An NGO report on the Planning Workshop of the
Extractive Industries Review of the World Bank held in Brussels between
28-30th October 2001
Background
The World Bank’s Extractive Industries Review
(EIR) is an initiative of the World Bank, undertaken at the prompting
of mainly US-based NGOs and members of Friends of the Earth-International,
to work out how it should deal with the oil, gas and mining sectors.
International campaigns with slogans such as ‘World Bank: Git your
Ass, out of Oil, and Mines and Gas!’ have been effectively communicated
to ‘Anti-Globalization’ demonstrators and triggered President Wolfensohn
to promise to review the Bank’s engagement in the sector. NGOs had
hoped that this review would be along the lines of the World Commission
on Dams (WCD).
However, the Bank has a perception that
it was somehow prevented from being able to ‘buy in’ to the WCD - it has not adopted any of the WCD’s main recommendations
- and it has thus proposed an Extractive Industries Review procedure
which lacks many of the elements of autonomy that gave the WCD its
credibility with people outside the Bank. In the case of the EIR,
the Bank aims to actively engage with the process in order to achieve
‘Bank buy in’ and so that it can be assured that the process will
result in ‘actionable recommendations’. The procedures are a bit
like a hybrid between a World Bank Sector Review process and the
WCD. Also, unlike the WCD, the aim is not to review the whole Mining,
Dams and Oil sector, but to focus on the World Bank Group’s (WBG)
engagement with the sector.
This report summarises my personal impressions
of the EIR based on attendance at the Planning Workshop but also
includes some basic information about the process designed to make
these comments intelligible to those who did not participate. It
is not meant to be a complete record of the meeting. Official minutes
are promised by the EIR secretariat next week. Annexes include an
NGO letter to the EIR and the response received.
Terms of Reference
The
scope of the EIR is to review the World Bank’s role in extractive
industries (Oil, Gas and Mining) in the context of sustainable development
and poverty alleviation. NGOs expressed concern about an opening
phrase in the TORs which states that the WBG ‘believes that such
industries can make a positive contribution to sustainable development
and poverty reduction in its member countries’. They felt that this
showed that the World Bank had drawn its conclusions even before
the EIR had started. The meeting was given the impression that the
offending phrase would be removed.
There was not much resistance to NGO recommendations
for the inclusion of themes like prior and informed consent, recycling,
energy alternatives, biodiversity, indigenous peoples, global warming
etc. etc. in the scope of the review, but industry spokespeople
expressed anxiety that the study would get unduly taken over by
global warming concerns. A spokesperson for the ILO wanted the interests
of workers threatened with retrenchment addressed. (For information
on the World Bank
Chad-Cameroon pipeline, click here.)
It was agreed that Dr. Salim would write
a letter to James Bond clarifying the TORs and that James Bond would
reply. These letters would be posted on the web and in this way
it was hoped that concerns about the scope and intent of the EIR
would be allayed.
EIR Process
Unlike the WCD, where there had been a whole
board of independent commissioners the EIR keys around an ‘Eminent
Person’ (EP), Dr Emil Salim ex-Indonesian Minister for the Environment
and Population during the 1980s and early 1990s. It is he, alone,
who has authority to decide what the final report of the consultation
process will say. He will report directly to World Bank President,
James Wolfensohn. However, the World Bank has reserved to itself
the role of making the ‘management recommendations’ to the Board
of Executive Directors. Dr. Salim has already reacted to this limitation
in the process and has insisted on the right to directly address
the Board of Executive Directors if he feels that the Management
Recommendations do not adequately reflect the ideas in his own report.
Dr Salim noted openly that the success of the review rests in trust
and he publicly committed himself to acting fairly and frankly.
A flow chart setting out how I understand
the review process can be found below and an organigram is found
below that. Further details should be sought in the official documentation
www.eireview.org
Focused Research
The terms of reference mentions that focused
research will be contracted to complement the regional workshops.
It was queried who would decide on this research and who would do
the contracting. The EP insisted that this would be carried out
at his discretion (ie not the World Bank’s) and would address cross-cutting
themes. It was not clarified what these themes will be but indigenous
peoples, governance and gender issues were mentioned.
