Letter to President Lemierre following the NGO meeting during the 2007 EBRD Annual Meeting

Jean Lemierre
President
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN
United Kingdom

RE: Follow-up to NGO meeting at the 2007 EBRD AGM

Dear President Lemierre,

Once again this year NGOs and EBRD staff, directors and you yourself have had fruitful discussions at the annual meeting. Our interactions in Kazan featured a fair amount of sweat, but no blood or tears. For this we are grateful to all concerned and in particular to the EBRD NGO Relations team and the Environmental department.

Before coming to the topics that we discussed with you during the May 22 meeting, we would like to applaud the EBRD for carrying out the Life in Transition survey.

The survey has revealed some tough truths about quality of life and other issues for people living in this region, and we were pleased to note your comment during the press conference: There is a massive need to improve transition. As we wrote in the lead article of last years Bankwatch Mail in London, The whole concept of transition impact needs to be changed to reflect social issues. As and when the topic of the EBRDs role in transition comes up for discussion, we would be most interested to provide constructive input from the ground.

On the situation regarding the position of NGOs in Russia, the additional time allocated by yourself and colleagues for these discussions was very much appreciated and seems to have brought closer mutual understanding. We look forward to seeing a growing partnership between Russian NGOs and the EBRD, among other things through regular meetings, in order to maximise the opportunities for transparency and environmental and social oversight to be present in all of the EBRDs expanding activities in Russia.

On the use of EBRD profits, we recognise that there will be an extensive debate on this issue. We are confident that some pro-active measures and/or instruments to have a positive impact on peoples lives will receive specially targeted funding. You have received from us an NGO suggestion regarding a dedicated fund for improving energy efficiency in the housing sector. We hope this receives due consideration and we are very willing to discuss the issue further.

On the forthcoming reviews of the EBRDs environmental and information policies, we look forward to robust, productive engagement during the respective review processes. We note with apprehension, however, the current settings of the appeal mechanism under the EBRD Secretary General which goes against the principle of independence and impartiality of justice bodies, as put forward by the Aarhus Convention. We understand that the EBRD will look into the issue and study further recommendations on improving the banks appeal instruments as outlined in the The Three Years On analysis of the Independent Recourse Mechanism published by CEE Bankwatch Network. We attach an updated version, including a new version of the Citizens Guide, for which we are grateful for comments provided by the IRM.

We acknowledge your hopes for stronger health and safety requirements to feature in the revised environmental policy. We expect that new significant commitments will also be made in the area of labour and gender mainstreaming. With respect to this point, we would appreciate if the constraints on human resources and social experts at the EBRD are brought to the attention of the bank's governors. We would also hope to see substantially greater attention given by the EBRD to the social aspects of its investments to take just one example from municipal infrastructure, the affordability of public services such as water supply.

On the Mittal Steel Termitau project in Kazakhstan, as you stated lessons need to be learned from the past. We would add more specifically that given the health and safety practices at Mittal, the EBRD must use all of its leverage to secure tangible improvements in the companys management system and ensure at the same time that full transparency surrounds the companys currently disgraceful activities in Kazakhstan via the involvement of trades unions and stakeholders interested in monitoring. Mittal's dialogue with local people and regular updates on its performance would certainly contribute to improving the situation in the town.

On the Boguchanskaya dam project, while acknowledging that EBRD has not yet been approached by Rusal, we would call on the EBRD not to finance the dam. As presented by Russian NGOs, the project is foreseen to have irreversible effects on the fragile environment of the lower Angara region and its population that could exceed those of the highly controversial Sakhalin II project. The EBRD should also consider the implication of involuntary labour as has been reported in the Russian media being involved in this project. Finally, the EBRD should not consider large hydro projects that are not in line with World Commission on Dam recommendations as sustainable sources of energy.

On the Sakhalin II project, the EBRD has pulled out of the project which is now 90 percent complete and which continues to be plagued by environmental and social problems that are being picked up by local NGOs, including Sakhalin Environment Watch. At this late stage in the projects implementation, we see no way that the project can achieve full compliance with the EBRDs environmental requirements. Any reciprocal financing for the project would undermine the transition and other concepts that underpin the EBRDs mandate. The EBRD has a great opportunity to demonstrate its commitment to sustainable development by promoting local entrepreneurship and publicly beneficial development on the island. The redesign of the Sakhalin action plan and a focus on fishing could be ways of promoting sustainable development.

On the Gazela Bridge, you rightly acknowledged that the project is highly challenging for the bank due to the resettlement of the Roma population. We would like to repeat that if the project is to test the EBRD's ability to stand up for social standards, the resettlement should be conducted in a transparent way under full consultative procedures with the local and host communities, and we would like to offer our assistance in this regard.

On the EBRDs activities in Mongolia, especially related to the extractives sector, we would flag that the bank must insist on good governance with contract transparency for Mongolian people. The EBRD should also not involve itself in coal projects in Mongolia.

We look forward to hearing from you on any of these issues, and also to meeting once again in Kiev next year.

Yours sincerely,

Klara Schirova
CEE Bankwatch Network
EBRD coordinator

On July 10, 2007 President Lamierre answered to our letter. Download the response as pdf here.