A coalition of nongovernmental organizations June 1 issued a broad critique of the European Investment Bank, including the criticism that the EIB is "the least transparent, least accountable and least democratically controlled institution in the family of agencies entrusted with implementing EU policies and among public financial institutions."
The "Public Funds for Public Benefit" was launched as the EIB held its annual meeting at its headquarters in Luxembourg June 2. Symbolically, a small group of orange-shirted activists outside the meeting offered brooms to the entering executive directors.
The critics’ statement noted that the EIB "has become the world’s biggest public lender," lending 40 billion euros a year, mainly for projects in EU member states, but also worldwide. Among the 50 groups sponsoring the letter were: Campagna per la Riforma della Banca Mondiale, CEE Bankwatch Network, Friends of the Earth International and Mouvement Ecologique/FoE Luxembourg.
Magda Stoczkiewicz, leading the EIB reform campaign for CEE Bankwatch Network and Friends of the Earth International, commented, "Power combined with secretiveness is completely out of tune with modern institutional practice."
While emphasizing the need for more transparency, the critics addressed a wide range of issues.
"As the ‘house bank’ of the EU, the EIB should respect and fully implement key EU goals such as promoting sustainable development, reducing the threat of climate change, protecting biodiversity, and creating employment," according to the commentary.(The complete statement and pictures of the broom demonstration are available at www.bankwatch.org/issues/eib/mcampaigns.html)
"Through its massive lending in energy and transport infrastructure, the EIB has become one of the world’s major institutional contributors to climate change. Through its "big lending" philosophy, the EIB often finances the big multinationals, which need the least public support and contribute least to public benefits.
In a related development, the freedom of expression advocacy group Article 19 weighed in with an analysis of EIB transparency (see more detail below).
Transparency Standards Judged Below EU Standards
The "Public Funds for Public Benefit" coalition called the EIB "the least transparent of all institutions established through the Treaty of the European Union," and the most non-transparent of the multilateral financing institutions (citing a recent draft analysis of transparency policy of all IFIs prepared by the Bank Information Center and freedominfo.org).
Specifically, the campaign asked for publication of a monthly summary of EIB operations; disclosure at least 120 days prior to decision making by the EIB Board of all environmental, social and human rights impact assessments, and other important project-related information; disclosure at least 60 days before public consultation of all relevant project documents; and public release of notes from the meetings of the EIB’s Board of Directors.
Broader Goals, Standards Recommended
More broadly, the coalition urged that EIB-supported projects in developing countries contribute to the United Nation’s poverty reduction goals and follow the EU’s policies on environmental and social safeguards.
To help reach these goals, "We demand that the EIB develops its own sectoral policies for investment in Energy, Forestry, Transport, Water and Waste Management and other key areas of focus in EU environmental policies, based on existing European legislation and policies." The EIB should set up an Advisory Committee for Sustainable Investment and Lending, the coalition said.
In the energy sector, the EIB was told to phase out funding for new fossil fuel projects by 2008, replacing them with renewables and efficiency programs, and ensuring in the meantime that all possible energy saving components of any industrial or energy project are maximized, according to the coalition. Other recommendations cover forest policies, transport, water, and waste management.
The coalition also demanded that the EIP adopt "a full-fledged accountability and compliance mechanism, which provides equal access for citizens from outside the European Union" and a "full-fledged anti-corruption policy."
In pursuit of policies to govern EIB lending to the private sector, the coalition asked, among other things, for "a comprehensive set of binding environmental, social, human rights and economic development rules and standards."
ARTICLE 19 Says EIB Falls Short of Meeting International Transparency Standards
Also on June 1, ARTICLE 19 issued a memorandum charging that "despite its stated commitment to openness, the Bank’s review of its policy failed to deliver the promised openness, and the policy fails in important respects to meet international standards in this area," including European Union standards.
"Our Memorandum identifies a number of serious concerns with the policy, including the following:
- The policy is not guided by the principle of maximum disclosure and applies only to resident legal or natural persons.
- The policy fails to set out a clear obligation to publish key information, including about information requests, instead simply providing a list of Bank publications.
- The regime of exceptions is excessive; it includes broadly defined exceptions and it fails to provide for the disclosure of information in the overall public interest.
- There is no right of appeal to a binding, independent body.
- The policy does not provide for protection for whistleblowers.
The full memorandum is available on the ARTICLE 19 website at: http://www.article19.org/docimages/1777.doc.
By Toby McIntosh
Filed under: IFTI Watch