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International Financial Institutions, Accountability and Transparency

A Policy Brief on the Inter-American Development Bank, Korea Export Import Bank, European Bank for Reconstruction and

Development, and the United Kingdom Export Finance Department

The Resource Curse

The New School Graduate Program in International Affairs 11/20/13

Masha Katz

Justin Coburn Emma Stoskopf-Ehrlich

Jonathan Leonard Jaron Vogelsang

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Contents Contents ............................................................................................................................................................ 2

List of Acronyms................................................................................................................................................ 4

Introduction ...................................................................................................................................................... 5

Inter-American Development Bank (IDB) ......................................................................................................... 7

Financing in the Extractive Sector ................................................................................................................ 7

Transparency and Accountability Policies .................................................................................................... 8

Access to Information ................................................................................................................................... 9

Enforcement Mechanisms ............................................................................................................................ 9

Comparison to Dodd-Frank, EU Directives, and IFC Sustainability Framework............................................ 9

The European Bank for Reconstruction and Development (EBRD) ................................................................ 11

Financing in the Extractive Sector .............................................................................................................. 11

Transparency and Accountability Policies .................................................................................................. 12

Access to Information ................................................................................................................................. 14

Enforcement Mechanisms .......................................................................................................................... 16

Comparison to Dodd-Frank, EU Directives and IFC Sustainability Framework .......................................... 17

United Kingdom Export Finance Department (UKEF) ..................................................................................... 19

Financing in the Extractive Sector .............................................................................................................. 19

Transparency and Accountability Policies .................................................................................................. 19

Accessibility of Information ........................................................................................................................ 22

Enforcement Mechanisms .......................................................................................................................... 22

Comparison to Dodd-Frank, EU Directives, and IFC Sustainability Framework.......................................... 23

The Korean Export Import Bank (KEXIM) ...................................................................................................... 24

Financing in the Extractive Sector ............................................................................................................. 24

Transparency and Accountability Policies ................................................................................................ 24

Accessibility of Information ....................................................................................................................... 25

Enforcement Mechanisms .......................................................................................................................... 25

Comparison to Dodd-Frank, EU Directives, and IFC Sustainability Framework ....................................... 25

Advocacy Recommendations .......................................................................................................................... 27

Inter-American Development Bank ........................................................................................................... 27

European Bank for Reconstruction and Development ............................................................................... 27

United Kingdom Export Finance ................................................................................................................. 28

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Korea Export Import Bank .......................................................................................................................... 29

Appendix A: List of EI Project Funded by the Inter-American Development Bank ........................................ 30

Appendix B: EBRB Draft Mining Strategy ........................................................................................................ 31

Appendix C: Criticisms of the EBRD Mining Operations Policy ....................................................................... 33

Appendix D: EBRD Public Information Policy .................................................................................................. 34

Appendix E: EBRD Administration Tribunal Case Study .................................................................................. 36

Appendix F: EBRD Financed Extractive Industry Projects ............................................................................... 37

Appendix G: Transcript of EBRD Interviews .................................................................................................... 38

Appendix H: UKEF Extractive Industry Projects Funded from 2010-2013 ...................................................... 45

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List of Acronyms

ATI: Aid Transparency Index COO: Country of Operation CSE: Civil Society Engagement Unit CSO: Civil Society Organization EA: Environmental Analyses EBRD: European Bank for Reconstruction and Development ECG: Export Credits and Credit Guarantees EI: Extractive Industry EIA: Environmental Impact Assessments EITI: Extractive Industry Transparency Initiative ESHR: Environmental, Social and Human Rights ESIA: Environment and Social Impact Assessment ESMR: Environmental and Social Management Reports ESS: Environmental and Social Strategies EU: European Union Exim: Export Import Bank ICC: Inter-American Investment Corporation IDB: Inter-American Development Bank IFC: International Finance Corporation IFI: International Institution KEXIM: Korea Export Import Bank LAC: Latin America and the Caribbean OECD: Organization for Economic Cooperation and Development PCM: Project Complaint Mechanism PIP: Public Information Policy PSD: Project Summary Document PWYP: Publish What You Pay RWI: Revenue Watch Institute SCF: Structured and Corporate Finance SDR: Special Drawing Rights SEA: Strategic Environmental Analyses SEC: U.S. Securities and Exchange Commission UKEF: United Kingdom Export Finance Department

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Introduction

International financial institutions (IFIs), lending vast sums of money to governments and the private sector, play a major role in the development of the extractive industry worldwide. Bilateral and multilateral "development" banks have funded tens of billions of dollars of projects in the extractive sector, and Export Import (Exim) banks have provided financing needed to import goods needed for extractive industries1. In the past, most IFIs had few accountability mechanisms and much of their operations were conducted in secrecy. Most banks provided very little information about their lending practices and little, if any information was made available to citizens in countries that received bank funds. In addition, most banks lacked policies to ensure that their financing was not causing or encouraging environmental degradation, poor macroeconomic policy choices, corruption or conflict. In the past two decades, this lack of transparency and accountability has gotten the attention of international civil society. Organizations like Revenue Watch Institute, Open Society Foundation, and other advocacy organizations have pressured governments and IFIs to adopt policies that encourage transparency and accountability.

In 2010, the United States Congress passed the Dodd-Frank Act. This piece of legislation was a major victory for transparency and accountability, as Section 1504 of the law requires publicly listed oil, gas, and mining companies to disclose payments (taxes, royalties, fees, production entitlements, bonuses, dividends, and infrastructure improvement) equal to or exceeding $100,000 to the U.S. government and foreign governments as part of their annual filings to the U.S. Securities and Exchange Commission (SEC), the agency that regulates the U.S. financial sector.2 Once the law takes effect, companies must disclose the type and total amount of payments made for each project and to each government, currency used to make the payment, and the financial period in which the payment was made.3 Although the Dodd-Frank Act was passed by congress in 2010, in July 2013, a Washington DC district court forced the SEC to abandon the rules that it developed to implement Dodd-Frank 1504. Although the judgment allows the SEC to re-state its implementation policies, no further court hearings have been occurred, and at this point, there is no clear implementation timeline.4

In 2013 the European Parliament revised its existing Directive on Accounting and Transparency that it passed in 2004. The new EU regulations strengthened its previous directives, and now require publicly listed and large private companies (annual turnover of more than €40 million; total assets more than €20 million and more than 250 employees) payments to governments in country by country

