World Bank Chief Condemned For Backing 4000MW India Coal Plant
By Nilima Choudhury
11 November, 2013
RTCC.org
World Bank President Dr Jim Yong Kim’s commitment to addressing climate change has been questioned in a letter from 68 groups in 28 countries, angry at his support for a 4000MW coal power plant in the Indian state of Gujarat.
A diverse array of organizations including Greenpeace, the Centre for Human Rights and Development in Mongolia and the National Fisheries Solidarity Movement accuse Kim of ignoring internal advice to reject funding for the plant, which will meet 2% of India’s power needs.
“Even more troubling, despite your [Dr Kim] work in public health and calls for urgent action to address climate change, your office cleared the response,” the letter says.
“Your decision means thousands of fishing and fishworker families will continue suffering from air pollution, contaminated water and destroyed marine resources that CAO found to be directly linked with the construction and operation of the Tata coal plant.”
The developer of the project, Tata, has been accused of displacing communities in the region, destroying their livelihood, contaminating water supply and destroying natural habitats.
Researchers have said the Tata Mundra plant, plus two others nearby, burn a total of 30 million tons of coal per year and emit about 88 million tons of CO2 annually – more than the combined total annual emissions of Bangladesh (a nation of 150 million people), Nepal, Sri Lanka, Bhutan and the Maldives.
Once complete, the project, the first in a series of nine such ultra-mega plants, will provide electricity to five states. The company said it is India’s most “energy efficient plant using supercritical technology”.
RTCC understands the World Bank’s internal audit body raised concerns with the private arm of the World Bank – the International Finance Corporation (IFC) – that the Tata Mundra plant was in violation of the bank’s sustainable communities policies.
The IFC provided a loan up to $450 million and $50 in equity in the financing of this project, which has cost $4.14 billion.
The World Bank is said to have increased its funding for fossil fuels to $2.7 billion, even though it has publicly committed to phase out coal lending. It currently has 386 active projects in India with a committed portfolio of $29.5 billion.
Energy security vs sustainability
The World Bank said improving access to electricity is the most important development priority and IFC’s investment in Tata’s project will help address this.
In April, Dr Kim went on record to say the World Bank would lead efforts to eradicate extreme poverty by 2030, which he said would need adequate action on climate change.
More recently, Kim said although getting a global climate change deal is critical, financial institutions should remember that immediate action is also possible.
The IFC said: “We will not end extreme poverty or build shared prosperity until we provide households with energy connections by increasing capacity, boosting transmission and distribution systems. IFC is committed to promoting clean-energy alternatives.”
The World Bank has produced its own reports on reducing emissions from cookstoves which could slow global warming, the impacts of 2°C and 4°C warming across several regions and the contribution of renewable energy to the global electricity supply mix.
Audit
The CAO report said the IFC’s risk assessment of the project was weak: “IFC did not consider alternative project design to avoid or minimize impacts, and that IFC has not treated complainants’ concerns as compliance issues,” it said.
In response to the letter, the World Bank told RTCC that the IFC welcomed the good practice suggestions in the CAO report, which it will work to implement with the developer of the coal project although it believes Tata has already addressed “several” of the concerns raised by the local community.
However, the World Bank refutes several other problems identified by the IFC.
“We believe there has been no physical or economic displacement of the seasonally migrant fishing communities nor has there been a denial of access to fishing or fish drying areas. “IFC is committed to open dialogue with its stakeholders and those directly affected by the projects it supports. We plan to continue our efforts to ensure sustainable development in the Tata Mundra project.”
Nicole Ghio, Sierra Club spokes woman told RTCC: “I think they know their decision is highly controversial, and they are trying to limit publicity. I think they would rather not respond, but we will keep pushing them.
“This decision is absolutely unacceptable, and the letter hopefully makes it clear that civil society is prepared to challenge future projects and hold the Bank accountable to its new energy strategy.”
Tata Mundra Letter
7 November 2013
To: Dr. Jim Yong Kim, President of the World Bank
Re: Open letter from civil society groups opposing World Bank rejection of CAO findings on Tata Coal Plant
Dear President Kim,
As concerned World Bank stakeholders and contributing taxpayers to our respective government’s official aid through the Bank, we are disturbed by your clearance of IFC response to the CAO report on the Tata Mundra coal power project.
In solidarity with the Indian fishing communities, we demand an explanation why you rejected the CAO findings on IFC’s policy violations in funding the Tata Mundra coal power plant. What actions will you take to mitigate the adverse impacts and end your financing of the deadly coal project?
