| The IDB’s approval of a loan for Peru’s Camisea Project |
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Dear Mr. Ueda, Re: The IDB’s approval of a loan for Peru’s Camisea Project On 4 September 2003 the Forest Peoples Programme (FPP) sent an Email letter asking you to reject IADB co-funding for the Camisea pipeline project in Peru. [1] The FPP has never received any reply from you nor from your office to that written representation. The purpose of this second letter is to inform you, as UK representative on the board of the IADB, that the Forest Peoples Programme is extremely disappointed to learn that the Inter-American Development Bank approved a loan for the total of US$ 135 million to Peru's Camisea Gas Project. The severe environmental and social problems tied to this project have lead national and international civil society groups to repeatedly exhort the IADB to withhold its financing, and yet, despite many other potential funders pulling out due to unresolved human rights and environmental concerns (see below), the IADB pushed this loan through with no heed to its constituents. We would like to express our particular astonishment that the European Executive Directors approved the loan in spite of the United States ED abstaining, citing inadequacies in the IADBs environmental and social oversight and conditions and the projects environmental and social management. In addition, the Overseas Private Investment Corporation (OPIC), the United States Export-Import Bank and, as we have recently learned, the ABN-AMRO, have all rejected financing for this project. In addition, Citigroup withdrew as financial advisors to the project last year. As a result, the European IADB EDs have merely propped up an IADB decision-making framework which is based on much lower environmental and social standards and performance than other public sector financiers, as well as private commercial banks. The IADB is unique among international financial institutions in having few clear, substantive environmental or social safeguard policies (other than its policies on involuntary resettlement and forestry and its outdated 1990 guidelines on Strategies and procedures on socio-cultural issues relating to the environment). In particular, the Bank's lack of a specific mandatory indigenous peoples policy has left decision-makers without a systematic binding policy framework for analysis of the serious and well-documented impacts of the Camisea project on local indigenous peoples. These are very severe deficiencies which will now be even further highlighted by the approval of the loan, and the much increased civil society scrutiny the IADB will be facing in all of its future projects and programmes. We would therefore urge you to use your position within the Bank to ensure that it promptly initiates a fully participatory process to establish strong binding social safeguard policies to be applied to all projects and programmes, including the Camisea project. In particular a mandatory indigenous peoplespolicy is fundamental. This policy must ensure that indigenous peoples' rights, such as free, prior and informed consent, their customary rights to lands, their right to meaningful participation, and their right to be free from involuntary resettlement, be fully respected and promoted in all IADB projects and programmes. With regards to the Camisea project itself, we urge you to ensure that, without delay, independent monitoring mechanisms are set up and implemented, local demands are incorporated into loan conditions and that the revised loan agreement is fully and effectively implemented in full respect of the rights of affected indigenous peoples. The Forest Peoples Programme hopes to learn as soon as possible how you plan to deal with the issues raised. We also respectfully request a written reply to the issues raised in this letter as well as those set out in our previous letter to you. Yours sincerely, Thomas F W Griffiths cc: Mr. Toshitake Kurosawa, Alternate Executive
Director, IADB |
