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World Bank fueling climate change, groups claim in historic complaint

/ 06:37 PM October 24, 2017

More than 100 citizen groups and 19 affected communities in the Philippines have filed a historic complaint against the International Finance Corporation (IFC), the World Bank’s private-sector arm, accusing the IFC of fueling global climate change through its investments in a Philippine bank.

This is the first climate change-related complaint received by the IFC’s independent watchdog, the Compliance Advisor Ombudsman.

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The complaint accuses the IFC of supporting 19 new or expanded coal-fired power plants in the Philippines through its investments in the local bank.

After receiving $253 million in IFC funding and the World Bank’s stamp of approval, the complaint alleged, the bank provided and arranged billions of dollars in financing for the power plants and the companies developing them, in violation of the IFC’s social and environmental Performance Standards and climate commitments.

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The complainants are calling on the IFC to use its leverage to stop the coal projects that have not yet commenced operation, and to ensure that its financial intermediaries in the Philippines and around the world stop financing coal projects and instead fund renewable energy solutions.

“Our complaint is an indictment of the IFC’s complicity in putting our country and communities at certain risk at a time when addressing climate change impacts is the order of the day,” said Aaron Pedrosa of the Philippine Movement for Climate Justice, one of the complainants.

“By providing funds to intermediaries that are bankrolling a new generation of coal plants, the IFC is lending its imprimatur to the deaths and destruction caused by coal plant operations. The IFC is in effect issuing a license to kill. It should be held to account,” Pedrosa said.

Pedrosa presented the complaint to the Compliance Advisor Ombudsman and the leaders of World Bank Group in Washington, DC.

World Bank President Jim Yong Kim has said further funding of coal in Asia will “spell disaster for us and the planet.”

Over the past five years, the World Bank Group has invested $50 billion in commercial banks and private equity funds, without disclosing where this money ultimately ends up. The IFC’s financial intermediaries are required to apply the institution’s strict environmental and social performance standards. In practice, however, they are financing harmful and high-risk companies and projects, with little apparent IFC oversight.

In October 2016, Inclusive Development International exposed the IFC’s hidden support for dozens of new coal projects in the Philippines and elsewhere as part of its Outsourcing Development investigative series.

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“If the world’s preeminent development finance institution can’t stop bankrolling dirty coal plants and instead support developing countries in making the shift to renewable energy technology, the consequences will be dire – for the Philippines and the rest of the world,” said David Pred, managing director of Inclusive Development International, which supported the groups to file the complaint together with Bank Information Center.

“Jim Yong Kim acknowledged as much last May when he said, ‘If Asia implements the coal-based plans now, I think we are finished.’ It’s now up to Dr. Kim to put his money where his mouth is,” Pred said.

Coal-fired power threatens the very existence of the Philippines. As the world’s third-most vulnerable nation to climate change, it has seen increasingly devastating storms and rising sea levels in recent years.

Carbon emissions from coal are the worst, according to a recent Greenpeace study, “Coal: A Public Health Crisis (Diseases and deaths attributed to coal use in the Philippines).”

Deaths due to stroke, heart and other cardiovascular diseases, and respiratory illnesses due to air pollution may go up from the current 960 annual premature deaths to 2,410 deaths per year, with the construction and operation of more coal power plants in the Philippines, the study said.

The study was based on research conducted by Harvard University on the impacts of emissions coming from coal-fired power plants in selected countries in Asia. The Philippine version evaluated 13 operational coal-fired power plants in the Philippines with a combined installed capacity of 3,799.10 megawatts (MW), as well as the potential impacts of plans to build new coal-fired power plants, which could dramatically increase levels of sulfur dioxide, nitrogen oxide and other harmful emissions.

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TAGS: Business, Coal, complaint, international finance corporation, power sector, World Bank
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