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World Bank branch indirectly backs coal megaproject despite green pledge

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A coal processing plant in Indonesia (Pic: Cassidy K/ILO/Flickr)

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The World Bank’s private lending branch is indirectly backing one of the world’s biggest new coal complexes, despite a new green policy.

In September, the International Finance Corporation (IFC) published its green equity approach (GEA), outlining that: “IFC no longer makes equity investments in financial institutions that do not have a plan to phase out investments in coal-related activities.”

Yet the client it chose to pilot the approach with in 2019, Hana Indonesia, has since approved project finance to the 2,000 MW Java coal power station in Banten, Indonesia.

A source with knowledge of the matter told Climate Home that when confronted, IFC officials claimed not to be aware of Hana Indonesia’s involvement in the coal megaproject.

“We are in discussion with PT Bank KEB Hana Indonesia to better understand its recent lending activities,” a spokesperson for IFC said.

Java 9 and 10 is predicted to release 250 million tonnes of carbon dioxide over 25 years, equivalent to the annual emissions of Thailand or Spain, according to a report by sustainable finance watchdog Recourse.

Greenpeace report warned that the $3.5 billion coal project could lead to more than 4,700 premature deaths over a 30-year period and affect the air quality in the Indonesian capital Jakarta, 120km from the power plant.

Indonesia has the fourth largest coal pipeline in the world and is one of only five countries in the world to start construction of new coal power plants in 2020, according to Climate Action Tracker.

The GEA was developed precisely to encourage equity clients in such countries to shift away from coal, with a goal to reduce their coal exposure by 50% by 2025 and to zero by 2030.

“The approach will allow IFC to continue engaging with banks that finance coal, but with a transparent framework and declining limits in line with the Paris Agreement and various climate scenarios,” the IFC said.

The policy came two years after the IFC said it would proactively seek clients committed to moving away coal.

“If the IFC continues to fund really egregious coal such as Java 9 and 10 that is a huge disappointment and frankly a betrayal of all the GEA stands for,” Recourse co-director Kate Geary told Climate Home.

“The GEA will be revised in 2021 and we need to see this loophole closed – no new coal has to be a condition of IFC agreement to partner with a bank under the GEA.”

Hana Indonesia’s parent bank is Hana Korea, South Korea’s fourth largest bank. IFC has a “long-term relationship” with Hana Korea, according to Seongeun Lee, a researcher at the Korea Sustainability Investing Forum. “They have invested in Hana Korea from their inception.”

IFC and Hana Korea are both shareholders in Hana Indonesia. IFC owns almost 10% and Hana Korea almost 70% of equity in the bank, according to Recourse. Neither bank has made a public statement on coal financing.

Hana Korea is one of several South Korean banks to invest in Java 9 and 10, noted Yuyun Indradi, the executive director of campaign group Trend Asia.

“Korea is financing dirty energy projects [overseas], while they try to implement the Green New Deal domestically. It’s a double standard,” Indradi said.

When President Moon Jae-in won the election earlier this year, he announced an ambitious Green New Deal, which included a 2050 net zero pledge and ending state support for overseas coal projects.

In July, South Korean lawmakers proposed a bill that would end financing for overseas coal projects. Seongeun said it is currently unclear whether the bill will pass and said that to date only six Korean financial institutions have declared that they will no longer invest in coal.

“Hana has seen that [Java 9 and 10] is the last chance as a business opportunity [to invest] in the dirty energy sector,” Indradi said.

According to Recourse, IFC could play a pivotal role in ending Indonesian and Korean investment in coal.

“We need IFC to take Hana Indonesia to task over this, and to use its relationship with Hana Korea to have a serious discussion about the bank’s huge coal exposure around the world,” said Geary.

This article was amended to clarify the emissions comparison.

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Forced Land Evictions in Uganda: Tenure and food insecurity on the rise…

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The scale of the issue, as revealed in Witness Radio’s recent report, is staggering and demands immediate attention: Over 5,000 hectares are targeted weekly by local and foreign investors, leading to the displacement of hundreds of Indigenous and local communities. This urgent situation threatens their food sovereignty and environmental stewardship, necessitating immediate and decisive action.

The forced land evictions are not just numbers; they are exacerbating inequality and directly undermining the efforts of local farmers to safeguard food systems and the environment.

Disturbing findings from the Daily Monitor: Uganda is grappling with a surge in malnutrition cases, with over 260,000 children suffering from acute malnutrition, as reported by UNICEF and WHO.

When evicted from their land, which is the source of livelihood, survival becomes very difficult, resulting in unwanted deaths, sicknesses, and poverty. These are not just statistics, but the harsh realities the affected communities face. It’s crucial to remember that there’s a human story of struggle and loss behind every statistic, and it’s these stories that should drive our actions.

Witness Radio’s recent report, which covered the first half of 2024, revealed that Ugandans face forced land evictions daily to give way to land-based investments, with 723 hectares of land at risk of being grabbed daily.

Furthermore, over 360,000 Ugandans were displaced, with a daily average of 2,160 people losing their livelihood. Land is targeted for oil and gas extraction, mining, agribusiness, and tree plantations for carbon offsets. While some investments have taken shape on the grabbed land, other pieces of grabbed land are still empty but under the guardship of military and private security firms.