1 Bank Information Center. Quick Reference Guide to Extractive Industries’ Revenue and Contract Transparency at the International Financial Institutions. 2010. Web. 19 Nov 2013. < http://www.bicusa.org/wp-content/uploads/2013/01/2010_Reference_IFIPolicies.pdf> 2 Dodd-Frank Wall Street Reform and Protection Act of 2010 § H.R. 4173 U.S.C. (2010) <.https://www.govtrack.us/congress/bills/111/hr4173/text> 3 Dodd-Frank Wall Street Reform and Protection Act of 2010 § H.R. 4173 U.S.C. (2010) <https://www.govtrack.us/congress/bills/111/hr4173/text> 4 Global Witness. History Will Show DC District Court Has Drawn the Wrong Conclusion on Dodd-Frank 1504. 4 July

2013. Web. 4 Dec 2013. < http://www.globalwitness.org/library/history-will-show-dc-district-court-has-drawn-wrong-conclusions-dodd-frank-1504>

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reports.5 Companies that are required to comply with the directives must disclose payments to governments including production entitlements, royalties, bonuses, fees, payments on infrastructure improvements, and taxes on a project by project and country by country basis.6 The EU’s accounting and disclosure directives are stronger than Dodd-Frank 1504 because they apply to logging companies and to large, privately held companies.7

The International Finance Corporation (IFC) began implementing its Sustainability Framework in 2012. The Sustainability Framework requires that all projects financed by the IFC in the extractive sector must disclose all payments (royalties, taxes, and revenue sharing) to governments.8 Although the IFC Sustainability Framework is an improvement on the IFCs previous transparency regulations, it still has a number of gaps, including vague terminology that opens a number of loopholes for companies to exclude certain financial disclosures. It also only requires contract disclosure for “significant new extractive projects that exceed 10% of government revenue”. Very few, if any extractive industry projects financed by the IFC meet this threshold for contract disclosure.9

While the United States, European Union, and International Finance Corporation have adopted policies and regulations that encourage transparency and accountability, other development and EXIM banks have been much slower to implement reforms. This policy brief will examine the transparency and accountability policies of four major IFIs: the Inter-American Development Bank, the European Bank for Reconstruction and Development, the Korean Export Import Bank, and the United Kingdom Export Finance Department.

5 European Commission. New disclosure requirements for the extractive industry and loggers of primary forests in the Accounting (and Transparency) Directives (Country by Country Reporting) – frequently asked questions. 12 Jun 2013. Web. 20 Nov 2013. < http://europa.eu/rapid/press-release_MEMO-13-541_en.htm> 6 Ibid. 7 Ibid. 8 Bank Information Center. Quick Reference Guide to Extractive Industries’ Revenue and Contract Transparency at the International Financial Institutions. 2010. Web. 19 Nov 2013. < http://www.bicusa.org/wp-content/uploads/2013/01/2010_Reference_IFIPolicies.pdf> 9 Bank Information Center. Quick Reference Guide to Extractive Industries’ Revenue and Contract Transparency at the International Financial Institutions. 2010. Web. 19 Nov 2013. < http://www.bicusa.org/wp-content/uploads/2013/01/2010_Reference_IFIPolicies.pdf>

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Inter-American Development Bank (IDB)

The Inter-American Development bank (IDB) was founded in 1959 to support efforts by Latin American and Caribbean countries to reduce poverty and inequality. The Bank aims to bring about development in a sustainable, climate-friendly manner and states that it is committed to increasing the transparency, accountability and integrity in all of its activities. The majority of the IDB’s financial activity is in the public sector, however the Bank does offer private sector loans through its Structured and Corporate Finance (SCF) department and the Inter-American Investment Corporation (ICC), which is a member of the Inter-American Development Bank Group. The former focuses on large corporations while the ICC is dedicated to strengthening small, medium and family owned businesses.10

Financing in the Extractive Sector

Since 1961, the IDB has lent a total of $124.3 billion to both public and private sector borrowers and of that $124.3 billion only $2.3 billion of it has gone towards extractive industry loans.11 According to the project documents available on the IDB website, the Bank has only made one private sector, extractive industry loan in the past ten years, a $488 million loan to the Dutch company Delba Drilling International Coopeartie (a private company) for the construction and operation of an off-shore mobile oil-drilling vessel located in Brazil.12 In 2008-2012, the ICC (the private sector window of the IDB that is focused on supporting small and medium sized businesses) lent a total of $50.8 million for extractive industry projects. Considering that the total amount of money lent by the ICC in 2008-2012 was $29.3 billion, extractive industry loans made up a very small percentage of the ICC’s lending portfolio.13

10 Any projects that are facilitated through the Structured and Corporate Finance department are published on the IDB’s website while all ICC financed projects are found on the ICC’s website.

11 Inter-American Development Bank. Approved Loans by Sector/ Subsector. Inter-American Development Bank. Web. November 16th, 2013. http://www.iadb.org/en/about-us/approved-loans-by-sectorsubsector,1329.html?module=01&lg=En&detail=Energy&subtitle=17,680.4 12Inter-American Development Bank. BR-L1120: Delba Vessel. Inter-American Development Bank, October 17th, 2007. Web. November 15th, 2013. http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=1108308. Inter-American

Development Bank. IDB approves US$488 million for construction and operation of semi-submersible offshore mobile oil-drilling vessel in Brazil. Inter-American Development Bank, October 17th, 2007. Web. November 15th, 2013. http://www.iadb.org/en/news/news-releases/2007-10-17/idb-approves-us488-million-for-construction-and-operation-of-semi-submersible-offshore-mobile-oil-drilling-vessel-in-brazil,4088.html 13 Inter-American Investment Corporation. 2012 Annual Report. Inter-American Investment Corporation. Web. November 11th, 2013. http://www.iic.org/sites/default/files/documents/pub/en/iicdocs-347645-v1-2012_annual_report_eng_web.pdf. Inter-American Investment Corporation. 2011 Annual Report. Inter-American Investment Corporation. Web. November 11th, 2013. http://www.iic.org/sites/default/files/pdf/iic2011ar_eng_lr.pdf. Inter-American Investment Corporation. 2010 Annual Report. Inter-American Investment Corporation. Web. November 11th, 2013. http://www.iic.org/sites/default/files/documents/pub/en/2010_annual_report_eng.pdf. Inter-American Investment Corporation. 2009 Annual Report. Inter-American Investment Corporation. Web. November 11th, 2013. http://www.iic.org/sites/default/files/documents/pub/en/2009_annual_report_eng.pdf

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In 2009 the Bank officially endorsed the EITI14 standards and through the Bank’s Transparency Trust Fund it offers support to countries that want to strengthen the transparency and accountability of their extractive industries.15 However, participation in the Transparency Trust Fund is completely voluntary and is not a requirement for obtaining an extractive industry loan. It should also be noted that the Transparency Trust Fund only grants loans to governments and it does not offer its services to private companies who would like assistance in increasing the transparency in its extractive industry activities.

