Professional Documents
Culture Documents
Table of Contents
Introduction ............................................................................................................................... 5
List of Acronyms ........................................................................................................................ 6
1 International Finance Corporation ................................................................................. 7
9 Annexes ................................................................................................................................. 51
9.1 International Finance Corporation ................................................................................ 51
9.1.1 Power Map ...................................................................................................................................... 51
9.1.2 Tables and Charts ........................................................................................................................ 55
9.2 Multilateral Investment Guarantee Agency ................................................................ 62
9.2.1 Power Map ...................................................................................................................................... 62
9.2.2 Tables and Charts ........................................................................................................................ 64
9.3 European Bank for Reconstruction and Development ........................................... 67
9.3.1 EBRB Draft Mining Strategy .................................................................................................... 67
9.3.2 Criticisms of the EBRD Mining Operations Policy .......................................................... 68
9.3.3 EBRD Public Information Policy ............................................................................................ 69
9.3.4 EBRD Administration Tribunal Case Study....................................................................... 70
9.3.5 EBRD Financed Extractive Industry Projects ................................................................... 71
9.3.6 Transcript of EBRD-related Interviews .............................................................................. 71
9.3.7 EBRD Financed Extractive Industry Projects ................................................................... 76
9.4 Inter-American Development Bank ............................................................................... 77
Introduction
Terra Lawson-Remer, J.D., PhD, Assistant Professor, The New School
Manuel Valderrama Florez, PhD Student, The New School
The present report is product of a collaborative research project between Revenue Watch
Institute and the Studley Program in International Affairs at The New School University. The
project sought to provide background analysis for potential broad-based coalition efforts to
improve global governance of extractive industries by promoting the transparent and
accountable management of oil, gas and mineral resources. For this, the research addressed
two main topics: a) transparency and disclosure requirements in the official development
finance (private sector development loans and sovereign risk guarantees) from bilateral
import-export credit agencies and multilaterals, and b) beneficial ownership in the
extractive industries sector. These distinct arms were developed through two respective
deliverables. All research and the respective deliverables were executed and written by the
class of the Resource Curse course of the fall semester of 20131.
The main objective of the first arm of the research project was to examine the current
requirements of International Finance Institutions regarding revenue, payment, and
contract disclosure. In addition to mapping these said requirements, the project also
assessed how did these compare to those included in the 2012 IFC Sustainability
Framework, and to new US-EU mandatory disclosure rules through stock market
regulations (e.g., Cardin-Lugar); examined the different enforcement mechanisms deployed
by all IFIs; determined the accessibility of the information that was being disclosed if any-;
and, estimated the coverage of stock market regulations in terms of projects and capital
where possible-. The researchers used existing RWI comments on IFI policies (e.g. EBRD
and US Ex-Im), international good practices (e.g. IMF Guide on Resource Revenue
Transparency), New Schools Resource Curse course literature, and other secondary
literature, for the assessments. Additionally, the project also described the key stakeholders
and decision makers of the IFIs examined.
Due to its extent, the deliverable for the first arm of this research was divided into two
reports, according to the type of IFI: a) Development Finance Institutions (DFI), and b)
Export-Credit Agencies (ECA). This document addresses transparency and disclosure
requirements in Development Finance Institutions. Each chapter develops the abovementioned research objectives to the extent that was possible due to information
constraints2-, and presents the results in four broad sections: background information of
each DFI, contract and payment transparency requirements, a comparison of these said
requirements with mandatory disclosure rules through stock market regulations, and policy
recommendations. The DFIs examined in this document are the following: i) International
Finance Corporation, ii) Multilateral Investment Guarantee Agency, iii) European Bank for
Reconstruction and Development, iv) Inter-American Development Bank, v) African
Development Bank, vi) Asian Development Bank, vii) Japan Bank for International
Cooperation, and viii) Overseas Private Investment Corporation.
Except Chapter 6 - The United States Export-Import Bank of the report dedicated to Export-Import Credit
Agencies, which was developed by project manager Manuel Valderrama Flrez, PhD Student at The New School
University.
2 Since we are dealing with transparency requirements, not all IFIs have included these sort of reforms in to
their policies.
1
List of Acronyms
ADB: Asian Development Bank
AfDB: African Development Bank
ATI: Aid Transparency Index
BTC Pipeline: BakuTbilisiCeyhan pipeline
China ExIm: The Export-Import Bank of China
COFACE: The Compagnie Franaise d'Assurance pour le Commerce Extrieur
COO: Country of Operation
CSE: Civil Society Engagement Unit
CSO: Civil Society Organization
EA: Environmental Analyses
EU: European Union
EBRD: European Bank for Reconstruction and Development
ECA: Export-Credit Agency
ECG: Export Credits and Credit Guarantees
EI: Extractive Industry
EIA: Environmental Impact Assessments
EITI: Extractive Industry Transparency Initiative
ESHR: Environmental, Social and Human Rights
ESIA: Environment and Social Impact Assessment
ESMR: Environmental and Social Management Reports
ESS: Environmental and Social Strategies
EU: European Union
Dodd-Frank: Dodd- Frank Wall Street Reform and Consumer Protection Act
ICC: Inter-American Investment Corporation
IDB: Inter-American Development Bank
IFC: International Finance Corporation
IFI: International Institution
JBIC: The Japan Bank for International Cooperation
KEXIM: Korea Export Import Bank
LAC: Latin America and the Caribbean
MIGA: The Multilateral Investment Guarantee Agency
OECD: Organization for Economic Cooperation and Development
OPIC: Overseas Private Investment Corporation
PCM: Project Complaint Mechanism
PIP: Public Information Policy
PSD: Project Summary Document
PWYP: Publish What You Pay
RWI: Revenue Watch Institute
SCF: Structured and Corporate Finance
SDR: Special Drawing Rights
SEA: Strategic Environmental Analyses
SEC: U.S. Securities and Exchange Commission
US Ex-Im: United States Export Import Bank
UKEF: United Kingdom Export Finance Department
WBG: World Bank Group
Number of Projects
Number of Countries
Total Portfolio
Mining
30 (companies)
37
23
225
$2billion
$500million
This section was elaborated by The New Schools students Alix Schroder <schra652@newschool.edu>, Kaili
Jackson <jackk073@newschool.edu>, Zo Meroney <meroz441@newschool.edu>, Rudy Shaffer
<shafr174@newschool.edu.
4 Oil & Gas Overview Presentation, International Finance Corporation (IFC).
http://www.ifc.org/wps/wcm/connect/2e17440049a5ca20a138e3a8c6a8312a/IFC2012_Oil_andGasOverv
iew.pdf?MOD=AJPERES (accessed November 20, 2013.
5 Annual Report 2013: Industry Results, International Finance Corporation (IFC)
http://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/annual+report/2013
_online_report/global_results/industry_results/ar13_results_industry_ogmc (accessed November 20, 2013).
3
Out of the 14 payments disclosed in 20117 (See Annex 9.1.2, Table 2 for more
details):
o Some used some form of an easy to understand consolidated chart disclosing
total payments to host government (Vostok, Peru LNG, Kuwait Energy)
o Hyperlinks were unavailable for 2011 (Melrose and ROCH)
o 1 used an easy to read template however it aggregated totals paid for the
entire region (Salamander Energy/Southeast Asia (Thailand, Borneo, and
Indonesia)
o 1 used an easy to understand template that broke payments down to local,
regional, national, and aggregate country total (Geopark)
o 1 used an easy template broken down into PAYE, SDL, UIF, Royalties, and
VAT payments to a country however, some website digging was needed
(Petra Diamonds)
o 1 used a Spanish only website (Medanito)
o 1 file was corrupted when downloaded. Only linked method of disclosure
(Pan American Energy)
o embedded payment disclosures in lengthy documents or annual reports
making it difficult to find the actual amounts disclosed (Lonmin, BPZ
Resources, Bankers Petroleum, Candax).
Of the disclosure methods deployed those with a direct link from the IFC website to
a consolidated chart detailing specific payment data such as income tax, VAT,
royalties, license and production bonuses, and other material payments provided
the clear and functional understanding. Companies such as Salamander Energy and
Kuwait Energy exemplified this method. Those companies employing the use of an
Policy on Environmental and Social Sustainability, in IFC Sustainability Framework, International Financial
Corporation: World Bank Group. January 1, 2012, p11
7 Government Revenues, International Finance Corporation (IFC),
http://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/industries/oil%2
C+gas+and+mining/development_impact/development_impact_disclosure/development_impact_disclosure
_government_revenues (accessed November 15, 2013)
6
Project specificity was similarly difficult to find unless the company was created to
work on only one project or if the IFC funded multiple fields headed under a single
project name. In the case of Peru LNG, the company was created specifically for the
project the IFC is funding and thus it was easy to delineate the payments made to
the host country.9 Yet, typically if multiple countries were involved in the IFC funded
project disaggregated totals would be disclosed by country, but not necessarily by
specific projects. For example, Petra Diamonds discloses its payments by country
and by type of payment, but not by specific project or field. This is problematic in
that according to the Summary of Investment by the IFC only one field in South
Africa is funded by the IFC commitment, yet Petra has licenses for five mining
sites.10
1.3.3 Contracts
The IFC requires that those extractive industry projects backed financially by the IFC are
made publicly available. As stated in the Policy on Environmental and Social Sustainability,
the principal contract set forth between the IFC client corporation and the host government
that outlines the key terms and conditions, under which the resource will be exploited,
along with any significant amendments to that contract, are to be made public.11 These
contracts include host government agreements (HGAs) and intergovernmental agreements
(IGAs). A summary may be accepted in lieu of full contract disclosure if it includes the life of
the contract, any material payments due to the government, other fiscal terms and
conditions, and a summary of any significant stabilization clauses.
9Payment
10
member of the World Bank Group, the IFC is subjected to project and policy level
evaluations to ensure adherence to the goals as stated by the IFCs mission.15
1.6 Recommendations
The IFC should create an addendum to the Policy on Environmental and Social Sustainability
specifying the types of payments to be disclosed, how they are to be disclosed, and where
they are to be disclosed. Additionally, an accessible template preferably in the form of a
consolidated chart detailing the determined payment types should be required.
The IFC should develop a hyper linked table of all Oil & Gas and Mining projects with links
to SII, ERSR, Annual Reports, above template, and contracts. Increasing the accessibility of
information for the public.
Develop an action plan to encourage contract disclosure requirements by those
governments with a high number of extractive industry corporations. Possible avenues may
be through the EITI, its advisory commitments, and through its member states and partners.
11
Figure 1. MIGAs Extractive Sector Portafolio, Fiscal Year 2013 - Source: MIGA 2013 Annual Report,
http://www.miga.org/documents/Annual_Report13.pdf
In 2013, MIGA issued $652.1 in guarantees of oil, gas, and mining projects. The two sectors
accounted for 11 percent of MIGAs outstanding gross portfolio.21 It is significant to note
that during MIGAs 2013 fiscal year, new business by sector shifted dramatically from the
financial sector to infrastructure and oil, gas and mining. The financial sector accounted for
17 percent of new volume in 2013, while infrastructure accounted for 46 percent of new
volume and the oil, gas, and mining sectors accounted for 23 percent of new volume (See
Annex 9.2.2 for outstanding portfolio distribution by sector).22
This section was elaborated by The New Schools students Alix Schroder <schra652@newschool.edu>, Kaili
Jackson <jackk073@newschool.edu>, Zo Meroney <meroz441@newschool.edu>, Rudy Shaffer
<shafr174@newschool.edu.