The report pointed out that the leading causes of forced land evictions were the lack of legal documents for land ownership and transparent mechanisms to regulate an influx of “investors.” This lack of legal ownership is not just a symptom but the root cause of the problem, highlighting the urgent need for legal reform to protect the rights of Indigenous and local communities.

Since the Uganda government announced an industrial policy that commoditized its land to fight its unemployment, which will give Uganda a middle-income class status from a low-developed country, there has been an increase in forced land eviction cases. This policy shift, encouraging large-scale industrial projects, has raised questions about the government’s responsibility and accountability in these evictions.

Many investors fraudulently acquire communities’ land and do not conduct feasibility studies to establish whether the targeted land has interests. On many occasions, communities are not consulted about their land, and no compensation is offered.

According to the Lands Ministry’s 2016 annual report, about 23 percent of Uganda’s land is registered. The registration is mostly with freehold (where the land is owned outright), mailo (a form of land tenure in Buganda, a region in Uganda, customary tenure), and lease (where the land is leased for a specific period) tenure systems.

Go-betweens and blockers use this gap with support from some government officials to acquire land titles fraudulently and later evict bonafide land occupants (Indigenous and local communities) to give way for land-based investment.

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Appellate Division of the East African Court of Justice (EACJ) rejects the request to dismiss the EACOP appeal case.

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By Witness Radio team.

The Appellate Division of the East African Court of Justice (EACJ) has rejected a request by the Tanzanian government to dismiss an appeal filed by four East African civil society organizations (CSOs) seeking compliance with the East African Crude Oil Pipeline (EACOP) with regional and international human rights standards.

Tanzania’s Deputy Solicitor General, Mr. Mark Mulwambo, requested the judges dismiss the Appeal, arguing that the record of proceedings from the hearings held at the First Instance Division was missing. The record of proceedings includes the CSOs and respondents’ submissions. He added that, without it, the judges at the Appellate Division could not determine whether the First Instance Court erred in the ruling that they made.

However, the court could not grant his request. Instead, it ordered the four CSOs that filed the Appeal to file supplementary information so that the judges could hear the case.

The Appeal will be heard by a panel of judges from the Appellate Division of the EACJ, including Justice Nestor Kayobera, the division’s president; Justice Anita Mugeni, the Vice President; Justice Kathurima M’Inot; Justice Cheboriona Barishaki; and Justice Omar Othman Makungu. These judges, with their expertise in regional and international law, will review the Appeal and make a final decision.

The Appeal was filed by four CSOs, including the Africa Institute for Energy Governance (AFIEGO) from Uganda, the Centre for Food and Adequate Living Rights (CEFROHT) from Uganda, the Natural Justice (NJ) from Kenya, and the Centre for Strategic Litigation (CSL) from Tanzania, in December 2023. This was in response to the dismissal of their case, which sought compliance with the East African Crude Oil Pipeline (EACOP) with regional and international human rights standards, by judges at the First Instance Division of the EACJ in November 2023.

During the dismissal, the court ruled that the applicants filed the petition out of time, stating that the petitioners should have filed the petition as early as 2017 instead of 2020. The court also ruled that it did not have jurisdiction to hear the case, meaning it did not have the legal authority to decide on this matter. These decisions were based on legal precedents and the specific circumstances of the case.

The CSOs were ordered to file the record of proceedings by Justice Nestor Kayobera by November 29, 2024.

The court session was attended by EACOP-affected communities from both Uganda and Tanzania. Among them was Mr. Gozanga Kyakulubya, an affected person from Kyotera District in Southern Uganda, who traveled to Arusha to participate in the hearing. His personal story underscores the profound impact of the EACOP on the lives of these communities.

He shared his grievance, stating, “I came to the court because I have a lot of pain. My land was taken for the EACOP, and before I was paid, it was fenced off. The government of Uganda also sued me because I rejected the low compensation offered by EACOP. We need at least one court to be fair to EACOP host communities, and we hope the East African Court of Justice will be that court.”

The EACOP has been designed, constructed, financed, and operated through a dedicated Pipeline Company with the same name. The shareholders in EACOP are affiliates of the three upstream joint venture partners: the Uganda National Oil Company (8%), TotalEnergies E&P Uganda (62%), and CNOOC Uganda Ltd (15%), together with the Tanzania Petroleum Development Corporation (15%).

The 1,443km pipeline will eventually transport Uganda’s crude oil from Kabaale—Hoima to the Chongoleani peninsula near Tanga Port in Tanzania.

Climate activists and civil society organizations, however, continue to oppose the project, claiming that it will harm several fragile and protected habitats irreversibly and violate key agreements and treaties.

The potential environmental damage is a cause for concern among these groups.

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Big oil firms knew of dire effects of fossil fuels as early as 1950s, memos show

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Newly unearthed documents contain warning from head of Air Pollution Foundation, founded in 1953 by oil interests.

Major oil companies, including Shell and precursors to energy giants Chevron, ExxonMobil and BP, were alerted about the planet-warming effects of fossil fuels as early as 1954, newly unearthed documents show.

