Subject: WB -OIl, GAS projects
SEND ENDORSEMENT TO SZDEB@FOE.ORG

Dear Colleagues

Next month, April 16-17, officials at the World Bank and IMF meet in
Washington, DC for their spring meetings. Many organizations and grassroots
groups are organizing large protests and demonstrations to take place
during that meeting.

Friends of the Earth-US, in consultation with other groups, has prepared an
NGO platform statement that calls on the World Bank to shift out of
financing oil, gas and mining projects and to announce an immediate ban on
financing these projects in pristine, frontier areas.  Over the years, it
is evident that investments in the extractive industries cause significant
and irreparable harm to the environment, the poor, indigenous communities,
and contribute to the crises of global climate change.  All too often,
these projects are associated with human rights abuses and the companies
build alliances with authoritarian governments to protect their corporate
interest.

We have developed this platform to call a halt to this kind of financing.
The statement also calls on public funds to be used for public good, while
recognizing that it may not be appropriate for the World Bank to be
involved in financing these projects either.  What is important is that
civil society sets the development priorities for their country, not by
bankers in Washington, DC.

We ask for your organizational endorsement and for your assistance in
circulating this statement to other organizations.  

To endorse, please send your name, organization and country to Sara Zdeb
(szdeb@foe.org, or fax 202/783-0444).    

The deadline for replying is April 3, 2000.

The statement is attached as both a word and text file.  Thanks for your
support.


Andrea Durbin
Friends of the Earth-US


Andrea Durbin
Director, International Program
Friends of the Earth - United States
1025 Vermont Avenue, NW 3rd Floor
Washington, DC 20005
telephone: 202-783-7400, ext 209
fax: 202-783-0444


NGO PLATFORM 
CALLING ON THE WORLD BANK GROUP
TO PHASE OUT FINANCING
 OIL, GAS AND MINING PROJECTS

APRIL 2000

In this era of globalization, there is a growing awareness that
environmental protection and economic development must go hand in hand.
Nowhere is the incompatibility of environmental destruction and poverty
alleviation more evident than in the World Bank Group's investments in the
extractive industries: oil, gas and mining.  As the world's largest
development institution, and one of the major vehicles for economic
globalization, the World Bank now stands at a crossroads: perpetuate
poverty and pollution through extractive industries, or alleviate poverty
through environmentally and socially sustainable development.

The undersigned organizations and individuals call on the publicly financed
World Bank Group to phase out of financing destructive oil, gas and mining
projects.  The Bank's support for these extractive industries underscores
its record of environmental and social destruction.  Oil, gas and mining
projects enable wealthy multinational corporations to extract resources and
profits from poor countries, leaving poverty in their wake.  They fuel
global climate change, pollute the environment and lead to deforestation.
Even worse, extractive industries have further entrenched corrupt and
dictatorial governments, and exacerbated human rights abuses. 

Oil, gas, and mining embody an unsustainable model of economic development
that has failed the world's poor in the 20th century.  There is no reason
for the World Bank Group to finance these sectors in the 21st.  The World
Bank Group devotes a significant share of its portfolio to extractive
sectors (in 1999, 40% of the World Bank Group's portfolio -which includes
IFC and MIGA - went to oil, gas and mining projects).  An environmentally
and socially sustainable approach would include investing in new
industries, clean technologies, environmental protection, job creation and
education. The World Bank Group should establish an immediate ban on new
exploration in pristine, frontier ecosystems (a ban more than 200
organizations from 52 countries called for at the Kyoto climate change
meeting). Finally, we call on the World Bank Group to develop a plan for a
complete phase out of financing oil, gas and mining projects. The
transition away from these sectors should be developed in a participatory
manner, be based on renewable energy-based systems and ensure the
livelihoods of local communities. 
            Ten Reasons the World Bank Group Should Stop Financing
Oil, Gas, and Mining Projects in Poor Nations


1. The Poor Often Pay the Highest Price
The environmental destruction and social upheaval that accompany oil, gas,
and mining projects often harm the poor the most.  The poor are the most
likely to be forced off of their land and made homeless by these projects.
They are the most likely to live in polluted surroundings and the least
empowered to demand fair compensation or a share in the revenue from oil,
gas and mining development. The poor are the most dependent upon local
natural resources for their food and livelihoods, and the most likely to
suffer when aid is diverted from social sectors to finance extractive
industries.  