19 MIGA Brief: Oil and Gas, MIGA, April 2013. http://www.miga.org/documents/oil&gasbrief.pdf, (accessed
Oct. 23, 2013), p.3
20 MIGA Brief: Mining, MIGA, April 2013, http://www.miga.org/documents/miningbrief.pdf, (accessed October
23, 2013), p.3
21 MIGA Annual Report 2013, MIGA, June 30, 2013, http://www.miga.org/documents/Annual_Report13.pdf,
(accessed December 4, 2013), p.3
22 MIGA Annual Report 2013, p.23
18
12
Infrastructure, 46%
Oil, gas, and mining 23%
Financial, 17%
Agribusiness, manufacturing,
and service, 14%
Currently, MIGA has 7 active oil and gas projects and 5 active mining projects (See Annex
9.2.2 for a complete list of active projects) 23. The majority of these projects are located in
Africa, with the remaining located in Latin America, Asia, and Central Europe. The guarantee
holders for MIGA-supported extractive sector projects include private companies,
development banks, and national banks. Several of the companies guaranteed through MIGA
for extractive industry projects are publicly listed in United States and European Union
stock exchanges (See Figure 3). Note: The companies listed in the U.S. exchange markets
have to comply with the Dodd-Frank Act transparency requirements, and the companies
listed in E.U. exchange markets have to comply with disclosure and transparency
requirements as dictated by the E.U Transparency Directive24.
U.S. Exchange Markets
Euronext Paris
Sasol Ltd
El Paso Corporation
Kinross Gold Corporation
(owns BEMA Gold
Corporation)
Kenmare Resources Plc.
Anglooval Mining Ltd
Sasol Ltd
Kenmare Resources Plc.
Mitsubishi Corporation
Dodd-Frank Act
EU Transparency
Directive
EU Transparency
Directive
EU Transparency
Directive
Table 2: Extractive sector companies in U.S. and E.U Exchange Markets - Source: Oil and Mining
Companies on Global Stock Exchanges, http://data.revenuewatch.org/listings/
Eramet SA
Note: all extractive sector projects (including non-active projects) can be found on
http://www.miga.org/sectors/index.cfm?stid=1813.
24 Transparency Requirements for Listed Companies, The European Commission (EC),
http://ec.europa.eu/internal_market/securities/transparency/ (accessed December 6, 2013)
23
13
mandate and to strengthening public trust in MIGA and its clients25. While the updated
Policy does not explicitly mention the extractive sector, it has several implications for
extractive sector transparency:
The Policy on Disclosure of Information stipulates that MIGA has to make available
certain specific information,26 including an Environmental and Social Review
Summary (ESRS) and Summary of Proposed Guarantee (SPG) for each MIGAsupported project. This encompasses all extractive sector projects.
14
15
16
They are disclosed on our websiteyou can find all projects and documentation we
publicly disclose related to those projects [on our website]39. However, we were unable to
locate any HGAs, IGAs, or similar on their website.
Where the client has undertaken a process of Social and Environmental Assessment,
the client is required to publicly disclose the Assessment document.
If communities may be affected by risks or adverse impacts from the project, the
client is required to provide the communities with access to information on the
purpose, nature, and scale of the project, the duration of proposed project activities,
and any risks to and potential impacts on such communities.
To remain eligible for MIGA guarantees, MIGA requires the guarantee holder to maintain
and preserve the following: (1) audited accounts of the project enterprise in accordance
with IFI reporting standards, (2) any other material information relating to the investment
project and (3) all required registrations, filing, declarations, authorizations, approvals,
permits, consents, concessions and licenses.41 The document does not explicitly state if the
guarantee holder has to maintain these records publicly.
17
However, we were unable to locate any precedent of MIGA terminating coverage or denying
payment due to failure of lack of transparency. Also, it isnt clear where to find the legal
documentation stating mentioned here. There is no explicit mention of transparency
requirements in any of the contract templates available on the website.
Accountability is also addressed through the Compliance Advisor/Ombudsman (CAO),
which enables individuals and communities affected by MIGA-supported projects to raise
their concerns to an independent oversight authority45, and the Independent Evaluation
Group (IEG), which assesses the development impact of MIGA programs, guarantee projects
and complementary services46.
MIGA limits the requirement for contract disclosure to only significant new
extractive projects.48 A significant new extractive project is a project expected to
account for ten percent or more of government revenues.
The 2007 Performance Standards document states that the Performance Standards
were revised in October 2013 and to visit www.miga.org/sustainability to access
them. However, there is no link or, even reference, to the 2013 Performance
18
2.6 Recommendations
49
50
Make the revenue, payment, and contract information from clients publicly available
on the MIGA website. Since MIGA requires clients of MIGA-supported projects to
(supposedly) publicly disclose a majority of this information, providing a platform
for public access would be a simple next step. Additionally, it would bolster
transparency and accountability within the client organizations.
Specify the method for affected communities to access disclosed contracts and
payment/revenue information. Currently, no such method is incorporated in MIGA
policy. One recommendation is to require clients to produce an annual report
disclosing revenues and payments that is specifically designed for public
consumption. The reports would be available on MIGAs website in English, as well
as in the language(s) of the host country.
Facilitate relationships between its clients and host country civil society
organizations, as a mechanism to increase public pressure for transparency and
accountability.
19
Figure 3. EBRDs Natural Resources Portfolio since 2006, by sector Source: Investments in Natural
Resources, EBRD54
In its Investments in Natural Resources section, EBRD does not offer a total investment
figure, but rather visually disaggregates data by sector. By conducting a visual estimation,
EBRD finances approximately $1.5 billion Euros in the extractive sector. The largest
The New Schools students Masha Katz -Katzm969@newschool.edu-, Justin Coburn cobuj499@newschool.edu-, Emma Stoskopf-Ehrlich -stose168@newschool.edu-, Jonatthan Leonard Leonj726@newschool.edu-, and Jaron Vogelsang -vogej566@newschool.edu- elaborated this section.
52
Natural Resource Sector. EBRD. Accessed November 16, 2013.
http://www.ebrd.com/pages/sector/naturalresources.shtml
53
Galnaftogaz Loan II Project Summary Document. EBRD. Accessed Nov. 19 2013 http://www.ebrd.com/
english/pages/project/psd/2013/45462.shtml
54
http://www.ebrd.com/pages/sector/naturalresources.shtml - Accessed Nov. 16 2013
51
20
category of investment claims to be in oil and gas extraction, with an investment of 300
million Euros. 55
The chart suggests that (between coal and metals) only about 70 million Euros have been
invested into mining operations. This seems remarkably low, considering that the EBRDs
project summary documents state that, over the course of the last 10 years, at least $1.49B
has been lent or approved for future loan disbursements, to mining projects56 (for a
breakdown of this figure see Annex 9.3.5 - EBRD Financed Extractive Industry Projects). The
graph fails to identify the time frame for the information presented.
The second largest amount of money invested by the bank is in remediation services with a
total of 270 Million Euros. Environmental remediation is the action of remedying
something, especially the reversal or stopping of damage to the environment.57 EBRD
remediation services include relocation efforts, clean-up projects, or efficiency
improvements i.e. the MOL/Slovnaft Energy Efficiency Project.58 (Remediation projects
were not classified as EI projects by the researcher in Annex 9.3.5 - EBRD Financed
Extractive Industry Projects)
There is no easy way to access the historical data of extractive industry activity in a
coherent or aggregated form. Instead, summary documents (PSDs) of natural resource
projects for the past 10 years were reviewed, and independent decisions which classified
the projects were made and EBRD's amount lent to extractive projects was calculated.
Many of EBRDs natural resource projects were not included as extractive. Generally these
were loans for: refinery construction/improvement, recycling (of coal/gas), pipeline
construction, petrol station construction, treatment facilities, and distribution networks. All
of the aforementioned information was collected into a spreadsheet (Annex 9.3.6 - EBRD
Financed Extractive Industry Projects) and analyzed.
EBRD projects which are classified as B-level (in terms of social/environmental impact)
only sometimes are required to provide PSDs,59 so there may be significant loans made to
clients for projects which are not disclosed. These include non-disclosed B-level projects, Clevel projects, and projects using intermediary financial Institutions.
According to the PSDs used in Annex 9.3.5 - EBRD Financed Extractive Industry Projects, in
the last 10 years (2004 - 2013) EBRD has approved $2.515B USD in strictly extractive
projects:
Mining: $1.5B (16 Projects)
Oil & Gas: $1.0B (14 Projects)
21
Since this significant progress was made in 2010, there do not seem to have been any
further concrete commitments or actions that EBRD has incorporated into its operational
policy structure. The EBRD scored in the Poor range on the Publish What You Fund
organizations 2013 Aid Transparency Index (ATI). In addition to its poor general rating, it
scored the lowest out of any of the development banks that were investigated, and it scored
only a 2.2/10 in its dedication to transparency.61 The policy does note the upcoming EU
Directive implementation, and states that it will:
Require the implementation of the new EU regulations on transparency of extractive
industries as soon as they will come into application. 62
For more detailed information and feedback on specific policy documents, please see the
following Appendices:
Mining Operations Policy (and its contrast with the Draft Mining Strategy regarding
RWI suggestions for alteration) Annex 9.3.1 EBRB Draft Mining Strategy
Criticisms of the Mining Operations Policy Delivered by CEE Bankwatch Annex
9.3.2. In its Mining Policy, The EBRD states that it encourages EITI compliance and
good governance practices:
The Bank will continue to adhere to best governance, transparency and revenue
management standards by encouraging its clients to implement principles and criteria of the
60 Mining
22
EITI.63
This statement begs the question: what has EBRD actually done to encourage its clients to
adhere to good governance standards? To answer this this question, EBRD projects have
been identified in which the client has agreed to adhere to PWYP or EITI policies, or are
otherwise enforcing standards of good governance in well-outlined and substantial ways.
For detailed information about which projects/clients are included, see Annex 9.3.5 EBRD
Financed Extractive Industry Projects. All information regarding the good governance of
these projects was taken from EBRD's own PSDs. Where it was unclear whether adherence
was a solid requirement, it was noted in the Annex 9.3.5, but not included those projects in
the aggregation of good governance projects. All data is gathered from January 2004
November 2013.
Total # of (strictly) extractive projects64: 30
Number of projects (explicitly) requiring adherence to the well-established good
governance principals of either EITI or PWYP: 13
Percentage of EI projects requiring well-defined good governance standards: 42%
Amount of money associated with these 13 Projects: $614M USD
Percentage of Money Invested in EI projects which requires good governance: 24.5%
63
64
65
66
23
Indeed, much of the PIP seems more concerned with confidentiality than with transparency.