Transparency and Accountability Policies

Neither the IDB nor the ICC have any concrete policies regarding contract or payment disclosure for private sector companies operating in the extractive industries. It was extremely difficult to find any specific policies that addressed either private sector lending and/or extractive industry projects despite the Bank’s repeated claims that it is dedicated to protecting the interests of native populations as well as fostering transparent and sustainable development.

According to the Bank’s current Access to Information Policy there are many exceptions for disclosure that would allow private sector companies to withhold information regarding contracts and payments made to host governments. These exceptions include:16

1. “Information provided in confidence” which can include financial, business, legal documentation, and other non-public information. This exception is so broad and vaguely laid out that it could be interpreted to encompass just about any type of financial or business transaction between company and government, including arrangements regarding payment streams and contract negotiation.

2. Loan and guarantee proposals for non-sovereign guaranteed operations. This essentially means that no original proposal documents describing private sector projects are disclosed. The research team is working under the assumption that original proposal documents would include contracts between private sector entities and governments.

3. The IDB only requires that non-sovereign guaranteed operations (i.e. private sector operations) disclose the following information:

a. Initial Project Abstracts b. Environmental and Social Strategies (ESS) c. Environmental Impact Assessments (EIA) d. Strategic Environmental Analyses (SEA) e. Environmental Analyses (EA) f. Environmental and Social Management Reports (ESMR) g. Abstracts of Approved Projects

14Inter-American Development Bank. Better Environmental and Social Safeguards. Inter-American Development Bank. Web. November 2nd, 2013. http://www.iadb.org/en/insitutional-reforms/better-environmental-and-social-safeguards,1830.html 15 Inter-American Development Bank. Transparency Trust Fund. Web. November 2nd, 2013. http://www.iadb.org/en/topics/transparency/support-for-countries/anticorruption-activities-trust-fund-aaf,1194.html 16 Inter-American Development Bank. Access to Information Policy. Inter-American Development Bank, April 26th, 2010. Web. November 17th, 2013.

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Access to Information

It was extremely difficult to locate IDB/ICC’s concrete policies regarding private sector lending and the most concrete guidelines that the research team found were within the Access to Information Policy. As demonstrated above, the requirements and exceptions to disclosure are extremely vague and easily manipulated to stretch a variety of interpretations. Additionally, there was no specific document that addressed mining and/or extractive industry projects which naturally makes it more difficult to ascertain the Bank’s involvement in the sector.

Enforcement Mechanisms

Considering that the IDB and IIC have no specific policy regarding contract or payment/revenue disclosure for private sector lending in the extraction industries there are no enforcement mechanisms that correspond with those requirements. The Bank does however require all contracted companies and individuals affiliated with the Bank to adhere to its ethical standards. Prohibited practices include:17 1. Corrupt practices 2. Fraudulent practices 3. Coercive practices 4. Collusive practices 5. Obstructive practices If any contractor, sub-contractor or borrower engages in any of the above activity then the Bank can: 1. Not finance any proposal to pay contractors 2. Suspend disbursement of operation 3. Declare misprocurement and cancel the portion of the loan earmarked for contracted services 5. Report any illegal activity to appropriate law enforcement authority 6. Impose other sanctions it deems appropriate Any punitive measure taken by the Bank will be immediately disclosed to the public.

Comparison to Dodd-Frank, EU Directives, and IFC Sustainability Framework

Considering that the IDB does not have any specific policies related to contract or revenue disclosure for private companies operating in the extractive industries, the Bank does not even meet the minimum standards set out by Dodd-Frank, the EU Directives and the IFC Sustainability to Framework. The IDB has recently completed a project that assessed whether their borrowing member countries comply with Dodd Frank’s requirements for project-by-project revenue and payment disclosure. The Bank plans to use the findings from the project to determine whether or not they will recommend changing their

17 Inter-American Investment Corporation. The Inter-American Investment Corporation’s Framework to Prevent Fraud and Corruption. Inter-American Investment Corporation, April 19, 2011. Web. November 10th, 2013.

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policies. If the Bank does decide to amend their policies based on this investigation it sounds as if it would be only for sovereign loans which obviously means that private companies would not be beholden to these stricter regulations. The research team attempted to gather more information on this project by emailing the heads of the project but they heard no response.

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The European Bank for Reconstruction and Development (EBRD)

The EBRD was created in 1991 for the purpose of building the economies of the formerly Soviet European states. It has since become the largest financial investor in central Europe, central Asia and the southern and eastern Mediterranean, and has a mission statement devoted to promotion of the private sector. The EBRD is owned by The European Union, The European Investment Bank, and 64 national governments from all over the world.

Financing in the Extractive Sector

The following facts are presented on EBRD’s website, and have been analyzed and criticized for usefulness. EBRD's “total project value” of investments in “natural resources” as a sector were 14.8 Billion Euros, which is divided across 105 different projects. 18 Its “net business volume” is 3 billion Euros.

Unfortunately, these aggregates have little supporting information or explanation. They fail to explain which time period is being reported upon, how numbers were aggregated, or how project value is assessed. These numbers, since they are not disaggregated by sub-sector include many natural resource projects which are not specifically extractive in nature, such as petrol distribution network projects like Galnaftogaz Loan II.19

In its “Investments in Natural Resources” section, EBRD does not offer a total investment figure, but rather visually disaggregates data by sector. By conducting a visual estimation, EBRD finances approximately $1.5 billion Euros in the extractive sector. The largest category of investment claims to be in oil and gas extraction, with an investment of 300 million Euros.

18 Natural Resource Sector. EBRD. Accessed November 16, 2013. http://www.ebrd.com/pages/sector/ naturalresources.shtml

19 Galnaftogaz Loan II Project Summary Document. EBRD. Accessed Nov. 19 2013 http://www.ebrd.com/ english/pages/project/psd/2013/45462.shtml

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The chart suggests that (between coal and metals) only about 70 million Euros have been invested into mining operations. This seems remarkably low, considering that the EBRD’s project summary documents state that, over the course of the last 10 years, at least $1.49B has been lent or approved for future loan disbursements, to mining projects.21 (For a breakdown of this figure, see Appendix F.) The graph fails to identify the time frame for the information presented.

