World Bank dilemma

ENVIRONMENTAL and civil society groups have wielded extreme pressure on the World Bank Group (WBG) to accept all recommendations of the Extractive Industries Review (EIR), which includes completely withdrawing future investment in the international coal industry.
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Angie Tomlinson

The report, Striking a Better Balance, originated from an independent consultation which looked at the role of the World Bank Group (WBG) in the extractive industries sector and was released December last year to strong support from groups such as the Friends of the Earth and a coalition of Nobel Laureates of Peace.


The report came to the general conclusion, whilst the WBG could play a part in the extractive industries within certain guidelines, this did not apply to the coal industry. The report recommended the WBG kept along the same lines it has in the last few years, not investing in any new coal mining development projects, and adopt this as a formal policy. Effectively this was a ban on WBG investments in coal mining.


Instead the EIR recommends the WBG redirect funds to projects which reduce pollution and green house gas emissions.


Support from environmental factions and opposition by groups such as the World Coal Institute (WCI) has resulted in a delay by the World Bank to issue its Management Response. According to WCI’s Ecoal newsletter, the reaction provoked by a draft Management Response leaked earlier this year showed WBG was in support of many of the recommendations but opposed to the more extreme ones, such as the issue of investments in coal and oil.


The process is slowly moving forward with World Bank president James Wolfensohn meeting with report leader Emil Salim on April 19 in Paris. Although there was no concrete result from the meeting, the two said they would continue with their consultations, meeting again in June this year.


By this time the Bank's management would have had an initial opportunity to discuss the report with the Committee on Development Effectiveness of the Board of Executive Directors, prior to the World Bank Group’s formal response.

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