The warning, from the head of an industry-created group known as the Air Pollution Foundation, was revealed by Climate Investigations Center and published Tuesday by the climate website DeSmog. It represents what may be the earliest instance of big oil being informed of the potentially dire consequences of its products.

“Every time there’s a push for climate action, [we see] fossil fuel companies downplay and deny the harms of burning fossil fuels,” said Rebecca John, a researcher at the Climate Investigations Center who uncovered the historic memos. “Now we have evidence they were doing this way back in the 50s during these really early attempts to crack down on sources of pollution.”

The Air Pollution Foundation was founded in 1953 by oil interests in response to public outcry over smog that was blanketing Los Angeles county.

Researchers had identified hydrocarbon pollution from fossil fuel sources such as cars and refineries as a primary culprit and Los Angeles officials had begun to proposal pollution controls.

The Air Pollution Foundation, which was primarily funded by the lobbying organization Western States Petroleum Association, publicly claimed to want to help solve the smog crisis, but was set up in large part to counter efforts at regulation, the new memos indicate.

It’s a commonly used tactic today, said Geoffrey Supran, an expert in climate disinformation at the University of Miami.

Fire emanating from a factory chimney
A gas flare from the Shell Chemical LP petroleum refinery burns against the sky in Louisiana. Photograph: Drew Angerer/Getty Images

“The Air Pollution Foundation appears to be one of the earliest and most brazen efforts by the oil industry to prop up a … front group to exaggerate scientific uncertainty to defend business as usual,” Supran said. “It helped lay the strategic and organizational groundwork for big oil’s decades of climate denial and delay.”

Then called the Western Oil and Gas Association, the lobbying group provided $1.3m to the group in the 1950s – the equivalent of $14m today – to the Air Pollution Foundation. That funding came from member companies including Shell and firms later bought by or merged with ExxonMobil, BP, Chevron, Sunoco and ConocoPhillips, as well as southern California utility SoCalGas.

The Air Pollution Foundation recruited the respected chemical engineer Lauren B Hitchcock to serve as its president. And in 1954, the organization – which until then was arguing that households incinerating waste in backyards was to blame asked Caltech to submit a proposal to determine the main source of smog.

In November 1954, Caltech submitted its proposal, which included crucial warnings about the coal, oil, and gas and said that “a changing concentration of CO2 in the atmosphere with reference to climate” may “ultimately prove of considerable significance to civilization”, a memo previously uncovered by John shows. The newly uncovered documents show the Air Pollution Foundation shared the warning with the Western Oil and Gas Association’s members in March 1955.

In the mid-1950s, climate researchers were beginning to understand the planet-heating impact of fossil fuels, and to discuss their emergent research in the media. But the newly uncovered Air Pollution Foundation memo represents the earliest known cautionary message to the oil industry about the greenhouse effect.

The Air Pollution Foundation’s board of trustees, including representatives from SoCalGas and Union Oil, which was later acquired by Chevron, approved funding for the Caltech project. In the following months, foundation president Hitchcock advocated for pollution controls on oil refineries and then testified in favor of state-funded pollution research in the California Senate.

Hitchcock was reprimanded by industry leaders for these efforts. In an April 1955 meeting, the Western Oil and Gas Association told him he was drawing too much “attention” to refinery pollution and conducting “too broad a program” of research. The Air Pollution Foundation was meant to be “protective” of the industry and should publish “findings which would be accepted as unbiased”, meeting minutes uncovered by John show.

After this meeting, the foundation made no further reference to the potential climate impact of fossil fuels, publications reviewed by DeSmog suggest.

“The fossil fuel industry is often seen as having followed in the footsteps of the tobacco industry’s playbook for denying science and blocking regulation,” said Supran. “But these documents suggest that big oil has been running public affairs campaigns to downplay the dangers of its products just as long as big tobacco, starting with air pollution in the early-to-mid-1950s.”

In the following months, many of the foundation’s research projects were scaled back or designed to be conducted in direct partnerships with lobbying groups. Hitchcock resigned as president in 1956.

Last year, the largest county in Oregon sued the Western States Petroleum Association for allegedly sowing doubt about the climate crisis despite longstanding knowledge of it.

DeSmog and the Climate Investigations Center previously found that the Air Pollution Foundation underwrote the earliest studies on CO2 conducted in 1955 and 1956 by renowned climate scientist Charles David Keeling, paving the way for his groundbreaking “Keeling Curve,” which charts how fossil fuels cause an increase in atmospheric carbon dioxide.

Other earlier investigations have found that major fossil companies spent decades conducting their own research into the consequences of burning coal, oil and gas. One 2023 study found that Exxon scientists made “breathtakingly” accurate predictions of global heating in the 1970s and 1980s, only to then spend decades sowing doubt about climate science.

The newly unearthed documents come from the Caltech archives, the US National Archives, the University of California at San Diego, the State University of New York Buffalo archives and Los Angeles newspapers from the 1950s.

The Western States Petroleum Association and the American Petroleum Institute, the top US fossil fuels lobby group, did not respond to requests for comment.

Origin Source: The Guardian

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