The second largest amount of money invested by the bank is in remediation services with a total of 270 Million Euros. Environmental remediation is “the action of remedying something, especially the reversal or stopping of damage to the environment.”22 EBRD remediation services include relocation efforts, clean-up projects, or efficiency improvements i.e. the MOL/Slovnaft Energy Efficiency Project.23 (Remediation projects were not classified as EI projects by the researcher in Appendix F) There is no easy way to access the historical data of extractive industry activity in a coherent or aggregated form. Instead, summary documents (PSDs) of natural resource projects for the past 10 years were reviewed, and independent decisions which classified the projects were made and EBRD's amount lent to “extractive” projects was calculated. Many of EBRD’s natural resource projects were not included as extractive. Generally these were loans for: refinery construction/improvement, recycling (of coal/gas), pipeline construction, petrol station construction, treatment facilities, and distribution networks. All of the aforementioned information was collected into a spreadsheet (Appendix F) and analyzed.

EBRD projects which are classified as B-level (in terms of social/environmental impact) only sometimes are required to provide PSDs,24 so there may be significant loans made to clients for projects which are not disclosed. These include non-disclosed B-level projects, C-level projects, and projects using intermediary financial Institutions.

According to the PSDs used in Appendix F, in the last 10 years (2004 - 2013) EBRD has approved $2.515B USD in strictly extractive projects:

Mining: $1.5B (16 Projects) Oil & Gas: $1.0B (14 Projects)

Transparency and Accountability Policies

EBRD encourages their clients to disclose contracts and payments to governments in both its Energy Operations Policy and Mining Operations Policy. However, the policy on transparency is vague – and mostly references external frameworks, like EITI, without promising to adhere to them across all

20 Natural Resources Sector. EBRD. Accessed Nov. 19th 2013 http://www.ebrd.com/pages/sector/ naturalresources.shtml

21 Project Summary Documents. EBRD. Accessed Nov. 19th 2013. http://www.ebrd.com/saf/ search.html?type=project 22 Remediation Definition. The Free Dictionary. Accessed Nov 20, 2013. http://www.thefreedictionary.com/ Environmental remediation 23 Project Summary Document: MOL/Slovnaft Energy Efficiency. EBRD. Accessed Nov. 19th 2013. http://www.ebrd.com/english/pages/project/psd/2012/43869.shtml 24 EBRD Policy Brief. CEE Bankwatch. May 2013. Page 2. http://bankwatch.org/sites/default/files/ briefing-EBRD-PIP-ESP-10May2013.pdf

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extractive industry projects. The one major hallmark of progress (which has already been addressed by RWI) is the requirement of disclosure of material project payments to host governments.

“The Bank will require mining companies to publicly disclose their material project

payments to the host government as a minimum revenue transparency obligation, both in

countries that apply and do not apply to the

EITI principals and criteria.”25

Since this significant progress was made in 2010, there do not seem to have been any further concrete commitments or actions that EBRD has incorporated into its operational policy structure. The EBRD scored in the “Poor” range on the Publish What You Fund organization’s 2013 Aid Transparency Index (ATI). In addition to its poor general rating, it scored the lowest out of any of the development banks which were investigated, and it scored only a 2.2/10 in its dedication to transparency.26 The policy does note the upcoming EU Directive implementation, and states that it will: “Require the implementation of the new EU regulations on transparency of extractive industries as soon as they will come into application.”27 For more detailed information and feedback on specific policy documents, please see the following Appendices:

Mining Operations Policy (and its contrast with the Draft Mining Strategy regarding RWI suggestions for alteration) - Appendix A

Criticisms of the Mining Operations Policy Delivered by CEE Bankwatch – Appendix B. In its Mining Policy, The EBRD states that it encourages EITI compliance and good governance practices:

25 Mining Operations Policy, October 17, 2012. Page 30 http://www.ebrd.com/downloads/policies/sector/mining-operations-policy.pdf

26 2013 ATI Index. Publish What You Fund. Accessed Nov 25. 2013. http://ati.publishwhatyoufund.org/donor/ebrd/ 27 Mining Operations Policy, October 17, 2012. Page 30 http://www.ebrd.com/downloads/policies/sector/mining-operations-policy.pdf

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“The Bank will continue to adhere to best governance, transparency and revenue

management standards by encouraging its clients to implement principles and criteria of

the EITI.”28

This statement begs the question: what has EBRD actually done to encourage its clients to adhere to good governance standards? To answer this this question, EBRD projects have been identified in which the client has agreed to adhere to PWYP or EITI policies, or are otherwise enforcing standards of good governance in well-outlined and substantial ways. For detailed information about which projects/clients are included, see Appendix F. All information regarding the good governance of these projects was taken from EBRD's own PSDs. Where it was unclear whether adherence was a solid requirement, it was noted in the appendix, but not included those projects in the aggregation of “good governance projects.” All data is gathered from January 2004 – November 2013.

Total # of (strictly) extractive projects29: 30

Number of projects (explicitly) requiring adherence to the well-established good governance

principals of either EITI or PWYP: 13

Percentage of EI projects requiring well-defined good governance standards: 42%

Amount of money associated with these 13 Projects: $614M USD

Percentage of Money Invested in EI projects which requires good governance: 24.5%

Access to Information

EBRD's website is simple and easy to navigate. The bank has published a public information policy (PIP) that details what type of information it can and cannot share with the general public. On many of EBRD’s policy documents, the bank encourages public commentary to be made within 60 days of the policy document’s creation. This exchange between the public and the bank is then published separately.30 Despite the seemingly participatory nature of this process, it has come under criticism by CSOs like Bankwatch.31 For a more granular breakdown of the PIP and a report on whether EBRD is delivering on their disclosure promises, please see Appendix C.

28 Mining Operations Policy. EBRD. http://www.ebrd.com/downloads/policies/sector/mining-operations- policy.pdf

29 Strictly Extractive Project Categorization includes: Projects which some or all of the money lent has been allocated to either exploration or direct extraction of resources, according to EBRD’s PSDs. It does NOT include natural resource operations in the post-extraction phase, i.e. pipeline construction.

