THE World Bank has started an investigation into its $3,75bn loan to Eskom after a complaint by two local environmental groups on behalf of the Lephalale community, where the Medupi power station is to be built.
Although the investigation is not expected to affect the granting of the loan, it could influence the way some of the money is spent.
Roberto Lenton, chairman of the World Bank’s inspection panel — the body leading the probe — yesterday said the investigation related to allegations of violations of the bank’s operational policies and procedures.
The inspection panel is an independent body that monitors the bank’s accountability and compliance with its social and environmental policies. It is a forum for parties aggrieved by bank policies and procedures.
Tristen Taylor, Earthlife Africa energy policy officer, yesterday said the Lephalale community was concerned about carbon and sulphur emissions from the 4800MW Medupi power station which the loan will fund.
Mr Lenton recently led a team on an “eligibility” visit to SA to investigate the Lephalale community’s concerns. In a statement to the bank’s board, Mr Lenton said he was “struck” by the level of concern about the project.
The panel decided on an investigation because the complaint by Earthlife Africa and Groundwork “raises issues of compliance and harm that can be addressed in the context of an investigation”.
Mr Lenton said his panel did not have the mandate to question board decisions, indicating that the loan would not be affected.
He said the panel would also not investigate SA and Eskom as the borrower. The panel could, however, make recommendations to the World Bank board “about project implementation, including the disbursement of funds for the project”.
In a statement yesterday, the World Bank office in Pretoria said that previous findings of the inspection panel had been taken into account in improving the design and implementation of projects.
However, the bank’s local officials declined to comment on the investigation. “The inspection panel is beginning its investigation and World Bank staff cannot comment on the specifics of ongoing investigations,” it said.
Source: http://www.businessday.co.za/
Pelindaba Working Group says:
Press Release: $3.75 Billion World Bank Loan to Eskom to Face Full
Enquiry
groundWork, Earthlife Africa Jhb
4th of August 2010
The World Bank Inspection Panel it to undertake a full investigation of
the $3.75 billion loan by the World Bank to Eskom, the South African
energy utility. This was the finding of the preliminary investigation
undertaken in May 2010. In April 2010, local residents in the Waterberg,
Limpopo Province, addressed their concerns on inter alia health,
environment, cultural and human rights issues to the Inspection Panel.
[1]
At a full World Bank board meeting on the 29th of July, Mr. Roberto
Lenton Chairperson of the Inspection Panel stated that, ‘based on its
review of the relevant documentation and its field visit, and taking
into account the sharply different views of the Requesters and
Management, the Panel considered that the Request raises important
issues of compliance and harm that can be addressed only in the context
of an investigation.’ [2]
This full investigation it to be undertaken despite the South African
government, backed by Algeria and Saudi Arabian Executive Directors of
the World Bank requesting an almost unprecedented full meeting to
discuss the project in an unsuccessful ploy to challenge the complaint
and limit its scope.
‘This action highlights South African government’s anxiety about the
fact that community people and NGO’s have raised concern about this
project, and that there is truth in their evidence’ says Bobby Peek,
Director of groundWork, Friends of the Earth South Africa who submitted
together with Earthlife Africa Johannesburg a call for the inspection on
behalf of the local community in the Waterberg.
Tristen Taylor of Earthlife Africa Johannesburg, raises the importance
of being on the ground with the local people to understand the
environmental justice impacts. ‘When the inspection panel came to South
Africa, interviewed the people, went to the area and actually saw what
is going to happen and what is already happening, they got a bit of a
wake-up call’.
Both groundWork and Earthlife Africa Jhb remain concerned about the
conflict of interest between the World Bank loan, the Medupi power
station, and the ANC’s financial stake in Chancellor House. This issue
remains a blight upon the body politic of South Africa.
Earthlife Africa and groundWork together with our international allies
especially those in Washington will continue to work with the local
people to prepare for the full investigation.
For more information, please contact:
Bobby Peek
Director
groundWork
Cell: 082 464 1383
Email: bobby@groundwork.org.za
Website: http://www.groundwork.org.za
Tristen Taylor
Project Co-ordinator
Earthlife Africa Jhb
Tel: 011 339-3662
Cell: 084 250-2434
Email: tristen@earthlife.org.za
Website: http://www.earthlife.org.za
Footnotes:
[1]
http://siteresources.worldbank.org/EXTINSPECTIONPANEL/Resources/Request_for_Inspection_(PUBLIC).pdf
[2]
http://siteresources.worldbank.org/EXTINSPECTIONPANEL/Resources/Final_Elig_Rpt_for_Disclosure.pdf
4th August 2010 at 7:58 pm