IFC pulls out of goldmine, considers pipeline

26 November 2002

In early October the International Finance Corporation (IFC) announced that it would not back the Rosia Montana goldmine in Romania. This decision followed intensive lobbying by NGOs including direct approaches to the World Bank President, James Wolfensohn, at the Bank/Fund annual meetings. The IFC will soon have to take a decision about whether to back an even more controversial and complex project – the Baku-Ceyhan oil pipeline.

The decision on Rosia Montana was at first portrayed as an example of Bank responsiveness to civil society concerns. NGOs said the project – the largest open-cast goldmine in Europe – would displace farmers living in the area and cause problems of cyanide pollution. The Bank briefed the press that its decision was “an example of how we’re seeking to have an open dialogue with all our development partners.” However, presumably in response to pressure from the Canadian company which is promoting the mine, the IFC soon circulated another version of events. This stated that the company was doing fine on social and environmental issues but had decided to obtain finance on the private markets because it could do so more quickly than from the IFC. The company also said it will continue to comply with Bank Group guidelines and policies.

The IFC now faces the challenge of justifying its planned support for the Baku-Ceyhan oil pipeline. The pipeline, which is being promoted by a consortium of oil companies led by BP, would run from Baku in Azerbaijan through Tbilisi in Georgia to Ceyhan in Turkey. NGOs from the three countries concerned, plus their international supporters have raised a number of serious concerns. These range from questions of proper assessment, consultation and compensation to larger matters such as corruption, debt and foreign oil companies obtaining exemptions from national laws. There are also issues of whether the project will destabilise a region with a history of conflict and human rights abuses (see Bretton Woods Update 30).

Following a visit to the UK by activists from the three countries, UK groups have sent relevant UK ministers a memorandum outlining 10 sets of issues. PLATFORM has also released a report detailing problems with the consortium’s consultation and assessment processes. Campaigners are requesting members of the public to join them in writing to decision-makers to stop the project entering the IFC‘s approval process in December. If the project does get accepted for formal IFC review this would mean that a final decision on backing for the project would be due in April 2003.

Campaigners are pointing to a leaked letter from BP to the President of Georgia demanding rapid approval of the project’s Environmental Impact Assessment as evidence that important issues are being neglected under pressure to get this project underway. They argue that such practices by trans-national companies may seriously jeopardise the countries’ progress towards democracy.

Press release on IFC Rosia Montana withdrawal, October 2002

Baku-Ceyhan CEE Bankwatch site

Joint UK NGO memo on Baku-Ceyhan pipeline, November 2002

UK campaign information

Friends of the Earth campaign site

Turkish oil project raises human rights, governance concerns , Bretton Woods Update 30

Wildcat Lawyering, American Lawyer, October 2002

UK campaign site