30 Public Information Policy: Report on the Invitation to the Public to Comment. EBRD. May 2011. http://www.ebrd.com/downloads/policies/pip/0811/BDS11166A1w.pdf

31 CEE Bankwatch: Bankwatch letter to EBRD on the transparency of the mining strategy review process. August 3rd, 2012. http://bankwatch.org/publications/bankwatch-letter-ebrd-transparency-mining-strategy-review-process

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The PIP provides an interesting insight into EBRD's trend of encouraging transparency for its clients, rather than requiring it. In the 2011 Public Information Policy (PIP) public commentary, a representative of EBRD explained the reasoning for the delegation of transparency accountability:

“The EBRD has a philosophy that disclosure of project information should be primarily the

responsibility of the client, and that this helps them to identify stakeholders, engage with

them, manage information flow, and handle complaints.... we want for them (the client) to

develop the transparency and accountability appropriate for their project.”32

Indeed, much of the PIP seems more concerned with confidentiality than with transparency. For

example, the EBRD offers 9 instances in which it reserves the right to invoke further confidentiality

measures that allowed by its general policies.33 Additionally, despite good web access to many of its

documents, an interview with CEE Bankwatch’s EBRD campaign coordinator revealed that:

“..if requested to provide access to such information (Revenue/Payment & Contract

Disclosure), the EBRD refers us to its clients or their financial reports, as published on their

web sites.... When asked by Bankwatch, if any money has been disbursed, the reply was

'check the client's website.' It is not always easy to find or to understand financial reports

of EI companies. And it should be fairly simple for the EBRD to say 'yes, we did – this much

for this and that.' or 'no, we did not disburse any moneys yet.'”34

When a project is proposed, the EBRD uses the guidelines from the COO's country strategy

document, local/state law, and scale of impact to determine a category for the project. For high impact

projects, it requires its borrowers to conduct and publish an Environmental and Social Impact Assessment

(ESIA). Projects are designated as category A when:

“it could result in potentially significant and diverse adverse future environmental and/or social impacts and issues which, at the time of categorisation, cannot readily be identified or assessed and which require a formalized and participatory assessment process carried out by independent third party specialists in accordance with the PRs”35

Projects are designated as Category B when:

32 Public Information Policy: Report on the Invitation to the Public to Comment. EBRD. May 2011. Page 9. http://www.ebrd.com/downloads/policies/pip/comment.pdf

33 EBRD Public Information Policy. (2011) Page 10-13. http://www.ebrd.com/downloads/policies/pip/pipe.pdf 34 Interview with Fidanka Bacheva McGrath. CEE Bankwatch EBRD Campaign Coordinator. October 21, 2013.

35 EBRD Environmental and Social Policy. (2008) Page 6. http://www.ebrd.com/downloads/research/policies/2008policy.pdf

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“The potential adverse environmental and/or social impacts that it may give rise to are typically site-specific, and/or readily identified and addressed through mitigation measures. These impacts could be from past, current or future activities. Due diligence requirements may vary depending on the project and will be agreed with the EBRD on a case-by-case basis”36

Each category has different standards of project transparency. Category A projects require a publicly

posted Project Summary Document (PSD), whereas category B projects can circumvented disclosure at the

discretion of the Secretary General. Several of EBRD's category B projects have come under criticism from

CSOs for inaccurate categorization, and their associated lower standards of project disclosure. In an

interview with CEE Bankwatch, its representative explained that:

“...there is the problem with categorization of EI projects, as so-called brown-field projects get a category B, which have lesser requirements on disclosure and shorter periods for public consultation. The problem is that 'brown-field' projects are usually associated with a legacy of heavy historic pollution and dodgy privatization agreements, issues that raise significant public interest that is not matched by the level of transparency provided for category B investments. Projects that BW has followed that are examples of the B categorization problem are: Chelopech Mining, DPM Long Term, and Centerra Gold Revolver.”37

Enforcement Mechanisms

The bank retains a number of mechanisms and reports which address policy infractions, allegations

of wrongdoing, and other types of complaints.

The Project Complaint Mechanism (PCM)

A detailed complaint-lodging process which is published on the EBRD website. The PCM process is

under review this year, and many civil society organization are in the process of submitting commentary.

CEE Bankwatch is currently lodging a complaint using the PCM regarding the Nuclear Safety Upgrade

Project in Ukraine. The only EBRD project which is strictly extractive and has an open PCM complaint

pending is the Oyu Tolgoi mine in Mongolia.38 However, this complaint is regarding road development and

not transparency practices.

EBRDAT – Administrative Tribunal

36 ibid 37 Interview with Fidanka Bacheva McGrath. CEE Bankwatch EBRD Campaign Coordinator. October 21, 2013.

38 Energy Resources Phase II and Oyu Tolgoi Complaint. EBRD Project Complaint Mechanism register. Feb 8th, 2013. http://www.ebrd.com/downloads/integrity/OT_complaint_1.07.2013.pdf

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See Appendix D

Civil Society Engagement

The bank maintains a Civil Society Engagement unit (CSE) which corresponds with and listens to

criticisms from (CSOs) and the society at large. In an interview, Bankwatch's said that “the CSO

department has been mostly very helpful.”39

Comparison to Dodd-Frank, EU Directives and IFC Sustainability Framework

As a method of measurement as to which of

EBRD's extractive industry clients are/will be subject

to Dodd-Frank and EU Directives, the researcher used

RWI’s “Oil and Mining Companies on Global Stock

Exchanges” tool40 to look up which (if any) stock-

exchange the client company was listed under. If the

company seemed to be unlisted, the researcher

looked up its country of incorporation, to discern

whether it was US/EU listed. This information is all

located in Appendix F. Here are some figures which

aim to demonstrate how much of EBRD’s EI portfolio

will be affected by the new EU directives. (None of

their EI clients are US listed or owned)

Total number of Projects: 30

Number Projects with Clients which are listed

on EU stock exchanges: 10

Number of projects with clients which are not

publicly listed, but are registered in the EU: 4

Percentage of projects which would/will

adhere to EU Directives: 46.6%

Amount of Money Effected by Directives: $1.01B USD

Percentage of money invested in EI which would be effected: 40.4%

39 Interview with Fidanka Bacheva McGrath. CEE Bankwatch EBRD Campaign Coordinator. October 21, 2013.

40 Oil and Mining Companies on Global Stock Exchange. Revenue Watch Institute. Accessed Nov. 20 2013. http://data.revenuewatch.org/listings/

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United Kingdom Export Finance Department (UKEF)

The United Kingdom Export Finance Department (UKEF) formerly known as Exports Credits Guarantee Department (ECGD) is the UK’s export credit agency and the oldest national export bank in the world having started in 1919.41 The purpose of UKEF is to complement the private market by providing assistance to exporters and investors, principally in the form of insurance and guarantees to banks. The two primary policies of UKEF are achieving strong and sustainable economic growth and increasing the UK’s exports and attracting inward investment.

