RAINFOREST ACTION NETWORK STATEMENT ON EQUATOR BANKS AND THE WORLD BANK EXTRACTIVE INDUSTRY REVIEWPublished by MAC on 2003-06-15
RAINFOREST ACTION NETWORK STATEMENT ON EQUATOR BANKS AND THE WORLD BANK EXTRACTIVE INDUSTRY REVIEW
This morning the Financial Times reported that the Equator Banks - a group of 20 international banks that committed to environmental and social guidelines last June led by Citigroup (NYSE: C), ABN Amro (ABZRF.PK), Barclays (BCLYF.PK), and West LB - circulated a letter asking World Bank President James Wolfensohn to reject recommendations proposed in the independent Extractive Industries Review (EIR). The letter specifically outlined opposition to proposals to implement an immediate ban on new investments in coal, a phase-out of oil by 2008, and a requirement of free and prior informed consent of all communities affected by specific projects.
We commend the progress of Citigroup in leading the private financial sector to address the most pressing environmental problems of our time. Citigroups New Environmental Initiatives raised the bar for the banking industry in areas related to deforestation and indigenous rights, endangered ecosystems and no-go zones, greenhouse gases and climate destabilization, and clean energy and sustainable development. This strong commitment to sound environmental ethics must be applied more fully to the challenges of climate change and indigenous rights. However, we are deeply disappointed to see that Citigroup and the Equator Banks are working to block urgent progress necessary in the financial sector. The EIR represents the best scientific and economic vision for a sustainable and just future for capital investment. We sincerely hope that the Equator Banks will support and learn from the social and environmental advances of the World Bank Group. Phasing out of investments in polluting, non-renewable energy is one of the best ways to ensure a sustainable, just, and prosperous future. It is time for the worlds largest banks to stop capitalizing on climate chaos and profiting at the expense of indigenous rights. The World Bank, and the private financial sector, must establish targets and timelines that will facilitate what the Earth needs now and in the future.
The recommendations of the EIR have been hailed by communities and governments worldwide as the way forward in addressing critical issues including poverty reduction, responsible development, and environmental sustainability. On April 2, 2004 the European Commission issued a statement calling for full implementation of the EIR recommendations.
The Equator Principles, signed and released in June 2003, commit private financial institutions to follow the safeguard policies employed by the private arm of the World Bank Group, the International Finance Corporation. Although the Principles represent a significant step forward, their release was met with strong objections by environmental groups, including RAN, who found that the Principles did not go far enough to secure real protections for endangered ecosystems or affected communities. To date, the Equator Principles have been signed by twenty private financial institutions, including ABN AMRO Bank, N.V., Barclays PLC, CIBC, Citigroup Inc., Crédit Lyonnais, Credit Suisse Group, Dexia Group, Dresdner Bank, HSBC Group, HVB Group, ING Group, KBC, MCC, Mizuho Corporate Bank, Rabobank Group, Royal Bank of Canada, Standard Chartered Bank, The Royal Bank of Scotland, WestLB AG, and Westpac Banking Corporation.
In January 2004, Citigroup set industry best practices when it extended its Equator commitments through its New Environmental Initiatives (http://www.citigroup.com/citigroup/environment/initiatives.htm). These commitments, developed with Rainforest Action Network, provide accountability and reform in key areas not addressed by the Equator Principles including climate change, illegal logging, and informed participation of affected communities. Environmental groups have since asked other financial institutions to meet or beat Citigroups standards.