Letter To The Editor: World Bank Rejected A Simplistic, Broad-Brush Response To Review Of Extractive Industries.
In reply to a letter from stakeholders that was published on August 5 in The Financial Times, Otaviano Canuto, Executive Director at the World Bank, writes in Wednesdays edition of the business daily that “despite the criticism from some stakeholders, we believe the World Bank Group was correct in committing itself to taking a closer look at its support for extractive industries and in crafting a responsible, balanced package of reforms that will help reduce poverty and provide a constructive way forward given the political, economic, and social realities of its member countries”.
We find it ironic that civil society stakeholders would agree that extractive industries are important for the economies of more than 50 developing countries where more than 1,5 billion people live on less than two dollar a day, yet recommend that the bank should cease its support for this sector, Canuto writes,according to the World Bank press review Wednesday.
Management of the bank took the appropriate course by rejecting a simplistic, broad-brush approach and choosing to treat each investment on a case-by-case basis. Far from favoring big business or big governments, the bank stands a better chance of helping the poor and indigenous peoples, and of ensuring acceptable safeguards for environmental preservation, by staying engaged with developing countries, Canuto states adding:
Rather than being too cautious, we question whether the bank has gone too far. Climate change, for example, is a real threat. But we need realistic solutions.
It would be virtually impossible to achieve any targeted reduction in greenhouse gas emissions by reducing extractive industry investments only in developing countries. In fact, the net effect would be to penalize unfairly the countries where most of the poor reside for the actions of the developed countries at a time when there is no agreement on a common global approach.
Given the uncertainty about the precise impact of changes in industrial policies on climate change, it is our view that the bank should avoid the adoption of any renewable energy target at this stage.
We believe the bank has wisely adopted an approach toward indigenous peoples and communities affected by projects that stresses consultation rather than consent. No one wants a local community to feel victimized by an extractive industry project.
However, the World Bank Group also needs to respect existing domestic laws and the established approaches to compensation and consultation in each country. It cannot override the laws of national governments, Canuto concludes.
Kilde: www.worldbank.org