Financing in the Extractive Sector

These figures are unclear because they are not coded in a way that indicates that projects are part of extractive industries. UKEF funded UK businesses a total of £4.3 billion in 2012-2013, this is an increase from £2.3 billion in 2011-2012.42 UKEF is supporting industries including aerospace, automotive, oil and gas and defense. Their funding ranges from as little as £4,000 to £2 billion and has allowed for UK businesses to export to 58 countries around the world.43

UKEF publishes partial information regarding the companies it insures and the projects they support. There is partial project information in their annual reports going back three years. All available projects are listed in appendix G.

Transparency and Accountability Policies

UKEF states in its annual report that a principle it holds in conducting its business is to “take account of factors beyond purely financial and of relevant government policies in respect of environmental, social and human rights impacts; debt sustainability; and bribery and corruption.

In 2000, UKEF introduced the Business Principles and an associated Business Principles Unit after a comprehensive review of the department. The principles were designed by Secretary of State for Trade and Industry, Stephen Byers, with the intention of “promote a responsible approach to business and ensure our activities take into account the Government’s international policies, including those on sustainable development, environment, human rights, good governance and trade.”44 The Business

41 "Case Studies." Clean Up Britain's Exports. Injustice Guaranteed, n.d. Web. 18 Oct. 2013.

<http://cleanupexports.org.uk/casestudies/>. 42 UK Export Finance. UK Export Finance Support to British Exporters at 12-year High.UK Export Finance.

GOV.UK, 20 June 2013. Web. 18 Oct. 2013. <https://www.gov.uk/government/news/uk-export-finance-support-to-

british-exporters-at-12-year-high>. 43 UK Export Finance. UK Export Finance Support to British Exporters at 12-year High.UK Export Finance. GOV.UK, 20 June 2013. Web. 18 Oct. 2013. <https://www.gov.uk/government/news/uk-export-finance-support-to-british-exporters-at-12-year-high>. 44 A History of Neglect UK Export Finance and Human Rights. Rep. Amnesty International, June 2013. Web. <http://www.amnesty.org.uk/uploads/documents/doc_23288.pdf>.

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Principles Unit was charged with implementing an assessment call the Case Impact Analysis Process. The CIAP would then inform the review of applications to the UKEF.45

In 2010 UKEF abandoned the Business Principles and closed the BPU. Corner House is a UK- based advocacy organization and has written several different reports about UKEF. The a report titled “Turning a Blind Eye, Corruption and the UK Export Credits Guarantee Department” by Dr. Susan Hawley, the author wrote,

“Its [UKEF] decision in 2011 to abandon its previous Business Principles and to exempt applications

under £10 million in value or with repayment terms of less than two years from mandatory environmental and social assessment means that it is moving away from compliance with the EU acquis, not closer to it.46

In 2008 the Working Party on Export Credits and Credit Guarantees (ECG) within the Organization

for Economic Cooperation and Development (OECD) wrote the Principles and Guidelines to Promote Sustainable Lending Practices in the Provision of Official Export Credits to Low Income Countries.47 The ECG also wrote the OECD Common Approaches or the Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence that was also adopted in June 2012.48 The UK is a member of OECD and UKEF is a member of ECG more specifically, therefore UKEF is obligated to follow these policies and regulations.

UKEF explains in the Guidance to Applicants: Processes and Factors in the UK Export Finance

Consideration of Application. “ESHR Impacts. In relation to ESHR impacts, and consistent with the OECD Common Approaches,

UK Export Finance will review a project against appropriate international standards dealing with ESHR impacts where: (i) the export credit has a repayment term of two years or more; and (ii) the project in respect of which the export is to be made is a new commercial, industrial or infrastructure undertaking at an identified location or where there is a material change in output or function to an identifiable existing project; and 2 www.oecd.org (iii) where the total amount of UK Export Finance support for a contract or contracts is equal to or greater than the equivalent of Special Drawing Rights (SDR) 10 million or the

45 IBID. 46 Hawley, Susan, Dr. Turning a Blind Eye, Corruption and the UK Export Credits Guarantee Department. Rep. Corner House, June 2003. Web. 17 Nov. 2013. <http://www.thecornerhouse.org.uk/sites/thecornerhouse.org.uk/files/correcgd.pdf>. 47 Principles and Guidelines to Promote Sustainable Lending Practices in the Provision of Official Export Credits to Low Income Countries. Publication. Organization for Economic Co-operation and Development, 22 May 2008. Web. 7 Dec. 2013. <http://search.oecd.org/officialdocuments/displaydocumentpdf/?cote=TAD/ECG(2008)15&doclanguage=en>.

48 Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence. Publication. Organization for Economic Co-operation and Development, 28 June 2012. Web. 7 Dec. 2013. <http://search.oecd.org/officialdocuments/displaydocumentpdf/?cote=TAD/ECG(2012)5&doclanguage=en>.

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project is in or near a sensitive area; and (iv) the project is classified as either category A or category B within the terms of the OECD Common Approaches.”49

This is commitment is in accordance with the ECG Common Approaches. The Common

Approaches document is not specifically about extractive industries but considers more broadly the environmental and social impact in the lending sector across various industries. As noted above, ECG members are required to closely monitor projects in Category A and release information about these projects to the public. Category A is defined as: “a project is classified as Category A if it has the potential to have significant adverse environmental and/or social impacts, which are diverse, irreversible and/or unprecedented. These impacts may affect an area broader than the sites or facilities subject to physical works. Category A, in principle, includes projects in sensitive sectors or located in or near sensitive areas. An illustrative list of Category A projects is set out in Annex I.”50

After reviewing Annex 1 regarding Category A, the researchers determined that extractive industries fall into this category:

“Operations that involve large scale extraction, via underground or open-pit mining, solution

mining, or marine or riverine operations to obtain precious metals, base metals, energy and industrial minerals, or construction materials. It may also include the processing of the extracted material. Large scale oil, gas, or liquefied natural gas development that may include any or all of: exploration (seismic and drilling); field development and production activities; transport activities, including pipelines/terminals, pump stations, pigging stations, compressor stations and associated facilities; or gas liquefaction facilities.”51

UKEF is required by ECG Common Approaches to conduct an environmental and social impact

assessment for all Category A projects, namely their extractive projects. They are required to make these reports public along with detailed information about each extractive project. ECG members are also required to meet all ten of the World Bank Safeguard Policies or all eight IFC Performance Standards.

