EIB at 50: Civil Society hopes for reforms

Environment and social campaign groups from across Europe marked the 50th anniversary celebrations of the European Investment Bank (EIB; see photo) this week by pointing out to the European Union's house bank that “Life begins at 50 - we hope.” The EIB has attracted sustained criticism from civil society organisations in Europe and across the world because of its non-transparent institutional nature, its lack of binding environmental and social standards—especially in its increasing lending activities in Africa, Asia and Latin America—and its continuing support for major fossil fuel extraction projects that undermine the bank's recent improved record in funding renewable energy projects. Desislava Stoyanova, co-ordinator of Counter Balance: Challenging the European Investment Bank, a new coalition of European NGOs concerned at the lending practices of the EIB, said: “We hope that the EIB has grown out of its youthful indulgences, backing dodgy projects without being accountable to anyone. Now that it’s entering middle age, the EIB will hopefully slow down and start to behave more responsibly.”

The EIB loaned EUR 48 billion of taxpayer-backed cash last year. At a series of actions in Luxembourg unofficially run in tandem with the EIB’s annual meeting of its board of governors, Counter Balance campaigners distributed spoof newspapers (“Luxemburger Wahl”) showing how things could look in the brave new world of the EIB’s more sustainable, small-scale, community-driven future. Anders Lustgarten of Counter Balance, in his ‘for one day only’ role of head of policy at the EIB, laid out a positive new vision for the EIB at two public press conferences in Luxembourg. The EIB’s ‘new’ policies include: phasing out its major involvement in fossil fuels and extractive industries; providing effective aid support in line with EU policies that prioritises people on the ground; ruling out potential funding support for the nuclear industry; ensuring that its future investments in the transport sector are ‘carbon negative’.

Prince Kumwamba, of Congolese NGO ACIDH which has criticised the EIB over its role in the highly controversial Tenke Fungurume copper mine in the Democratic Republic of Congo, said: “These changes at the EIB sound absolutely wonderful, and are at long last in line with what Southern communities and economies really need, rather than some huge oil field or open cast mine that creams off our natural resources with little accruing to us except clean-up costs. When these policies become reality, we will truly have something to celebrate.”

See for further information: Everyone's Investment Bank website: http://www.eib50.org/

NGOs brand EIB the weakest link in EU development aid

At the European Development Days in Lisbon, NGO campaigners concerned about the expanding financing role of the European Investment Bank (EIB) in developing countries have called for the EIB to urgently strengthen its lending standards and procedures. According to Magda Stoczkiewicz, Policy coordinator for CEE Bankwatch Network, its recent big funding increase will make the EIB the largest multilateral lender in developing countries by volume. Yet, compared to other lenders, the EIB's environmental and social standards and policies leave a lot to be desired. The EIB should adopt policies and procedures that help to uphold strong environmental, social and human rights standards for investments in developing countries, rather than serving as a support bank for European corporations.

A new report commissioned by CEE and written by the International Rivers Network (IRN) details how to date major dam projects financed by the EIB have damaged communities and the environment and have failed to bring development benefits. The report, Raising the bar on big dams: Making the case for dam policy reform at the European Investment Bank, provides case studies of five controversial dam projects in Africa and one in Laos where the EIB has been involved in the project financing. The report highlights that despite making vague references to the recommendations of the World Commission on Dams (WCD), the EIB currently has no sector policy for dams. The report recommends better analysis of up front options to meet energy and water needs, a key tenet of the WCD. "Our report shows that the EIB has invested more than €400m in projects that have had huge costs on all fronts for poor countries ill equipped to resolve their problems," said Lori Pottinger, Africa Campaign Director at IRN. "EIB-supported dams have pushed species to extinction, led to worsening poverty for people forced out by their huge reservoirs, permanently damaged critical natural systems that support millions, and led to huge debt burdens. The EIB is now investing or considering investing millions more in future problematic dams that are likely to repeat this sorry history. From Ethiopia to Congo, large dams now on the drawing board or under construction with EIB help are setting Africa up for future failure as a changing climate renders them a poor solution for adapting to new hydrological realities."

A similar picture has also been revealed in a new study from Friends of the Earth France, EIB: six years financing the plundering of Africa. The report shows how the EIB is providing important financing to large-scale mining projects in African countries. Between 2000 and 2006, in Africa, the EIB granted more than €364m in loans to the mining industries, and since early 2007 the EIB has already approved loans of more than €300m for two giant mining projects in Madagascar and in the Democratic Republic of Congo. Whereas the effects on poverty alleviation of such projects are very controversial, their devastating consequences on environment and local communities' lives have been unfortunately amply demonstrated.