Jakarta, 30 January 2002

To: All the Extractive Industries Review Stakeholders

Dear Friends,

Firstly please do not feel disheartened if the Extractive Industries Review team has not been in touch with you all for quite a while. Even if we have been silent I want to assure you that important work has been proceeding and we are now coming back to you with results of our work during December 2001 and the first weeks of January 2002.

Since the Extractive Industries Review Planning Workshop was held in Brussels last October 2001, many of you have expressed your concerns about a number of constraints that in your opinions could sacrifice the quality of this review. I have taken these concerns very seriously, especially since they were voiced by a number of different stakeholders.

I am pleased to inform you that I have been able to discuss these concerns with President Wolfensohn of the World Bank Group, and that a broad consensus on a number of issues concerning the timeframe of the review, independence of the secretariat, inclusiveness of the review process and control over the budget, and the Terms of Reference have been arrived at.

The timeframe of the review

The timeframe for the review has been prolonged until June 2003, when I will communicate the review’s final report to President Wolfensohn of the World Bank Group and to the public. This new time frame will allow the EIR team and stakeholders involved in the process to also review the results of the World Bank Group’s findings from its internal evaluation units (OED and OEG), as well as the review environment and social safeguard policies which the Office of the Compliance Advisor/Ombudsman of IFC/MIGA is managing, as well as their compliance review of recent extractive industries projects in IFC/MIGA portfolios. 

This new time frame of course still has many constraints. However, I ask you to please join in my optimism that if we set our hearts at it we will manage to do a good job in carrying out the review.

The independence of the secretariat

Beginning on the first of February 2002, the EIR secretariat will be based in Jakarta. Bernard Salome, who remains head of the secretariat and my deputy, will move to Jakarta.

My team will consist of Bernard Salome, Chandra Kirana, and a full time secretary in Jakarta, and Roberta Lovatelli, Julia Grutzner and Ioana Zamfir in Washington.  I have furthermore asked Dr. Robert Goodland to be my advisor on environmental and social aspects of extractive industries, provide support generally with the consultations, and coordinate the experts committees. All individuals’ Terms of References will be posted on the EIR website.

Inclusiveness of the process

The process of consultations is intended to be inclusive to all stakeholders in the extractive industries. My team and I will do our best to involve every stakeholder, and that everyone, the governments, the civil society, the business, and the World Bank Group can share their opinions in some way.

Inclusiveness will be reflected in the review procedures: currently the EIR team is working out a new work plan, which will be posted on the EIR website (www.eireview.org) early next week.  I propose that this work-plan becomes a starting point for fostering this inclusiveness and trust.  Please comment and give us your advice on how to improve the work of the EIR.

I would like to inform you that the World Bank Group will continue to be a stakeholder in the review.  I acknowledge that especially civil society is opposed to this idea and respect many of their fears. On the other hand I also respect the arguments that the World Bank Group is giving me concerning the importance of their involvement in the review process.  In this situation I am asking all parties to please give me the authority to welcome the World Bank Group to participate as a special stakeholder who will have the responsibility to prepare materials explaining its projects, policies and procedures that have influenced the extractives industries until now. Then it will be the responsibility of the other stakeholders to review how these projects, policies and procedures have influenced reality.  Have they enhanced sustainable development? Have they helped reduce poverty? What have been the constraints? What has worked, what has not? Where can we then move forward from here?

Finally my team will be responsible in carrying out work with the Regional and Final Consultation Workshop facilitators to establish clear procedures that will ensure a positive dialogue where civil society, business, and governments, and the World Bank Group staff involved will be insured with the opportunity to present their information, experiences, views and recommendations freely.

Budget Concerns

The budget needed to carry out this Review with integrity is a very important issue. As you will be able to conclude from my exchange of letters with President Wolfensohn, the World Bank Group strongly feels that the US $ 3.1 million budget they allocated should be sufficient. However, for the record I need to make it clear that this budget was imposed on me before I had even developed a work plan. Furthermore some of these funds had either been spent or earmarked, by the time I came on board. What is remaining is now entirely under my control to be used in the best interest of the review.

The budget within my control will go a long way towards achieving the objectives, but probably will not suffice. Thus I have retained the independence to raise funds if necessary, and we are open to contributions of funds from other stakeholders of the Review, providing this does not jeopardize independence. All use of funds will be reported in a transparent way on the EIR web-site in detail with the exception of personal information such as salary levels.

The Terms of Reference

All the above changes are reflected in a new Terms of Reference, which you can also find on the website. This new Terms of Reference has taken into consideration input provided during the Planning Workshop in Brussels, letters from Civil Society, and other stakeholder input provided in a formal or informal way.

Dear friends and colleagues,

I believe that with all the changes we have affected, my team and I are now in a position to go ahead and do our job. A lot of work needs to be done, a lot is at stake. I would therefore like to call on you once again to extend your trust in me and my team, so that we can all move forward proactively and focus our energies on the tasks at hand.

I very much look forward to working with you all over the next year and a half, and sincerely thank you for your interest and participation in the Extractive Industries Review process.

Yours,

Emil Salim.