OCP pipeline violates World BankEnvironmental and Social Standards

As the largest funder of the OCP pipeline, the German Bank WestLB has been under fire from environmentalists and the German Green Party. In October 2001 there was an international day of action with protests in WestLB offices in 17 cities around the world.

WestLB have always defended themselves by claiming that the OCP project follows World Bank guidelines for protection of environment and treatment of indigenous peoples. In fact this is one of the conditions of the loan contract between WestLB and OCP.

So it was a major blow to WestLB when their claim was refuted by Dr. Robert Goodland, a tropical ecologist and one of the most renowned experts on World Bank Standards. Dr. Goodland was an environmental advisor to the World Bank for 25 years and authored most of what are now called the "Social and Environmental Safeguard Policies" of the World Bank, namely Environmental Assessment, Natural Habitats, Indigenous Peoples, and Cultural Property.

Goodland claimed that OCP pipeline violates the most important Environmental and Social Standards of the World Bank.

For a copy of the study by Dr. Goodland, click here

___________________URGEWALD____________________
Von-Galen-Strasse 4
D-48336 Sassenberg
Germany
Fon: +49 (0)2583 1031
Fax: +49 (0)2583 4220
Email: urgewald@urgewald.de
http://www.urgewald.de
_______________________________________________

Press release
13th September 2002

WestLB Pipeline in Ecuador:
Slap in the Face from leading expert on World Bank Standards

Duesseldorf (13/9/2002) - The OCP oil pipeline in Ecuador, which is substantially financed by the German public bank WestLB, violates the most important Environmental and Social Standards of the World Bank. This is the result of the first independent environmental and social compliance assessment for the project presented by the German NGOs "Rettet den Regenwald" and "Urgewald" in Duesseldorf on Friday. The assessment of the pipeline project found „ substantial non-compliance with all four applicable World Bank's Social and Environmental Safeguard Policies".

The author is the Canadian citizen Dr. Robert Goodland, a tropical ecologist and one of the most renowned experts on World Bank Standards. Dr. Goodland was an environmental advisor to the World Bank for 25 years and authored most of what are now called the "Social and Environmental Safeguard Policies" of the World Bank, namely Environmental Assessment, Natural Habitats, Indigenous Peoples, and Cultural Property. He further led the team publishing the World Bank's best-selling 'Environmental Assessment Sourcebook' (3 vols), and about 20 other books, and was one of the team writing the Bank's Involuntary Resettlement policy. Goodland retired 2001 and now works as an independent environmental consultant. He visited the OCP project in Ecuador in August 2002.

Dr. Goodland's mission was to assess the truth behind the claims of WestLB and OCP that the pipeline project is in compliance with World Bank Standards. After the first critical press articles und increasing world wide protests of dozens of environmental and social NGOs, WestLB committed itself in August 2001 in a public statement that „ a prerequisite for any financial involvement of WestLB in the [OCP] project is that the project sponsors adhere to the environmental standards set by the World Bank."

Goodland's study is a resounding slap in the face for WestLB. He found that the Environmental Impact Assessment (EIA) for the pipeline project failed to investigate the pipeline route with the least impacts. Above all the EIA ignores the most important impacts of the pipeline, namely the ecological and social impacts of doubling oil extraction in the Amazon. In addition, the EIA violates the World Bank policies on Natural Habitats and on Involuntary Resettlement. Dr. Goodland writes further that the pipeline is forced forward with illegal methods and violates the World Bank's policy on Indigenous Peoples.

Dr. Goodland comes to the conclusion that the pipeline will lead to a new oil boom in the Amazon. The most severe social and environmental impacts of the project will be that on Amerindians, the tropical rain forests and the poor. The project will intensify the already catastrophic situation in the oil extraction areas. Especially the Amerindians of the Amazon will be deprived of their lands, the natural resources they depend on, and will be exposed to severe dangers for their health. The reasons are the contamination of the water, soils and the air through the toxic wastes of the oil industry.

