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World Bank is backing dozens of new coal projects, despite climate pledges

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1 year ago

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New research shows that the International Finance Corporation, part of the World Bank Group, is providing back-door support to at least 39 new coal projects, constituting over 68 gigawatts of new coal-fired power capacity throughout China, Indonesia and Cambodia.

The International Finance Corporation (IFC), the private lending arm of the World Bank Group, is indirectly backing dozens of new coal projects throughout Asia, according to a new report, Blowing Smoke: How Coal Finance is Flowing through the IFC’s Paris Alignment Loopholes. The report, based on research conducted by Inclusive Development International, Recourse and Trend Asia, was published today, in advance of the World Bank Annual Meetings taking place in Marrakech next week.

“We found that the IFC is still backing new coal capacity through its investments in banks and other financial institutions despite its commitments to align those investments with the Paris Agreement,” said David Pred, executive director of Inclusive Development International. “This is the opposite of the sustainable development that IFC purports to promote, and it is having a devastating impact on coal-affected communities throughout Asia and the entire planet in this time of climate peril.”

A planned 700-megawatt coal-fired power plant called Jambi 2, to be located in Indonesia’s Jambi province, is among the new coal projects the IFC is indirectly supporting. The new report focuses on Jambi 2 as a case study for how the IFC’s lending ends up supporting new coal development and the impact that has on local communities. According to local advocates and community members interviewed by Inclusive Development International, Jambi 2 is a project the province doesn’t want and doesn’t need—one that will exacerbate the already devastating impacts of coal development in the area, including air and water pollution and related health issues. Yet Postal Savings Bank of China—an IFC intermediary and a major coal financier in the region—has provided a credit line to Jambi 2’s developer, China Huadian.

“Ongoing coal development in Indonesia, including the Jambi 2 plant, will accelerate climate change and its catastrophic consequences,” said Novita Indri, energy campaigner at Trend Asia. “It’s a slap in the face to Indonesia, an island nation that is uniquely vulnerable to rising sea levels and already suffering from extreme weather events.”

Postal Savings Bank of China is by far the largest financier of coal developers in the IFC’s portfolio. According to data compiled by Inclusive Development International and published alongside the new report, the IFC purchased a $300 million equity stake in Postal Savings Bank in 2015 and the bank has gone on to provide 418 billion RMB ($57.3 billion) in no-strings-attached credit lines and project loans to companies developing dozens of coal-fired power plants in the region. The bank has provided these loans at a time when much of the financial industry is shifting away from coal, implicating the IFC and the World Bank Group in the last vestiges of coal finance and the devastating impacts it has for coal-affected communities and the climate. The authors of the report are calling on the IFC to leverage its influence as a major shareholder to stop Postal Savings Bank from continuing to finance coal development.

“It’s hypocritical for the IFC to allow its banking clients to finance projects like Jambi 2 and other coal development in Asia while at the same time promising to align its lending with the Paris Agreement on Climate Change,” said Kate Geary, co-director of Recourse. “While committing to move away from coal on paper, the World Bank Group is failing to ensure that its investments aren’t  supporting coal power projects that are significant contributors to climate change and that wreak devastation on affected communities.”

These latest revelations come on the heels of reports last month that communities in Indonesia’s Banten province have lodged a formal complaint against the IFC for backing two new massive units in the Suralaya mega-coal complex. Similar complaints have been lodged against the IFC in the past, including regarding its support for coal expansion in the Philippines.

“The IFC has contributed to serious harms related to coal expansion in many countries,” added Pred. “Now it has a responsibility to repair the damage it has done and prevent future harm by requiring that all of its financial intermediary clients, including Postal Savings Bank of China, stop financing coal development immediately.”

Notes for editors:

Regarding IFC’s financial intermediary lending and “no coal” commitments

Inclusive Development International previously followed the money in the IFC’s financial-sector portfolio and published our findings in our Outsourcing Development investigative series, which exposed (among other things) the coal plants and mines the IFC was indirectly backing.

