European Ombudsman urges European Investment Bank to enhance transparency – once again!
The European Investment Bank (EIB), the EU’s lending arm, is facing renewed pressure to improve its transparency (1). In a recent decision, the Ombudsman highlighted the EIB’s insufficient justification for withholding access to environmental information related to a significant loan granted to Poland’s largest state-owned energy utility, PGE (2).
26 July 2023
Source: European Investment Bank, Author: Caroline Martin
In October 2022, the EIB announced that its board had approved a significant loan to an undisclosed energy utility in Poland to modernise the electricity network. Bankwatch, however, could not identify this loan proposal on the Bank’s project list. Consequently, we requested environmental information, including the borrower’s identity. In response, the EIB, citing its transparency policy, which permits withholding commercially sensitive information until a loan agreement is signed, claimed that it was prevented from disclosing the information because it had signed an agreement to protect the commercial interests of its client.
However, the European Ombudsman, Emily O’Reilly, advised that, when handling information access requests, the EIB should consider overriding public interests and inform its clients that broad access to EU documents should be granted to the public. Any denial should rely solely on exceptions provided in the Bank’s transparency policy. She stressed that applying this exception requires proper justification based on specific and actual explanations of reasonably foreseeable risks of damage rather than hypothetical scenarios.
This is not the first time the Ombudsman has criticised the EIB’s transparency rules. In 2022, the Ombudsman issued three decisions following complaints from Bankwatch, Client Earth and Counter Balance in relation to EIB’s transparency practices. The Ombudsman found that the Aarhus information rules, which apply to the EIB, requires the Bank to adopt a more ambitious approach to disclosure. Of the several improvements recommended by the Ombudsman, none has been implemented by the EIB to date (3).
Anna Roggenbuck, EIB policy officer at CEE Bankwatch Network, says: ‘The European Ombudsman’s decision is an important milestone in enhancing transparency within the EIB. In this case, the EIB reached an agreement with PGE, one of the largest polluters in the EU, to withhold environmental information about the loan until the deal was finalised, with the sole purpose of avoiding public scrutiny and potential criticism. The Ombudsman found that their arguments about the need to protect the commercial interests of the company simply held no water. The EIB has increasingly entered into such confidentiality agreements with its clients. This strategy shows the Bank’s total disregard for Article 15 of the EU Treaty, which states that ‘to ensure the participation of civil society, the Union’s institutions, bodies, offices and agencies shall conduct their work as openly as possible.’
Anna Roggenbuck, EIB policy officer at CEE Bankwatch Network
Notes for editors:
(1) The EIB’s own official transparency statistics are telling. The level of transparency of its operations has decreased dramatically in recent years. In 2021, only 57 per cent of project summaries were published at least three weeks prior to approval in line with the general rules of its transparency policy. This percentage was less than in 2020 (60 per cent) and considerably less than in 2011 (99.7 per cent).
(2) PGE is Poland’s biggest coal-heavy energy utility, responsible for approximately 40 per cent of the country’s electricity generation. Bankwatch has repeatedly criticised the EIB, the self-styled ‘EU climate bank’, for channelling public money into fossil fuel companies such as PGE.
(3) The EIB has consistently flouted the EU’s transparency rules, the Aarhus Convention on access to information, and the best practices of multilateral development banks. This poor record is perhaps best reflected in the EIB’s ranking in the DFI Transparency Index, which measures the transparency of the world’s leading development finance institutions. The bank scores the lowest among multilateral development banks, lagging far behind institutions such as the Asian Development Bank, the African Development Bank and the International Finance Corporation.
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