AfricaFocus Bulletin May 17, 2017 (170517) (Reposted from sources cited below)

Editor’s Note

“We, the undersigned representatives of African civil society, express our deep concern regarding efforts by the European Union and France to hijack the Africa Renewable Energy Initiative (AREI), an African-owned and African-led initiative endorsed by all 55 African Heads of State to scale up renewable energy on our continent.” April 6 statement by Pan African Climate Justice Alliance and over 200 civil society networks and groups from 34 African countries.

In light of the threats to the climate coming from the new U.S. administration, it is tempting to look to other leading powers, including those in Europe and Asia, to provide positive examples of international action on climate change. Yet it is also clear that these actions fall short of what is needed. African activists are taking the lead in pointing out these inconsistencies.

This AfricaFocus Bulletin includes documents and links illustrating that point, both on the continent-side statement cited above and on current mobilization in Kenya against plans for a major new coal plant in Lamu.

For previous AfricaFocus Bulletins on energy-related issues, see http://www.africafocus.org/intro-env.php

++++++++++++++++++++++end editor’s note+++++++++++++++++

NET hearings ongoing in Lamu

Proceedings of court hearings, 11–12 May 2017

deCOALonize: the anti-coal, pro-renewable, pro-community, pro-sustainable development campaign in Kenya

[Excerpts only: for full report with links and photos, see https://medium.com/@deCOAL/ – Direct URL: http://tinyurl.com/l3k9xax]

[For additional background see http://www.decoalonize.org/ and http://www.savelamu.org/]

From 11 to 12 May 2017, Kenya’s National Environmental Tribunal (NET) held hearings in Lamu County to consider community groups’ objections regarding the insufficiency of the proposed Lamu coal plant’s Environmental and Social Impact Assessment. They visited the site and heard from witnesses pertaining to the proposed site, local community, and its ecosystem.

NET commissioners on site visit to Lamu

The objections were filed by a handful of residents, Save Lamu, and Natural Justice, in response to the granting of a license for the ESIA by the National Environmental Management Authority. Following this week’s site visit, NEMA will hold a second hearing in Nairobi later this month.

Media coverage of hearings (to date)

Mainstream media coverage of the 11–12 May National Environmental Tribunal meetings has been thus far limited to a handful of articles.

A second round of allegations by the County Commissioner Kanyiri accusing anti-coal plant activists of being “used by cartels” appeared in The Star, despite citing no evidence. The Star further reported that Lamu Women Representative Shakila Abdalla pledges to take the matter to High Court (which the community groups already intend to do).

Meanwhile, the Business Daily reported on the anti-coal demonstrations, a silent march through Lamu town, and community views:

Protestors accused the Lamu County government, the National Environment and Management Authority (Nema) and the Energy Regulatory Commission (ERC) of trying to force the project on them. “We will continue fighting till the end. The project is harmful and that’s why it has been rejected in Kitui and other places in this country. We will not allow such kind of a project unless they come up with an alternative and environmental friendly project rather than coal. We are for green energy,” Ishaq Abubakar, a resident opposed to the project said.

[continued at http://tinyurl.com/l3k9xax]

As the World Cuts Back on Coal, a Growing Appetite in Africa

New coal plants in Africa are largely being paid for by China and developed countries that are turning away from the technology at home. Here’s why.

By Jonathan W. Rosen

National Geographic, May 10, 2017

[Excerpts only. For full article see http://news.nationalgeographic.com – Direct URL: http://tinyurl.com/lwtqs7g]

Lamu, Kenya – Few places in the world exude a sense of timelessness as Lamu, an island off of Kenya’s northern coast home to the oldest and best preserved Swahili settlement in East Africa. Lamu’s old town, a UNESCO World Heritage site and an epicenter of Indian Ocean trade for centuries, is a maze of narrow winding streets that cut through neighborhoods of limestone and coral houses, past elaborately carved mahogany doors and several dozen mosques and churches. Only a handful of motor vehicles are allowed on the island; transportation is mainly the domain of donkeys or men pushing wooden carts thorough the tropical swelter.

Yet Lamu Island’s 24,000 residents are faced with what many here call an existential crisis. Some 15 miles north of town, on a sparsely populated seaside area of the mainland formerly used for growing maize, cashews, and sesame, a Kenyan company known as Amu Power is preparing to erect a $2 billion coal power plant, the first of its kind in East Africa.

Financed with Chinese, South African, and Kenyan capital, and built by the stateowned Power Construction Corporation of China, the plant is intended to add 1,050 megawatts of capacity to Kenya’s national grid and power operations of an adjacent 32 berth deep-water port. Both are part of an ambitious government plan to transform Kenya into a newly industrializing, middle-income country by 2030.