Expert Groups
Likewise the terms of reference mention
the creation of Expert Groups to assist the work of the EP and we
sought clarification about these too. I urged that the EP should
recruit a representative group of commissioners or experts to accompany
him in his work, who should share with him the task of assessing
inputs and drafting the report and recommendations. The EP’s response
it that he will select these experts himself – he favours having
regional groups that will assist the regional consultations and,maybe, a final group to help him through the final drafting
stages.
Writers
The TORs do not say who will actually draft
the consultation report and we sought clarification on this. The
conclusion was that writers would be contracted directly by the
EP and would work under his close supervision. The EP requested
suggestions of who might take on this role.
Role of the World
Bank
The key figure on the World Bank’s side
in this process is the Director of Mining at the World Bank, James
Bond. The degree to which the WBG appears to dominate the EIR process
was highlighted repeatedly throughout the meeting by NGOs and tacitly
by some IGOs. Some NGOs expressed a great deal of concern about
the number of Bank staff at the meeting. On the other hand the lack
of anyone from the GEF was also regretted. In the end there was
not clear agreement on what role the WBG should have at future meetings:
some thought the Bank should limit its role to listening and providing
information others asked that it be more ‘actively involved’.
A view was expressed
that the WBG had the role of being both player and referee in the
process [or, maybe, judge and jury and executioner?]. The spokesperson
for Friends of the Earth International forcefully expressed the
view that the EIR was only a process for legitimising further WBG
engagement in the sector. Some NGOs called for a moratorium on WBG
funding of the extractive industries during the course ofthe EIR and some made clear that they think the WBG should
move out of the sector altogether.
How
autonomous is the day-to-day functioning of the EIR? The Eminent
Person and his assistant are located in Jakarta. However, the EIR
secretariat is located within the IFC, the Private Sector arm of
the World Bank, on the same floor as the mining department. Three
of the four employees of the secretariat are seconded from the World
Bank and the head of the secretariat is a one-time World Bank employee,
though he has been out of the Bank doing other development work
in the past seven years. Currently all the staff in EIR secretariat
in Washington DC have employment contracts with the World Bank.
NGOs remain very suspicious about the location
and independence of the Secretariat and this may be the one issue
on which they really don’t share a view with the EP.
Budget
The workshop was not given the details about
the budget. It is understood that the EIR currently has a budget
of some US$ 3.1 million. About US$1.5 million has already been allocated
by the World Bank. The remaining US$ 1.6 million is unallocated.
NGOs stated the view that the budget should
be controlled by the Eminent Person and not by the World Bank. During
the workshop Dr. Salim stated that he has insisted on full control
of the future spending of the budget. Further funds are being sought.
Planning Workshop itself
Concern was expressed at the relative lack
of IPOs and African participants. Materials were not provided in
Spanish, French or Russian and the quality of interpretation was
poor. There was no opportunity to actually address any substantive
issues, except to flag them as subjects for the regional discussions,
but this was not expected as this was a planning meeting.
Industry Concerns
Industry representatives at the meeting
did not speak a great deal. Strong views that were expressed included
the following:
- The World Bank is only funding 2-3% of FDI in the
EI sector – do WB investments in the sector make sense? Would
these projects get funding anyway and what was their value?
- Oil, Mining and Gas comprise very distinctive sectors
and should not be conflated
- Social and environmental issues are important for
industry
- Opportunities should be provided for affected communities
to tell their stories
- There should be a balance between ‘good’ and ‘bad’
cases.
Government Concerns
Government participants did not have very
strong views. Their main concern was that the process should result
in clarification of the obstacles that prevent EI from making a
positive contribution to sustainable development and poverty alleviation
and what the WBG could do about them.
Regional workshops
Field visits
It
was agreed that field visits should be made by the EP and his (undefined)
team to get a first-hand view of some cases.
Relation to OED and OEG reviews
The World Bank and IFC both have ‘independent’
quality assessments units, referred to as the Operations Evaluation
Department and the Operations Evaluation Group, which report direct
to the Board of the Bank and IFC and not to senior management. Both
OED and OEG are carrying out reviews of WBG performance in the sector.
These reviews will not be completed within the same time frame as
the rest of the EIR but will continue into June 2003. At present
it is suggested that draft reviews will be provided to the final
workshop in June 2002.
