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World Bank Under Pressure from Tutu

Feb 16 2004

World Bank President James Wolfensohn, in London today to give a keynote speech on the challenges of globalisation [1], is facing pressure from Nobel Peace Prize winner Archbishop Desmond Tutu to clean up the World Bank's policy and practice on funding oil and mining industries.

Archbishop Tutu joins four other Nobel winners and more than 300 organisations who have written to Wolfensohn calling on him to radically reform the way the World Bank supports oil and mining industries [2]. A recent review of World Bank funding for extractive industries, commissioned by Wolfensohn found that funding extractive industry projects was not a suitable use of public money in the vast majority of cases and does not promote sustainable development. It recommended the Bank reallocate funds towards renewable energy [3],

But a draft copy of World Bank's response to the Extractive Industries Review, leaked last week, revealed that the Bank had not committed to making changes to ensure its investments benefit local communities and reduce poverty. The Bank's own data shows that countries which rely on oil as their primary export are more than 40 times more likely than other nations to be involved in civil war [4].

"War, poverty, climate change, greed, corruption, and ongoing violations of human rights - all of these scourges are all too often linked to the oil and mining industries. Your efforts to create a world without poverty need not exacerbate these problems.

The review says the World Bank Group should not support coal and oil projects without taking up its recommendations.

"The report clearly states the World Bank's support for oil and mining does not benefit local communities,protect basic human rights or the environment in the vast majority of cases. The World Bank Group, with its stated mission as poverty alleviation and sustainable development, must keep its commitment to put into place the recommended necessary changes of the review."

Notes

[1] World Bank President James Wolfensohn will give a keynote speech at "Making Globalisation Work for All" at 1000 at HM Treasury on Monday 16th February Other speakers include: Rt. Hon. Gordon Brown MP, Chancellor of the Exchequer; President Lula of Brazil; Rt. Hon. Hilary Benn MP, Secretary of State for International Development

[2] Full details of the letter and signatories available from Friends of the Earth media office

[3] The recommendations of the Extractive Industries Review include:

• Informed consent from local communities and indigenous peoples affected by extractive projects as a pre-condition for financing;

• Phasing out lending in support of oil and coal and to invest its scarce development resources in renewable energy by setting lending targets of increasing renewable energy lending by 20% a year;

• Ensuring the establishment of indigenous peoples' land rights as a condition for project finance;

• ensuring that revenues of Bank-financed projects benefit all affected local groups;

• requiring that freedom of association be present in Bank financed projects as a basic human/labor rights requirement;

• ensuring that good governance structures are in place before project finance and implementation occurs;

• protecting biodiversity through establishing "no go" areas for internationally recognized critical habitats;

• requiring that submarine tailings disposal not be used in World Bank Group supported mining projects;

• Increasing revenue transparency and improving public disclosure about projects; and promoting overdue key institutional reforms to deal with the long documented "pressure to lend" in the World Bank that has resulted in weakening of implementation of key environmental and social protection policies.

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