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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.

MEDIA FOR CHANGE NETWORK

EACOP PAPs have started a private criminal proceeding against Army General, Hoima Police Commander and others over their criminal acts during illegal land evictions.

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By Witness Radio team.

The East African Crude Oil Pipeline (EACOP) Project-Affected Persons (PAPs) of the Kapapi community have started criminal proceedings at Hoima Chief Magistrates Court against the Hoima Rural District Police Commander, Uganda People’s Defence Forces (UPDF) General, and Hoima Deputy Resident District Commissioner (D/RDC) and others at large for the criminal and attempted offences committed while illegally evicting over 2500 locals off their land.

The evictees were residing in Waaki North, Kapapi Central, Waaki South, Runga, and Kiryatete villages in Kapapi and Kiganja sub-counties in Hoima district.

Brig. Gen. Peter Akankunda Nabasa, Gafayo Ndawula William, Kyakashari Micheal (Deputy RDC Hoima), Oketcha Micheal, Bogere Patrick (DPC, Hoima), Kiiza Nathan Byarugonjo, Oromo Luzira (Secretary LCI, Runga), Mukindo Bosco, Okethi Bosco, Oming Jacob, Muswa Micheal, Kawiya Henry, Ningaling Joseph and others still at large have been summoned to appear before Hoima Chief Magistrate court and show cause why they should not be prosecuted.

The 1st accused person is the Deputy Commander of Uganda People Defense Forces Police, First Division, Kakiri in Wakiso District; The 2nd Accused is a Businessman with Businesses in Hoima District; the 3rd Accused is Deputy RDC Hoima District. The 4th Accused is the District Police Commander, Uganda Police Force, Hoima District. The 5th, 6th, 7th, 8th, 9th, 10th, 11th, 12th & 13th Accused are residents of Kapaapi Village, Kapaapi Parish, Kapaapi Sub County, Hoima District.

Criminal case file no. 877 of 2023 opened at Hoima court contains various criminal offenses allegedly committed by the accused, such as criminal trespass, arson, looting property, sexually abusing and raping women, battering people, and forcefully evicting residents from their homes, which constitutes a violation of the non-derogable right to freedom from torture, cruel, inhumane, and degrading treatment, as guaranteed under Article 23 And 44 of the 1995 Constitution of the Republic of Uganda.

According to complainants following the invasion, the accused persons perpetrated severe human rights violations against them and their families. These transgressions encompassed the discharge of tear gas canisters into the same, firing of live bullets, setting their houses ablaze, physical assaults, kidnap and the forced eviction from their land.

“During the raid, the accused persons came to my house at around 1 AM local time and set it on fire forcing us out. By the time I rescued the children who were deeply asleep, one of them was severely burnt. Upon forcing us out of our homes, I, my children, and my neighbors were tied up, severely battered, women raped, and forcefully evicted us from our land. Currently my family is rendered homeless, living at a church in Bulisa without any basics of life.” Said one of the witnesses in the case.

On February 10, 2023, at 1:00 AM local time, dozens of unidentified armed men, cladding Uganda Police Force (UPF) Uganda People’s Defense Force (UPDF) uniforms and believed to be under the orders of DPC Bogere and Brigadier Nabasa together with armed guards from Magnum, a private security company dispossessed lawful land occupants without compensation, resettlement, or a court order.

Why Tirenga is mentioned in this illegal land eviction? In a February 2021 report from Total Energies Uganda, titled “Tilenga Project – Resettlement Action Plan 4,” it identified Kapapi, Runga, Waaki, and Kiryatete villages as areas that will be affected by the proposed Tilenga Feeder Pipeline Component (RAP 4).

The Tilenga feeder pipeline corridor is approximately 95 km long. It originates from the Tilenga Project Central Processing Facility (CPF), about 8 km northeast of Buliisa town in Buliisa District and 5 km south of the Albert Nile. The purpose and the need for the Tilenga feeder pipeline, according to Total Energies, is to deliver crude oil to the planned refinery in Kabaale and the East African Crude Oil Pipeline (EACOP).

According to Witness Radio – Uganda findings, the individuals named in the case file have been in correspondence with the Total Energies before and after the illegal land eviction with the motive to benefit from the community’s grabbed land.

The case is yet to be fixed for hearing.

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DEFENDING LAND AND ENVIRONMENTAL RIGHTS

Statement: The Energy Sector Strategy 2024–2028 Must Mark the End of the EBRD’s Support to Fossil Fuels

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The European Bank for Reconstruction and Development (EBRD) is due to publish a new Energy Sector Strategy before the end of 2023. A total of 130 civil society organizations from over 40 countries have released a statement calling on the EBRD to end finance for all fossil fuels, including gas.

From 2018 to 2021, the EBRD invested EUR 2.9 billion in the fossil energy sector, with the majority of this support going to gas. This makes it the third biggest funder of fossil fuels among all multilateral development banks, behind the World Bank Group and the Islamic Development Bank.

The EBRD has already excluded coal and upstream oil and gas fields from its financing. The draft Energy Sector Strategy further excludes oil transportation and oil-fired electricity generation. However, the draft strategy would continue to allow some investment in new fossil gas pipelines and other transportation infrastructure, as well as gas power generation and heating.

In the statement, the civil society organizations point out that any new support to gas risks locking in outdated energy infrastructure in places that need investments in clean energy the most. At the same time, they highlight, ending support to fossil gas is necessary, not only for climate security, but also for ensuring energy security, since continued investment in gas exposes countries of operation to high and volatile energy prices that can have a severe impact on their ability to reach development targets. Moreover, they underscore that supporting new gas transportation infrastructure is not a solution to the current energy crisis, given that new infrastructure would not come online for several years, well after the crisis has passed.