For example, the EBRD offers 9 instances in which it reserves the right to invoke further
confidentiality measures that allowed by its general policies.68 Additionally, despite good
web access to many of its documents, an interview with CEE Bankwatchs EBRD campaign
coordinator revealed that:
..if requested to provide access to such information (Revenue/Payment & Contract
Disclosure), the EBRD refers us to its clients or their financial reports, as published on their
web sites.... When asked by Bankwatch, if any money has been disbursed, the reply was
'check the client's website.' It is not always easy to find or to understand financial reports of
EI companies. And it should be fairly simple for the EBRD to say 'yes, we did this much for
this and that.' or 'no, we did not disburse any moneys yet.'69
When a project is proposed, the EBRD uses the guidelines from the COO's country strategy
document, local/state law, and scale of impact to determine a category for the project. For
high impact projects, it requires its borrowers to conduct and publish an Environmental and
Social Impact Assessment (ESIA). Projects are designated as category A when:
it could result in potentially significant and diverse adverse future environmental and/or
social impacts and issues which, at the time of categorisation, cannot readily be identified or
assessed and which require a formalized and participatory assessment process carried out
by independent third party specialists in accordance with the PRs 70
Each category has different standards of project transparency. Category A projects require
a publicly posted Project Summary Document (PSD), whereas category B projects can
circumvented disclosure at the discretion of the Secretary General. Several of EBRD's
category B projects have come under criticism from CSOs for inaccurate categorization, and
their associated lower standards of project disclosure. In an interview with CEE Bankwatch,
its representative explained that:
...there is the problem with categorization of EI projects, as so-called brown-field projects
get a category B, which have lesser requirements on disclosure and shorter periods for
public consultation. The problem is that 'brown-field' projects are usually associated with a
legacy of heavy historic pollution and dodgy privatization agreements, issues that raise
67
68
69
70
71
Public Information Policy: Report on the Invitation to the Public to Comment. EBRD. May 2011. Page 9.
http://www.ebrd.com/downloads/policies/pip/comment.pdf
EBRD Public Information Policy. (2011) Page 10-13.
http://www.ebrd.com/downloads/policies/pip/pipe.pdf
Interview with Fidanka Bacheva McGrath. CEE Bankwatch EBRD Campaign Coordinator. October 21, 2013.
EBRD Environmental and Social Policy. (2008) Page 6.
http://www.ebrd.com/downloads/research/policies/2008policy.pdf
ibid
24
significant public interest that is not matched by the level of transparency provided for
category B investments. Projects that BW has followed that are examples of the B
categorization problem are: Chelopech Mining, DPM Long Term, and Centerra Gold
Revolver.72
25
26
The New Schools students Masha Katz -Katzm969@newschool.edu-, Justin Coburn cobuj499@newschool.edu-, Emma Stoskopf-Ehrlich -stose168@newschool.edu-, Jonatthan Leonard Leonj726@newschool.edu-, and Jaron Vogelsang -vogej566@newschool.edu- elaborated this section.
77 Any projects that are facilitated through the Structured and Corporate Finance department are published on
the IDBs website while all ICC financed projects are found on the ICCs website.
78 Inter-American Development Bank. Approved Loans by Sector/ Subsector. Inter-American Development Bank.
Web. November 16th, 2013. http://www.iadb.org/en/about-us/approved-loans-bysectorsubsector,1329.html?module=01&lg=En&detail=Energy&subtitle=17,680.4
79Inter-American Development Bank. BR-L1120: Delba Vessel. Inter-American Development Bank, October 17 th,
2007. Web. November 15th, 2013. http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=1108308.
Inter-American Development Bank. IDB approves US$488 million for construction and operation of semisubmersible offshore mobile oil-drilling vessel in Brazil. Inter-American Development Bank, October 17th,
2007. Web. November 15th, 2013. http://www.iadb.org/en/news/news-releases/2007-10-17/idbapproves-us488-million-for-construction-and-operation-of-semi-submersible-offshore-mobile-oil-drillingvessel-in-brazil,4088.html
80 Inter-American Investment Corporation. 2012 Annual Report. Inter-American Investment Corporation. Web.
November 11th, 2013. http://www.iic.org/sites/default/files/documents/pub/en/iicdocs-347645-v12012_annual_report_eng_web.pdf. Inter-American Investment Corporation. 2011 Annual Report. InterAmerican Investment Corporation. Web. November 11th, 2013.
http://www.iic.org/sites/default/files/pdf/iic2011ar_eng_lr.pdf. Inter-American Investment Corporation.
2010 Annual Report. Inter-American Investment Corporation. Web. November 11th, 2013.
http://www.iic.org/sites/default/files/documents/pub/en/2010_annual_report_eng.pdf. Inter-American
Investment Corporation. 2009 Annual Report. Inter-American Investment Corporation. Web. November 11th,
2013. http://www.iic.org/sites/default/files/documents/pub/en/2009_annual_report_eng.pdf
76
27
In 2009 the Bank officially endorsed the EITI81 standards and through the Banks
Transparency Trust Fund it offers support to countries that want to strengthen the
transparency and accountability of their extractive industries.82 However, participation in
the Transparency Trust Fund is completely voluntary and is not a requirement for obtaining
an extractive industry loan. It should also be noted that the Transparency Trust Fund only
grants loans to governments and it does not offer its services to private companies who
would like assistance in increasing the transparency in its extractive industry activities.
81Inter-American
28
84
29
This section was elaborated by The New Schools students Alix Schroder <schra652@newschool.edu>, Kaili
Jackson <jackk073@newschool.edu>, Zo Meroney <meroz441@newschool.edu>, Rudy Shaffer
<shafr174@newschool.edu.
86 Mission and objective, AfDB, http://www.afdb.org/en/about-us/mission-objective/ (accessed November 11,
2013)
87,3 http://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/multi-donor-secretariat-forextractive-sector-mdses/background
88 Industries and Services, AfBD, http://www.afdb.org/en/topics-and-sectors/sectors/private-sector/areasof-focus/industries-and-services/ (accessed October 25, 2013)
85
90
30
The AfDB website states that through its involvement, AfDB promotes the attraction of
foreign investments based on transparent, stable, and balanced legislation in the sector. 91
The AfDBs policy on transparency and accountability is not extractive industry specific but
applies across the Banks projects. In regard to the oil and gas sector, the AfDBs new Energy
Sector policy states that the Bank Group will promote policies, principles, and practices
that enhance transparency in the exploitation of [oil and gas] as well as in the use and
distribution of the revenues.92 In the mining industry, one of the AfDBs policy objectives is
to ensure compliance with mining codes, foster greater disclosure, and transparency of
revenue management93. In 2006, the AfDB endorsed the Extractive Industries Transparency
Initiative (EITI) and now holds an observer seat on the EITI board. At the end of 2007, the
AfDB added EITI engagement as an indicator to be monitored by the African Development
Funds results measurement framework. The Bank will continue to provide funding for EITI
implementation of country work plans, the conduct, audit and validations involved and
provide capacity building and technical support for RMCs. The AfDB is also slated to be a
key World Bank partner is promoting value-added approach to the extractive industry
sector, particularly in developing a multi-donor trust fund for the initiative.
As of February 2013 the AfDB has enacted the Disclosure and Access to Information (DAI)
Policy, which replaces the Banks 2005 Policy on Disclosure of Information. The new DAI
policy aims to address shortcomings and gaps in the previous policy including:
31
In particular, Section 3 of the DAI Policy explains what the policy covers and enumerates the
list of exemptions to the policy.
The project details of all AfDB projects can be found at the website
www.afdb.org/en/topics-and-sectors/. Board, budget, and compliance reviews are all open
to the public as well as legal documents, policy documents and financial information. All of
the projects are country specific and listed under a given country, with most project
descriptions in French only. It is hard to find a brief summary and key facts without reading
the entire document of each project. It is also difficult to determine how much each project
cost and the specifics of each contract. It is extremely difficult to locate specific numbers and
contractual agreements, given how much information is presented. Each project has its own
document, which clearly states grant information, the sector, the objectives, outcomes,
justification and conclusion, but projects can only be searched by country and not by
sector.96
While the AfDB does not explicitly mention extractive industry transparency
requirements, the AfDBs new Disclosure and Access to Information (DIA), enacted
in February 2013, states that all documents should be open and transparent to the
public, facilitating better knowledge and understanding of the Bank Group
Activities, its use of resources, and engagement with client countries.97 While the
DIA Policy actively endorses full disclosure there is still some ambiguity about exact
payment, revenue, and contract disclosure requirements for Bank clients.
The Bank also has a Voluntary Disclosure Program, which encourages firms or
individuals in Bank-financed projects to volunteer information in which they may
have participated.99
32
out the Agreement for Mutual Enforcement of Debarment Decision and that client will be
considered ineligible to participate in contracts financed or administered by the African
Development Bank. In order to practice good governance and transparency, the Bank also
has a Whistle-blowing and Complaints Handling Policy where clients can raise concerns. A
whistle-blower is any party who conveys a concern or allegation indicating a prohibited
practice such as fraud and the President will make recommendations based on the specific
case101.
Additionally, the AfDB strives to keep stakeholders informed by ensuring that the intended
beneficiaries of the Banks Groups Development operation understand the intended
objectives and derive the benefits.
While the new DAI Policy is a big step towards articulating clear standards of
information disclosure the list of exemptions included in the document tempers the
success of the policy. Several clauses are so open-ended as to essentially negate the
effectiveness of the Banks commitment to information disclosure. Many of the
clauses offer blanket exemptions rather than applying them on a case-by-case basis
(such as documents related to the deliberation process).
o Key examples of ambiguous clauses:
Section 3.3, Subsection D, Clause i) states: The Bank Group will not
provide access to information provided to it by a member country or
third party that has indicated in writing that such information be
kept confidential.
This allows an incredible amount of leeway for client
countries to obscure important revenue or contract
information and this clause does not clarify if there are any
limits on what can be stated as confidential.
Section 3.3, Subsection F, Clause iii) states: Details of individual
transactions under loans and trust funds, information regarding
amounts overdue from borrowers of a short-term nature, or actions
taken before any loans are declared impaired; and
Section 3.3, Subsection F, Clause iv): Banking or billing information
of Bank Group entities, member countries, clients, donors, recipients,
or vendors, including consultants. 102
This greatly limits the possibility of revenue and payment
disclosure and allows for the obscuring of a great deal of
relevant Bank client information.
http://www.afdb.org/fileadmin/uploads/afdb/Documents/GenericDocuments/Integrity%20and%20AntiC
orruption%20Department%20of%20the%20African%20Development%20Bank%20Group%20Standard%
20Operating%20Procedures.pdf (accessed November 20, 2013)
101 Standard Operating Procedures, p.4
102 Disclosure and Access to Information Policy, AfDB, p. 13
33
fully and regularly. Annex I of the Disclosure and Access to Information103 offers a
sample of information to be proactively disclosed but without sufficient explanation.