NB: These reviews will not cover MIGA –
a loophole that I noted but forgot to point out in the meeting –
we need to draw this to the attention of Dr. Salim urgently.
Schedule
The aim is that the report of the EP (at
least in draft form) should be ready in time to be presented to
the Rio + 10 meeting in Johannesburg. The regional meetings are
planned for January to April 2002. The ECAmeeting, tentatively planned for Bratislava in November/December
2001, will be delayed until next year and may be held in Ukraine.
The location of the other meetings was not decided.
Final meeting
Strategic perspectives:
where does it all lead?
My main concern in leaving the workshop
is that we don’t really have any sense of what the
EIR is leading to in terms of action by the WBG. In terms of content
this is fair enough – the outcome should depend on the inputs from
the regional meetings and other information provided. However, despite
my asking for clarification, the Bank declined to give any clear
idea of what kind of steps it could take to ‘operationalise’ any
of the recommendations that come from the EIR. Off the record, a
World Bank staffer noted that a long term option not favoured by
management at the present would be to develop a Strategy and Operational
Policy on Oil, Gas and Mining (OGM), but that this could take years.
Another scenario would be that the responsibility for OGM could
be passed to the Vice-Presidency for Environmentally and Socially
Sustainable Development. A third option, which could be considered
was the development of ‘alternative compliance mechanisms’… ‘new
forms of involving stakeholders’. This is the approach which I personally
feel offers the most mileage, and would allow scope for the deployment
of a strong argument that mines-affected groups should have the
right to prior and informed consent. Another staff person noted
out of plenary that another form of actionable recommendation would
be ‘Best Practice’ guidelines, such as those the Bank already has
for off-shore oil and gas projects. During the plenary, James Bond
evinced a great reluctance to answer questions about the ways in
which recommendations could be couched in terms of Bank procedures,
claiming such questions were ‘unfair’. When pressed he answered
that options for operationalising EIR recommendations might range
between setting up a special Panel to adopting an Operational Policy
or ‘anything in between’.
The strong reluctance of the World Bank
to discuss these issues in open plenary left me wondering whether
the WBG’s plea for the process to be one that allows ‘buy in’ and
‘actionable recommendations’ is serious. Rather it seems they want
to reserve for themselves the role of deciding what concrete actions
and operational guidance should result from the EIR.
By the end of the meeting it was still not
clear if the Management Recommendations would be made publicly available
in draft before going to the Board. It will be necessary to insist
on this if the process is to have any credibility.
Marcus
Colchester, 31 October 2001
|
November 8, 2001
Dr. Emil Salim
Indonesian Biodiversity Foundation
Patra Jassa Building, 2nd Floor
Room 11E1
Jl. Jend. Gatot Subrato Kav. 32-34
Jakarta 12950
Indonesia
Subject:
Civil Society Concerns Regarding Extractive Industries Review
Dear
Dr. Salim:
The undersigned
organizations write to thank you for listening to our views
in Brussels last week regarding the World Bank’s Extractive
Industries Review process (EIR). We believe that this is a
vitally important moment for the Bank to reconsider its current
development paradigm that prioritizes the extraction of non-renewable
natural resources as a vector for development and poverty
alleviation. We also believe, however, that in order for the
current review to be worthwhile it must be transparent, inclusive,
independent and encompass a sufficiently broad range of issues
and alternatives.
As we expressed
to you in Brussels, we have several key concerns that we believe
need to be addressed in order to ensure the transparency,
inclusiveness, independence and comprehensiveness of the review
– and our continued participation in this process. We would
like to reiterate those concerns here and provide a set of
recommendations for addressing them.
Concern
1: (Transparency) Greater overall transparency necessary for
the process.
We are
concerned about an apparent lack of transparency surrounding
key decisions that have already been made regarding the design
of the process. Location and staffing of the secretariat and
the timing and location of regional consultations are two
examples. Decisions on these issues appear to have been made
without significant stakeholder input.
Ø
Recommended Action 1: Open all key decisions on content
and process, including timing and location of regional consultations,
to input from interest groups.
