Highlights
[Highlight] Quality of renewed consultations over Moscow motorway already in doubt
(September 2, 2010)

While it had been announced that a hearing will take place on 16 September, there is no word on how any wider consultation process will be organised and whether any environmental impact assessment documents will be made available on which to base inputs, thus creating a severe risk that the exercise will be mainly cosmetic.
Meanwhile the Khimki administration is using deceptive methods to gather signatures in favour of the currently proposed route. Workers of municipal enterprises have been involved on a compulsory basis in rallies in support of the current option of the motorway. Moreover teams of pro-administration propagandists are being deployed to various settlements to spread rumours among locals that any alternative option would lead to massive demolition of residential houses – even in places far from any possible placement of the motorway.
The international financial institutions often claim that engaging in projects results in better outcomes than if they were not involved. Now is a key moment to see whether they can indeed affect real changes in this project.
[Highlight] EBRD warned not to dirty hands with Armenian bank
(September 1, 2010)

The case illustrates one of the problems with EBRD lending to financial institutions. While provisions of the bank’s Environmental and Social Policy are applicable to the specific investment in a particular financial intermediary – and these are essentially national legal standards - the same policy provisions do not extend further across the intermediary’s portfolio, creating a situation of policy inconsistency and hypocrisy.
So for example a credit to a bank for financing energy efficiency measures in local businesses has to adhere to the EBRD’s lending standards in that credit line, but is free to invest in other climate-damaging or other environmentally problematic projects using non-EBRD money.
If the EBRD truly wants to promote sustainable development across its activities, it needs to apply more stringent criteria when selecting potential financial institution recipients and apply its standards consistently across its intermediaries’ whole portfolios.
[Highlight] In Moscow, thousands protest destruction of Khimki Forest
(August 23, 2010)
Organisers had to overcome numerous obstacles, as the city authorities had claimed that a permit had only been granted for a ‘rally’, not a ‘concert’. Additionally, unknown motorcyclists attempted to puncture the tyres of the sound equipment van, which the police also prohibited from entering the square; attendees were required to pass metal detectors, causing long queues; and one man attempted to cut off the electricity supply. Singer-songwriter Yury Shevchuk had to entertain the crowd “unplugged” with only a megaphone to amplify the sound, while other artists due to attend were not allowed into the square at all.
“In spite of all the difficulties, the rally was a great success”, said Mikhail Mateev of the Movement to Defend Khimki Forest. “The fact that so many people were willing to stand up and say “No!” to destruction of Khimki Forest is a strong message, and we hope that the European banks and project concessionaire Vinci are listening.”
[Highlight] Khimki defenders resolute on Sunday concert-rally - join in online!
(August 20, 2010)

While the city hall press office reported that a concert would not be permitted, but only a rally, another city hall employee confirmed that the permit application was fine.
This interference is just one - and a relatively mild one - of many examples of suppression of expression against Save Khimki activists by the Russian government, which the EBRD and EIB risk condoning if they decide to finance the Moscow-St Petersburg motorway project in its current form.
The concert-rally is to be held this Sunday, 22 August, 17.00 at Pushkin Square in Moscow under the slogan "We all live in Khimki Forest!" Apart from Yuri Shevcuk - singer from rock band DDT - the concert will feature Michael Borzykin, Alexander F. Sklyar and others and be compered by well-known music critic Artemy Troitsky.
“There is ever-wider support for our campaign”, stated Mikhail Mateev of the Movement to Defend Khimki Forest, "and we hope it is becoming obvious to Vinci, the concessionaire, and the European banks that they cannot support the proposed routing for the motorway".
If you’re not in Moscow but on social media outlets you can support the steadfast Khimki protests online: join the virtual facebook event or post “We all live in Khimki Forest!” on facebook and twitter.
[Highlight] EIB undermines own complaint mechanism by signing loan for ArcelorMittal while investigation still underway
(August 17, 2010)