The project is controversial in part due to the risks it poses to Lamu’s delicate marine environment, which many fear will harm its two most vital industries: fishing and tourism. Yet it is also emblematic of Africa’s growing appetite for coal, the most polluting form of power generation, which until now has existed in significant quantities only in the continent’s most industrialized country, South Africa.

According to data compiled by CoalSwarm, an industry watchdog, more than 100 coalgenerating units with a combined capacity of 42.5 gigawatts are in various stages of planning or development in 11 African countries outside of South Africa—more than eight times the region’s existing coal capacity. Nearly all are fueled by foreign investment, and roughly half are being financed by the world’s largest coal emitter: China.

This comes at a time when China and India, which accounted for 86 percent of global coal development over the last decade, are putting coal projects on hold at record rates due to existing overcapacity, the lowering cost of renewables, and crippling pollution that is thought to kill more than a million people a year in the case of China alone. Many of the world’s more developed countries are also in the process of phasing out the fuel as a power source.

“So many states are now withdrawing coal because of its emissions—because of its environmental destruction,” says Walid Ahmed, a member of Save Lamu, a local coalition that’s trying to stop the Amu Power project. “So we don’t see why they should bring it here.”

[for more see http://tinyurl.com/lwtqs7g]

EU, France accused of hijacking ‘Africa-led’ clean energy scheme

April 27, 2017

African head of $10bn programme quits, saying French environment minister Ségolène Royal intervened to impose EU-preferred projects

By Megan Darby

http://www.climatechangenews.com – Direct URL: http://tinyurl.com/l3t9su7

[For May 10 amd May 17 updates from Climate Change News, see http://tinyurl.com/ka63foh and http://tinyurl.com/mwktayd Notably, French environment minister Royal has moved ahead with her own plan for a replacement for the former director.]

A $10bn clean energy programme launched at the Paris climate talks “by Africa, for Africa” is in turmoil after interventions by the EU and France.

Youba Sokona saw the African Renewable Energy Initiative as a chance for Africans to take control of climate finance. In a resignation letter obtained by Climate Home, the top official of the Africa Renewable Energy Initiative (AREI), Youba Sokona, accused donors of a deliberate strategy to “railroad” Africans into rubber-stamping projects selected by Europeans.

Matters came to a head in Conakry, Guinea, on 4 March, where the board approved 19 projects worth €4.8 billion ($5.2bn). By Sokona’s account, the Europeans present “managed to effectively force through” the list, overriding “a string of reservations” expressed by some African members.

“There was evident contempt for, and abandonment of, the AREI principles,” he wrote.

Youba Sokona (Pic: Flickr/Heinrich-Böll-Stiftung/Stephan Röhl)When launched, the AREI was vaunted as a scheme to bring clean power to the continent, on African terms. But many of the projects chosen by European Commission representatives are neither new, renewable nor owned by Africans.

Sokona announced his resignation on the spot and leaves the post at the end of April, with no replacement lined up.

French environment minister Ségolène Royal and EU commissioner for international development Neven Mimica led the non-African delegation at the meeting. Mimica’s EU officials chose the projects, but according to Sokona’s letter, Royal asked him to present them to the AREI board. He refused, on the basis he had not seen the list until two days earlier.

High-level representatives from Egypt, the African Development Bank – which hosts the AREI staff – and the African Union expressed concerns at the board meeting about bypassing the AREI screening process. But the presidents of former French colonies Chad and Guinea, Idriss Déby and Alpha Condé, aligned with the Europeans in urging members to give the go-ahead, Climate Home understands.

Two officials from Royal’s private office acknowledged there had been disagreement, but denied Royal had exerted undue influence. President Condé convened the meeting, they said, and Royal was there to “facilitate”.

“Our minister was very keen to help him push forward quickly and efficiently. It was important for everybody to jump-start the initiative… and not have it bogged down by governance issues,” said Royal’s advisors.

This was an “exceptional process”, they added. “The decision was made by the Africans to select the projects as soon as this meeting because they considered that the projects were ready to be moved forward – despite the fact that the governance is not fully set up and finalised.”

A spokesperson confirmed that the European Commission had identified 14 of the projects, at the request of the AREI board. Five that had been first presented at UN climate talks in Marrakech were then added to the list. Minutes of the meeting have yet to be published, nearly two months later.

The incident is a fracture in the solidarity that allowed rich and poor countries to reach a climate agreement in Paris. Under the UN deal, many developing countries put forward their first ever pledges to curb greenhouse gas emissions. Those commitments hinge on financial support from the developed world. But where the money comes from and who controls where it goes remain fraught questions.

