MAC: Mines and Communities

World Bank Pull Out Of Oil And Coal' Now Official Advice

Published by MAC on 2003-11-25
Source: Friends of the Earth International

'World Bank Pull Out of Oil and Coal' Now Official Advice

Friends of the Earth International - Media Advisory

November 25, 2003

Washington, DC (US) - An independent review commissioned by the World Bank and released today [1] recommends the Bank to stop financing all coal and oil projects in developing countries.

Many of the recommendations of this Extractive Industries Review final report, due to be discussed only on December 11-13, point to an important shift away from traditional support to the extractive industries and are likely to meet strong resistance from the bank's shareholder countries.

"The recommendation to immediately end financing for coal and 'phase out investments in oil production by 2008' is a progressive and welcome step," said Janneke Bruil of Friends of the Earth International. "It is important that the harmful and dangerous effects of such investment are acknowledged by influential public funders," she added.

Friends of the Earth strongly encourages the World Bank shareholder countries to adopt and support this "phase out investments in oil production" recommendation without delay.

The new report also recommends to step up funding for renewable energy projects, citing the need to combat climate change and this recommendation was welcomed by Friends of the Earth International.

Similarly, Friends of the Earth welcomed the report's recommendation of 'Free, Prior and Informed Consent' for communities and indigenous people that are to be impacted by the Bank's projects.

The environmental federation also believes that the suggested phase out in coal and oil projects should be extended to large-scale mining.

The report recommends steps forward in regulating the mining industry, recognising local people's rights and implementing 'best practice'. However the devastating and irreversible social and environmental impacts of the mining industry would not be fully mitigated even if all EIR recommendations were put into practice.

For this reason Friends of the Earth International believes that the World Bank should withdraw from large-scale mining altogether. Development finance should instead be used to support job transition, mine closure, reparations payment and alternative solutions such as re-use, recycling and reducing consumption.

Funding from the World Bank's private sector arm, the International Finance Corporation, is highly influential in giving a political stamp of international approval to oil, mining and gas projects, the benefits of which are often questionable while the negative impacts are significant, as laid out clearly in the EIR report.

Despite strong opposition from civil society organisations, two of the most controversial bank projects of recent years - the Chad- Cameroon oil pipeline in Africa and the Caspian oil pipeline (Baku- Tsibilisi-Ceyan) - "have been pushed through by the World Bank's management and its shareholder countries, particularly the US," according to a recent Financial Times report [2]

The Financial Times article also states:
"The [Extractive Industries Review] consultation process was initially marked by accusations of bad faith from non-governmental organisations. NGOs such as Friends of the Earth and the Washington- based Institute for Policy Studies accused the World Bank of trying to exert undue influence over the process and of giving too large a voice to business representatives. Bernard Salomé, a bank official who was appointed as secretary to the review, recently left after repeated complaints that the process was being hijacked by the bank."

For more information:

Carol Welch, Friends of the Earth US in Washington,
+1-202-7837400 or +1-202-744-8048 (mobile)

Janneke Bruil, Friends of the Earth International in Amsterdam
+31-20-6221369 or +31-6-52118998 (mobile)

Notes to Editors:

[1] the Extractive Industries Report is available at

[2] Financial Times; Nov 20, 2003 "World Bank advised to pull out of oil and coal financing" By Alan Beattie in Washington

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