Since then, the World Bank Group has made a series of commitments designed to reform its approach to investing in financial institutions, reduce its exposure to coal and align itself with the Paris Agreement. Most prominently, in 2019 the IFC launched its Green Equity Approach, which requires financial institutions in which it holds shares to halve their coal exposure by 2025 and eliminate it from their portfolios by the end of the decade. In 2023, the IFC closed a major loophole that Inclusive Development International, Recourse and Trend Asia pointed out in the approach by updating the rules to restrict equity clients from financing any new coal projects.

However, the IFC’s flagship approach aligning its indirect lending operations with the Paris Agreement contains other loopholes and gray areas: it still allows equity clients to underwrite bonds for coal developers, and it allows clients to finance industrial projects that are powered by dedicated coal plants, a concept known as captive coal. And it is unclear how and whether the “no new coal” rule is being applied to existing clients’ corporate financing of coal developers. In fact, as our new research and report show, banks in which the IFC holds equity stakes—including Postal Savings Bank of China—have continued to provide financing to the developers of new coal projects.

Regarding our methodology

For this report, Inclusive Development International traced the International Finance Corporation’s money through financial intermediaries to new coal-fired power capacity in Asia. The full results are here.

We define new coal capacity as projects that have become operational since 2019; projects that are under construction; and projects that have been announced by developers. This data does not include projects that are listed as shelved or canceled, although developers regularly reactivate shelved projects after long periods of inactivity.

For all data on coal plants, including project names, generating capacity, development timelines and project owners, we relied on the Global Energy Monitor, which tracks energy infrastructure around the world. For data on project developers, including their current coal-generating capacities, development plans, and issuances of debt securities, we relied on the Global Coal Exit List, which the IFC also uses  to help its clients identify coal exposures in their portfolios.

All other data comes from research conducted by Inclusive Development International, Recourse and Trend Asia into corporate filings, the International Finance Corporation’s project disclosures, and site visits in Indonesia.

Source: inclusivedevelopment.net

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NGO WORK

World Bank Project Cancelled in a Landmark Victory for Tanzanian Villagers

Published

2 days ago

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January 22, 2025

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—FOR IMMEDIATE RELEASE—

January 21, 2025; 9:00 AM PST

Media Contact: amittal@oaklandinstitute.org, +1 510-469-5228

  • In a major victory for Tanzanian pastoralists and farmers, the World Bank funded REGROW project, which enabled extrajudicial killings, human rights abuses, livelihood restrictions and forced evictions to expand Ruaha National Park (RUNAPA) is cancelled.
  • Amidst an ongoing investigation by the independent Inspection Panel, the Bank first suspended the project in April 2024, citing the Tanzanian government’s noncompliance with safeguards for resettlement and grievance mechanisms.
  • The cancellation comes after nine United Nations Special Rapporteurs expressed their concerns and demands to the Tanzanian government and the World Bank around forced evictions and human rights abuses linked to the project.
  • Over 84,000 people in 28 villages remain at risk of eviction, abuses, and livelihood restrictions. Impacted communities call on the World Bank and the government of Tanzania to cancel the park expansion so they can remain on their lands and reclaim their lives.

Oakland, CA – The World Bank’s US$150 million Resilient Natural Resource Management for Tourism and Growth (REGROW) project in Tanzania is cancelled. The decision came after 16 months of advocacy by the Oakland Institute to hold the Bank accountable for enabling the expansion of RUNAPA and supporting TANAPA, the paramilitary Tanzania National Parks Authority. Its rangers are responsible for egregious human rights abuses, including extrajudicial killings and crippling livelihood restrictions that have terrorized farmer and pastoralist communities in the Mbarali District. The expansion of the Park from one to over two million hectares threatens over 84,000 people.

“This landmark decision is a major victory for the villagers who courageously stood up to stop the project,” said Anuradha Mittal, Executive Director of the Oakland Institute. “Though forced to stop funding the terror it unleashed, the Bank must now urgently address the serious harms it has enabled and respond to the demands of the communities whose lives are on hold.”