2. Indigenous Communities are Jeopardized 
Oil, gas and mining operations have devastated dozens of indigenous groups
around the world, resulting in loss of their numbers, territory,
livelihoods and cultural identity. From the Amazon Basin to Asia, these
indigenous peoples' ways of life are built on age-old traditions and deep
ties to and interdependence with the ecosystems where they live.  As a
result of these extractive industries, indigenous communities often lose
their right to self-determination, their right to their land and livelihood.  

3. Leads to Forest Destruction and Biodiversity Loss
>From Siberia's temperate forests, to the mangroves of Central Africa, to
the rainforests of the Amazon basin, oil, gas and mining projects threaten
precious forests and cause irreversible damage to ecosystems and
biodiversity loss.  Oil and gas exploration, mining and new roads (which
are often an indirect result of oil, gas and mining exploration) currently
threaten more than half of both South America's and Russia's frontier
forests, according to the World Resources Institute. Coal mining in eastern
India threatens to destroy the last remaining habitat for the endangered
tiger. Much of this exploration and mining is taking place in pristine,
frontier forest areas.

4. Toxic Contamination of Communities 
Oil, gas, and mining operations are significant sources of ecological
degradation even in wealthier nations with stronger environmental
protections.  In poorer countries with weaker environmental standards and
less oversight capacity, the likelihood of oil spills, toxic emissions, and
contamination is greatly increased, and governments and communities are
less equipped to limit the damage. Between 1982 and 1992 Shell's subsidiary
in Nigeria spilled about 1.6 million gallons of oil in the Niger Delta,
most from leaking pipelines.  Spills, gas flaring, improper disposal of
waste, and mining accidents result in toxic releases that can be dangerous
and even deadly to humans, and can poison groundwater, farmland, livestock
and marine resources, the very resources on which the poor depend.  
 
5. Negatively Impacts Women
Women often bear a disproportionate amount of the costs of extractive
projects in their communities.  Women are often not included in the Bank's
consultation process for projects, even though they are responsible for the
welfare of their family.  Often men are hired to work in the extractive
industries, leaving women behind with an increased workload.  Their
customary responsibilities are made even more difficult as the natural
resources upon which they and their families depend, including clean
drinking water and fuelwood for cooking, are polluted or degraded by these
extractive industries. 
 
6. Extractive Industries Often Tied to Human Rights Abuses
>From forced relocation, to the brutal, and sometimes deadly, suppression of
those who dare to demand fair compensation or clean-up, the drive for
profit from fossil fuels and minerals has all too often led to human rights
violations by governments and corporations.  Witness the struggle in
Nigeria by the Ogoni people to demand the clean-up of the pollution on
their land by the oil industry, or the demand of the Amungme in Irian Jaya,
Indonesia, calling for fair treatment and compensation from the largest
gold and copper mine in the world.  The rights of individuals and
communities are often sacrificed in the search for profit by these
industries.  


7.  Ties with dictators and corrupt governments
Many of the countries with oil, gas and mining projects suffer from
corruption and authoritarian regimes.  Whether it is Russia, Colombia,
Indonesia or Nigeria, repressive countries often form alliances with
multinational corporations involved in extractive industries.  For the last
two years, Transparency International, a non-profit corruption watchdog,
has identified Chad as the most corrupt nation in the world.  In spite of
this situation, the World Bank still claims oil development will benefit
the poor in these countries, and is ready to finance a multi-million dollar
oil development scheme. 

