The World Bank has agreed to new rules meant to prevent revenue from oil and gas projects going to corrupt regimes but rejected a call for it to pull out of those projects altogether, according to the World Bank press review Wednesday.
– There was very broad consensus that we should remain engaged, we do add value, Rashad Kaldany, director of the Washington-based World Banks oil, gas and mining department, said in a conference call with reporters.
The bank will require companies and countries to disclose oil payments, and to publicly disclose how the bank views the corruption in a country before it gets a loan for an oil or gas project. The bank management must still rework some aspects of the changes in the next few weeks, Kaldany said.
The World Bank Board of Directors met to consider the management response to the Extractive Industries Review, an independent report on the role of the World Bank that was conducted by Emil Salim, the former Indonesian environment minister, after 2l years of consultation with government, business and civil society organizations. It asked for some fine-tuning and clarification on a few points, but will approve the overall statement in the next few weeks.
While the Board broadly agreed that the bank should continue investing in extractive industries, like oil, to give developing nations their best chance to reduce poverty, it also agreed to increase substantially its investment in renewable energy and to strengthen policies to guard against the theft of revenues by corrupt elites.
World Bank President James Wolfensohn said Tuesday that energy and mining resources are essential to many poor countries development goals, and should not be excluded from the banks remit.
– The harsh reality is that some 1,6 billion people in the developing nations still do not have electricity, and some 2,3 billion people still depend on biomass fuels that are harmful to their health and the environment, he said adding: – That underscores the need for our continued but selective engagement in oil, gas, and coal investments.
The US Treasury Department said it supported the banks decision, but cautioned work was needed to help mitigate the risks associated with extractive industries in poor countries. Environmental and social groups, however, criticized the World Bank decision for shying from meaningful reform.
– By largely ignoring the reviews recommendations, the banks management has ensured that the poverty pipeline will continue to flow, said Keith Slack, an extractive industries policy advisor at Oxfam. – The banks unwillingness to change means that this process will likely result in precious little for the poor communities affected by oil and mining projects around the world,” Slack said.
Kaldany said that the banks directors decision constituted a “balanced” alternative to the proposals made by Salim. He said the bank will work to ensure public disclosure of the revenues generated by such projects. – This is a large and very significant step forward, Kaldany said.
– This is at the very least a cultural change that will be required. We will have to be very explicit in public on what we expect to accomplish through these projects, noted he.
Salim has already disagreed with that assessment. In a memo to the banks directors last month, he said the bank was engaging “business as usual with by not adopting most of his recommendations.
Kilde: www.worldbank.org