In this case, donors – which include Canada, the US and Japan as well as EU member states – pledged to “mobilise” $10 billion by 2020. This is to install 10GW of “new and additional” clean power capacity across the continent.

But while the African technical team expected this to mean new climate finance, the developed countries argued for old money to count towards meeting the 10GW goal. In their joint statement from Paris, they said the money would flow “through a variety of mechanisms”, including a list of existing finance programmes.

The resulting first tranche comes from various development banks and involves only one euro of public funding to 15 of private investment. Critics say the minimal public input indicates the projects were already commercially viable. That suggests the initiative has relabelled business-as-usual, not driven the access to clean energy Africans need.

The list presented by the EU to Africans includes four large grid infrastructure projects, which support clean and dirty energy alike1. An interconnector planned for west Africa will facilitate “large-scale development” of hydropower and natural gas resources, according to the World Bank.

At least one of the initiatives – the Tendaho geothermal project in Ethiopia – got funding approval before the AREI launched.

This was all agreed by the African board, Royal’s advisors stressed. “A lot of these projects, they don’t come out of a bag just like that, a lot of them have been in the pipeline for a long time… If it was not for AREI, maybe these projects would still be in limbo.”

Western private investors stand to benefit from the deals. For example, the privately-owned 30MW Djermaya solar plant in Chad is being developed by a group of companies headquartered in London, Paris and Toronto. Whatever the side-benefits, Chadians will pay for this clean energy and the profits end up in Westerners’ pockets.

This was not the programme Sokona, a Malian with four decades’ experience in energy policy and sustainable development, had in mind.

He laid much of the groundwork for AREI unpaid before being officially appointed to lead the independent delivery unit from August 2016. In a video on the AREI homepage, he explains his intention to “reverse the dynamic” whereby aid donors typically set the agenda. Under his vision, African countries would put forward proposals to be screened by African technical experts and approved by African leaders.

“It is not energy per se. It is how to change the life of the people, how to give to them better conditions, better situation and better future.1 The technology is only a pretext to do that,” Sokona said in the video.

By January 2017, Sokona’s team had identified a pipeline of 442 projects across Africa, but not filtered them through AREI criteria. An AREI report on the list of projects notes the “over-whelming dominance of plans for large regional projects” rather than “transformative” programmes for energy access and capacity building.

At the same time, Royal was taking matters into her own hands. She had assumed the presidency of COP21, the historic 2015 Paris climate summit, after the event. This was a chance to start putting the Paris Agreement into practice. It may also have bolstered her credentials for an (ultimately unsuccessful) bid to lead the UN development programme.

A report presented on the sidelines of the UN general assembly in September 2016 put Royal’s name above the AREI logo. It includes more than 20 photos of her touring African countries and glad-handing leaders. In the foreword, she hails the “extraordinary potential” of the initiative. “We… need Africa to be able to make a real difference with its own solutions,” she writes.

Yet in the end, Africans were left out of the loop. Hearing of the Conakry row, nearly 200 African civil society organisations signed an open letter objecting to the EU “hijacking” the initiative.

Tasneem Essop, founder of the Energy Democracy Initiative in South Africa, described the European players’ behaviour as “absolutely shocking”. “[AREI] was one of the most inspirational initiatives emerging from Africa. We were so desperate for this kind of leadership,” she told Climate Home.

Far from the focus on community access to clean energy Essop hoped for, the EU list represented “business as usual”. And the way it was imposed was all too reminiscent of the history of development finance being dictated by the rich. “We thought we had passed those ways, but this is such an explicit and crude grab, it is mind-boggling that this could have happened now.”

Essop argued that the developed world, which bears most responsibility for causing global warming, has a duty to support Africa in clean growth. “They [donors] think it is charity. It is not charity. This is very much part of the obligations under the UN climate convention.”

The civil society letter calls on the EU and France to surrender any aspiration to board membership and respect the initiative’s autonomy. “AREI must be run by Africans for Africans. Interference in African governance belongs to another era,” it says.

Asked how France would rebuild trust in the process, Royal’s advisors said: “It is an African-led initiative and it is really for the Africans to discuss this and make sure [the process] is inclusive. What our minister can do is mention this to President Condé and she will work to that effect, as a facilitator.”

Stop European Hijacking of the Africa Renewable Energy Initiative

Statement by African Civil Society

April 7, 2017

http://www.pacja.org – Direct URL: http://tinyurl.com/kvbysco

We, the undersigned representatives of African civil society, express our deep concern regarding efforts by the European Union and France to hijack the Africa Renewable Energy Initiative (AREI), an African-owned and African-led initiative endorsed by all 55 African Heads of State to scale up renewable energy on our continent.