Dr. Goodland writes that „the impacts of oil extraction on the tropical forest ecosystem include irreversible losses of Ecuador's rich patrimony of biodiversity, and that „ improper oil disposal and spills are so common that the areas degraded and contaminated by oil have been increasing tremendously over the last 30 years." Natural protected areas of worldwide importance will be destroyed.

On the social level, the expert found the most severe violations of World Bank Standards along the pipeline route. "I interviewed many affected families, elected officials & community leaders who have substantial claims that OCP or their sub-contractors abused them", writes Goodland and cites examples: OCP often did not pay agreed compensation payments, or paid less than the agreed amount. Brutal police raids against people who did not want to sign contracts and use of tear gas also against women and children. Parts of the police are paid directly by OCP. Attempts of assassination have been undertaken in the oil extraction area against the Mayor of Lago Agrio and the prefect of the province of Sucumbios. Both feel threatened by the business partners of WestLB.

"There is surely no other expert who is more qualified to assess compliance with World Bank Standards in this project than Dr. Goodland" states Heffa Schücking, director of "Urgewald". "Who ignores this study, will stop at nothing", comments Werner Paczian, press officer of "Rettet den Regenwald". Goodland showed "that the WestLB pipeline directly threatens large numbers of people in Ecuador and will led to a catastrophic devastation of the environment". NGOs are therefore calling on WestLB to call back its loan and quit the project.

The NGOs also hold the Prime Minister of North Rhine Westphalia (NRW), Clement, and the Ministers for Finance, Steinbrueck, and Economy, Schwanhold, from the Social Democratic Party (SPD) responsible for the consequences of the oil pipeline as they tolerated the actions of WestLB and even supported them in some cases. The federal State of NRW is by far the largest shareholder of WestLB. The study was sent by express messenger to Prime Minister Clement and WestLB's CEO Sengera on the 11th of September 2002. The government of NRW announced its intention to put forward a common position statement on the pipeline project at the meeting of the parliamentary "Committee for Europe and One-World-Politics" on the 30th of September 2002.

The study which was initiated by the German NGOs "Rettet den Regenwald" and "Urgewald is supported by Greenpeace, the Institute Suedwind as well as several US and Italian NGOs and the three biggest Italian labor unions. The latter have been calling upon the Italian bank Banca Nazionale del Lavoro (BNL) to leave the consortium of banks which are financing OCP.

„We now need a decision on this question by the nervously roaming Prime Minister of NRW, Mr. Clement," demands Greenpeace forest expert Martin Kaiser. "The decision is whether to go on making deals with a corrupt consortium of oil companies or to withdraw WestLB's loan to ensure climate and forest protection."

For Irene Knoke from the Institute Suedwind, who has worked for years on the problem of Ecuador's debt, the study proves that once again the poor have to support the consequences of mal-development. "The International Monetary Fund is pressuring Ecuador to double its oil production in order to facilitate repayments of its totally prohibitive foreign debt. Instead of pushing a project that will destroy Ecuador's nature capital and drive large parts of the country's population into destitution, the IMF should be working towards cancellation of the debt."

The NGOs who commissioned the study demand that WestLB finally fulfills the provisions of its own credit contract with OCP. WestLB confirmed several times that in case of violations of the World Bank's Standards a premature settlement clause will come into force. This means that no new credit tranches are to be transferred and that already paid-out tranches have to be called back. „The study of Dr. Goodland means that the massive violations of World Bank Standards by OCP are now on the record. If WestLB wants to be considered a serious business bank it has to quit the financing of this project" demands Schuecking.

For questions and further information on the WestLB pipeline, please contact:

Werner Paczian, Rettet den Regenwald e.V., phone +49-171-83 99 059
Heffa Schücking, Urgewald, phone +49-2583-1031
Martin Kaiser, Greenpeace, phone +49-171-8780817
Irene Knoke, Institut SÜDWIND, phone +49-174-1849904

Photos and video images from Ecuador can be obtained at „Rettet den Regenwald" (phone +49-40-410 38 04) or Greenpeace photo editorial office (phone +49-40-30618-376).