Concern 2: (Scope)Should the Bank be involved in extractives at all?We
believe the review should cover the full spectrum of options
on future involvement of the Bank in extractive industries
and must start by questioning whether the Bank should
have a future role in extractive industries – not by assuming
that it should, as is stated in the current TOR and background
paper.A growing body of evidence suggests that
promoting the oil, mining and gas industries is at best a
highly problematic way to reduce poverty. The Bank needs to
differ from a commercial bank in the pursuit of its objectives.
It is essential that the Bank acknowledge this and allow that
one outcome of the review could be a decision by the Bank
to end its support for these industries.
The review
should also include within its scope the activities of the
Multilateral Insurance Guarantee Agency (MIGA), which has
significant involvement in the extractive industries.
Ø
Recommended Action 2: Change the TOR so that it allows
for the consideration of a full range of alternatives, including
the possibility of the Bank’s withdrawal from extractive industries,
and includes MIGA’s activities within its purview.
Concern 3: (Comprehensiveness)The review should consider the contributions
of the Bank’s support for oil and gas to climate change and
its impacts on the poor.
The review to date has not incorporated adequate attention
to these issues. Consultations are tentatively planned in
areas primarily proximate to mining projects, rather than
petroleum projects, and there has yet to be any clear answer
as to how to address the climate, developmental and human
rights impacts of petroleum. It is also completely unclear
how the alternative to further fossil fuel projects, namely
renewable energy (e.g. solar, wind, efficiency, micro-hydro),
will be evaluated and incorporated.Expert views, including those of climate
scientists and representatives of renewable energy interests,
should be solicited on the global environmental, developmental,
labor, and human rights impacts of petroleum vs. the impacts
of renewable energy sources.
Ø
Recommendation 3: Commission independent research on the
climate impacts of the Bank Group’s fossil fuel portfolio
(including projects for extraction, distribution, and power
plants) from the Intergovernmental Panel on Climate
Change (IPCC) and other climate and renewable energy experts.
Concern
4: (Time frame) More time needed for process.
We believe that the timeframe for the process is too condensed
and that more time is needed to allow adequate preparation
for the regional consultations. We do not believe that the
stated goal of coordinating the review with the Rio +10 process
should compromise a thorough and comprehensive EIR.The first
regional consultation is scheduled for early December in Bratislava.
We believe this is too soon to allow a revised version of
the TOR to be circulated and for the translation of key documents
for the consultation.
Ø
Recommended Action 4: The first regional consultation should
be postponed until February 2002. The draft consultation report,
rather than the final management report, should be presented at
Johannesburg in September 2002.
Concern 5: (Independence)
Staffing and location of the EIR Secretariat: We believe
that the secretariat should be independent of the Bank and
should serve the review rather than the Bank. We do not believe
that the Secretariat can be fully independent if it remains
housed within the Bank and is comprised of Bank personnel.
The Bank has committed itself to provide you with any information
you request, thus the “cajoling” function informally ascribed
to the Secretariat should not be necessary.Alternative means
can be found to provide you with confidential information
that cannot be transmitted via fax, email or phone. Additionally,
we believe that if the Secretariat is truly intended to provide
a support function to you, it should be located where you
are most easily able to communicate with its staff, i.e. Jakarta.Finally,
perception is very important in processes such as this. The
perceived independence of the process would be greatly enhanced
by locating the Secretariat outside of the Bank.
Secretariat
staff should formally commit themselves to not seeking employment
with the Bank for a period of five years following completion
of the EIR process. Additionally, a truly comprehensive review
will require additional staff and resources for the Secretariat.
We believe you should select, in consultation with stakeholder
groups, additional Secretariat staff who come from, but do
not necessarily represent, the various stakeholder groups.
Ø
Recommended Action 5: The Secretariat should be expanded
and moved to Jakarta. A purely logistical services function
could remain in Washington. Secretariat staff should formally
renounce employment with the World Bank for a period of five
years following completion of the review.
Concern 6: (Participation) Consultations
must be open to all interested parties. In order to have
a truly participatory review that reflects the concerns of
all interest groups, the consultative meetings must be open
to all interested parties. Slots for funded participation
should be allocated via self-selection among stakeholder groups
(civil society, industry, government). The Eminent Person
should intervene in situations in which there is not consensus
with the stakeholder groups about the funded participation
of a particular individual or group.