AREI (http://www.arei.org) was launched by the African governments with the support of African citizens during COP21 in Paris, with the goal to provide at least 10 billion watts (10GW) of new and additional renewable energy to Africa’s peoples by 2020, and put the continent on course to add at least another 300 GW and achieve universal access to energy for all Africans by 2030. It was supported by $10 billion in pledges for 2015-2020 by developed countries in Paris.

AREI as defined in its framework, principles and work plans is a unique initiative. It is aligned with our values of people-centred approaches, community rights, equity and a bold vision of Africa taking a global lead towards flourishing societies powered by clean, renewable energy.

Since Paris, an Independent Delivery Unit was set up to deliver in accordance with AREI’s people-centred principles and approaches. The expectation was that a Board with Heads of State representing each African sub-region would be established, supported by a technical committee involving broad representation and participation by civil society.

AREI’s integrity and promise of bringing light and energy to Africa’s people is now being gravely threatened by the efforts of the European Union and France for premature, undue approval of ‘their’ projects and seeming attempts to co-opt the initiative to serve their ends, supported by a small handful of Africans. At a Board Meeting convened in Conakry on 4 March, we understand the European Union and France have:

• Publicly “announced the preparation of 19 new renewable energy projects, with a total potential investment of €4.8 billion” (EU press release 4 March – http://bit.ly/2mLxiqG) – when they are actually claiming to provide a mere 1/16th or €0.3 billion of this amount, not all of which is for “new projects” or even for “renewable energy”, and with no clarity whether any of these are “additional'” efforts.
• Managed to have rammed through the Board for adoption these partly EU-funded projects, despite the express objections from some African countries and institutions, and contrary to the principles of African ownership that would expect project priorities and proposals to stem directly from African countries
• Ignored and bypassed AREI’s own evaluation process in accordance to its criteria ( http://bit.ly/2mwiMDr) – developed with African and northern government, civil society and otherstakeholder inputs. These require all projects be assessed in line with AREI social, environmental, gender and other principles and safeguards before any approvals can be made
• Claiming Board memberships when they seem to have only been invited to the meetings (AREI minutes of the first inaugural board on 29 January – http://bit.ly/2mY6b82) and contrary to the idea there should be one developing and one developed non-African country in the Board.
• Pushed for the imposition of EU technical experts to supposedly take control of AREI core documents to be consistent with European interests

All the above seems to have caused the Head of the Independent Delivery Unit, a prominent and well- respected African, to declare his resignation.

These actions have been enabled by one or two African states while the interests of the majority of States, and of Africans, have been set aside.

While we acknowledge that the EU has scaled up support for African renewables since COP21 in Paris, these most recent behaviors are completely unacceptable. Recycling existing projects as “new” ones for AREI virtually ensures it will fail to meet its goal of 10 billion watts of “new and additional renewable energy generation capacity by 2020”, leaving Africans in the dark.

Listing projects in numerous African countries without their consent means these countries may miss out on genuinely new and additional resources from AREI in the future, undermining the legitimate expectations of those countries and their people.

These carefully staged interferences in Africa’s institutions threaten not merely the potential of AREI to deliver new renewable energy, they call into question the independence and sanctity of African governance arrangements, including the African Union.

Based on these concerns, we call on all African States, leaders and people to demand genuinely people- centred renewable energy for Africa, building on the great model set out by AREI and endorsed by all African countries.

We demand:

1. That the European Union and France step aside and abandon any aspirations to have seats as Board members, and ensure AREI remains African-led and African-owned. AREI must be run by Africans for Africans. Interference in African governance belongs to another era.
2. Full accountability, transparency and participation must be provided for African states and for civil society in all aspects of AREI. The Initiative cannot and must not become a tool for one or two African States to benefit themselves or their European counterparts.
3. That any ‘endorsement’ by the Board of the 19 existing EU projects is indefinitely suspended until a thorough review against AREI Criteria, environmental and social safeguards, prior informed consent by the States and citizens concerned, and active civil society participation are undertaken. It must be for individual African states and people, not the EU, to propose projects to AREI.
4. That all further funding and projects through AREI be genuinely “new and additional” to ensure the delivery of real outcomes for our people, with no more accounting tricks, and to ensure that developed countries are accountable and meet their financial obligations.
5. That active participation by all civil society constituencies is ensured at all levels of AREI including its governing bodies, its workplan and project development, and project implementation on the ground.
6. That African countries immediately take action to put AREI back on track and ensure full independence for the Independent Delivery Unit from donors, the African Development Bank and other third parties, and the reinstatement of its Head

We call for all partners in government, academia, faith-based, labour, gender, environmental, community-based organizations, national coalitions and regional and international networks to join us in championing a truly African-led and peoplecentred approach to renewable energy on our continent. AREI needs to succeed.