Villagers mobilizing against World Bank-funded evictions in Tanzania

When initially informed of the abuses and violations of its own safeguards in April 2023, the World Bank failed to take action. In June, the Institute filed a request for inspection on behalf of the impacted villagers with the Bank’s Inspection Panel and followed up in September 2023 with a widely covered report, Unaccountable & Complicit.

As a result, the Inspection Panel launched an investigation in November 2023. Amidst the investigation, in a rare move, the World Bank suspended disbursements to the project in April 2024, citing(link is external) the Tanzanian government’s “non-compliance with their Environmental and Social (E&S) obligations… non-compliance related to involuntary resettlement planning activities taking place in RUNAPA,” as well as the absence of a grievance redress mechanism. Continued advocacy led to the project being eventually cancelled in November 2024.

Additional pressure(link is external) to hold the Tanzanian government and the World Bank accountable came from nine United Nations Special Rapporteurs who urged “all necessary interim measures … to prevent any irreparable harm” to affected villagers.

“The initiative of the UN experts is vital given the extent of abuses inflicted by paramilitary rangers on local communities in a country where there is no rule of law,” continued Mittal. “The government and the Bank must be held accountable for the harms caused by their disregard for basic human rights for the sole purpose of increasing tourism revenue,” she concluded.

Impacted communities are demanding the following actions:

  1. Removal of beacons placed marking the expansion of the park and to officially revert park boundaries to the 1998 borders established by GN 436a.
  2. Provide comprehensive compensation for damages incurred by livelihood restrictions and violence inflicted by TANAPA rangers, including:
    1. Value of fines paid by pastoralists to reclaim cattle illegally seized.
    2. Value of cattle auctioned.
    3. Compensation for the loss of agricultural production for three seasons (2023, 2024, 2025).
    4. Compensation for the victims of violence and killings by TANAPA.
  3. Establish a multistakeholder independent mechanism to oversee reparations.
  4. Restore social services to villages impacted by GN 754.
    1. Complete construction on Luhanga Secondary School and provide it with government teachers.
    2. Reopen Mlonga Primary School that was closed in October 2022.
    3. Ensure all villages located within GN 754 boundaries are provided with the power, water, and social services they are entitled to like other villages.

“We call on the World Bank to fully assume its responsibility and urgently take these necessary steps to answer our pleas for justice. Our lives are on hold as the threat of eviction looms over us every single day. Our livelihoods have been undermined for years, our children are out of school, our farms sit fallow and our cattle are still being forcibly seized. We cannot continue living like this. The Bank must adequately address our past and ongoing suffering.”

– Statement by impacted villagers in Mbarali, January 2025

Source: oaklandinstitute.org

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NGO WORK

West and Central African grassroots organisations reaffirm their commitment against tree monocultures and in defence of their ancestral lands and forests

Published

1 month ago

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December 24, 2024

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For almost 10 years, the Informal Alliance against the expansion of Industrial Monocultures in West and Central Africa has had an important role in connecting grassroots organisations and activists and strengthening the resistance against land grabbing and other attacks by oil palm and other plantation companies in the region.

Last November, community activists and grassroots organisations that are part of the Alliance, from 10 countries, gathered at their General Assembly to renew their commitment to the defence of ancestral lands and to keep resisting against neo colonial interests and the corporate takeover of communities’ lands.

See below the full declaration:

Gabon, November 2024

THE MOUILA DECLARATION
of the
Informal Alliance against the expansion o Industrial Monocultures

We, the 60 members gathered at the 6th General Assembly of the Informal Alliance against the expansion of Industrial Monoculture Plantations, in Mouila, Gabon from November 19 to 22, 2024, representing communities and organizations of Gabon, Nigeria, Cameroon, Sierra Leone, Congo Brazaville, Liberia, Ghana, Congo Kinshasa, Ivory Coast and Uganda are deeply committed to the fight against land grabbing, particularly by tree plantation companies. LET US ADOPTE this Declaration which marks our conviction in the vital importance of the recognition and return to ancestral community land ownership in Africa, for the well-being of the first occupants.

