World Bank mulls advice to end oil and coal project fundingPublished by MAC on 2003-12-11
World Bank mulls advice to end oil project funding
December 11, 2003
Washington - The World Bank is considering how to respond to an independent report that recommends the institution phase out investment in oil projects by the end of 2008 because of environmental concerns, a bank official said this week.
The Extractive Industry Review was commissioned by bank president James Wolfensohn and started work in July 2001, after criticism from the nongovernmental community about the bank's work in extractive industries.
The study, which also recommends the bank stay out of activities in coal mining, was led by former Indonesian environment minister Emil Salim.
Two of the bank's most controversial recent projects, the Chad-Cameroon and the Caspian oil pipelines, were approved by the lender's shareholders in the face of fierce opposition from environmental and nongovernmental groups who said the projects would do more harm than good.
Asked in a briefing if the bank would take into account the report's recommendation on oil, Rashad Kaldany, director of the World Bank Group's oil, gas, mining and chemicals department, said at a briefing: "It is one of the ones that we will study carefully and that we need to consult further with various stakeholders."
He said the bank's management, after consultations with the institution's 184 country shareholders, will respond early next year. The authors of the report are due to meet in Lisbon later this week to finalized the details.
Kaldany said the bank was looking into the recommendations in the report which said the institution should "devote its limited scarce resources to investments in renewable energy, resource development, emissions-reducing projects, clean energy technology, energy efficiency and conservation, and other efforts that de-link energy use from greenhouse gas emissions."
The World Bank is not obliged to follow the recommendations in the report but nongovernmental groups have seized on the findings to urge the bank to change its ways.
"The oil and coal industries increase poverty, human rights abuses, and environmental degradation locally and globally, and the World Bank has no business using our tax dollars to support them," Steve Kretzmann who works at the Institute for Policy Studies, a Washington think-tank said in a statement last week.
Kaldany said the bank has changed the ways it carries out oil projects but said it is still early to say whether this has made a difference to them.
"On the one side this report says yes there's a role for extractive industries, yes there's a role for the World Bank group... but on the other side they are saying phase out or get out of certain sub-sectors," he said. "We would like to understand better what is the logic."