Following a complaint from Machimar Adhikar Sangharsh Sangathan (MASS Association for the Struggle for Fishworkers’ Rights), an organization of fishing families impacted by the IFC financed 4,000 megawatt Tata Mundra Ultra Mega Power Project in Kutch, Gujarat, the CAO issued a report showing that the IFC committed serious violations of its mandatory safeguards. The CAO found that ‘IFC weaknesses in reviewing the client’s risk assessment and mitigation did not support the formation of a robust view that the project met the IFC’s policy requirements, that IFC did not consider alternative project design to avoid or minimize impacts, and that IFC has not treated complainants’ concerns as compliance issues.’
However, the IFC rejected the expert findings and issued no remedial action, choosing instead to defend the project decision and client. Even more troubling, despite your work in public health and calls for urgent action to address climate change, your office cleared the response after a month of silence. Your decision means thousands of fishing and fishworker families will continue suffering from air pollution, contaminated water, and destroyed marine resources that CAO found to be directly linked with the construction and operation of the Tata coal plant. This decision contradicts your decades of public health advocacy and speeches on moving the Bank away from funding fossil fuels.
Mr. President, you must show that you are serious about your statements at previous WB/IMF annual meetings on climate, accountability and learning from past mistakes. The CAO found massive shortfalls at the IFC, showing that the mechanisms to uncover such issues are working. However, while the Tata Mundra project provided an opportunity to prove your commitment to learning from these failures, your clearance of the IFC response continues the lack of public accountability within the IFC.
Unless the findings from the World Bank Group’s internal watchdogs, like the CAO and the Inspection Panel, are taken seriously and acted upon, their role is in name only. This decision undermines the mandate of CAO while allowing staff and management to avoid culpability.
Civil society around the world demand you hold the IFC accountable by taking hard but appropriate actions to address the CAO findings, starting with the development of a remedial action plan and the withdrawal of IFC financing from the Tata Mundra coal project.
Sincerely,
Jubilee, Australia
Market Forces, Australia
Coastal Livelihood and Environmental Action Network (CLEAN), Bangladesh
Initiative for Right View, Bangladesh
Participatory Research Action Network PRAN,
Bangladesh
VOICE, Voices for Interactive Choice and Action, Bangladesh
11.11.11 Coalition of the Flemish NorthSouth
movement, Belgium
Carbon Market Watch, Belgium
CNCD11.11.11
(Centre national de coopération au développement), Belgium
Center for Environment, Bosnia and Herzegovina
Environment and Society Association, Colombia
Les Amis de la Terre, France
Urgewald, Germany
Abibiman Foundation, Ghana
AKSIi!F for gender, social and ecological justice, Indonesia
Debtwatch, Indonesia
Greenpeace Indonesia, Indonesia
Indonesia Civil Society Forum for Climate Justice (CSFCJI), Indoneisa
Norman Jiwan, Indonesia
UKPWR community against Coal, Indonesia
Re: Common, Italy
Japan Center for a Sustainable Environment and Society (JACSES), Japan
Jamaa Resource Initiatives, Kenya
Kosovo Civil Society Consortium for Sustainable Development, Kosovo
Centre for Human Rights and Development, Mongolia
Gobi Soil, Mongolia
OT Watch, Mongolia
Jal Sarokar Kendra, Nepal
BankTrack, Netherlands
Both ENDS, Netherlands
Climate Change Network Nigeria, Nigeria
Alyansa Tigil Mina, Philippines
Quercus – Associação Nacional de Conservação da Natureza, Portugal
Earthlife Africa Jhb, South Africa
National Fisheries Solidarity Movement, Sri Lanka
Taiwan Environmental Protection Union, Taiwan
Zanzibar Climate Change Alliance, Tanzania
Green World Education Foundation, Thailand
Accountability Counsel, U.S.
Bank Information Center, U.S.
Center for Biological Diversity, U.S.
Center for International Environmental Law (CIEL), U.S.
Earth Day Network, U.S.
Feminist Task Force, U.S.
Friends of the Earth U.S., U.S.
Inclusive Development International, U.S.
Institute for Policy Studies, Climate Policy Program, U.S.
Oil Change International, U.S.
Pacific Environment, U.S.
Sierra Club, U.S.
World Team Now, U.S.
Bretton Woods Project, UK
Climate and Health Council, UK
Forest Peoples Programme, UK
Indigenous Peoples Links (PIPLinks), UK
The Corner House, UK
World Development Movement, UK
National Ecological Centre of Ukraine, Ukraine
CHANGE (Center of Handson Actions and Networking for Growth and Environment), Vietnam
Development Centre (GreenID), Vietnam
Green Innovation, Vietnam
350.org
Alpe Adria Green
Climate Action Network (CAN) Europe
Greenpeace International
Kyoto2
NGO Forum on ADB, AsiaPacific
SEE Change Net
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