While the AfDB website makes information widely accessible to the public, there are
several shortcomings with the actual process of acquiring information. Projects are
only found under country specific names, and contract requirements are buried
deep within the text. The most optimal way to find information is through the search
key, and even then, the documents can be hard to sort through to determine what is
actually being presented, who is involved and what was accomplished.
Operational Policy Papers: The most recent and useful operational policy papers on
the website included the Environmental Review Procedure for Private Sector
Operations and of the AfDB May 2000; Environmental and Social Assessment
Procedures for AfDB Public Sector Operations June 2001; Integrated
Environmental and Social Impact Assessment Guidelines October 2003; and a
handbook on Stakeholder Consultation and Participation in AfDB Operations 2001.
These are standard guideline and procedural document, which are apparently
currently being used by the AfDB.104
5.6 Recommendations
The policy is a good start but requires a significant amount of clarification and
specification. On a simple level there needs to be a closer focus on exactly
enumerated client requirements.
The exemptions should be case specific rather than across the board. There should
be more criteria for evaluating why a particular piece of information should be
exempted.
AfDB should reorganize the website. AfDB doesnt struggle with lack of content, it
struggles with an over abundance of content that cannot be easily found, because of
lack of organization. For the purpose of practicality and functionality, less
information and more conscious presentation of the material would enhance the
overall structure of the AfDB website.
o Rather than sorting projects by country, it would be more useful to sort
projects by sector (i.e., health, agriculture, education etc.), similar to that of
IFC and MIGA. Projects should clearly state objectives, costs, analysis, and
34
The Institute for Democracy in Africa (Idasa) believes that in order for the AfDB to
be more transparent, the following measures have been proven most effective105:
o Senior management making statements and taking other actions that make
it clear and provides access to information as an organizational priority;
o Providing targeted training on access to information and building access to
information elements into other training activities;
o Incorporating access to information into corporate incentive structures and
appraisal systems;
o Educating the public, particularly in project affected areas, about their right
to access information and how it may be exercised;
o Putting in place a central system for tracking requests when they are
made, who receives them, what response was provided, any appeals, and so
on which should itself be made public;
o Publishing and widely disseminating an annual review of implementation of
the access to information policy (a sort of internal audit);
o Putting in place an effective and progressive system of record management;
o Developing a protocol on what sorts of information should be recorded in
permanent form (such as which sorts of meetings should be minuted); and
o Providing for individual sanctions for willful obstruction of access to
information.
o A discrete budget should be allocated for purposes of implementing this
principle and a dedicated body or individual within the IFI should have
responsibility for discharging these duties.106
Tamufor, Lindlyn and Gary Pienaar, African Development Bank Information Disclosure Policy
Implementation Research Project, Idasa, 2011, http://freedominfo.org/documents/AfDB2011gtiReport.pdf,
p. 46
106 Ibid.
105
35
6.2 Methodology
The Asian Development Bank maintains an extensive online database of policy and project
documents. I have examined this as my primary resource, and augmented it with secondary
sources concerning EITI performance and applications as well as critiques on ADB projects
and policies.
I have also compiled Annex 9.6 of extractive sector projects with total extractive costs,
organized by project. The ADB maintains a comprehensive excel document of all projects on
its website on the project search page, which is useful for looking at trends across time, and
for organizing projects by varying components.111
Report developed by Gabriel Stoltzfus, gabestoltzfus@gmail.com, Resource Curse course student, The New
School University
108 Overview: Asian Development Bank. Website http://www.adb.org/about/overview. Accessed 12/09/13.
109 Door Creaks Open on Myanmars Gas Petrolium Economist. Feb. 2012.
110 Resource Governance Index. Revenue Watch Institute. 2013.
111 This excel spreadsheet of ADB Energy sector projects is available under the link titled: Download Sovereign
Projects (As of October 2013). Asian Development Bank Website. Accessed 12/09/13.
107
36
This instance of payment disclosure is singular and unique in the ADB literature, perhaps
because it is a large project (a $100 Million contract with energy conglomerate Lukoil) or
perhaps because transparency in Uzbekistan is poignantly limited by government opacity.
This reference highlights two important things: that the ADB has reliable mechanisms for
disclosure and is interested in exercising responsibility in their projects.
In the case of the Kandym gas project and the Indonesian Tangguh Liquified Natural Gas
project one could allot the entire project cost to extractive infrastructure, but this was not
the case in other projects I identified. These projects are multi-faceted and in most cases
extractive infrastructure cost makes up only a fraction of the whole. The cost break down
for ADB projects is not always available for those currently in-progress, but if they have
already been completed the disaggregated costs can usually be found in completion
documents, posted to the project documents on the ADB website. I examined the
completion documents and presidential reports114 as well as various others for each of the
six projects and found the total cost of the Asian Development Banks extractive sector
projects in the last ten years to be $500,350,074 dollars. A chart containing extractive sector
costs for each project is organized in Annex 9.6 - ADB Extractive Industry Projects.
37
framework in 2008, yet the document only references EITI expectations once, and briefly, in
its sub-section on coal extraction. On page 28, section 59 it states:
The DMC (Developing Member Country) should agree to implement the provisions of the
EITI for all coal mines in its territory. 115
There is no specific language requiring payment or contract disclosure in the Energy Policy.
The singular mention of the EITI framework in this passage is vague, and a suggestion at
best. In the oil and gas sections under the Fossil Fuel heading of the policy no mention is
made of payment or contract disclosure, nor of the EITI recommendations in general.116 All
language concerning disclosure measures and EITI commitment are also absent from the
Public Communications Policy, which directs information management guidelines for the
ADB.117
However, any concrete action has yet to materialize. The ADB has done little in real
language to include disclosure in present policy or future goals, excepting the case of the
Kandym Gas Fields. A working strategy document called the Knowledge management
Directions and Action Plan (2013-2015) lays out a plan for improving a variety of ADB
policies, practices and norms concerning transparency and information sharing, yet the EITI
was not mentioned once. Only on page 22 are any disclosure requirements mentioned
briefly, and as a topic for further work:119
In particular, ADB needs to establish clearer guidelines on, among others, appropriate forms
of engagement for planning and implementing joint CSR and philanthropic programs;
information disclosure and accountability; the nature, forms, and negotiation of co-financing
agreements; use of funds; and what should be minimum levels of resource mobilization that
merit ADBs engagement and partnership.
Similarly, the overarching Strategy 2020, published in 2008, outlines the organizations
future expectations and goals over the next twelve years across a broad spectrum of topics.
It refers to transparency in several places, but does not include language concerning
Energy Policy. The Asian Development Bank. June 2009. Pp 28, sec. 59.
Energy Policy. The Asian Development Bank. June 2009. Pp. 28 30.
117 Public Communications Policy: Disclosure and Exchange of Information. Asian Development Bank. 2011.
118 Public Communications Policy: Disclosure and Exchange of Information. Asian Development Bank. 2011.
Pp. 2.
119 Knowledge Management Directions and Action Plan (2013-2015). Asian Development Bank. 2013.
115
116
38
payment, revenue or contract disclosure, nor its commitment to the EITI framework.
Neither of these policies seem to follow up on the Banks statements of commitment to
transparency. In light of the recurring gap between rhetoric and action on EITI disclosure
requirements, the Asian Development Bank must decide soon whether it wishes to remain
at the vanguard of development institutions on this increasingly visible issue.
Yet I believe there is hope. Although the absence of disclosure policies seems to indicate
unwillingness to reform, the ADB has expressed a strong ethic concerning information
disclosure within their own organization in the past, and possesses the foundation for a
strong disclosure framework.120 In addition to this, the organization has been shown above
to have at least some genuine willingness to address disclosure expectations. It is even
encouraging feedback for its review of the Strategy 2020, in an online feedback tool that
can be found on its website.121 Because the bank has spoken loudly and publicly about a
commitment to partnership and sharing ideas122, it does not seem unreasonable to think
that they would entertain the idea of partnering with RWI to improve upon their disclosure
standards.
The Asian Development Bank is at a turning point: they are a monumental development
institution that is beginning to move in the direction of concrete disclosure policy and they
have an opportunity to help their member countries stave off the governance challenges
that seem to come with resource wealth. The organization still requires some provocation,
but unless the building momentum towards resource extraction accountability ebbs it
would be surprising to see the ADB regress on their current path towards embracing the
EITI framework.
Public Communications Policy: Disclosure and Exchange of Information. Asian Development Bank. 2011.
Section 6, pp. 14 25.
121 Link to Strategy 2020 Feedback Tool:
http://www.adb.org/forms/strategy-2020-mid-term-review-feedback-form
122 Knowledge Management Directions and Action Plan (2013-2015). Asian Development Bank. 2013. Pp. 12
Para 2.
120
39
The best approximation available is that JBIC has signed loans for approximately $74 billion
worth of natural resource projects over the last 10 years.126 See Annex 9.7 for details
This section was elaborated by The New Schools students Alix Schroder <schra652@newschool.edu>, Kaili
Jackson <jackk073@newschool.edu>, Zo Meroney <meroz441@newschool.edu>, Rudy Shaffer
<shafr174@newschool.edu.
124 Profile: Role and Function, Japan Bank for International Cooperation (JBIC), 2013,
http://www.jbic.go.jp/wp-content/uploads/page/2013/08/677/jbic-brochure-english.pdf, p.1 (accessed
October 18, 2013)
125 Profile of JBIC, JBIC Annual Report 2013, JBIC, http://www.jbic.go.jp/en/information/annual-report/year2013, (accessed October 12, 2013)
126 Energy, Natural Resources and Environment Finance, JBIC Annual Report 2013, JBIC,
http://www.jbic.go.jp/en/information/annual-report/year-2013, (accessed October 12, 2013)
123
40
Financial information for JBIC can be located by moving through several sets of links before
eventually
being
directed
to
an
external
site
http://www.jfc.go.jp/n/english/pdf/JFC2012e_P9-18.pdf that is part of the previous
incarnation of JBIC. Annual reports and role and function reports can also be obtained but
there is little mention of these issues beyond a basically stated commitment to transparency
and accountability.
7.3.2 Contracts
There is no clear articulation regarding client contract disclosure requirements in JBICs
materials on loan policies or project financing.
127
The JBIC does not have a policy regarding revenue, payment, or contract
transparency. There is no mention of international frameworks that are currently
gaining purchase in the extractive industry financing sector.
Information in general is difficult to come by and the JBIC website fails to adequately
provide access to its lending policies and disclosure requirements should any
actually exist.
Documents and project information are not easy to access or unavailable entirely
and project information lacks important financial detail.
41
Contact information to ask further questions is not centralized but must be located
by searching through the organizational structure to find phone numbers/emails.
7.3.6 Recommendations
42
Report Developed by Annie Juergens Behr, anniejbehr@gmail.com, Resource Curse course student, The New
School Fall, 2013.
129 Shayerah Ilias, The Overseas Private Investment Corporation: Background and Legislative Issues, CRS
Report for Congress, July 5, 2011, p.1
130 OPIC Handbook, available at http://www.opic.gov/sites/default/files/docs/OPIC_Handbook.pdf, accessed
11/1/13, page 4.