On 3 March this year, the organisations together with the Global Action on ArcelorMittal coalition, filed a complaint with the EIB complaint office stating that the bank had failed to prove that it had properly assessed whether ArcelorMittal could have financed the EUR 250 million ArcelorMittal R&D Facility project from its own vast resources.
The groups are concerned that ArcelorMittal is benefitting from ever more public funds - in the form of EIB and EBRD loans and windfall profits from the European Emissions Trading Scheme - while failing to prove any real improvements in its poor environmental and social performance.
[Highlight] A people's perspective on financial sector lending
(August 16, 2010)

In our comments, submitted today, on the new draft financial sector strategy of the European Bank for Reconstruction and Development (EBRD), we ask the bank to pay more attention to the social impacts of its investments, like the affordability of loans, foreign currency lending, gender impacts, etc.
Among the issues raised is the EBRD's financial intermediary operations (lending through private banks and investments through private equity funds) in central and eastern Europe. Bankwatch has repeatedly pointed to the need to publish information that would help answer the above questions.
As the crisis continues to impact the EBRD's countries of operations it is now more than ever time for the bank to look critically at the impacts of its financial sector operations on ordinary people and move beyond business as usual.
For more details, download our comments on the draft strategy (pdf).
[Highlight] EIB complaints office confirms shortcomings on Belgrade resettlement
(August 4, 2010)

Responding to a complaint lodged by Bankwatch and Serbian member Centre for Ecology and Sustainable Development (CEKOR) the Complaints Office of the European Investment Bank has, in an unprecedented step, determined that unless the EIB tidies up its financing performance of the project by the end of this year, the bank will have to fully recall its EUR 25 million loan for the project.
The complaint was submitted to the EIB’s redress mechanism last September, alleging the bank’s mishandling of repeated requests for information and its flawed appraisal of the vastly complex social risks of the project. Many people from the former settlement still lack adequate housing or provisions for employment.
[Highlight] EU taxpayers' pearls to be cast before swine in Hungary
(July 28, 2010)

Bankwatch Hungarian member group National Society of Conservationist (MTVSZ) is supporting locals and advocating their claim that a large share of these EU funds are being invested in the wrong project.
Using the money to support family farms to raise the same amount of piglets would create significantly more jobs and strengthen local agribusiness. This large scale farm could instead damage local agriculture and will inevitably become a major polluter in the area. Manure from the farm is will be disposed in the surrounding municipalities and pose high risks to the nitrate-sensitive soil and local drinking water.
[Highlight] Clashes over protected Moscow forest intensify – get involved and urge international investors to take action!
(July 23, 2010)

Responding to Monday’s action by Russian environmental groups to prevent illegal logging in the Khimki forest at Moscow’s northern outskirts, scores of unidentified and hooded persons assailed protestors at the site so that construction works on the 8 billion euro Moscow - St Petersburg motorway could move forward.
Police arrived to the scene after being called by nongovernmental organisation Movement to Defend Khimki Forest to restore order but instead detained at least ten activists on site, came reports from the demonstration. These arrests follow five others that were made the previous day at a demonstration in Moscow during which protestors attempted to deliver Khimki ‘firewood’ to Prime Minister Vladmir Putin in protest of the forest’s illegal destruction.
In light of these recent developments, Bankwatch is calling on international financial institutions the European Investment Bank and European Bank for Reconstruction and Development, both of whom are considering financing for the project to the tune of 1.5 billion euros, to immediatey withdraw any consideration of funds for the project.
Lend your support and get involved here.
[Highlight] Paltry response from Commission confirms cozy relationship with mining industry and jeopardised environment for European public
(July 12, 2010)

While civil society groups had for more than a month asked for consultations on implementing the ban, news about discussions between the Commission and mining industry representatives now casts an unsightly light on its decision to reject the ban and defer instead to existing EU legislation.
“This is scandalous. Mining companies were already congratulating Mr. Potocnik for heeding their advice and rejecting the ban before any response to the public about a decision on consultations was delivered. We’ve dealt with this type of approach in Bulgarian institutions before, and now we have confirmation about the purview of special interests within the Commission,” said Daniel Popov from the Center for Environmental Information and Education in Sofia, Bulgaria.
[Highlight] European public banks need to do more on renewables and energy efficiency in southeast Europe says new Bankwatch study
(July 1, 2010)

