pipeline through the highly sensitive support zone of the Borjomi-Kharagauli National Park and the Tsalka region was approved in violation of Georgian environmental law. [1]

Green Alternative will point out that the routing decision also violated the statutory rights of Georgian citizens, which provide for proper access to information and meaningful participation in the decision-making process (as per article 37 of the Georgian constitution), the Aarhuus Convention and the actual Host Government Agreement signed by the Georgian government and BTC Co.

Towards the end of last year the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) separately agreed to finance the BTC pipeline, moves which have both provided USD 500 million of the USD 3.6 billion total and, more significantly, a priceless seal of western approval for the project.

Yet verifiable breaches of World Bank standards as well as international and domestic law continue to dog the pipeline. With the IFC, the EBRD and other project creditors due to sign the project credit agreement in Baku on February 3, this Georgian legal challenge to the pipeline is one of three which are currently in process. [2]

Court details:

The case will be heard in the Appeal (Regional) Court in Tbilisi by the administrative and tax issues jury on Tuesday, January 20, 2004. The hearing starts at 2pm.

Members of Tbilisi based Green Alternative can be contacted in advance:
Manana Kochladze: +995 99916647
Nino Gujaraidze: +99599902520
Ketevan Kvinkadze: +995 900654
Email: greenalt at wanex.net

Notes for editors:

1. The drinking water reserves in the Tsalka region are an alternative water source for Tbilisi. The Borjomi region of Georgia is home to the mineral water and tourism industries, the few promising sectors of the Georgian economy. Exports of Borjomi mineral water make up 10 percent of total Georgian exports.

Leaked documents from the international food conglomerate Group Danone to the Georgian Glass and Mineral Water
Company and from The Monitor Group, a leading international strategic consulting firm, illustrate that the currently approved routing of the BTC pipeline through Borjomi is already jeopardising one of Georgia’s
key economic interests.

2. The two other current legal challenges are:

i) an Application which has been lodged by human rights NGOs, together with a landowner directly and adversely affected by the project, with the Court of First Instance (CFI) of the European Court of Justice, regarding the Host Government Agreement for the BTC pipeline.

ii) the Kurdish Human Rights Project has applied to the European Court of Human Rights for leave to bring cases on behalf of 36 named individuals whose land was expropriated for the construction of the pipeline. The applicants, who are all Turkish citizens of Kurdish descent living along the pipeline route, allege the project violates Articles 6, 8, 13 and 14 of the European Convention on Human Rights, and Article 1 of Protocol No. 1 to the Convention.

Read the CEE Bankwatch Network Comprehensive BTC background information.