World Bank mulls advice to end oil project funding
(Reuters - Dec 11)
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."