Issue 3, March 2003

1. Confidential World Bank Report Criticizes Extractive Industry Investment in Developing Countries

2. Activists in Azerbaijan and Turkey Facing Repression for Criticism of Environmentally Harmful Projects

3. President Bush’s Corporate Accountability Plan: Failing to Measure Up

4. Companies Admit to Investors that Climate Change is a Risk to Business

Confidential World Bank Report Criticizes Extractive Industry Investment in Developing Countries

Echoing the assessment of Friends of the Earth and other critics of the World Bank's support for fossil fuel and mining projects, the Bank's own Operations Evaluation Department (OED) has recommended that the Bank stop trying to increase investment in extractive industries in countries with weak governance. The report also acknowledges that most developing countries have weak governance.

The confidential draft report, entitled "Evaluation of the World Bank Group's Activities in the Extractive Industries: Factoring in Governance," concluded that "when governance is poor, [extractive industry development] is a curse." As a result, it concluded that in countries with weak governance structures, the Bank should focus its efforts on improving the country's ability to manage the costs and risks associated with its extractive industries, rather than attracting new investment.

“Implementing the recommendations in this report would have profound implications for Bank involvement in extractive industries, and would keep the Bank out of highly controversial projects like the Chad-Cameroon oil pipeline and the Baku-Tbilisi-Ceyhan oil pipeline,” said Steve Herz of Friends of the Earth.

For more information, contact Steve Herz at 202-783-7400 ext. 122.

Activists in Azerbaijan and Turkey Facing Repression for Criticism of Environmentally Harmful Projects

On Feb. 24, 2003, the son of the President of Azerbaijan made a statement on national television threatening opponents of the proposed Baku-T’bilisi-Ceyhan (BTC) pipeline project. The Bush administration strongly supports the project and the World Bank and U.S. Export Credit Agencies are considering funding it.

In another disturbing incident, a leading lawyer faces trial in Turkey for his comments on the environmental impact assessment (EIA) for the Ilisu dam project, which the US Export-Import Bank has considered supporting. The lawyer, Mr. Mahmut Vefa, general secretary of the Diyarbakir Bar Association, stated in his submission for public comment to the Bank that the Ilisu Dam, if built, would deny local people their property rights and exacerbate the problems of resettlement. This submission was reproduced in an article in the Diyarbakir Bar Association Journal. For this article, Mr. Vefa now faces trial, accused of “overtly insulting the moral integrity of the government and the military and security forces.”

Environmental activists fear active U.S. lobbying for projects like BTC may give these regimes latitude in squashing dissent. “In a climate where commenting on an EIA for a major infrastructure project results in prosecution for a crime against the state, free and fair consultation on the Baku-T’bilisi-Ceyhan pipeline cannot take place in Azerbaijan or Turkey,” said Carol Welch of Friends of the Earth.

For more information, contact Carol Welch at 202-783-7400 ext. 237.

President Bush’s Corporate Accountability Plan: Failing to Measure Up

In a new policy paper released for the one-year anniversary of President George Bush’s 10-point Corporate Accountability Plan, Friends of the Earth analysis shows that Washington has yet to address fundamental changes in the way corporations conduct their activities in our economy.

“The corporate reforms coming out of Washington have failed to restore public confidence in Wall Street and Corporate America,” said Michelle Chan-Fishel. “Americans know that big business's unchecked power and greed can create misery for ordinary people and their environment. Bush’s weak 10-point plan fails to reveal whether Wall Street and Corporate America are living up to our collective expectations of decency and social responsibility.”

To view the paper, visit www.foe.org/camps/intl/corpacct/bushcorp.html

Companies Admit to Investors that Climate Change is a Risk to Business

Last year, 35 institutional investors managing over $4.5 trillion in funds wrote the FTSE 500 companies, requesting information on how the companies were managing climate change-related risks. At a March 4, 2003 event, the Carbon Disclosure Project released the results of this survey, which indicated that 80 percent of respondents acknowledged climate change is a business risk and more than a third were taking action on the issue. Event participants, which included former Secretary of State Madeline Albright, former EPA Administrator Carol Browner, and several institutional investors, also mentioned the need for climate risks to be disclosed in filings to the Securities and Exchange Commission.

For more information, visit www.cdproject.net and www.foe.org/camps/intl/corpacct/wallstreet/secsurvey.pdf, or contact Michelle Chan-Fishel of Friends of the Earth at 510-848-1155 ext. 315.