As a member of ECG, UKEF is required to adopt and implement these policies and procedures of project monitoring, evaluation and disclosure. UKEF has adopted ECG policies and demonstrate this in the Guidance to Applicants document. UKEF is listing a selection of project details in their annual report but has been doing so since before these policies were adopted. It is unclear if and how the UKEF is implementing these policies, the researcher was unable to locate the reports required for extractive

49 Guidance to Applicants: Processes and Factors in UK Export Finance Consideration of Applications. Publication.

UKEF- UK Government, 3 Oct. 2012. Web. 7 Dec. 2013. <https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/210648/guidance-on-processes-and-factors-ukef.pdf>. 50 Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental

and Social Due Diligence. Publication. Organization for Economic Co-operation and Development, 28 June 2012. Web. 7 Dec. 2013. <http://search.oecd.org/officialdocuments/displaydocumentpdf/?cote=TAD/ECG(2012)5&doclanguage=en>. 51 Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental

and Social Due Diligence. Publication. Organization for Economic Co-operation and Development, 28 June 2012. Web. 7 Dec. 2013. <http://search.oecd.org/officialdocuments/displaydocumentpdf/?cote=TAD/ECG(2012)5&doclanguage=en>.

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Category A projects. Additionally given that UKEF is giving funding and offering insurance to companies that implement extractive projects, they are not in the position to conduct an ESIA or even to publish the company ESIA report. The implementation of the ECG policies for Category A projects in now explicitly described by UKEF and there is no evidence of its implementation.

There are no clear requirements regarding revenue, payment and contract disclosure at UKEF or ECG. There are a few organizations that have released reports or published articles about the lack of transparency at UKEF. Clean Up Britain’s Exports is a website that uses case studies of UKEF projects to illustrate their concerns with the transparency of the agency. Amnesty International June 2013 Briefing called A History of Neglect: UK Export Finance and Human Rights is one such report. Amnesty International reports:

“Civil society organizations and parliamentarians have raised concerns over UKEF’s lack of

transparency and disclosure for many years, but successive governments and UKEF itself have consistently ignored them. As a result, a high level of mistrust and suspicion has developed around UKEF’s policies and practices. Obtaining information from UKEF is a monumental task, and the agency shows no apparent willingness to change. This has consequences for UKEF’s image and its stakeholder relations, and also raises public accountability issues.”52

As noted, there have been many requests made to UKEF for transparency and they do publish

information about individual projects they are funding and the costs associated with these projects. The projects are not organized or coded in a way to assess the total amount of revenue or payments in the extractive industry.

Accessibility of Information

Information is very difficult to access and requires a lot of time on their website trying to find the relevant information and then looking for secondary sources that frequently criticized UKEF for their lack of transparency. The researchers traced policies from UKEF to OECD and ECG in order to find policies regarding environmental and social impact assessments but information about revenue disclosure was not found.

Enforcement Mechanisms

No policies or procedures exist to be enforced. As noted in the quote above from the Amnesty International Briefing, it is very difficult to access information from UKEF about how they conduct their business.

52 A History of Neglect UK Export Finance and Human Rights. Rep. Amnesty International, June 2013. Web. <http://www.amnesty.org.uk/uploads/documents/doc_23288.pdf>.

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Comparison to Dodd-Frank, EU Directives, and IFC Sustainability Framework

Given that new US-EU mandatory disclosure rules through stock market regulations (e.g., Cardin-Lugar) will cover a larger number of companies, companies receiving funds and insurance from UKEF will be forced to abide by these rules. This will likely indirectly affect UKEF, however the department is largely accountable to the parliament and there have been minimal changes made to UKEF’s transparency procedures. In another report by Corner House, they explained “under recently introduced EU law, ECGD/UKEF, in common with other EU export credit agencies, is now obliged to report to the European Commission every year on its compliance with EU objectives and obligations.”53

UKEF lacks clarity, transparency and accountability. As noted above there are critical questions and problems with their policies and protocols, they state that they follow OECD Common Approaches however evidence of this and required reports are not made public. UKEF is a member of OECD and as such they are also held to the standards of IFC Performance Standards and the World Bank Safe Guard Policies. This means that there are venues to hold UKEF accountable and to demand from them detailed reports and increased transparency.

53 Corner House Submission to APPG on International Corporate Responsibility: All Party Parliamentary Group on International Corporate Responsibility Investigation into the Workings of UK Export Finance. Rep. Corner House, 22 June 2012. Web. 17 Nov. 2013.

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The Korean Export Import Bank (KEXIM)

The Korean Export Import (EXIM) Bank was established by the Republic of Korea in 1976 to promote Korean exports and improve Korean economic development. It offers export loans, trade finance, and guarantees to Korean companies or to companies that are heavily invested in by Korean companies. It also administers programs aimed at the reunification of the Korean peninsula.54 The U.S. State Department states that corporate social responsibility in South Korea is still in its infancy. The State Department has criticized Korean companies’ disclosure of social responsibility reports.55

Financing in the Extractive Sector

The Korean Exim Bank only funds projects that involve Korean owned companies or companies heavily invested in by a Korean owned company. The types of projects financed by the bank include all stages of oil, gas and mining development and agricultural investment. Information is only available in the aggregate and there is very little breakdown. The bank currently has $41 million invested in quarrying and mining worldwide and $3 million invested in electricity, gas, steam, and water supply industries.56

Transparency and Accountability Policies

The bank states that it follows generally accepted disclosure practices as they exist in South Korea and it claims to have adopted transparent management practices to increase public trust.

According to article 89 of the Financial Services Commission57:

1. A financial institution shall precisely disclose its contract terms of financial transactions in order to protect the rights and interests of its customers.

2. A financial institution shall not behave in any manner under the following items when disclosing the contract terms under Paragraph (1):

a. Express affirmatively or roughly on matters not determined precisely yet in relation to financial product transaction;

54 “Foreign Investment Statistics.” Korea Eximbank. Accessed 02Nov13. http://211.171.208.92/odisas_eng.html 55 “2013 Investment Climate Statement: Republic of Korea.” U.S. State Department. Accessed 02Nov13. http://www.state.gov/e/eb/rls/othr/ics/2013/204670.htm

56 “Natural Resources Development Credit.” Korea Eximbank. Accessed 02Nov13.

http://www.koreaexim.go.kr/en/banking/Natural.jsp 57 “Regulation on Supervision of Banking Business”. Financial Services Commission. 03May07. http://fsc.go.kr/eng/lr/list.jsp?menu=0302&bbsid=BBS0055

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b. Express in misleading or ambiguous way on comparative advantages over other financial products without providing any specific grounds; and

c. Employ terms which may give rise to misunderstanding or dispute. 3. The Governor shall determine necessary matters to be disclosed to the public including

contract terms and transaction costs, etc.