Ø
Recommended Action 6: Consultation meetings should be opened
to all interested parties. Stakeholder groups should self-select
funded participants.
Concern 7: (Research) Openness and Participation
in selecting Focused Research: During the planning workshop
the importance of focused research on specific cross-cutting
themes was mentioned. It is important that the themes for
this focused research are selected in an open manner and that
the resulting studies are carried out through processes that
involve all relevant interest groups.
Ø
Recommendation Action 7: Announce the need for suggestions
of themes for focused research. Select trusted organizations
to carry out the research in an open and consultative manner.
Concern 8: (Expert groups) Ensure effective engagement
of interest groups in selecting Expert Groups: It is important
that the Expert Groups to be selected to guide the Regional
Workshops and the Final Workshop and drafting process should
be trusted representatives of the different interest groups
who should be able to share the burden of hearing testimony,
analyzing focused research and unsolicited inputs and ensuring
the production of balanced reports that fairly summarize the
information gathered by the process.
Ø
Recommendation Action 8: Select members of the Expert Groups
to be representative of the major interest groups in order
that they can share the role of overseeing and reporting the
Regional Workshops and the Final Workshop.
Concern 9: (Final workshop) An open process for
the Final Workshop. The Brussels meeting did not findtime to discuss the form of the final workshop.
It is important that the final workshop is also open, that
there is good participation and that adequate time is given
to scrutinize and discuss the final report and recommendations
before these are sent to the World Bank President.
Ø
Recommendation Action 9: The final workshop should
also be open and funded participants should again be self-selected.
Adequate time must be given to scrutinize and discuss the
final report and recommendations.
We believe
that addressing the above concerns is essential and that they
can be addressed without the expenditure of significant additional
resources. Our future participation in this process will depend
on a satisfactory resolution of these concerns.
We thank
you again for your willingness to consider these issues and
will look forward to your response.
Sincerely,
Marcus Colchester
Forest
Peoples Programme
Vicky
Corpuz
Tebtebba
Foundation
Oronto
Douglas
Environmental
Rights Action/Friends of the Earth International
Petr
Hlobil
CEE
Bankwatch Network
Stephen
Kretzmann
Institute for Policy Studies
Jaff Napoleon
Transnational
Institute
Keith
Slack
Oxfam
America
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November
12 2001
No.: 9/EPO/XI/2001
Re.: Civil Society Concerns Regarding Extractive Industries Review
1.
Marcus Colchester (Forest Peoples Programme)
2.
Vicky Corpuz (Tebtebba Foundation)
3.
Oronto Douglas (Environmental Rights Action/ Friends of the
Earth International
4.
Peter Hlobil (CEE Bankwatch Network)
5.
Stephen Kretzmann (Institute for Policy Studies)
6.
Jaff Napoleon (Transnational Institute)
7.
Keith Slack (Oxfam America)
Dear Friends,
Thank you for the letter you sent in which
you raised many important concerns. After reading it and considering
the points you have raised I am now coming back to you with
my thoughts and decisions. For practical reasons I will be
addressing these concerns in the same sequence as you have
raised them as follows:
Concern
1: Greater over all transparency necessary for the process.
I believe in the importance of this principle,
and thus my secretariat will do the best to open all key decisions
on content and process of the EIR (please see my letter to
the Brussels Planning Workshop participants which has been
sent to you and will also be available on the web-site). Regarding
the location for the Consultation Workshops, we are also open
to any suggestions, however we do need to have made a firm
decision concerning venues at least one month before the event
to allow smooth logistics. On this I humbly request you to
bear with me as much a you can with the venues proposed for
the Consultation Workshops. As the selection of these venues
have been made purely on logistic judgments, and will not
deter openness or inclusiveness, especially if we apply the
‘self appointment’ principle for participant selection. If
you have any strong rejections to the proposed venues please
inform us immediately , as we do have time constraints. These
time constraint to a certain extent are dictated by my own
schedule and responsibilities, such as those that come with
the position of being chair to the WSSD, but also are governed
by important milestones within the WBG itself. The recommendations
of the EIR review must be timely so that President Wolfensohn
will be able to bring recommendations to the attention of
the WBG Board of Directors. I grant that the current time-line
for the EIR is seriously tight and am looking at the possibility
of extending the entire exercise to the 31st of
December 2002.