We hereby sign on to this statement:

Regional Groups & Networks

Pan-African Climate Justice Alliance (PACJA) Kenya [Full list includes almost 200 civil society groups and networks from Algeria, Benin, Burkina Faso, Cameroun, Chad, Djibouti, DR Congo, Ethiopia, Ghana, Cote d’Ivoire, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Morocco, Mozambique, Niger, Nigeria, Senegal, Sierra Leone, Somalia, South Africa, Sudan, Swaziland, Tanzania, Togo, Tunisia, Uganda, Zambia, and Zimbabwe

[Note: an statement of support for the African civil society demands was circulating as this AfricaFocus was prepared, and will be available on-line later today. AfricaFocus will post a link to that statement in the web version of this Bulletin as soon as possible.]

Key excerpts from a semi-final draft of this international letter to the European Union/European Commission and France, are as follows:

“We, the undersigned organizations, are writing to express our dismay at the actions of France and the EU regarding the governance of the Africa Renewable Energy Initiative (AREI), and to show our support for the demands of African civil society to reverse these developments.”

“For all these reasons, we fully support the demands of African civil society to reverse recent developments and put the AREI and its leadership and governance back on track, as outlined in their recent statement.”

“The AREI is an African-led initiative that, with proper governance, has the potential to address the energy needs of African peoples and the planet’s climate challenges. Only by respecting the initiative’s African sovereignty, ensuring projects are aligned with AREI criteria, and providing genuine support can the EU and France help to meet these goals.”

AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

AfricaFocus Bulletin can be reached at africafocus@igc.org. Please write to this address to suggest material for inclusion. For more information about reposted material, please contact directly the original source mentioned. For a full archive and other resources, see http://www.africafocus.org

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Editor’s Note

“The World Bank Group has indirectly financed some of Africa’s most notorious land grabs, according to a report by a group of international development watchdogs. The World Bank’s private-sector arm, the International Finance Corporation (IFC), is enabling and profiting from these projects by outsourcing its development funds to the financial sector.” – Oakland Institute

This new investigative report, from five international development watchdog organizations, focuses particularly on the role of the World Bank in fueling land grabs in Africa through its financing of private sector investments, for both mining and agriculture. While the problem of appropriation of land by both national elites and financial interests around the world is pervasive in many African countries, these particular projects are notable because they are promoted by a global organization ostensibly dedicated to addressing poverty. The evidence is that the result is the opposite.

This AfricaFocus Bulletin contains a press release from the Oakland Institute and excerpts from the full report, which has references to additional case studies and additional documentation.

In addition to the organizations involved in this report, cited below, other international organizations actively involved in these issues include ActionAid International (see http://www.actionaid.org/land-for for case studies and for campaign materials); Oxfam International (https://www.oxfam.org/en/tags/land-grabs and Global Witness (http://tinyurl.com/k39spqg).

For previous AfricaFocus Bulletins on agriculture and related issues, see http://www.africafocus.org/intro-ag.php

On land grabbing in particular, see particularly http://www.africafocus.org/docs12/wb1205.php, http://www.africafocus.org/docs12/sl1205.php, http://www.africafocus.org/docs10/ag1010a.php, http://www.africafocus.org/docs10/ag1010b.php, and http://www.africafocus.org/docs10/ag1010c.php

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World Bank Fuels Land Grabs in Africa Through Shadowy Financial Sector Investments

Oakland Institute

May 1, 2017

http://www.oaklandinstitute.org – direct URL: http://tinyurl.com/l3dz69p

[full report available at http://tinyurl.com/n2g9b7r]

Oakland, CA — The World Bank Group has indirectly financed some of Africa’s most notorious land grabs, according to a report by a group of international development watchdogs. The World Bank’s private-sector arm, the International Finance Corporation (IFC), is enabling and profiting from these projects by outsourcing its development funds to the financial sector.

            AngloGold Ashanti mine in Siguiri in eastern Guinea.       The mine produces about 300,000 ounces of gold each year.

The report, Unjust Enrichment: How the IFC Profits from Land Grabbing in Africa, was released today by Inclusive Development International, Bank Information Center, Accountability Counsel, Urgewald and the Oakland Institute.

“Pouring money into commercial banks that are driven only by profit motivations is not the way to foster sustainable development,” said Marc Ona Essangui, Executive Director of Brainforest and winner of the Goldman environmental prize in 2009. “In Gabon, this development model has instead enabled a massive expansion of industrial palm oil, which threatens our food security and the ecological balance of Congo Basin’s ancient rainforests.”

“Tens of millions of hectares of land on the African continent have been grabbed by foreign investors in recent years. This has led to loss of life, land, and livelihoods for millions, and threatened the very survival of entire communities and indigenous groups,” commented Anuradha Mittal, Executive Director of the Oakland Institute. “The World Bank must acknowledge that this is not development. It is not poverty reduction. These are investments for corporate profits that exploit and displace people.”

