10 December 2003
July 11, 2003
Mr. James Wolfensohn
President
World Bank
1818 H Street, NW
Washington, DC 20433
Mr. Peter Woicke
Executive Vice President
International Finance Corporation
2121 Pennsylvania Avenue, NW
Washington, DC 20433
Dear Mr. Wolfensohn and Mr. Woicke,
This letter is a follow up to our previous letter to Mr. Shahbaz Mavaddat requesting the release of information regarding the Baku-Tbilisi-Ceyhan pipeline project. Specifically, we would like the public release and distribution of IFC's development impact assessment, economic due diligence, and legal due diligence for the project.
Development Impact Assessment
According to the World Bank Group's own internal evaluation, in countries with poor governance, "increased investment in extractive industries is likely to lead to bad development outcomes." The World Bank Group Governance Program ranks governance in the lowest 18th percentile for Azerbaijan and in the lowest 19th percentile for Georgia. In the Review of IFC's Safeguard Policies published by the Compliance Advisor Ombudsman office, "IFC should be clearer at the outset of a project about what specific sustainable development impacts it expects to achieve and then measure itself against those goals and report on it." Given the development challenges this project must overcome, we ask that IFC provide to the public its assessment of the development impact of the BTC project, including clear benchmarks for measuring the outcomes.
In a letter from Yasmin Tayyab dated 13 February 2003, the IFC states that the development impact of the project is discussed in the National and Regional Review produced by BTC Co. However, this review is not an IFC document and does not address how the IFC, as a public institution with a mandate of poverty alleviation, has determined that the project will have a positive impact on poverty. This determination is particularly important in light of the Bank Group's own research and experience which indicate a negative correlation between natural resource dependency and development outcomes, particularly in poor governance situations. The review also does not establish any benchmarks or include indicators for measuring outcomes. In addition to releasing the analysis the IFC used for this project, we also request that this project be used as a pilot case for the transparent and project-specific application of the IFC's Sustainability Initiative.
Economic Due Diligence
One key aspect of assessing the development impact of the project is the economic analysis. The Summary of Economic Due Diligence was made public for the Bujagali Dam Project and we see no reason why this information cannot be released for the BTC project. Particularly in light of controversies raised about the financial viability of the project, we expect IFC, as a publicly-financed institution, to release this information.
Legal Due Diligence
The Host Government Agreements raise legal issues that are of significant concern to numerous civil society groups and lawyers. Many of these issues and concerns are described in a recent report by Amnesty International and in complaints filed in seven countries with the OECD. The IFC has stated that it "believe[s] that the IGA-HGA framework…does not restrict the law-making processes." However, we ask that the IFC substantiate its beliefs by releasing a summary of its legal analysis including not only its analysis of whether the project meets all local and international laws, but also its analysis of how each HGA, since becoming law in each country, has and will impact the democratic process, rule of law, and the ability of the citizens and elected bodies to influence future legislation.
The release of the HGAs and other project information for the project was a step forward for transparency. We encourage the IFC to continue this spirit of transparency by releasing this additional information as soon as possible for open discussion prior to the Board approval.
Sincerely,
Karen Decker
Bank Information Center, US Mayis Gulalaliyev
Caucasus NGO Confederation Manana Kochladze
Green Alternative, Georgia Carol Welch
Friends of the Earth US Nana Janashia
CENN - Caucasus Environmental NGO Network Arzu Abdullaeva
Helsinki Citizens Assembly Azerbaijan National Committee Sagida Abdulvahabova
Union of Research of Women Problems, Azerbaijan Fariz Mamedov
Support to Economic and Social Development, Azerbaijan Rauf Abdullaev
Charity Organization "Merhamet," Azerbaijan Vahid Gazi
Center for Pluralism "Inam," Azerbaijan Eldar Ibrahimov
Society and Law Legal advise Center, Azerbaijan Petr Hlobil
CEE Bankwatch Network Anders Lustgarten
Kurdish Human Rights Project Greg Muttitt
PLATFORM, UK | Chingiz Isbatli
Center for sustainability development of Azerbaijan Ali Abbasov
Center for strategic Research "AREAT," Azerbaijan Nazire Gurban
Center of Civil Initiatives, Azerbaijan Rovshan Salmanzade
Charity Organization Azerbaijan Scientists Damien Mille
CADTM France Vincent Brisard
World Bank Boycott/ASEED Europe Regine Richter
Urgewald, Germany Susanne Breitkopf
Les Amis de la Terre, France Sharon Courtoux
Survie, France Nick Hildyard
The Corner House, UK Camille de Maissin
Agir ici, France Willemijn Nagel
Friends of the Earth Netherlands Antonio Tricarico
Campagna per la riforma della Banca mondiale, Italy Doug Norlen
Pacific Environment, US |
cc. Rashad Kaldany, Director Oil, Gas, Mining & Chemicals, IFC
Gavin Murray, Director of Environment and Social Development Department, IFC
Meg Taylor, Compliance Advisor/Ombudsman