The World Bank's Board of Executive Directors on August 3rd endorsed a business-as-usual approach to World Bank lending for oil, gas and mining projects. After investing three years and several million dollars in the Extractive Industries Review (EIR) process, the World Bank Group refused to commit to the bulk of its recommendations. While the World Bank took some small steps, notably to require revenue transparency in large extractive projects, it largely embraced a flexible, case-by-case approach to the evaluation and implementation of oil, gas and mining projects going forward.
"The World Bank has once again demonstrated that it is all talk and little action," said Shannon Lawrence, international policy analyst at Environmental Defense. "There is a complete disconnect between the environmental, social, and economic costs of extractive projects and the Bank's proposed remedy."
"The Bank's response is reminiscent of its reaction to the World Commission on Dams. How many independent, multi-stakeholder reviews that are commissioned by the Bank does it take to bring about change at this public institution?" said Lawrence.
The EIR recommendations were designed to address the failure of the Bank's oil, gas and mining projects to deliver poverty reduction and sustainable development benefits. The review concluded that the World Bank has a role to play in the extractive sectors only if the "right conditions" are in place to deliver on the Bank's poverty alleviation mandate. To establish these conditions, the EIR recommended supporting oil, mining and gas projects only in countries that meet a minimum standard of good governance to manage project risks and use revenues transparently to benefit the poor. The EIR also recommended that the World Bank strengthen its environmental policies, rebalance its energy portfolio and ensure that the poor and local communities directly benefit from oil, gas, and mining development.
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