The report is based on a yearlong investigation conducted by Inclusive Development International, which found that IFC-supported commercial banks and private equity funds have financed projects across the world that have forcibly displaced hundreds of thousands of people and caused widespread deforestation and environmental damage. In Africa, the investigation uncovered 11 projects backed by IFC clients that have transferred approximately 700,000 hectares of land to foreign investors.

The projects include agribusiness concessions in the Gambela region of Ethiopia that were cleared of their indigenous inhabitants during a massive forcible population transfer campaign in the area; oil palm plantations in Gabon that have destroyed 19,000 hectares of rainforest and infringed on the customary land rights of local communities; and a gold mine in Guinea that led to the violent forced eviction of 380 families.

“These projects are antithetical to the World Bank’s mission of fighting poverty through sustainable development,” said David Pred, Managing Director of Inclusive Development International. “They also make a mockery of the IFC’s social and environmental Performance Standards, which are supposed to be the rules of the road for the private sector activities that the IFC’s intermediaries support.”

The report is the fourth of the investigative series Outsourcing Development: Lifting the Veil on the World Bank’s Lending Through Financial Intermediaries, which follows the trail of IFC money and examines at how it impacts communities around the world.

Inclusive Development International’s yearlong investigation uncovered 134 harmful or risky projects financed by 29 IFC financial-sector clients. These projects are found in 28 countries and on every continent except Antarctica. A database of the findings can be found here (https://goo.gl/UZ90PI).

In response to the concerns raised in the Outsourcing Development investigation and by the IFC’s Compliance Advisor Ombudsman, IFC Executive Vice President Philippe Le Houérou recently acknowledged the need for the World Bank Group member to re-examine its work with financial institutions. In a blog post from April 10, Le Houérou wrote that the IFC would make “some important additional improvements to the way we work,” by scaling back the IFC’s high-risk investments in financial institutions, increasing its oversight of financial intermediary clients and bringing more transparency to these investments, among other commitments.

The IFC has also exited investments in banks highlighted by the Outsourcing Development investigation, including ICICI and Kotak Mahindra in India and BDO Unibank in the Philippines.

“We welcome the IFC’s new commitments to encourage a more responsible banking system by increasing its oversight and capacity building of financial sector-clients moving forward,” said Pred. “However, rather than simply divest, we want to see the IFC work with its clients to redress the serious harms that communities have suffered as a result of the irresponsible investments that we have brought to light.”

“IFC’s collusion in land-grabbing in Africa is deeply shocking, so its pledge to reduce high risk lending to banks is welcome, said Kate Geary, Forest Campaign Manager for Bank Information Centre Europe. “But how can we be sure when there is no disclosure of where over 90 per cent of IFC’s money invested through third parties ends up? The IFC’s financial sector clients must come clean about projects they are financing so they can be held accountable to their commitments to invest responsibly.”

Financial-sector lending represents a dramatic shift in how the IFC does business. After decades of lending directly to companies and projects, the World Bank Group member now provides the bulk of its funds to for-profit financial institutions, which invest the money as they see fit, with little apparent oversight. Between 2011 and 2015, the IFC provided $40 billion to financial intermediaries such as commercial banks and private equity funds. Other development finance institutions have followed suit.

The Outsourcing Development series is available at: http://www.inclusivedevelopment.net/outsourcing-development

A database of IFC Financial Intermediary sub-Investments with serious social, environmental and human rights risks and impacts is available at:

https://goo.gl/UZ90PI

For more information, please contact:

David Pred, Managing Director of Inclusive Development International: +1 917-280-2705; david@inclusivedevelopment.net; Twitter: @preddavid

Kate Geary, Forest Campaign Manager at BIC Europe: +44 7393 189175; kgeary@bankinformationcenter.org

Moritz Schröder, Communications Director at Urgewald: +49 17664079965, moritz@urgewald.org

Kindra Mohr, Policy Director at Accountability Counsel: +1 202-742-5804, kindra@accountabilitycounsel.org, Twitter: @AccountCounsel

Anuradha Mittal, Executive Director of the Oakland Institute: +1 510-469-5228; amittal@oaklandinstitute.org, Twitter: @MittalOak

Unjust Enrichment: How the IFC Profits from Land Grabbing in Africa

[Excerpts from full report. Full report available at http://tinyurl.com/n2g9b7r]

On November 7, 2015, Sira Bérété was walking home from high school. It was a hot, dry after- noon in remote northeastern Guinea, one of West Africa’s poorest countries.