WE RECOGNIZE THAT:

  • Ancestral lands are home to communities of people with traditional culture and knowledge of nature;
  • Women play a critical role in the defense of their ancestral lands and forests;
  • Community ancestral land in Africa has intrinsic worth and warrants respect regardless of it usefulness in habitants and humanity as a whole;
  • The natural wealth, rights and freedom to their land is being eroded this day at  a frantic and unprecedented  manner and rate because of delibrate harmful development policies clade in colonial legancy;
  • Ancestral community territories illegally occupied during colonial and post-colonial government regimes as concessions to corporations for business development violate the rights of the people and therefore, constitutes serious crimes against human, an illegality is an illegality regardless of the time they were committed;

WE FURTHER ACKNOWLEADGE THAT:

  • Post-colonial governments have failed in their responsibilities by giving true independence to the communities by prioritizing colonial interests by foreign agents by enacting neo-community laws to dislodged and robbed communities of their ancestral land using various opaque notions of national land and/or government land ownership;
  • The threats caused by the senseless acts of grabbing ancestral land and awarding them as concessions to business has brought untold hardship, violence and irreparable damage such loss of lives and biodiversity, entrenched poverty due loss of livelihoods and community property, early child pregnancy, and gender-based violence, etc.
  • African countries that got independence in the 1960s and 70s, today consider communities as belonging to the State and governments and sit in the comfort of their armchairs in faraway land to grant concessions to corporations without Free, Prior, and Informed Consent of the true of the ancestral landowners.

WE ARE COMMITTED TO:

  • Promote and defend agroecological practices and food sovereignty as a form of resistance;
  • Facilitate the establishment of effective and efficient network of communities, activists and NGOs cooperating at local and international level to understand the strategies and tactics used by corporations to steal communities ancestral land and to develop further strategies and tactics to guide communities to stop land grabbing and recover previous illegal occupied land according to the Alliance objectives;
  • Develop mechanisms that permit all sectors of society, especially the longstanding local populations to nonviolently start the journey to assert their ancestral rights to land fondly referred to by some governments as national land and/or state own land, be partners in planning, establishment of initiative that add value to the ancestral land;
  • Strengthen nonviolent resistance education and provide training that will improve their ability to confront governments and corporations that want to take over their territories.
  • Strengthen education for nonviolent resistance and provide training that will improve their ability to confront governments and corporations that want to take over their territories.
  • Plead for the authorities to provide young people with access to land in rural areas, facilitate their training and support.

RECOGNIZING that action to protect the living riches and beauty of ancestral land depends, on the full commitment of the affected local people, WE PLEDGE OURSELVES to work wholeheartedly to implement the provisions of this Declaration.

EMPHASZING that the recognition of ancestral land is essential to sustaining human society and conserving our planet, WE INVITE THE MEMBERS AND FRIENDS OF THE ALLIANCE to convey this Declaration far and wide with the purpose of ensuring that the conclusions acre incorporated in daily activities.

Signatories:

• Community members from Gabon
• Musiru Divag de Fougamou Gabon
• Institute of sustainable Agriculture, Grand Bassa county, Jogba clan, Liberia
• Women’s Network Against Rural Plantations Injustice (WoNARPI), Sierra Leone
• Alliance Uganda Chapter
• Witness Radio, Uganda
• Nature Cameroon
• Synaparcam, Cameroon
• COPACO, DRC
• RADD, Cameroon
• Struggle to Economize Future Environment (SEFE), Mundemba, Cameroon
• CPPH, Cote d’Ivoire
• Collectif des Ressortissants et Écologistes des Plateaux Bateke, Gabon
• REFEB, Cote d’Ivoire
• YVE Ghana
• JVE Côte d’Ivoire
• Association Gulusenu du village Doubou, Gabon
• Muyissi Environnement, Gabon
• Komolo Agro Farmers Association Kiryandongo, Uganda
• Ndagize julius, East African, Uganda
• LOOK GREEN, CARE FOUNDATION, Nigeria
• Association les Rassembleurs du Village Mboukou, Gabon
• Joegba United Women Empowerment and Development Organization (JUWEDO), Liberia
• COLLECTIF ADIAKE. Cote d’Ivoire
• CNOP, Congo
• Maloa, Sierra Leone
• World Rainforest Movement
• GRAIN

