Threat posed by hydro to Mavrovo National Park under the spotlight at Skopje conference

On Thursday in Skopje, over 100 people attended the first public conference [mk] regarding the two planned hydropower plants in the Mavrovo National Park, one of the oldest and most valuable protected areas in the country. A petition to save the park that was launched one day earlier has already gathered over 13 000 signatures.

Last week’s meeting constituted the first time ever when representatives of the Ministry of Environment and Physical Planning, experts, civil society organizations and local communities gathered together to debate about the controversial hydro power projects "Lukovo pole" and "Boskov most”.

Bankwatch member group Eko-svest, together with Front 21/42, the Macedonian Ecological Society, international partners and the two largest environmental coalitions in Macedonia, "Ecology – priority" and "Natura 2000" which together have 20 environmental organisations as members, have been for years advocating for the protection of Mavrovo National Park according to the guidelines of IUCN (the International Union for the Conservation of Nature, the largest global professional conservation network).

On Thursday, we appealed again to our political leaders that Mavrovo National Park continue to be protected, as part of only 9 percent of Macedonian lands which today receive official protection.

One of the biggest threats to the park is posed by the 68 MW Boskov Most project which involves the construction of a 33 m high dam and reservoir and is threatening the integrity of the park ecosystem as well as the habitat of the Balkan lynx, a threatened species.

Andrey Sovinc, the Regional Vice-President for Europe from the International Union for Conservation of Nature (IUCN), explained that hydro power plants do not belong in national parks. According to the IUCN, the essence of the idea of a protected natural area is to ensure the long-term protection of the natural ecosystem from the negative impacts of humans. As such, these areas are no-go zones for the construction of dams or any other type of destructive commercial activities.

Andrej Sovinc added that constructing hydro power plants in national parks represents a “disregard for the recognised values of national parks” and “sends a negative message to the international community” as it is contrary to European legislation, Natura 2000 and the Water Framework Directive.

The Macedonian Law on Nature Protection was prepared in line with the IUCN guidelines and system of categorisation for protected areas. According to the IUCN, most of the Boskov Most project area would fall into category II of protected areas - National Parks - in which it is not allowed to implement any kind of commercial activity, even those deemed "viable", if it has been established that there will be a negative impact on natural ecosystems and living organisms that are characteristic of the area. Only traditional activities such as farming, ecotourism, traditional fishing and the like would be allowed to take place in National Parks under the IUCN guidelines.

Despite warnings from international experts and provisions in the national legislation, investors including public banks have been willing to finance the two hydro power plants. The European Bank for Reconstruction and Development has provisionally approved financing for Boskov Most, while the International Financial Corporation (IFC), the private lending arm of the World Bank Group, is considering lending for the construction of Lukovo Pole.

Breach of EBRD safeguard policies

After the EBRD approved the project in November 2011 and signed the finance contract the same year, Bankwatch member group Eko-svest from Macedonia submitted a complaint to the EBRD's Project Complaint Mechanism, arguing that by granting this loan the bank was failing its own environmental and public participation standards. Indeed, the EBRD internal body verifying such complaints found that the bank had indeed breeched its own standards with this loan.

Despite this decision, the EBRD failed to take further action. Even more, as the bank is currently revising its Environmental and Social Policy (ESP), it is taking the opportunity to actually weaken its environmental and social criteria in order to allow for these projects to pass more easily (according to the draft currently on the table, to be approved in May). And this while at the same time claiming to implement international standards for safeguarding nature.

The changes in the ESP draft that raise the greatest concern are the weakening of the safeguards for “critical habitats”, an increasingly vague and flexible approach towards EU law and a loophole allowing the bank's board to first approve projects and only then for studies about the project’s social and environmental impact to be carried out. This was exactly the case in the Boskov Most project where bio-monitoring was commissioned only after board approval, in breach of the bank's current policy.

The weakening of the ESP is highly controversial, as issues which are serious enough to potentially prevent projects from going ahead must be fully addressed before board approval; if projects are given a finance green light before these studies are conducted, project promoters are being encouraged to treat them as a mere formality.

Last but not least, once the project passes a certain stage, the EBRD keeps receiving so-called 'commitment fees' from the project promoter until the loan is disbursed, , which ensures that the bank does not lose money if it approves projects prematurely. But the fact that the bank wins anyway should not be an excuse for failing to do proper due diligence and rushing decision-making on controversial projects like Boskov Most.