131 Blake Puckett, The Foreign Corrupt Practices Act, OPIC, and the Retreat from Transparency, Indiana Journal
of Global and Legal Studies, Vol 15, #1 (2008): 159.
132 Friends of the Earth and Pacific Environment, Extractive Sector Projects Financed by Export Credit
Agencies, No Date of Publication-possibly 2006, available at
http://pacificenvironment.org/downloads/The%20Need%20for%20Foreign%20Investment%20Contract
%20%20Revenue%20Reform%20at%20ECAs%20_final_.pdf, Accessed October 2013, p. 10.
133 Ibid. p. 10
134 Roshen Hendrickson, Adjustment of the Role of the Overseas Private Investment Corporation (OPIC) in SubSaharan Africa, Africa Today 58 (4), 2013, p. 77.
135 Please note that although Hendricksons article is about Sub-Saharan Africa she uses the term Africa
through the section described above when discussing OPICs investments. This may be because OPIC uses
the category Africato denote all countries in Africain some of its annual reports.
136 Ibid.
128
43
extractive sectors (with OPIC funding in Africa totaling 2.1 billion dollars during this
time).137
In the 2000s however, Hendrickson believes that increasing pressure from environmental
groups led OPIC to take incremental measures to improve [their] environmental impact
through avoidance of extractive projects and requirements to measure carbon output. 138
In 2007, OPIC committed to promoting energy efficiency and low and no-carbon
technology, encouraging carbon sequestration, and reducing direct greenhouse gas
emissions by 50 percent between 2008 and 2023.
Since 2008, with OPICs increased interest in environmental concerns and renewable
energy projects, there has been a significant drop off in financing and investments for
extractive industry projects. In an analysis of OPIC projects for this report, we found that
OPIC investment in extractive projects has decreased significantly over the past five years,
going from 2.4 billion dollars in total investments in extractive projects between 20032007, to 442 million dollars in total investments in extractive projects between 2008-2013
(year to date). OPIC investments in extractive projects over the last five years is less than
1/5 of what it was during the prior five years (see Annex 9.8.2 - Opic Extractive Projects).
In 2011, when OPICs total project portfolio was 14.5 billion dollars139, only 345 million
dollarsor less than 3%--went to extractive industry projects (a total of 4 projects that
included 2 geothermal projects; see Annex 9.8.2 - Opic Extractive Projects). By contrast, in
2011 OPIC reported that 1.1 billion dollarsor just over 7% of their total budgetwent to
renewable energy projects, an amount that was roughly triple the support [for renewable
energy projects] in 2010.140
8.3 Methodology
Information on OPIC was collected through a combination of methods including: 1) a
literature review of secondary sources related to OPIC; 2) a review of primary sources
available on the OPIC website; and 3) email exchanges and phone conversations with OPIC
staff members.
Secondary sources were compiled through a comprehensive literature review. In the first
week of November, I searched Lexis/Nexis and JSTOR for articles with OPIC or Overseas
Private Investment Corporation in the title line or body of the abstract. In addition, during
October, I had previously used a google search to look for articles about OPIC that had been
published by nonprofit organizations concerned with transparency, accountability, and
environment sustainability (such as Revenue Watch Institute, Publish What You Pay, and
Friends of the Earth).
In addition, I reviewed the OPIC website, including policy statements, annual reports141, list
of current projects142, and previous comments from other organizations on OPIC policy.
Ibid. P. 80.
Ibid. p. 79
139 OPIC annual report 2011, available at http://www.opic.gov/sites/default/files/docs/051912-annualreportFINAL.pdf , accessed on Nov 19, 2013, p. 7.
140 Ibid, p. 6.
141 Available at http://www.opic.gov/media-connections/annual-reports , Accessed multiple times over the
course of October and November, 2013.
137
138
44
Using the information in the annual report and the list of current projects, I compiled a list
of extractive oil, gas, and mining projects funded by OPIC over the last 10 years (both
finance and investment funding; see Annex 9.8.2 - Opic Extractive Projects). In addition, all
extractive industry funding recipients were checked against the SEC website and the RWI
database of Oil and Mining Companies listed on Global Stock Exchanges to determine
whether the project would be covered under section 1504 of Dodd Frank or similar global
initiatives.
Finally, I contact OPIC by phone and email to ask for additional information and clarify
information found on the website. In mid October, I spoke by phone with Amanda Burke,
the OPIC press agent to ask for an interview with an OPIC staff member. Ms. Burke asked me
to submit a list of questions, which I did (see email, Annex 9.8.3 Communication with OPIC
regarding policy inquiry). I followed up with Ms. Burke several times during the following
weeks, and she said by phone and email that she was having trouble finding someone who
would be able to answer my questions. On October 25th, I spoke with Ms. Burke and she
said that the person who had been responsible for this area had left OPIC in the spring and
had not yet been replaced, therefore there was no obvious contact person for this area of
expertise. However, she said that she was trying to find someone in the legal department
who would be able to answer my questions. In mid November, I received an email from Ms.
Burke, with written response to my questions, but no indication of who had actually
answered the questions (see email, Annex 9.8.3 Communication with OPIC regarding policy
inquiry).
45
8.5 Transparency
8.5.1 Payment and Contract Disclosure
As of October 15, 2010 when OPIC released a new Social and Environmental Policy
Statement, the agency has required compliance with EITI or substantially similar principles
and criteria for most extractive industry projects (this requirement was confirmed in an
email from OPIC dated November 12, 2013; see attached email). Through this mechanism,
OPIC would seem to require companies to disclose payments, including taxes, royalties, and
dividends (and, according to new EITI standards, this reporting would be required on a
project-by-project basis).144 In addition, according to the new EITI standards, companies
would be encouraged to disclose contracts.145
The text of the requirement, found in section 5.22 of OPICs Social and Environmental Policy
Statement, reads as follows:
5.22 Prior to OPCs issuance of approval for a project that significantly involves an
Extractive Industry and OPICs support to the project is valued at $10 million or more
(including contingent liability) (1) Applicants must agree to implement Extractive Industry
Transparency Initiative (EITI) principles and criteria, or substantially similar principles and
criteria related to the Project; and (2) the host country where the project is to be carried out
must have committed to EITI principles and criteria or substantially similar principles and
criteria or be taking the necessary steps to establish functioning systems. OPIC may approve
an Extractive Industry project if the host country does not meet the requirements of this
paragraph only if (1) OPIC determines that it is in the foreign policy interest of the United
States to provide support to the Project and (2) the host country does not prevent the
Applicant from meeting the disclosure requirements of this paragraph. 146
Since 2011, three of the five extractive industry projects that OPIC has financed have
received 10 million dollars or more in financing, and would therefore, in theory, fall under
this requirement (in addition, OPIC has financed two geothermal projects during this
time).147 However, none of these three companies were listed as participants in EITI on the
EITI website. Nor do these companies mention EITI on their own websites.148 I also search
these three company websites to try find out whether they have implemented a
substantially similar principle or initiative for these OPIC sponsored projects. I could find
no evidence that they had.
It would seem that OPIC has not made a significant effort to enforce their EITI requirement,
or to significantly grapple with this requirement. As of this draft, the transparency page on
the OPIC website still displays OPICs previous EITI policy statement, which was adopted in
Revenue Watch Institute, EITI Improves Reporting Standards, March 7, 2013, available at
http://www.revenuewatch.org/news/blog/eiti-improves-reporting-standards, Accessed Nov 19, 2013.
145 Ibid.
146 OPIC, Social and Environmental Policy Statement, October 15, 2010. Available at
http://www.opic.gov/sites/default/files/consolidated_esps.pdf , Accessed in October, 2013. Page, 21.
147 The organizations are: 1) Apache Corporation (http://www.apachecorp.com); 2) Joshi Technologies
International Inc (http://www.joshitech.com), and 3) Parko Services
(http://www.parkoservices.com.co/resultados.php?len=ing).
148 Ibid.
144
46
2006149, and which encouraged EITI compliance.150 When asked about this discrepancy, an
OPIC representative replied:
OPICs policy is what is specified in the Environmental and Social Policy Statement. Other
areas of the website that are not in conformance will need to be revised accordingly. Thank
you for bringing this to our attention.151
Given that OPICs new EITI policy was adopted in 2010, it would seem that OPIC has been
delinquent in making its current EITI policy clear to its funding recipients and its own
officers. (The original OPIC policy in regards to EITI, as reflected on the website, was
originally adopted in 2006.152)
While it is true that the volume of extractive industry projects may not be significant
compared to other OPIC sectors, it would still seem important that this requirement be
enforced.
OPIC should make it clear throughout all its materials that EITI compliance is required.
Statements about EITI compliance should be added to OPICs application materials. In
addition, all OPIC projects are required to submit an annual self-monitoring questionnaire,
and OPIC should add questions about payment disclosure to these questionnaires (as well
as making it clear that contract disclosure is encouraged) and then follow-up with those
who are not compliant. OPIC also conducts site visits of environmentally sensitive projects.
Hendrickson, p. 79.
See (http://www.opic.gov/who-we-are/transparency), Accessed Nov 20, 2013. ( I also have a screenshot of
this, in case they change it. )
151 Email from unidentified OPIC staff member, November 12, 2013.
152 Hendrickson, p. 79.
153 Email from unidentified OPIC staff member, November 12, 2013.
154 Ibid.
149
150
47
OPIC should monitor compliance with EITI standards on payment and contract disclosure
during these site visits.
8.5.5 Recommendations
OPIC already has a policy in place that would require payment disclosure, and encourage
contract disclosure, for most of its extractive industry projects. I believe the most effective
way for RWI to influence OPIC policies would be to encourage them to enforce their EITI
policy. While OPIC does not publish lists of employees, other than its top executives, it does
have a clear process for making comments on OPIC compliance with its own policies. The
OPIC Office of Accountability is an independent office within OPIC that can conduct an
investigation of how OPIC applied its relevant policies to the OPIC-supported project.156
This process is open to local communities, other project-affected parties, and their
representatives.157 RWI could make contacts with representatives of communities affected
by one of the extractive industry projects that was funded by OPIC in 2013, and make a joint
complaint to the Office of Accountability, asking OPIC to enforce its own EITI policy. The
two most recent extractive industry projects funded by OPIC include 40 million dollars in
financing for the development and production of oil and natural Gas in 23 Concessions in
Egypt, and 14.5 million dollars in financing for the expansion of the Palagua Oil Field in
Colombia, including the drilling of 32 additional wells.158
It is not clear to me how section 1504 of Dodd Frank applies or will apply to the situation of two companies
operating together on a project, when one is SEC listed and the other is not. I see that Dodd Frank includes
rules that apply to companies that control another company (and requires them to disclose payments
from any company that they control). But, what if the two companies are simply operating together? Will
the one company who is SEC listed simply be able to pass the payment to the other company who is not SEC
listed, thereby allowing the second company to make the payment without disclosing, and thereby
circumventing section 1504 of Dodd Frank?
