It's May 1998 in Kiev and the EBRD is in town for its annual meeting. Bankwatch is also there, striving to ensure that non governmental representatives from across central and eastern Europe receive accreditation to attend and share knowledge with its staff. After all, the bank's function is to help improve the living standards of the region's citizens.
Accreditation for 35 representatives has been requested well in advance but the EBRD has decided to restrict that number to 15. Meanwhile, the Ukrainian secret police has been alerted to the fact that Bankwatch is distributing copies of the joint EBRD and World Bank Energy Efficiency Action Plan, which highlights the policies of the two banks in the energy sector.
The Ukrainian government deems the dissemination of this kind of information inappropriate and the police move in and confiscate all copies of the plan. Some of us are harassed and some Ukrainian colleagues who are peacefully demonstrating outside the building are arrested.
Low point
For Bankwatch, an NGO network with member groups in 10 former communist bloc states and which
celebrates its 10th anniversary in June, Kiev '98 represented a low
point in the organization's experiences with the EBRD. Thankfully it has
not been repeated.
The EBRD has now improved its accreditation procedures for the annual meeting so that more than just a token number of NGO representatives can attend and make their voices heard.
Indeed, relations have developed to the extent that it has become standard practice for the meeting to wind down with a formal meeting between representatives and the president, which has produced a high-quality and necessary dialogue.
Positive role
In this, as with a range of other evolving policy and procedural issues, Bankwatch has played a positive role over the years in reminding the EBRD of many of its statute-based duties and responsibilities. These are some of the positive results:
l Bankwatch's 2001 Language Apartheid campaign for the translation of key EBRD documents into respective national languages was creative and proved largely
successful.
l The EBRD responded to the proposal from Bankwatch and Human Rights Watch for the Uzbekistan Country Strategy to lay out key benchmarks on human and civil rights, which led to the EBRD cutting off public lending to Uzbekistan in April 2004.
l Former President Jacques de Larosiere decided in 1995 to set up the Energy Efficiency/Conservation team in response
to requests from Bankwatch and other NGOs such as Friends of the Earth,
despite US objections. This positive
move has developed over the years into
a model programme, in spite of continued US negativity.
l In response to Bankwatch advocacy, the EBRD has continued to develop its Environmental and Environmental Impact Assessment policies, and it is now customary for NGOs to be consulted on problem projects and new or revised policies.
l After several years of dialogue, the EBRD has followed Bankwatch's advice by setting up a compliance mechanism. However, this has yet to be tested and, in our opinion, does not go far enough.
It is at the individual project level where there have been several, high-profile clashes between Bankwatch and the EBRD on projects that either were not rejected by the bank or where it failed to follow its sustainable development mandate.
The highly controversial Baku-Tbilisi-Ceyhan pipeline project was approved for funding in spite of a welter of environmental, human rights and social issues raised by NGOs in the region and around the world.
Bankwatch continues to follow the progress of the pipeline construction. It is closely monitoring its compliance with EBRD policies and guidelines, and the impact of the pipeline on the fragile human rights situation and the environment
in the region. The long saga concerning the Ukrainian K2R4 nuclear reactors shows that even when abundant economic, environmental and social information is presented to it, the EBRD, alone in the development bank community in supporting the nuclear industry, is likely to bow to political pressure from its members. Its much-vaunted transition impact, an integral part of its assessment for proposed projects, continues to lack any clear and measurable indicators.
Bankwatch has long maintained that
the EBRD must encourage debate on
the concept of transition and produce
more sophisticated and tangible indicators to measure and verify the various impacts of investments.
Unless it does, suspicions will remain that the transition impacts of projects are simply box-ticking exercises designed to placate critics.
When the EBRD justifies the financing of more petrol stations in Sofia (as it did in 2004) to "introduce increased competition in the sector", despite the existence of a number of companies already competing against each other, it shows the critics that their suspicions are justified.
Waiting for results
The EBRD's crucial involvement in the region's transport and energy sectors has also still to deliver real beneficial transition impacts. The recently launched Transport Policy disappointingly commits the EBRD to four more years of extensive rail privatization and to continued support for motorway construction, with no consideration given to who should be picking up the external costs of road transport: road users and polluters, or society as a whole?
On energy, the EBRD should have already started promoting the long overdue shift in the energy sector from the current concentration on fossil fuels and nuclear energy to cleaner and more sustainable alternatives. Unfortunately, the EBRD dropped the ball at last year's Bonn Renewables Conference and failed to declare ambitious targets for its future lending in the renewables sector.
However, ahead of the EBRD's review of its energy policy, President Jean Lemierre has stated unequivocally that energy efficiency must go up and greenhouse gas emissions must go down in the countries east of the EU. Along with other international groups, Bankwatch will be working to ensure that his words are heeded in
the review's final negotiations later
this summer.
Time to debate
Bankwatch also remains convinced that the EBRD must start debating how to address the social situation in the countries that remain outside the European Union. Since the start of the EBRD's
operations, the gap in these countries between wealthy elites – usually with a communist and sometimes even a criminal past – and the rest of the population has increased significantly.
These groups, and the foreign multinationals, are now the main beneficiaries of EBRD investments. This public money should be used to benefit other segments of society. Stability in the region, often imposed through human rights abuses, can and should be achieved through more equitable investments.
The EBRD should extend the type of benchmarks it used in Uzbekistan to other countries in the region where human rights abuses are significant and where civil society is marginalized, and use its investments as a lever to promote real transition.
Labour rights
So far the bank has largely ignored the issue of labour rights. It is unjustifiable for foreign workers to receive preferential treatment in EBRD-backed projects, as is the case with the Baku-Tbilisi-Ceyhan pipeline.
Bankwatch staff are now looking forward to future engagements with the EBRD in the hope that the bank will make greater efforts to serve the citizens of central and eastern Europe.
Tomasz Terlecki is executive director at Bankwatch