As Bérété approached her village, she heard soldiers shouting. The situation in her community, Kintinian, had been tense for a while, and government security and defense forces had become a regular presence. The commotion alarmed the ninth grader, but she needed to get home. So she kept walking.

Bérété heard gunshots. She didn’t have time to react. She felt an immense force slam into her from behind. Her body hurled forward. A bullet entered her back, to the left of her spine, just below her shoulders. It tore through her and exited through the front of her neck.

She remembers the pain. She remembers starting to run. Then she lost consciousness. She doesn’t remember much else.

She found out later that a bystander had rushed her to the hospital. The medical staff saved her life. She spent three months recovering — nearly 90 days of agony and trauma — before being discharged. Her life has not been the same since.

Bérété has dropped out of school. She has lost functional use of her left arm. She is in constant pain. It grips her head, neck and arm, and moves down to her hand and fingers.

She carries more than the pain from that day. She worries that the terror will never leave. “I’m still afraid,” said Bérété, her eyes pooling with tears. ” Those soldiers came to brutalize us. They came to take our land.”

Before the shooting, Bérété had lived with her father, who maintained a small plum orchard. Their lives were modest. “We always had enough to eat,” she said. But they and approximately 380 other families lived on valuable land.

There was gold under that land, and a mining company wanted it. The firm, called Societe Anglo- Gold Ashanti de Guinee, or SAG, has held a concession since 1998 to mine a 1,500-square-kilometer area that encompassed Bérété’s village. In 2015, SAG announced that its existing mines in the concession had been depleted. The company needed new land to mine.

According to numerous community members interviewed for this report, the company moved in with government security and defense forces and compelled the families to sign inventories of their possessions, often at gunpoint. The mixed forces included members of the notorious Presidential Guard, known as the Red Berets, an elite unit that massacred and raped hundreds at a political rally in the capital in 2009.

“I signed over my land with a soldier pointing a gun at me. I had no choice,” said Bassy Camara, 42, a small-scale gold buyer who lost his home and his business. “If you had a man standing over you with a gun, what would you do?”

SAG is a subsidiary of AngloGold Ashanti, a South African gold mining company with operations on three continents. The sole purpose of SAG, a joint venture with the Guinean government, is to mine the concession in Guinea.

AngloGold Ashanti is the world’s third-largest gold mining company. The company generated $4.25 billion in revenue in 2016.

In 2015, the year before Bérété and her neighbors were evicted, AngloGold Ashanti received a loan worth 1.4 billion South African rand (approximately $102 million) from two commercial banks located in South Africa. The loan was general in nature, meaning the company could use the money as it chose, including funding its mining operations around the world.

One of those lenders, Nedbank, is a financial-intermediary client of the International Finance Corporation (IFC). The World Bank’s private-sector arm provided Nedbank with $140 million for “cross-border lending across Africa, including capital-intensive projects.” An IFC press release announcing the deal noted that the funding was designed to increase lending for “resource-extraction projects” in Africa, among other goals. Support for AngloGold Ashanti’s gold mine in Guinea falls squarely within the purpose of the IFC’s loan to Nedbank.

Through this financial relationship, IFC money could be used by AngloGold Ashanti to operate and expand the mine in Guinea. Moreover, profits from AngloGold Ashanti and the mine have moved up through Nedbank and on to the IFC, in the form of interest from the loans.

In other words, the IFC, whose mission is to fight poverty and support sustainable private-sector-led development, is both indirectly financing and profiting from a project that is harming and further impoverishing the poor.

The IFC’s exposure to the mine fits a pattern. An ongoing investigation by Inclusive Development International has found that the IFC is indirectly funding some of the most harmful invest- ment projects in the world. The World Bank Group member is doing this by channeling the bulk of its funding through shadowy investments in financial intermediaries, such as commercial banks and private equity funds. The IFC poured over $50 billion between 2010 and 2015 into the financial sector, where it has little control over or even knowledge of how that money is used.

Although the IFC’s financial-sector clients are required to implement the institution’s social and environmental Performance Standards, the evidence suggests that this is not happening in practice, contributing to headline-grabbing abuses. And since the IFC does not publicly disclose the end use of such funds, the World Bank Group can frame the deals in terms of job creation and poverty reduction — when in fact the funds often flow to projects that undermine these goals.

When the Nedbank loan was announced, IFC official James Scriven praised the deal. “IFC, the [Af rican Development Bank] and Nedbank share the objective of increasing social and environmental awareness in the financial sector, helping to contribute to more sustainable economic development across Africa,” Scriven said. (The African Development Bank provided a concurrent $140 million loan to Nedbank.)