156 OPIC Office of Accountability Website, Available at http://www.opic.gov/who-we-are/office-ofaccountability, Accessed on Nov 19, 2013
157 Ibid.
158 Information available on the OPIC website, Project Description for the Columbia Project available at
(http://www.opic.gov/sites/default/files/files/joshi-technologies-international-2013.pdf ) and for the
Egypt project at (http://www.opic.gov/sites/default/files/files/apache-iii-information-sumary.pdf).
155
48
49
ANNEXES
50
9 Annexes
9.1 International Finance Corporation
9.1.1 Power Map
9.1.1.1
9.1.1.2
IFC Stakeholders
Global Heads at the IFC:
o Mining: Tom Butler
Tel: (202) 473-5989
E-mail: tbutler@ifc.org
o Oil & Gas: Lance Crist
Tel: 1 202-473-0773
E-mail: lcrist@ifc.org
o Media Inquiries: Josef Skoldeberg
Tel: 1 202-473-6978
E-mail: jskoldeberg@ifc.org
Civil Society:
o Chief, Public Affairs: Aaron Rosenberg
Washington, DC
Tel: (202) 458-9385
Email: ARosenberg1@ifc.org
o Head of Communications and Public Affairs: Oliver Griffith
Western Europe
Tel: (33-1) 4069-3195
Email: OGriffith@ifc.org
o Communications Officer: Andrea Engel
Brussels, Belgium
Tel: (32-2) 552-0039
Email: AEngel@ifc.org
Client Stakeholders
Oil and Gas (Active Projects):
o Bankers Petroleum, Canada
o BPZ Resources, USA
o Candax Energy, Inc, Canada
o Geopark, Chile
o Kuwait Energy, Kuwait
o Medanito, S.A., South Africa
o Pan
American
Energy,
UK/Argentina
o Peru LNG, Peru/US, South Korea,
Japan
Mining (Active Projects):
o Lonmin, South Africa
o Petra Diamonds, Bermuda/
Jersey
o Aricom, UK
o Argentex Mining, Canada
o Baobab Resources, Australia
o Eurasian Minerals, Canada
o Kalukundi (Africo)
o Kasbah Resources, Australia
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
ROCH, Argentina
Salamander Energy, UK
Vostok, UK/Russia
Topic Tunisia, Tunisia
Allan Potash, Canada
Kosmos Energy/Tullow Oil,
Bermuda
Rialto Energy Ltd, Australia
Melrose Resources, Irish
Kiwara
Lydian, Jersey
MBAC Fertilizer Corp (Itafos
Project), Canada
Allana Potash, USA
Antares Minerals, Canada
Far East Energy Corporation,
USA
Greystar Resources, Canada
51
o
o
9.1.1.3
o
o
Oxfam America
In 2009, RWI and Oxfam collaborated to Host Discussions on Extractive Industry
Transparency, however since the passage of the Cardin-Lugar section of the Dodd-Frank
Act, Oxfam has spawned another campaign encouraging Big Oil to disclose payments made
to host countries. Strengthening this partnership to develop a collaborative campaign
addressing revenue and payment transparency with a detailed, goal focused, and structured
action plan could prove to be very effective both towards the IFC and at a grassroots level of
involvement.
o Right to Know Right to Decide Campaign
o
o
o
o
www.oxfamamerica.org/BigOil
current campaign to get oil companies to disclose oil payments made to
host governments
info@oxfamamerica.org
campaigns@oxfamamerica.org
Vice President of Policy and Advocacy: Paul OBrien
Media contact: Laura Rusu
Office: (202) 496-1169
Mobile: (202) 459-3739
lrusu@oxfamamerica.org
Senior Policy Manager for Extractive Industries: Ian Gary
Media contact: Alex Blair
Office: (202) 777-2929
Mobile: (202) 460-8272
ablair@oxfamamerica.org
52
Similarly, the IFC sought advisory services from the WRI in its 2011 revision of the IFC
Performance Standards. Capitalizing on the established relationship between the IFC and WRI,
Revenue Watch should attempt a partnership particularly within WRIs The Access Initiative
(TAI). Touted as the largest network of civil society organizations dedicated to ensuring that
local communities have159 access to information so that they can participate in the decisions
that affect their lives.
www.accessinitiative.org
www.wri.org/our-work/project/access-initiative-tai/tools#project-tabs
access@wri.org
Named contacts: Lalanath deSilva, Carole Excell, Jesse Worker, Cait ODonnell
9.1.1.4
The Access Initiative, The Access Initiative, www.accessinitiative.org/about (accessed November 30,
2013)
160 Listening to Our Stakeholders, IFC,
http://www.ifc.org/wps/wcm/connect/c5fdb1804657ab38a2e0e7c173ed7557/IFC_Stakeholders.pdf?MOD=
AJPERES (accessed December 7, 2013)
53
procure their ideas and perspectives on certain policies and projects. Another avenue would
be to maneuver the relationship into a direct partnership where RWI could be contracted for
technical assistance or to manage a joint program. The later two options offer an avenue for
RWI to advocate through participating in the Annual Meetings or through directly engaging
with officials at the World Bank.
civilsociety@worldbank.org
specific individuals can be found according to level (country, regional/departmental,
global)
with
whom
RWI
could
partner
with:
http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/CSO/0,,contentMDK:20093
777~menuPK:220425~pagePK:220503~piPK:220476~theSitePK:228717,00.html
54
9.1.2.2
TSX
LSE
US
Duetsche
BME
AusSE
JSE
MICEX
Bankers
Bankers
PanAmerican(BP)
Lonmin
Peru LNG
(Repsol)
Gryphon
Lonmin
Vostok
Candax
Geopark
Kosmos
PanAmerican(BP)
Antares
PanAmerican(BP)
Lonmin
BPZ
Petra Diamonds
Kasbah
Melrose
PanAmerican(BP)
Salamandar
Aricom
(Petropavlovsk)
Mindoro
Nyota
Lydian
Petra Diamonds
Argentex
Rialto
Salamander
Aricom
(Petropavlovsk)
Baobab
Far East Energy
Baobab
Nyota
Allan Potash
Antares
Lydian
Mindoro
Nyota
Rialto
55
9.1.2.2
Project
Bankers
Petroleum
Host
Government
Albania
Sector
Oil &
Gas
Year of
Commitment
2009
Development Level
Made
material
government
payments
Revenue
Payment
Disclosure
Mechanism*
Disaggregate
d by Project?
Quarterly and
Annual
Financial
Statements
Yes: Albanian
fields are
funded as a
single IFC
project
What Info is
Disclosed?
Income tax,
royalties
Taxes,
royalties
BPZ
Resources
Candax
Energy Inc
Peru
Tunisia
Oil &
Gas
Oil &
Gas
2008
2011
Made
material
government
payments
Made
material
government
payments
Annual Report
No
Annual Report
No:
Disaggregate
d by country
but not by
project or
field
Contract
Accessibility
Income tax,
royalties
(proxy
calculation),
domestic
royalty and
delivery
obligations
Comments
Consolidated
charts
Yes: via
Annual
Report
stipulates
key terms
and
principal
agreement
of contract
No chart or
ledger form
used. Payments
made were
imbedded
within reports
dialog.
Embedded
within a lengthy
annual report.
No consolidated
chart with data
of government
payments.
56
Geopark
Kuwait
Energy
Lonmin
Medanito,
S.A.
Argentina
& Chile
Egypt &
Yemen
Oil &
Gas
Oil &
Gas
South
Africa
Minin
g
Argentina
Oil &
Gas
2009
2009
Made
material
government
payments
Made
material
government
payments
Consolidated
Chart
Consolidated
Chart
2007
Made
material
government
payments
Web-based
Sustainable
Development
Report
2011
Made
material
government
payments
Unable to
Determine
No:
Disaggregate
d by country
but not by
project or
field
Yes:
Disaggregate
d by country
(funded as a
single IFC
project)
Yes:
Marikana
area (IFC
funded
operations)
Government
payments
(Community,
Regional/Prov
inical
Government,
National
Government,
Total)
Royalties;
Bonus
Payments;
Porfit/Income
Tax; Value of
profit oil
delivered to
government;
Other fiscal
benefits to
government
(Field Tax,
KFAS/Zakat,
Export duty,
MRT & VAT);
Total
Cash
payments for
materials and
services
purchased;
Social capital
(donations
and other
community
projects);
Government
Taxes
Easy to read
chart, but lacks
detail and
specificity of
projects and
types of
payments being
made.
Clear and
user/reader
friendly.
Detailed and
specific. Direct
link from ifc.org
website
Direct link to a
report on
sustainable
practices.
Statement is in
ledger form
from the
perspective of
Lomnin.
57
Melrose
Resources
Pan
American
Energy
Peru LNG
Petra
Diamonds
ROCH
Egypt &
Bulgaria
Oil &
Gas
Argentina
Oil &
Gas
Peru
Oil &
Gas
Tanzania
Minin
g
Argentina
Oil &
Gas
Melrose
Resources was
acquired by
Petroceltic.
Disaggregation
of IFC funded
projects and
related
payments
indiscernible.
Corrupted file.
2007
Made
material
government
payments
Unavailable
link from
ifc.org site for
2011;
Petroceltic F12
Report
available via
2010 link on
ifc.org
No
N/A
2007
Made
material
government
payments
Annual Report
No
N/A
2008
Made
material
government
payments
Consolidated
Chart
Yes: Peru
LNG (special
purpose
company
created for
project)
Taxes (VAT
net and
Customs);
Muncipalities;
Others
Easy to read
direct statement
of payments,
but vague in
nature ex.
Others.
Pay-As-YouEarn (PAYE),
Skills
Development
Level (SDL),
Unemploymen
t Insurance
(UIF),
Royalties,
Value Added
Tax (VAT),
withholding
tax
Easy to read
with a easily
navigated
webpage for
disclosure of
payments, but
lacks project
detail.
N/A
2010
Made
material
government
payments
Consolidated
Chart
No:
Disaggregate
d by country
but not by
project or
field
2008
Made
material
government
payments
Unavailable
link from
ifc.org site for
2011
Unavailable
link from
ifc.org site
for 2011
58
Salamande
r Energy
Asia
Oil &
Gas
2008
Made
material
government
payments
Consolidated
Chart
2007
Made
material
government
payments
Consolidated
Chart
Vostok
Russia
Oil &
Gas
Aricom
Russia
Minin
g
2007
Project
evaluation
Payments not
yet made
Topic
Tunisia
Tunisia
Oil &
Gas
2009
Production
not started
Payments not
yet made
MBAC
Fertilizer
Corp
(Itafos
Project)
Brazil
Minin
g
2011
Not in
production
yet
Payments not
yet made
Allana
Potash
Ethiopa
Oil,
Minin
g
2010
Early stage
exploration
Payments not
yet made
Country
totals and an
aggregate
total:
Thailand,
Laos,
Vietnam and
Indonesia
Yes: Diall
Alliance
project in
Russia
Government
Payments
(License
Fees/Signatur
e Bonus/PSC
training, VAT,
Corporate Tax
& SRB,
Royalties,
Production
Bonus)
Community
Development
Outlay (US$);
Purchasers
from National
Suppliers
(Million US$);
Taxes and
Other
Payments
(Million US$)
Summary of
social and
developmen
t
agreements.
