LETTERS TO THE EDITOR: World Bank falling short in its mining sector rolePublished by MAC on 2004-05-07
LETTERS TO THE EDITOR: World Bank falling short in its mining sector role
By Robert Napier
Financial Times; May 07, 2004
Sir, Sir Mark Moody-Stuart of Anglo American (May 4) seems to have both missed the raison d'être of the World Bank and misinterpreted the recommendations of the extractive industries review (EIR).
The problems associated with this sector are well recognised, but the industry has failed to address them for too long. Sir Mark must have a very selective memory to focus on the four so-called success stories out of the many resource-rich nations. Perhaps this is an acceptable success rate for the World Bank. The UK government, as shareholder, needs to raise the bar significantly by supporting the EIR.
The World Bank has failed to demonstrate that it understands or monitors how its investments in extractives achieve its mandate of alleviating poverty. I would like to confirm that this is the mandate of the bank, despite common misconceptions that it exists to support multinationals in exploiting the natural resources of developing countries.
Indeed, it is surprising that Sir Mark can forget the problems Shell faced during his time at the company and continues to face in Nigeria. Following his article I remain unclear as to whether society is supposed to trust Anglo American to operate responsibly or whether the company's new chairman feels he needs the World Bank's help to keep it in line.
Our experience of the World Bank's involvement in project finance does not match the additionality claims made by industry. By the time the bank gets involved, contracts are signed and construction is under way, and its input is mostly window-dressing and damage limitation.
The World Bank has failed to provide evidence of the improvements resulting from its involvement in the finance of extractives projects. As the EIR correctly states, the focus should be on governance of projects. Investment in the South will not be limited, as the private sector will continue to conduct these projects. The World Bank has an opportunity to augment and diversify investment by increasing its investment in renewables.
Governments, industry and non-governmental organisations around the world have spoken through the EIR; if Anglo American is allowed to veto this proposal, no sustainable development will occur at the World Bank.
Robert Napier, Chief Executive, WWF-UK, Godalming, Surrey GU7 1XR, UK