The signatories of the statement call on the EBRD to amend the Energy Sector Strategy to

  • fully exclude new investments in midstream and downstream gas projects;
  • avoid loopholes involving the use of unproven or uneconomic technologies, as well as aspirational but meaningless mitigation measures such as “CCS-readiness”; and
  • strengthen the requirements for financial intermediaries where the intended nature of the sub-transactions is not known to exclude fossil fuel finance across the entire value chain.

Source: iisd.org

Download the statement: https://www.iisd.org/system/files/2023-09/ngo-statement-on-energy-sector-strategy-2024-2028.pdf

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MEDIA FOR CHANGE NETWORK

Pushing back: The EACOP victim community rushes to court seeking reinstatement onto their land and compensation.

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By Witness Radio team

One of the East Africa Crude Oil Project (EACOP) victim communities in Hoima district has run to Hoima high court challenging a forceful and violent eviction which pushed them off their land, asserting that it was very illegal and unconstitutional and subjected them to degrading treatment.

The Kapapi community, as commonly referred to, is composed of both pastoralists and cultivators that were lawfully living in Waaki North, Kapapi Central, Waaki South, Runga, and Kiryatete villages in Kapapi and Kiganja sub-counties in Hoima district since the 1950s.

In a February 2021 report from Total Energies Uganda, titled “Tilenga Project – Resettlement Action Plan 4,” it identified Kapapi, Runga, Waaki, and Kiryatete villages as areas that will be affected by the proposed Tilenga Feeder Pipeline Component (RAP 4).

The Tilenga feeder pipeline corridor is approximately 95 km long originates from the Tilenga Project Central Processing Facility (CPF), about 8 km northeast of Buliisa town in Buliisa District and 5 km south of the Albert Nile. The purpose and the need for the Tilenga feeder pipeline, according to Total Energies, is to deliver crude oil to the planned refinery in Kabaale and the East African Crude Oil Pipeline (EACOP).

Uganda National Oil Company (UNOC), as the Government nominee, holds a 15% participating interest in the Tilenga project; Total Energies E&P Uganda B.V., the operator, holds 56.67% while the other partner, China National Offshore Oil Corporation (CNOOC) Uganda Limited holds 28.33% shares.

On 10th February 2023 at 1:00 am local time, unidentified dozens of men cladding Uganda Police Force (UPF) and Uganda People’s Defense Force (UPDF) uniforms, together with armed guards from Magnum, a private security company violently evicted over 2,500 locals from 1294.99 hectares of land with no compensation or resettlement, looted animals and food stuffs. The eviction was executed without a court order.

Through their lawyers Arinaitwe Peter & Company Advocates, Mulega Eria and 13 others on behalf of the pastoralists community in a Civil Suit no. 78 of 2023, sued a UPDF Brigadier General. Nabasa Peter, Bogere Patrick, a Hoima Rural District Police Commander, Kyakashari Micheal, the Deputy Resident District Commissioner (RDC) of Hoima district, one Gafayo Ndawula William, Kiiza Nathan Byarugonjo, Oketcha Micheal, Oromo Luzira, Magnum Security company limited, Muhwezi Aston, William Kiiza, Kyamanywa Alex, Wilber Kiiza, Hoima district Land Board and Commissioner land registration among others.

In a second matter, Civil Suit no. 79 of 2023, Ajaruva Uchida and 112 others on behalf of the crop growers community, sued a UPDF Brigadier General Nabasa Peter, Bogere Patrick, a Hoima Rural District Police Commander, Kyakashari Micheal, a the Deputy Resident District Commissioner (RDC) of Hoima district, a one Gafayo William Ndawula, Kizza Nathan Byarugonjo, Oketcha Micheal, Asimwe Moses Byangire, Oromo Luzira and Magnum security company limited among others.

Both communities are accusing the latter of carrying out a forceful and violent eviction from their land, alleging a disregard of lawful procedures driven by a desire to profit from EACOP related projects.

In both suits, both communities demand for several remedies from the courts of law, such as a permanent injunction restraining all defendants and their agents from further interference with their land, an order for an immediate return onto their land, and compensation.

Arinaitwe Peter, one of the lawyers, expressed optimism that Courts would hear the cries of the Kapapi people, who have endured destitution, significant suffering, and displacement, with some living in internally displaced people’s camps following the brutal eviction.

“We are optimistic that the honorable Court will listen to the cries of the Kapapi people. These people are destitute, they have suffered immensely, and some of them are currently residing in internally displaced people’s camps due to a brutal eviction carried out by the individuals mentioned in different suits. Our purpose here is to ensure that their voices are heard, have justice served, and that they are immediately returned to their land while the legal case is ongoing.” Said Mr. Arinaitwe.

Mr. Kataza Samuel, one of the community environmental defenders, called on Hoima Court to expedite the hearing of their matters since many of the residents are undergoing hardships as a result of forceful evictions.

“Our people are enduring immense suffering, with many families torn apart by poverty. They are scattered across in different parts of the country, struggling for survival, while some are forced to live with relatives. Unfortunately, essential services like shelter, food, healthcare, and education for their children remain elusive. We are here to seek justice for our violated rights, and, therefore, we implore Court to intervene urgently,” He added.

As we write this story, the grabbed land continues to be heavily guarded by Uganda People’s Defense Forces (UPDF) Soldiers and Magnum Security Company guards.

Court is yet to fix hearing dates for both suits.

 

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