Source: World Rainforest Movement

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NGO WORK

Urgent Call for Conditionalities on New IFC and EBRD Loan to Oyu Tolgoi Mine

Published

1 month ago

on

December 17, 2024

By

By Accountability Counsel and partners

Joint Statement

December 9, 2024

We, the undersigned civil society organizations (CSOs) and representatives of herders from Mongolia, strongly condemn the International Finance Corporation (IFC) and European Bank for Reconstruction and Development (EBRD) in providing a $100 million loan each, to Oyu Tolgoi (OT). This decision blatantly disregards years of unresolved grievances, environmental harm, and the failure of OT to comply with IFC and EBRD’s safeguard standards, as well as widespread rejection from local herders, CSOs, and even the Mongolian government.

Unresolved Harms and Non-Compliance

OT has failed to address critical issues, including its commitments under the 2017 Herders Complaint Resolution Agreements and IFC and EBRD’s social and environmental safeguards. Longstanding issues include:

  1. Failures in completing Resolution Agreements: Herders continue to struggle to sustain their livelihoods and protect the environment, as the agreements resulting from CAO complaints remain incomplete. The Tripartite Council (TPC), tasked with implementing the 2017 Agreements, has failed to ensure meaningful involvement of herders in safeguarding their rights and livelihoods.
  2. Tailings Storage Facility (TSF) Seepage: Despite implementing a Remedial Action Plan (RAP) as required by lenders to address the seepage from tailings cell 1 (TC1), OT has neither adequately mitigated the seepage nor transparently disclosed its full extent. Recent data reveals worsening water quality, with Total Dissolved Solids (TDS) levels rising dramatically downstream.
  3. Pasture and Water Scarcity: The mine’s expansion plans threaten vital grazing lands and water resources. Springs that once supported herders’ livelihoods have dried up, forcing herders to compete for limited resources. Moreover, the Dugat-Khaliv river, a key water source for herders, has been diverted around TC2 in a diversion channel without capacity to convey flood-level flows during rainy periods, leading to significant water loss for downstream herders.
  4. Environmental Failures: OT consistently fails to meet the design goal of 64% tailings solid content, resulting in inevitable seepage from the additional pressure exerted by excess water in the tailings cell. This and other design inefficiencies directly lead to massive water wastage estimated at up to $1.46 million per year.
  5. Inadequate Community Engagement: Herders were not meaningfully consulted about the RAP or OT’s expansion plans, violating IFC and EBRD principles of transparency and participation.

Water Mismanagement and Wastage

OT’s operations exacerbate water scarcity through inefficient tailings management. Water wasted due to tailings solids being below design criteria results in significant financial and environmental costs:

  • From 2013-2017, OT achieved 56% solids (8% below design standard), wasting $1.46 million worth of water annually. From 2018-2024, OT achieved nearly 60% solids (4% below design standard) on average, meaning OT wastes $730,000 annually on replacement water. OT has approximately wasted $12.41 million since 2017 from losing 248.2 million liters of water.
  • Oyu Tolgoi (OT) must attain the highest percentage of solid content as specified by its design criteria, 64%, to effectively prevent water scarcity in the South Gobi Desert and ensure improved water access for herders. While lenders argue that the 60-64% range meets the standard, 2012 ESIA states that “Final concentrate will be thickened to 65% solids” which proves otherwise. The TSF operating consistently below 60% results in excessive water waste, posing severe risks to the fragile desert ecosystem and the livelihoods of herders who rely on limited freshwater resources. Achieving the 64% target is not merely an option but a critical necessity to minimize environmental harm, optimize resource use, and uphold OT’s responsibility to local communities.
  • This inefficiency compounds the structural weakness of tailings dams, necessitating costly redesigns and increasing the risk of catastrophic failure. Concerns Over Project Categorization and Political Risks We are deeply concerned that IFC and EBRD categorized OT’s expansion as a Category B project, despite its significant and irreversible impacts on herders and the environment. This misclassification downplays the scale of the risks, undermining proper oversight. Additionally, the Mongolian government is in a disagreement on additional financing that will add more debt, and the Mongolian Parliament Resolution #103 requires an independent audit of underground mine cost overrun which has not been disclosed. Approving new financing in such a contentious political and social environment poses significant risks to the project’s viability.

