EU Bank ‘Financing Destruction’ in Africa

By David Cronin for IPS

The European Union is financing ecologically and socially destructive projects in Africa, a Brussels conference has been told.

Officially, the Luxembourg-based European Investment Bank (EIB) is committed to using the 53 billion euros (67 billion dollars) it releases each year, to pursue policies that protect the environment and alleviate hardship.

But evidence gathered from projects that this low-profile EU body has financed in Africa indicates that its loans are having the opposite effect.

One of the largest projects it has financed relates to the construction of a 1,070 km oil pipeline in Chad and Cameroon. This project, to which the EIB allocated 144 million euros in 2001, has required the large-scale confiscation of lands farmed by peasants.

Human rights activists in the surrounding region have alleged that communities affected have not received adequate compensation, that discharges of oil from the project have polluted several rivers and streams, and that gas flaring undertaken by ExxonMobil, one of the participating companies, has caused severe respiratory and other health problems.

Thérèse Mekombe, president of the Association of Women Lawyers of Chad, claimed that revenue from the project is being used by her country’s president Idriss Deby to increase military expenditure. Deby has been accused of supporting the Justice and Equality Movement, one of the groups involved in the violence in Darfur, across Chad’s border with Sudan, which has uprooted more than 2.5 million people over the past five years.

“On Aug. 11 – Independence Day – the government was so happy to show off its war vehicles,” said Mekombe, speaking at a conference on the EIB’s activities held in the Belgian Senate Dec. 2. “This is not what the population expected from the exploitation of oil. They wanted the revenue to be invested in development projects and to help the Chadian population get out of extreme poverty.”

A separate project financed by the EIB involves a gas pipeline in West Africa. Stretching more than 680 km, it starts in the Niger Delta and ends in Ghana, where it is expected to begin delivering energy in the coming weeks. In December 2006, the bank awarded 75 million euros to the Accra government for work on this pipeline, which brings together such companies as Shell, Chevron, Texaco and Nigerian National Petroleum.

Twelve communities in Nigeria who allege that the project will cause irreparable harm to the environment on which they depend filed a complaint to the World Bank, which has also been financing it, in 2006. Earlier this year, the World Bank Inspection Panel found that the communities had not been properly consulted about the consequences of the project.

Green campaigners contend that financing schemes that are reliant on fossil fuels run counter to the EU’s stated objective of fighting climate change.

Osayande Omokaro from Friends of the Earth Nigeria said that European energy firms are eager to increase their investment in Africa in order to compete with China and to reduce their dependence on oil and gas from the Middle East and Russia.

“Europeans pride themselves as promoters of human rights, freedom and good governance,” he added. “The Chinese do not really promote these values. The Europeans must live by what they practise at home, even if it means losing some ground to the Chinese. It is better to make sure you practise what you preach.”

During 2007, the EIB became the first public lender to agree to fund the Tenke Fungurume mining project in Congo. Covering over 1,000 square kilometres, this will extract copper and cobalt, two materials heavily demanded throughout the world. Mobile phones, for example, rely extensively on Congolese cobalt.

Lent 100 million euros from the EIB, this project has left hundreds of families homeless as they were displaced in order to make for mining installations.

Prince Albert Kumwamba N’Sapu, director of the Congolese organisation Action Against Impunity for Human Rights, said that most workers hired for the project lack a contract of employment. “Thousands do not have any rights, they have terrible working conditions and they go into mines without any protection,” he added. “They are without any healthcare when they are injured. And they are not allowed to set up a trade union.”

He urged the EIB to formally accept an independent investigation into how its money is being used. “Problems of poverty should be at the centre of any investment. Is this project really contributing to alleviating poverty?” he asked. “Is it really a development project? The bank should say if the project is really useful.”

Anne-Sophie Simpere from Friends of the Earth France said that national parliaments throughout Europe need to scrutinise the bank’s activities. “The EIB is barely known by the public at large but it provides enormous funds to developing countries and is the leading public financier to the extractive industries,” she added. “Apart from their disastrous impacts in Africa, these investments grossly contradict EU efforts to fight climate change, as well as to reduce poverty and conflicts.” (END)

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