No revenue
contract
readily
available
User friendly
consolidated
chart including
data on local
Goods &
Services
purchased and
Community
Based
Payments.
Direct link to
data.
Some detail but
could be more
specific on
whether
royalties and
types of taxes
paid.
59
Antares
Minerals
Peru
Minin
g
2009
Early stage
exploration
Payments not
yet made
Argentex
Mining
Argentina
Minin
g
2010
Early stage
exploration
Payments not
yet made
Baobab
Resources
Mozambiqu
e
Minin
g
2008
Early stage
exploration
Payments not
yet made
Eurasia
Minerals
Haiti
Minin
g
2010
Early stage
exploration
Payments not
yet made
Far East
Energy
Corporatio
n
China
Minin
g
2007
Early stage
exploration
Payments not
yet made
Greystar
Resources
Colombia
Minin
g
2009
Early stage
exploration
Payments not
yet made
Gryphon
Minerals
Burkina
Faso
Minin
g
2009
Early stage
exploration
Payments not
yet made
Gryphon
Minerals
Burkino
Faso
Minin
g
2010
Early stage
exploration
Payments not
yet made
Kalukundi
(Africo)
Democratic
Republic of
the Congo
Minin
g
2007
Early stage
exploration
Payments not
yet made
60
Kasbah
Resources
Morocco
Minin
g
2010
Early stage
exploration
Payments not
yet made
Kiwara
Zambia
Minin
g
2009
Early stage
exploration
Payments not
yet made
Kosmos
Energy/Tul
low Oil
Ghana
Oil &
Gas
2009
Early stage
exploration
Payments not
yet made
Lydian
Kosovo/
Armenia
Minin
g
2007
Early stage
exploration
Payments not
yet made
Mindoro
Resources
Phillipines
Minin
g
2010
Early stage
exploration
Payments not
yet made
Nyota
Minerals
Ethiopa
Minin
g
2010
Early stage
exploration
Payments not
yet made
Rialto
Energy Ltd
Cote
D'Ivoire
Oil &
Gas
2011
Early stage
exploration
Payments not
yet made
Simandou
Guinea
Minin
g
2007
Early stage
exploration
Payments not
yet made
Yes: via
sec.gov and
revenuewatc
h.org
61
MIGA stakeholders
o
Antonio Barbalho, Sector Manager for Energy and Extractive Industries at MIGA
Barbalho oversees all extractive industry matters at MIGA. Prior to MIGA,
Barbalho held several senior positions at Deutsche Bank and CERA.
Email: abarbahlo@worldbank.org
Aradhana Kumar Capoor, Operations, Sanctions and Governance, Infrastructure,
Oil, Gas, and Mining guarantees; Board Matters; Finance and Risk Management
(Legal Affairs)
Aradhana specializes in the legal side of oil, gas, and mining guarantees. He
is also the lead counsel for MIGA on board matters, finance, and risk
management.
Email: akumarcapoor@worldbank.org
Board of Directors (See Annex D for complete list) 161
The Board of Directors reviews and decides on investment projects and
also oversees general management policies. There are currently 24
directors on the Board. The six largest shareholders in MIGA (France, UK,
Germany, US, Japan and China) each vote for a director. The remaining
directors are elected by the votes of subdivisions of countries.
MIGA Directors and Alternates, MIGA, November 11, 2013, (PDF file),
http://siteresources.worldbank.org/BODINT/Resources/278027-1215526322295/MIGADirectors.pdf
(accessed November 20, 2013)
162 Projects, MIGA, http://www.miga.org/projects/index.cfm (accessed November 20, 2013).
161
62
63
FY08
FY09
FY10
FY11
FY12
FY13
Infrastructure
41
41
35
30
33
38
44
Financial
29
37
47
52
49
41
32
13
11
Agribusiness,
manufacturing and
services
17
13
11
11
13
15
13
Total
100
100
100
100
100
100
100
9.2.2.2
Investor/Guarantee Holder
Project
Host Country
Guarantee
Amount ($M)
Cote dIvoire
437.0
Apache Egypt
Egypt
150.0
Uzbekistan
119.5
Companhia Mozambique de
Gasuduto SARL (CMG)
Mozambique
49.7
Ghana
75.0
Mozambique
72.0
Comaas Asociadas
Petroleras S.A.
Argentina
40.2
64
9.2.2.3
Investor/Guarantee Holder
Project
Host Country
Kupol
Russian
Federation
304.6
Indonesia
207.0
Zambia
30.0
Mozambique
20.8
Mozambique
12.4
9.2.2.4
Investment Insurer
Country
United Kingdom
United Kingdom
United Kingdom
Kenya
United Kingdom
Bermuda
65
Bermuda
United States
Finnvera Plc
Finland
Norway
United States
Hannover Rckversicherung AG
Germany
United Kingdom
Saudi Arabia
United Kingdom
Mnchener Rckversicherungs-Gesellschaft
Germany
United States
Japan
Belgium
United States
United Kingdom
Bermuda
United Kingdom
United States
66
Switzerland
Italy
United Kingdom
166
167
67
enforced. Has it outlined any specific policy reforms concerning investment in metals
mining? Yes. Please see above.
Has EBRD extended the Energy Operations Policy (2006) requirements regarding
Coal/Hydrocarbon projects to publicly disclose their material project payments to the host
government (such as royalties, taxes and profit-sharing) as a minimum revenue transparency
obligation168 to projects in the mining sector? Yes. Although they do not specify
royalties, taxes and profit sharing as they did in the Energy Operations Policy.
Contract Disclosure Suggestions: (on section 3.3)
Does the Mining Operations Policy require the disclosure of contracts from its clients? No. It
makes mention to contract disclosure only in reference to external frameworks, such
as PWYP, and does not lay out any Bank policies on the issue.
International Best Practice on Legal and Regulatory Framework Suggestions: (on section 3.4)
Is EBRD specific in the framework which it chooses as the current best practice and commits
to enforcing the principals held within? No. All mentions of such frameworks are general,
and never is it specified which one the EBRD follows, or how it plans to update its
current policies to meet these standards. In The Bank's 6 approaches to the issue of
transparency, all of them begin with the term support.169 In this context, it means that
the initiation of any such efforts come from an external actor, and does not entail any
sort of policy commitment on the part of The Bank.
Criticism: One of the Bank's approaches to transparency states: The Bank will implement
best international corporate governance standards in its investments.170 This is clearly
untrue, as many standards (like the IFC's) have emerged which are substantially better in
practice than EBRD's current policies.
168
169
170
171
172
The policy fails to address the majority of expectations and commentary surrounding
its release.
Despite a 3 year submission period for commentary; comments and responses were
not released to the public until the draft strategy was published. This is despite an
open letter issued by a number of CSOs to EBRD's President Sir Suma Chakrabart,
requesting a two-stage process for feedback on the policy.172 The president replied to
this request by saying I highly appreciate your views on the way we could improve
68
o
o
our consultation practices on the Mining Strategy as well as on policies and strategies
in general in order to strengthen further the Bank's transparency and accountability. I
would strongly encourage you to put your recommendations forward during the
revision of the Public Information Policy which will also take place in 2013.173 The
request was not granted, and instead pushed ahead to the 2013 of the PIP.
Instead of setting new standards, the Policy makes reference to other pre-existing
EBRD policies.
Regarding transparency specifically, Bankwatch had this to report: With regards to
transparency, the initial public submissions were asking for more inclusive and
transparent processes of preparation and reporting on Environmental and Social
Action Plans for EBRD mining projects as well as higher transparency standards and
requirements for the Bank's clients.
69
(3) Board Committees. Terms of Reference and Membership of the Committees of the
Board of Directors. These are published.177
(4) Organogram of the Bank: The bank will post a graphic to identify the various
departments and components of the institution. No. This could not be found by the
researcher.
The only somewhat comparable info-graphic depicting
organizational structure was this Organizational Chart.178 This chart is rather
basic, and doesn't give the viewer the dynamic depiction of process flows and
chain of command which an Organogram suggests it would deliver.
(5) Administrative Tribunal. The Bank will post on its website details of the Bank's
administrate Tribunal, as well as copies of its decisions. The Tribunal is an internal
legal system aimed at resolving disputes of an employment or administrative
nature, and thus not of particular interest to EI studies at large. However,
among the handful of cases disclosed, one very important case stuck-out which
may be of interest to RWI. In fact, the researcher found the case to be relevant
enough to warrant its own appendix.179
Members of Committees of the Board of Directors as at 1 October 2013. EBRD. October 1, 2013.
http://www.ebrd.com/downloads/board/Committees_13-14_(1_Oct).pdf
178 EBRD Organization. EBRD. October 2013. http://www.ebrd.com/downloads/orgcharts/ebrd.pdf
179 Administrative Tribunal. EBRD. Accessed Nov. 20, 2013.
http://www.ebrd.com/pages/about/principles/tribunal.shtml
180 EBRD Appellant v. EBRD, EBRDAT 2011/AT/01. EBRD (Accessed Nov. 15th, 2013)
http://www.ebrd.com/downloads/integrity/2012-10-22-judgement.pdf
177
70
The Tribunal's proceedings and verdict provide some insight into EBRD's values when dealing
with issues of corruption. They fired this employee despite his senior position and long track
record with the company, which suggests that they are not being selective with who they
target in their proceedings. Because this complaint came from the outside, it suggests that the
Office of the Chief Compliance Officer (OCCO) Headed by Enery Quinones181 - is receiving
complaints in an effective manner, and genuinely lodging those complaints into the system. It
also suggests that those who served as judges for this tribunal have an morally sound attitude
regarding abuses of project income in the Natural Resources sector, and that they are now
more aware of potential corruption and mismanagement of payments. The names and contact
information of the 3 judges are listed below, because they could be good people for RWI to
approach for: additional information, insight into EBRD proceedings, and partnerships for
policy reform aimed at avoiding similar abuses in the future using higher levels of project
payment transparency:
(1) Jan Paulsson (President) - Tel - 305-284-5638. Email: jpaulsson@law.miami.edu
(2) Sarah Christie - http://www.zoominfo.com/p/Sarah-Christie/307473102
(3) Stanislaw Soltysinski - Tel - +48 22 608 70 01. Email:
stanislaw.soltysinski@skslegal.pl http://www.skslegal.pl/team.php?person=38
It could be re-enforced that if EBRD takes RWI's advice on the PIP commentary and practices
publication of all contracts, across all sectors, between the EBRD and project loan sponsors,
that corruption issues, such as this one, would be easier to identify and mitigate.
71
Jonathan: Are you satisfied with EBRD's Revenue Disclosure policies for its extractive projects
(both mining and energy)? If not, can you point out a few key loopholes or failures to disclose?