Recommendations and Conditionalities

IFC and EBRD must impose strict conditionalities on OT before any disbursements begin and ensure the conditionalities are placed in the lending agreement, including:

  1. Fulfillment of Past Commitments:
    • Include the 2017 Herders Complaint Resolution Agreements (HCRAs) in lenders’ compliance requirements and fully implement them.
    • Amend the RAP to include routine medical assessments for herders and their animals impacted by the contaminated water from the TSF seepage, and update Stakeholder Engagement Plan to involve the wider herder community impacted by the seepage.
    • Disclose all the important data from the attachments and annexes of the RAP.
  2. Water and Tailings Management Improvements:
    • Achieve the 64% as the highest solid content target for tailings as per the original ESIA.
    • Disclose the full extent of TSF seepage impacts, including chemical contamination and health risks.
  3. Protection of Herders’ Livelihoods:
    • Permanently halt land acquisitions that displace herders and prioritize using existing lease areas for future tailings cells.
    • Construct a permanent Dugat-Khaliv diversion channel based on maximum flood probabilities.
  4. Transparency and Meaningful Engagement:
    • Disclose all environmental and social impact assessments (ESIA) for expansion plans, implementation of the ESAP from the initial OT project loan, and OT Green Investment Plan.
    • Take actions to strengthen TPC functions through assessing TPC Charter and the implementation of the HCRAs
    • Ensure meaningful consultation with affected communities on all project aspects. This includes consultations on the expansion plans, environmental and social assessment related documents and strengthening of the Tripartite Council with valid herder representation as the body responsible to address herders’ concerns around the OT project.

The approval of new financing to OT without addressing these critical issues perpetuates harm to herders and the environment while eroding public trust in IFC’s and EBRD’s commitment to sustainable development. We call on IFC and EBRD to uphold their safeguards and suspend agreement signing and financing until OT achieves full compliance and fulfills its obligations to herders and the environment.

(Link to full statement in English and Mongolian)

Contact Information:
Sukhgerel Dugersuren, Oyu Tolgoi Watch, 976-99185828, otwatch@gmail.com
Battsengel Lkhamdoorov, Gobi Soil, 976-88705595, tsengel_5595@yahoo.com
Julio Castor Achmadi, Accountability Counsel, julio@accountabilitycounsel.org
Nina Lesikhina, Bankwatch Network, ninalesikhina@bankwatch.org

Signatories:
Gobi Soil, Mongolia
Oyu Tolgoi Watch, Mongolia
Center for Human Rights and Development, Mongolia
AFE, Mongolia
APPDO, Mongolia
CA NGO, Mongolia
GFS, Mongolia
MFSW, Mongolia
RwB Mongolia
SR NGO, Mongolia
SWA, Mongolia
SWB NGO, Mongolia
Accountability Counsel
CEE Bankwatch Network, Regional
Bank Climate Advocates, USA
Bank Information Center, USA
Both ENDS, the Netherlands
Center for Community Mobilization and Support, Armenia
Centre for Research and Advocacy, Manipur, India
Earth Thrive, UK/Serbia
Friends with Environment in Development (FED), Uganda
GAIA, Regional
Gender Action, USA
Green Advocates
Initiative for Right View (IRV), Bangladesh
International Accountability Project
INWOLAG
Kazakhstan International bureau for human rights, Kazakhstan
London Mining Network
LSD, Senegal
NGO Forum on ADB, Regional
Peace Point Development Foundation-PDF, Nigeria
Recourse
Samata & mm&P, India
Sinergia Animal, Brazil
Urgewald, Germany
Witness Radio, Uganda.

Source: Accountability Counsel.

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