8.  Supports Corporate Welfare
The multinational corporations involved in extractive industries often have
profits that dwarf the size of many of the Bank's borrowing countries.  In
the Chad-Cameroon Pipeline Project, which the Bank is poised to finance,
the lead company - Exxon - has annual profits that are four times the
budget of Cameroon and 40 times the budget of Chad. Although earmarked for
sustainable development and poverty relief, nine out of ten World Bank
fossil fuel projects benefit transnational corporations based in wealthy
countries. These multinationals are wealthy and do not need to tap into
preciously limited foreign aid.  Furthermore, when the Bank subsidizes
these corporate giants, it diverts much needed aid from programs that truly
benefit the poor.

9. Extractive Industries Fuel Global Climate Change
Fossil fuels are the major cause of global climate change and must be
phased out. Climate change is already wreaking havoc on the poorest in
developing countries, and threatens to only worsen their situation. The
World Bank Group should be leading the way to assist countries in a
transition towards a more renewable energy economy and maximizing energy
efficiencies, not tapping into the last remaining resources for the
dirtiest, most climate-destabilizing fuels.  Today the World Bank spends 25
times more on fossil fuel projects than on renewables. Rather than taking
substantive action on climate change, and drastically reducing their fossil
fuel lending, the World Bank is now launching a carbon trading scheme,
which threatens to provide even more subsidies to the already heavily
subsidized fossil fuel industry.  

10  Increases Debt and Dependency of Poor Countries
Oil, gas and mining development commit countries to a path of indebtedness
and dependency on external aid.  Desperate for hard currency to service
debts, poor countries exploit their natural resources at unsustainable
rates, such as petroleum reserves or minerals, to export for foreign
exchange.  This costly development path fuels growing indebtedness, and the
World Bank's policy-based lending encourages an unsustainable export-led
growth strategy. 


Ten Better Examples of Good Development

There is no shortage of alternatives to oil, gas and mining. Opportunities
will vary between countries, but this is not an obstacle ensuring that
foreign assistance directly responds to the needs of the poor and offer
sustainable solutions to pressing environmental problems. The starting
point is for the World Bank Group to work with governments to establish a
participatory process and consult with citizens and stakeholders in the
borrowing countries to identify national development priorities for
investment and financial support. It may not be appropriate for the World
Bank Group to invest in each of these areas.  But the bottom line is that
where the World Bank Group is providing financial assistance to developing
countries, it must limit its support to projects and policy lending that
directly alleviates poverty and promotes environmentally and socially
sustainable development. Some better development examples than what the
World Bank is currently doing with the majority of its lending, include: 



1. Support education and technical training.
Investing in human capital is the most important investment of all. A
quality education empowers a person to defend their rights and to
creatively employ their own resources. Basic education is a fundamental
right and the foundation upon which an informed and dynamic citizenry is
based, yet it is denied to hundreds of millions of children around the
world. Primary education is key, especially for girls. 

2.  Promote healthy societies.
Easily preventable diseases continue to kill millions of people each year.
In many countries of Sub-Saharan Africa, roughly one in four children will
die before the age of five and diarrhea is a leading cause of death among
toddlers. Responding to this scandal and waste of human and economic
potential is a moral imperative that the world must face. 

3.  Support micro and small enterprise.
Supporting small and medium enterprises, as well as micro-enterprise
initiatives, has obvious social advantages over the mega-projects that
characterize World Bank Group lending.  Smaller enterprises result in more
employment per dollar invested, are more likely to reinvest earnings in the
local economy and can be more easily targeted to benefit women and
marginalized communities. From producing carbon filters out of coconut
husks, to exporting organic foods to other markets, opportunities for
promoting small and medium sized initiatives are endless.

4.  Build strong agricultural sectors that respond to peoples' needs.
Agriculture is the lifeblood of many of the world's poorest countries.
World Bank projects and policy lending have often been associated with
accumulation of land in the hands of the few and the promotion of export
driven agriculture that can ultimately undermine food security. What is
needed is a more positive role in development in the agriculture sector
that deals with land redistribution and land rights, sustainable
agricultural practices and more appropriate technology development.  