Jonathan: Are you satisfied with EBRD's Payment disclosures for extractive projects (both mining
and energy)? If not, where have they fallen short, either in policy or practice?
Jonathan Are you satisfied with EBRD's Contract disclosures of extractive projects (both mining
and energy). I don't believe that they disclose these at all, however since the disclosure
requirements vary so much from project to project, I was hoping that you might be able to point
out the most glaring deficiencies.
Fidanka: The EBRD is not obligated by its policies to disclose information on revenues,
payments or contracts. Instead it delegates the disclosure responsibilities to its clients.
Accordingly, if requested to provide access to such information, the EBRD refers us to its
clients or their financial reports, as published on their web sites. Additional to this limited
disclosure, the
EBRD can decide to provide further confidentiality derogations from its policies to certain
projects. In fact the Public Information Policy of the EBRD is more concerned with
confidentiality than with transparency.
It should be mentioned in EBRD's favor that the bank promotes the EITI and encourages all its
clients from the Power &Energy and Natural Resources sectors to join the initiative, or even
declines to invest in cases when a country or a company is not willing to do so. For example
the
EBRD has declined proposals from Kazakhstan for investments in its oil and gas extraction,
however, it does still finance projects in the Transport or Manufacturing (chemicals) sectors
that are directly linked to oil and gas extraction.
(See http://bankwatch.org/publications/bankwatch-mail-48#Kazakhfossils)
Additional to lack of obligation for the EBRD to disclose financial information, there are
several practices that make its investments in Power & Energy and Natural Resources project
even more obscure. First of all, there is the problem with categorisation of EI projects, as socalled brown-field projects get a category B, which have lesser requirements on disclosure
and shorter periods for public consultation. The problem is that 'brown-field' projects are
usually associated with a legacy of heavy historic pollution and dodgy privatization
agreements, issues that raise significant public interest that is not matched by the level of
transparency provided for category
B investments.
Projects that BW has followed that are examples of the B categorization problem are:
Chelopech Mining (http://www.ebrd.com/english/pages/project/psd/2004/4468.shtml)
DPM Term Loan (http://www.ebrd.com/english/pages/project/psd/2010/36793.shtml),
Centerra Gold Revolver
(http://www.ebrd.com/english/pages/project/psd/2010/41543.shtml)
Additionally there are projects that we've spotted but not monitored closely:
Hambeldon Mining debt and equity, post controversial cyanide spill:
http://www.ebrd.com/english/pages/project/psd/2012/43886.shtml
http://www.ebrd.com/english/pages/project/psd/2012/42831.shtml
72
So for example as part of the Centerra gold revolving debt facility the EBRD provided a pot of
money for several of the company's activities in Kyrgyzstan and Mongolia, but it did not
provide information about the exact nature of the activities. When asked by Bankwatch, if any
money has been disbursed, the reply was 'check the client's website.' It is not always easy to
find or to understand financial reports of EI companies. And it should be fairly simple for the
EBRD to say 'yes, we did this much for this and that.' or 'no, we did not disburse any moneys
yet.' Once we saw that money has been disbursed we requested information about the exact
activities that the investment was covering, but instead of clear information we received a
Project Summary Document up-date. PSD up-dates are rare and very non-informative
especially if compared to project pages of the IFC for example.
Second there is the problem of setting the project area of influence. For example the bank may
choose an energy efficiency component of a dirty lignite mine project and may argue that
equipment purchased with the loan is limiting its responsibility to only a small area of the
mine, thus excluding from its area of responsibility developments of other fields of the mine,
carried out in serious clashes with local communities. A good example here is the Kolubara
lignite mine Environmental Improvement Project:
(http://www.ebrd.com/english/pages/project/psd/2011/41923.shtml)
Jonathan: Has EBRD been able to meet their own transparency requirements as laid out in their
policies? If not, when did this occur?
Fidanka: As mentioned above, the EBRD does not bind itself to very high requirements of
transparency, and furthermore it can relatively easily avail of the possibility to provide
derogation from its transparency requirements and declare project information as
'confidential'.
Attempts to access information, based on the EBRD's commitment to apply the Aarhus
Convention, on loan conditions that are considered non-commercial, but strictly
environmental and social conditionalities, have failed in the past. For example our recent
attempts to receive environmental and social information on the loan conditions for the
Nuclear Safety Upgrade project in Ukraine have failed completely.
Jonathan: Is there adequate recourse and response from the EBRD when information disclosure
issues have been brought to their attention?
Fidanka: Concerns with information disclosure are taken to the Secretary General of the
EBRD, who has never resolved any requests in our favor. Therefore Bankwatch is currently
preparing a complaint to the Project Complaints Mechanism on the above-mentioned Nuclear
Safety
Upgrade project in Ukraine, but otherwise we have not tested this option so far.
(Researcher Note: This PCM effort was abandoned, because the documents in question were
attained through other means. These means are explained in the 2nd interview)
Jonathan: Has the EBRD's Civil Society Engagement Unit been helpful and cooperative during
your interactions with them? Have they been readily available?
Fidanka: Yes, the CSO department has been mostly very helpful.
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Jonathan: Who is the CSO "Transparent World?" I've seen their name included on commentary
documents, but haven't been able to pull up any information on them on the web. Are you
familiar with this organization? If so, can you provide me with a document/link/description so
that I might learn more?
Fidanka: I have no idea who they are.
Jonathan: What information can you offer about the Secretary General? They seem to have a lot
of power over disclosure of information. Have they been a worthwhile advocacy avenue?
Fidanka: Yes, the Secretary General's office is in charge of PIP and its implementation currently in charge of PIP revision. Unfortunately they have not been a worthwhile avenue.
For example in the case with Centerra's revolving debt facility we complained several times
that the PSD was not updated after we figured that money has been drawn from the financial
reports published on-line. As a result the PSD was updated with some minimal and very
unclear information that still did not allow us to understand what activities exactly did the
money went towards. Such types of facilities are extremely obscure.
Jonathan: Are there any updates on your PCM exercise regarding the nuclear safety upgrade
project in Ukraine? Are there any documents you could send me which provide insight into the
proceedings?
Fidanka: So a solution was sought through the Secretary General's office, not through the
PCM. But at the end it was easier to get the document leaked from a friendly capital/treasury.
Once we got the document we did not continue pushing for disclosure. We have increasingly
directed more of our advocacy work to the capitals of some of the big shareholding countries
and it is paying off with some useful leaks - eg. drafts of policies, board documents.
Jonathan: What are your plans for the upcoming/current reviews on the policy documents?
Is there anything which you would like RWI to be aware of, or to work in collusion with,
regarding policy commentary proceedings?
Fidanka: On PIP in general we want to see less stress on confidentiality - it would require a bit
of a change of attitude as the bank is very stuck into its 'unique business-sensitive approach.'
We would like to see more accountability of Directors, especially of the EU ED - in short we
want more EDs to publish their votes and positions / elaborations on justification for a vote.
We would like to see disclosure of loan agreements or at least any environmental and social
conditionalities that are part of the contract. Then the new president of the bank is very keen
on having better understanding and communication of the real impact of projects, so we will
be pressing for more transparency on results from monitoring and evaluations, better and
more regular up-dates of PSDs.
Jonathan: Has the Civil Society dialogue exchange phase for policy revisions been made more
participatory, as per Bankwatch request? I saw in a letter from the president that you should
address the procedure's inadequacies in the upcoming PIP review. Have you/will you do this?
Is there anything you would like to see from RWI in this regard?
Fidanka: Sorry, I am not sure I understand the question. Can you give me the links, so I know
what it is about?
Jonathan: This Grant: http://www.revenuewatch.org/grants/training-journalists-mdbs-andebrd.
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Did monitoring and evaluation of media sources find that EBRD was being more thoroughly
reported on? How was M & E conducted for this project? Did Bankwatch find the project
valuable in hindsight? Should RWI use its money on similar journalistic training, or are there
more effective uses of money?
Fidanka: Yes, this particular training was very successful. Journalists from the training did
publish pieces about the EBRD and projects in their countries. Also in Astana they were active
in attending the press events at the bank's AGM and raising questions with the chief
economics and the president. As a result of this training and of long-term media outreach in
the region the EBRD is well known and problems surrounding its projects are fairly well
reported. (But to be honest last year in Istanbul it was not as easy with journalists from the
bank's new region of operation - maybe because in Astana we had our Russian speaking team
that knew the region very well, while we still do not have wide contacts in the MENA region,
in-house Arab speakers etc. Also the EBRD is only starting there and we do not have a handful
of controversial projects to discuss with media in the region (as we do in the FSU), so I guess it
is just the beginning.) So I'd say that journalistic trainings are a good idea, but it really
depends on how they are organized, and if they are a part of a longer-term process of building
media contacts etc. As to alternative projects - in Bankwatch we are currently expanding our
work on tax justice, and we will be paying much more attention to contracts and revenue
disclosure than we have so far.
Jonathan: Has EBRD made any noteworthy progress towards greater transparency within the
last year? (even minor noteworthy examples are good)
Fidanka: Yes, as I mentioned above, more ESIA documentation can now be found on clients'
web sites. But we still have to rely on local communities and environmental groups, on media
reports, to spot problems. For example few weeks ago we heard from local activists in Turkey
about a coal plant that is part of the SOCAR Aegean Refinery in Turkey - neither PSD, not ESIA
documentation mentioned any such associated coal plant, and the consultants who did the
due diligence only degraded documentation provided by SOCAR, in spite of the fact that
information about public opposition to the coal plant is easy to find (esp. in Turkish language).
Jonathan: Have you seen the tribunal findings where the Natural Resources project
Senior-Banker was fired (after 14 years of employment) for embezzling money from a shady
"consultancy" firm, and put it in his sister's offshore bank account?
http://www.ebrd.com/downloads/integrity/2012-10-22-judgement.pdf.
Aside from being an entertaining story, do you find it useful from an advocacy standpoint? Did
this willingness to terminate veteran employees over corruption scandals raise your opinion of
EBRD, and does it hold any significance towards policies of information disclosure?
Should the judges who ruled against the banker be considered as potential partners for creation
of more transparent information and financial policies?
Fidanka: Unfortunately, we know very little about the case to be able to use it in any way.
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Delba Drilling
International Cooperatie
GB Group S.A.
Delba Vessel
Amount of Financing
Provided
$488 million (IDB loan)
2012
Import-Export America
Russ Ltd
Compaas Asociadas
Petroleras S.A.
Chevron Caribbean
2012
Chevron Caribbean
Marlin DR
2007
2009
2010
2010
Company
Title of Project
Inter-American Investment Corporation. Oil, Gas, and Mining Projects. Inter-American Investment Corporation.
Web. November 12th, 2013.
184 Projects and Operations, AfDB, http://www.afdb.org/en/projects-and-operations/ (accessed November, 20,
2013)
183
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78
79
185
186
Hendrickson, p. 79-80.
A full list of the organizations that commented on the OPIC ESPS can be found here:
http://www.opic.gov/doing-business-us/OPIC-policies/related-documents . Accessed Dec 9, 2013.
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