Concern
2: Should the Bank be involved in extractive Industries at
all?
I have discussedthe possibilities for the WBG’s future involvement
in oil and gas and mining after the review with senior officials
in the WBG, and rest assured that withdrawal from oil, gas
and mining is not excluded. The TOR is currently under review,
as I informed all participants during the Planning Workshop
in Brussels. I thank you for your valuable input on this issue.
However I request your kind patience on this issue, as I am
still collecting more input and will be proposing a TOR amendment
to the WBG after the deadline of the 15th of November
2001.These amendments will be available on-line in our web-site www.eireview.org by the 18th
of December 2001. I have made a special note to bring up the
issue of MIGA with the WBG when I next meet them during the
first week of December 2001 in Washington D.C.
Concern
3: (Comprehensiveness) The review should consider the contributions
of the Bank’s support for oil and gas to climate change and
its impacts on the poor.
Your concerns are indeed valid, related to
this my assistant in Jakarta and staff in Washington are currently
compiling a list of independent experts who will be able to
assist the EIR, not only on the issue of climate change and
renewable energy, but other cross cutting issues as well.
Your recommendations concerning which institutions and experts
we need to be looking at would be most valued. Again, I cannot
stress enough the importance of specific and timely information
from you as you are well aware of the tight deadlines we are
facing.
Concern
4: More time needed for process.
We are postponing the first consultation
to the second week of January 2002, which will be covering
the Asia and Pacific region. We are also seriously looking
at the possible scenario of presenting the draft consultation
report at Johannesburg in September 2002. I will again be
discussing this issue with the WBG when I visit Washington
D.C. during the first week of December 2001.
Concern
5: Staffing and location of the EIR secretariat.
The substance of the review report will be
comprised of:
a.
Information gained through the Regional Consultative Workshops
that will be implemented based on the design developed with
a number of stakeholders. These inputs have not only been
solicited through the EIR planning workshop in Brussels, but
also have been solicited via the internet.
b.
Site/Project visits that will include meetings with affected
communities at the local level. Which sites will be visited
and how meetings will be implemented,to a large extent depends on input from all the different
stakeholders of the review, including of course information
from yourselves.
c.
Commissioned independent research done by expert advisors,
the appointment of these experts will also be based upon inputs
and considerations provided by concerned stakeholder interest
groups. All advisors will be working and communicating directly
with myself.
My EIR secretariat in Washington is responsible
for:
d.
The facilitation of a smooth consultation process, especially
from a logistics point of view.
e.
Administration of the contracting experts.
f.
Arranging the logistics of my trips to sites/projects.
g.
Maintaining our web-site to make sure that all information
is transparent and inclusive.
h.
Providing information for those interest groups who do not
have access to the internet, in other words they are responsible
for effective outreach so that all important interest groups
do gain access to information and possibilities of participation
in this review.
i.
Arranging my meetings with WBG officials, board of directors,
and quite importantly providing myself with valuable insight
concerning how the different relevant departments in the WBG
work. Personally as the Eminent Person responsible for this
review, I feel the role of my secretariat in Washington is
a very important one, and that it will contribute constructively
to this process.
Concern
6: (Participation) Consultation must be open to all interested
parties.
The secretariat is looking forward to your
input on how we should proceed on ‘self selected’ participants.
Please provide guidance as soon as possible, as we will need
to move fast on this.
Concern
7: (Research) Openness and Participation in selecting Focused
Research and concern 8: Select members of the Expert Groups
to be representative of the major interest groups in order
that they can share the role of overseeing and reporting the
Regional Workshops and the Final Workshop.
We will announce the need for suggestions
of themes for focused research, and the selection of experts.
For the oversight of the Consultation Workshops, I believe
all participants will play an important role in overseeing
the process and insuring quality of the reporting as they
will be reviewing the draft reports before they will be finalized.
Concern
9: (Final workshop) An open process for the final Workshop.
Thank you for bringing this issue up. I will
do my best to ensure openness of the final workshop.
I hope this letter addresses your concerns
adequately, please rest assured that I will do my best to
uphold the principles of independence, inclusiveness and openness
of the EIR process and highly appreciate your participation.
Sincerely,
Emil Salim
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