The report finds that 50 percent of the European Investment Bank’s energy investments in the region in the period 2002-2009 were for fossil fuel projects, with only nine percent for energy efficiency and renewables. 52 percent of the European Bank for Reconstruction and Development’s energy investments were for fossil fuel projects, with 28 percent in renewables and energy efficiency. The vast majority of the EBRD renewables and energy efficiency investments have been carried out in Bulgaria, with very few in the Western Balkans so far.
[Highlight] Sounding the potential of a European budget "for the people and the climate"
(June 29, 2010)

With this in mind, Bankwatchers in Bulgaria, the Czech Republic, Latvia and Poland have spent the last six months immersed in energy scenarios, efficiency potentials estimates, national and EU strategies, and have interviewed more than 50 government officials, industrial association representatives, academics and other experts in the field of public finance to find out how the next EU budget for the 2014-2020 period can effectively support a low-carbon economy with benefits for people and nature.
The research outcomes will be published in the coming weeks, but to give away some of the results already now: thermo-insulation of buildings, sustainable heat production, development of smart grids and efficient industrial technologies have been identified as top priorities for public funding in central and eastern Europe.
Today, Bankwatch invited experts from the new EU member states, and representatives from the European Commission, the European Parliament, the European Investment Bank and the European Bank for Reconstruction and Development to supply them with our experience from the ground to discuss how the future EU budget can help decrease the dependency on fossil fuels, ensure climate and environmental protection, boost green innovation and increase the quality of life.
[Highlight] Nukes not sustainable for the Baltic states say activists
(June 4, 2010)

The groups called on the gathered officials to cancel their nuclear power projects across the region, requesting that the current Baltic Sea “Nuclear fever” – according to the Baltic Marine Environment Protection Commission, the Baltic Sea is the most radioactive sea in the world – must end if real sustainable development is to take root in the region.
Referring to the example of the massively over-budget and delayed building Olkiluoto-3 reactor in Finland, the groups cautioned against the growing number of nuclear gambles that are now on the table in other Baltic Sea states, including proposals to mine uranium in the Baltic Sea Region, as well as plans to store radioactive waste in rocks near the Baltic Sea.
Alternatives to nuclear are not in short supply, according to the groups who urged Baltic decision-makers to consider much greater use of renewable energy sources, energy efficiency and smart energy systems. Such an approach would create more jobs, would use local resources and would increase overall the security of the states and the region. Linas Vainius, of Atgaja and one of the founders of Bankwatch, commented: “The competition currently ongoing between Baltic governments to be the first to build a new nuclear reactor using taxpayers' money does not represent sustainable development.”
[Highlight] Civil society voices urge EBRD to use extra billions for real sustainability
(May 25, 2010)
Despite concerns about the EBRD's performance in delivering benefits to people and nature in its countries of operation - not to mention a range of evidence to the contrary - the bank has duly received EUR 10 billion worth of additional trust in its activities. Some of these extra funds will help the EBRD increase its support for the coal industry. Yet expanding investments in coal does not “build sustainable growth”, rather it will end up obstructing EBRD finance for renewable energy and energy efficiency measures.
Together with Croatian partner organisation Zelena Akcija, Bankwatch focused attention on the EBRD's sustainability-lite concept in a public action outside the meeting. For video materials from the action, and for presentations of other critical issues relevant to EBRD financing in central and eastern Europe, visit our YouTube coverage of the bank's meeting in Zagreb.
[Highlight] EBRD must not sacrifice sustainable agribusiness for economies of scale
(April 22, 2010)

While including several environmental and social aspects in its new draft agribusiness sector strategy the EBRD does not develop a vision of a low-carbon agribusiness sector in its region of operation. As detailed in Bankwatch’s inputs into the draft paper, the bank’s strategy neglects that some of the apparent strengths of western agribusiness (low retail price, uniform products, etc.) have overall negative social and environmental impacts, such as soil degradation, dependence on vulnerable monocultural production, reduced biodiversity, crowding out of small scale farmers or increased urban sprawl connected to the construction of hypermarkets.
Read more about how cheap food prices will cost the public dearly if the EBRD does not develop a clear roadmap for the region towards an agribusiness system that preserves existing local and diverse production and does not lead to great increases in food transportation.
[Highlight] Saving of Rospuda Valley in Poland wins world's top environmental prize
(April 19, 2010)