Yet in Guinea, the IFC’s support for Nedbank has created anything but sustainable development. Deprived of their land and livelihoods, and given paltry compensation by AngloGold Ashanti, the relocated families have spiraled into destitution. “We don’t have enough food for our children,” said Lala Condé, a mother who lost her home.

The mine’s impacts extend far beyond those evicted. Approximately 150,000 people are believed to be living in AngloGold Ashanti’s concession area. They are in danger of being forcibly evicted in the future.

The mine has also caused serious environmental damage. AngloGold Ashanti uses cyanide, a deadly toxin, to wash the gold in preparation for refining. During rainstorms, which occur frequently in tropical Guinea, residual cyanide has flowed into the area’s water sources, killing fish and livestock and poisoning drinking water, according to community members.

AngloGold Ashanti has made a number of promises to the people whose lives it has upended. It has pledged to provide jobs, irrigation, drinking water and electricity to those it evicted. Yet community members say that the company has kept few of those promises.

” The company took everything from us. We’ve been left with nothing. No trees. No water. No jobs,” said Balla Camara, an elected representative of the affected community.

“At this moment, we prefer death to life,” he said.

…

Africa is in the grips of a land-grabbing epidemic. Nearly a decade ago, in the wake of the global financial crisis, food and commodity prices soared, creating an unprecedented money-making opportunity for investors.

Large multinationals, in search of cheap land to grow crops and extract minerals, rushed to Africa to make deals. Huge swaths of land have been granted to these firms, mainly in the form of long-term leases for mining and agro-industrial projects.

Between 2008 and 2010 alone, investors acquired between 53 million and 61 million hectares of land on the continent, an area roughly the size of Ukraine, according to an academic analysis of media reports collected by the International Land Coalition.

National policy makers and international development institutions, including the World Bank, have enabled this trend by promoting large-scale land investments as a catalyst for rural development. Supporters contend that these projects increase the productivity of under-used land and create jobs in countries rich in natural resources but poor in capital.

Yet by encouraging foreign investment in land that was deemed “idle” or “empty,” these policies have enabled the seizure of land that local people have sustainably used and managed according to their traditions for centuries. To those affected, these deals have been nothing more than land grabs, resulting in dispossession and displacement on a massive scale.

The World Bank Group has been at the center of this storm. Through its advisory services, the IFC has encouraged governments to make land easily available to investors by setting up land banks and similar one-stop investment shops. Acknowledging the environmental and social risks of large-scale land deals, the bank’s leadership has argued that these can be managed and minimized through the adoption of voluntary codes of conduct, to which investors and governments could be persuaded to adhere.

The IFC has also provided direct financial support for companies to develop largescale industrial plantations. These investments have, however, been limited since 2009, when the bank’s then president, Robert Zoellick, instituted a temporary moratorium on lending to the palm oil sector, following a damning investigation by the IFC’s ombudsman into complaints of land grabbing and deforestation by an IFC client in Indonesia. While the palm oil moratorium was lifted in 2011, the IFC has been hesitant to invest directly in large-scale land projects because they inevitably — and visibly — run afoul of its environmental and social standards.

But IFC money is still flowing to these projects in Africa — through the murky back channel of financial intermediaries. By following this trail of money, Inclusive Development International has revealed that the IFC has contributed to some of the most notorious land grabs on the continent.

In Ethiopia, the IFC indirectly financed the Indian agribusiness company Karuturi Global through ICICI, a top Indian bank that the IFC provided with $150 million in 2006. In 2010, with financing from ICICI, Karuturi signed long-term leases for 111,000 hectares of land to develop sugarcane, corn and oil palm plantations in the Gambella region. Thousands of indigenous Anuak and Nuer people were forcibly displaced from the area that was simultaneously offered to foreign investors, including Karuturi, under the government’s “villagization” program, according to the Oakland Institute.

In Gabon, Ecobank Transnational, an IFC financial-sector client, has financed oil palm plantations and processing facilities operated by the Singaporean company Olam. The project is being developed on a 300,000-hectare concession that local and international environmental groups warn threatens to destroy large areas of the Congo Basin rainforest, harming biodiversity and the liveli- hoods of thousands of people.

Export-oriented industrial sugarcane plantations in Sierra Leone and Zambia, funded by multiple IFC financial intermediaries, have been accused of grabbing small-holder farmland and displacing thousands of people, leading to declining incomes and food security.

The IFC’s exposure to these projects demonstrates the risks of financial-sector lending. Yet the World Bank Group member has doubled down on the practice in recent years. The institution’s outstanding commitments to commercial banks, private equity funds and other financial intermediaries have risen by 45% since 2010. According to the IFC’s own data, between 2013 and 2015, its lending to financial intermediaries categorized as “high-risk” jumped by 300%, from $450 million to $1.3 billion.

AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

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