5.  Deliver energy to the rural poor.
Roughly two billion people in rural areas lack access to electricity and
other forms of energy. While the World Bank has a strategy to address these
needs, it has never properly implemented it. Instead, financing is oriented
toward industrial development and urban areas, thereby further
impoverishing the rural poor.  Drawing on advances in renewable energy, and
existing production, the Bank Group could bring energy to millions of
people in rural areas. In most cases, cost-benefit analysis shows that
renewable forms of energy are the most viable way to reach remote, rural
areas.

6.  Improve the quality of life in urban areas.
Gridlock, pollution, crime and a declining quality of life are the products
of overcrowded cities flourishing in the developing world. The World Bank
Group could help counter-act this trend by directing more of its resources
towards land-use planning, improved efficiency in building practices and
pollution control. Better-organized transit corridors, especially public
transit such as low cost ultralight rail vehicles, would reduce
pollution-related illnesses. The World Bank Group could work to support
innovative building practices and work with city planners to improve the
design of urban areas.  The Bank could also invest in more urban area
pollution programs, the cause of so many health related problems.   

7.  Develop productive alternatives to deforestation.
Even by its own analysis, World Bank Group projects are often associated
with accelerating rates of deforestation. More emphasis should be placed on
developing alternatives to deforestation and promoting the sustainable use
of certain forest resources. Innovative alternatives exist, such as
emerging substitutes for wood products and non-wood paper production, or
supporting eco-tourism and the sustainable harvesting of forest products
such as rubber.  Governments should be enabled to expand protected areas
for conservation and sustainable use because forests are critical for the
global environment and for generations to come.


8.  Encourage the efficient use of water.
Water scarcity is a growing global concern, as well as an increasingly
obvious potential source of conflict.  Despite the shortages and its
fundamental importance to life on earth, huge volumes of water are
unnecessarily wasted each day. Bombay loses up to one-third of its water,
and losses are as high as 50 percent in Manila. Similarly, irrigation
systems that account for more than half of the water drawn for human use,
can also be sources of great waste. The World Bank Group could improve
quality of life by directing more of its resources to reducing leakage,
improving water conservation and developing mechanisms to more efficiently
employ existing irrigation systems. 

9.  Promote energy efficiency and renewable energy development.
Rather than promoting the exploration and production of fossil fuels, the
World Bank Group should be concentrating its energy on capturing the
hundreds of millions of dollars in revenues that are annually lost through
energy inefficiency. Investments in preventing heat loss and in
co-generation processes that simultaneously produce both hot water and
electricity, could save World Bank Group clients billions of dollars in the
coming decades. Combined with energy efficient lighting and building
techniques, this would reduce energy imports and possibly free up energy
for export. Similarly, by supporting emerging markets in solar, wind and
fuel cell technology, the Bank will be promoting energy that will not
exacerbate pollution problems or global climate change. 

10.  Immediate Debt Cancellation and Recognition of Ecological Debt.
The dire problem of debt must be addressed.  The World Bank Group should
move forward this year on granting immediate debt cancellation to the
highly indebted poor countries and develop a program for debt relief for
middle income countries. These programs should include innovative
approaches to protect and conserve more pristine, frontier ecosystems
around the world. It should also be recognized that there is an ecological
debt that must be reckoned with since Northern consumers have benefitted
from cheap natural resources, including oil, gas and minerals, from the
South. These resources have been extracted at a high cost to the
environment and communities. 



Endorsed By:









~~~~~~~~~~~~~~~~~~~
Environment Support Group (R)
36, Reservoir Road
Basavanagudi
Bangalore 560 004. INDIA
Telefax: 91-80-6614855
Email: esg@bgl.vsnl.net.in
~~~~~~~~~~~~~~~~~~~