Gosia's inspirational campaigning work on behalf of the Polish Society for the Protection of Birds, and involving a wider coalition of activists and organisations, ultimately resulted in a significant legal precedent for the protection of wilderness habitats across Europe: her challenge to the Polish government has led to the first ever successful intervention by the EU to obtain an order from the European Court stopping a member state from breaching environmental regulations and damaging a Natura 2000 site. This court ruling now has the potential to strengthen the legal framework for EU environmental regulations across Europe, specifically the protection of Natura 2000 sites.
Bankwatch is proud to have been part of this major campaign victory, and highly recommends a read of Gosia's top activist tips published today in The Guardian. They are bound to come in handy - in spite of the precedent set by Gosia and supporters of the Rospuda campaign, there is no guarantee that the "environmental safety first" message has registered yet with project promoters and developers across central and eastern Europe.
[Highlight] EBRD hopes for 10 billion euros more cash - Bankwatch calling for environment, social justice and transparency to be put into the frame
(March 19, 2010)

Yet the EBRD's plans show some serious environmental, social and transparency shortcomings that cannot be ignored if the bank‘s projects are to bring long-term benefits to societies and the environment in central and eastern Europe and Central Asia.
Bankwatch’s concerns are outlined on a new website featuring cartoons to illustrate some of the weaknesses in the EBRD's operations. Join us in writing to your EBRD country representative before the Board meeting next Tuesday.
[Highlight] Rusty reasoning: groups challenge EIB to justify the latest ArcelorMittal public millions
(March 11, 2010)

On 21 October 2009 the European Investment Bank’s board of directors approved a loan to ArcelorMittal worth EUR 250 million for a research and development programme said to be all about bringing environmental added value to the company's European operations. The company has a very chequered history over the last ten years in its implementation of environmental improvement schemes that have been financed by over half a billion dollars in public loans.
Yet leaving the important environmental issues to one side, couldn't a company the size of ArcelorMittal be expected to either fund the project out of its own resources or be able to access commercial loans, leaving advantageous EIB funding to companies more in need? And isn't the EIB supposed to only give loans to finance those projects that cannot be entirely financed by the various means available in European member states?
Frustrated by their dealings with the EIB on these matters, Bankwatch, ClientEarth and Global Action on ArcelorMittal have this week lodged a formal complaint with the Secretary General of the EIB that questions the rigour and ultimate validity of the bank's pre-loan assessment. Read it here and consider the magnetic pull ArcelorMittal seems to have towards public money.
[Highlight] Having trouble with a nightmare EU funded project? Get inspired by the Save the Kresna Gorge campaign
(March 4, 2010)
This new audio-visual slideshow documents the 13 years of the campaign, arriving at the current tunnel compromise that has been brokered - one that should see the Kresna gorge being saved from an invasion of road-building. This feature on such a long-running but inspirational campaign comes as Bankwatch launches a new website - www.sustainableeufunds.org - dedicated to providing support for NGOs from across Europe that are working to ensure sustainable use of the EU funds. As the Kresna case demonstrates, even when you think the worst has been averted, major infrastructure developers may potentially have other ideas in mind, especially when millions of euros of public money are involved.
The new website aims to keep groups working on EU funds cases updated on the latest trends, campaign tactics and information vital to successful advocacy efforts. And also - despite so much negative evidence - to present what can and does make a good EU funded project.
[Highlight] New blog on Gazela resettlement provides evidence of the challenges ahead
(February 8, 2010)
While the physical conditions have improved for families resettled near Belgrade - they are now living in container accommodation rather than shacks cobbled together from whatever they could find - large question marks remain over the plans for long-term accommodation and employment and the fate of those transported to southern Serbia.
Our blog 'Out of sight' aims to document how the resettled families are getting on in their new locations, what still needs to be improved in this resettlement project, and what should be done differently in future projects.











CEE Bankwatch Network gratefully acknowledges EU funding support.