However, article 94 states that58:

1. The provisions of Articles 5 through 25, Article 26, Paragraph (1), Item 2, Article 26, Paragraph (3), Article 32, Paragraphs (3) through (5), Articles 33 through 48, Article 50, Article 51, Articles 52-2 through 52-5, proviso of Article 53, Paragraph (1), Article 54, Article 59, Article 74, Articles 79 through 89, and Article 91 shall not apply to the KEXIM. <Amended on September 23, 2002>

2. The Governor may forbear to order the KEXIM to write-off specific bad assets pursuant to Article 27, Paragraph (7) if it judges that the order may cause any diplomatic or commercial problems.

3. Unless prescribed otherwise in this Regulation, the provisions under Article 92, Paragraph (3), and Paragraphs (5) through (8) shall apply to the KEXIM. There seems to be no requirements by the bank to obligate or even just to encourage borrowers

to disclose revenue, payments, or contracts.59

Accessibility of Information

Information on the Korean Exim Bank is very difficult to access. Its website lacks a search function and information is extremely disorganized. The bank's website states that English language pages were not official pages bank documents. All official documents for the bank are in Korean which significantly limits accessibility of information on bank policies and projects.

Enforcement Mechanisms

There does not appear to be any requirements to enforce.

Comparison to Dodd-Frank, EU Directives, and IFC Sustainability Framework

58 “Regulation on Supervision of Banking Business”. Financial Services Commission. 03May07. http://fsc.go.kr/eng/lr/list.jsp?menu=0302&bbsid=BBS0055 59 “Banking Regulations” Korean Financial Services Commission. Accessed on 02Nov13. http://fsc.go.kr/eng/lr/list.jsp?menu=0302&bbsid=BBS0055

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The Korean Exim Bank has a very minimal transparence and accountability framework. As such, if it was to implement policies in the IFC framework, nearly all of its policies and procedures relating to transparency and accountability would be rewritten and changed.60

It is unclear how Dodd-Frank and the EU Directives will affect the companies that typically borrow from this bank. The Korean EXIM Bank is completely controlled and funded by the Korean government.61 Furthermore, it only funds Korean owned companies or foreign companies where a Korean company has a serious investment62. Since Dodd-Frank only applies to companies listed in U.S. stock exchanges it is unlikely to have much of an impact on the Korean Exim Bank since it only lends money to Korean companies. The bank does not publish which companies have received loans from it so it is hard to determine what effect Dodd-Frank will have in regards to borrowers of this institution.

According to the New York Stock Exchange only nine Korean companies are listed on the U.S. exchanges.63 These companies are KB Financial, Korea Electric Power, KT Corporation, LG Display, MagnaChip, POSCO, Shinhan Financial, SK Telecom, and Woori Finance.

60 “Banking Regulations” Korean Financial Services Commission. Accessed on 02Nov13. http://fsc.go.kr/eng/lr/list.jsp?menu=0302&bbsid=BBS0055 61 Ibid. 62 “Natural Resources Development Finance.” Korea EximBank. Accessed 02Nov13. http://www.koreaexim.go.kr/en/banking/Natural.jsp 63 “Korean Economic Summit at the NYSE.” New York Stock Exchange. Accessed 18Nov13. https://exchanges.nyx.com/marc-iyeki/korea-economic-summit-nyse

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Advocacy Recommendations

Inter-American Development Bank

Although the Inter-American Development Bank has very strong social and environmental

impact assessment requirements, it does not have strong payment disclosure policies. Its policies on payment and revenue disclosure currently fall short of international standards and could be greatly improved by stricter guidelines and enforcement mechanisms. In 2011 the IDB began a project entitled “Strengthening Governance in the Extractive Industries in LAC” which was designed to examine gaps between LAC governmental extractive industry policies and Dodd-Frank, EITI and Revenue Watch best practice requirements64. The project, currently in its implementation stage, will assess each of the bank’s borrowing member countries’ policies on payment disclosure, revenue disclosure and tax collection and evaluate how accessible this information is to the general public. After all the data has been collected, IDB will then determine whether or not IDB will support member countries to adopt domestic transparency mechanism. Recommendations from this project will be released in December 2014 and will have a significant impact on the way that the America’s extractive industry is regulated. Although the IDB does not provide a significant amount of financing towards private sector extractive industry projects, there is no policies that would preclude greater involvement in the extractive industry sector in the future. RWI could play a critical role to ensure that recommendations in the report are implemented and to build civil society’s capacity to hold their governments accountable for policy implementation.

European Bank for Reconstruction and Development

The European Bank for Reconstruction and Development (EBRD) is a worthwhile target for RWI advocacy. Considering its sixty-four shareholding countries, there are multiple avenues for exerting pressure. Because the bank is located in London, and its largest shareholder is the US government, it will feel a greater pressure to align its requirements with those of the Dodd-Frank/EU Directives, even when dealing with companies which are not US or EU listed.

The ERBD invests a significant amount in the extractive so any movement towards transparency, however minor, will have a large impact in regards to the number of projects and dollars affected.

With some encouragement, EBRD could be brought up to speed using feedback and guidance from RWI. We suggest the following argument concerning the EBRD mission statement, some of which states:

“In all our operations we follow the highest standards of corporate governance and sustainable development.”65

64 Inter-American Development Bank. Strengthening Governance in the Extractive Industries in LAC. 2011. Web. 20 Nov 2013. < http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=36594325> 65 EBRD Homepage Mission Statement: http://www.ebrd.com/pages/about/what/mission.shtml

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RWI's could easily argue that the IFC sustainability framework currently represents the highest standard of corporate governance in extractive industry financing. EBRD's polices fall short of that standard in numerous and significant ways. EBRD is under-performing on its mission statement, and should either amend the statement or bring its policies up to “the highest standards of corporate governance.”

As the second advocacy suggestion, we suggest conceptualizing sets of indicators as measurement of transparency requirement, and creating an index for international financial institutions, which rates IFIs similarly to RWI's resource governance index. This index would be used similarly to the Governance Index, in that it would encourage lenders to adopt transparency requirement practices and to improve their scores.

Lastly, since some, but not all of the companies that receive EBRD financing are subject to the EU directive, RWI and its allies should advocate that EBRD should create its own transparency policies that are comparable to those contained in the EU directives. This could be a major step towards universal payment transparency in the extractive sector and would be precedent setting since the EBRC is such a major actor in extractive industry financing.

United Kingdom Export Finance

UKEF is an optimal advocacy target for RWI for three reasons: it has minimal transparency policies and practices; it is contributing significant amounts of money to fund extractive industry projects; and there are opportunities to build coalitions with other likeminded and reputable organizations that are also advocating to change UKEF’s transparency practices.

As discussed previously UKEF has no policy of transparency and releases minimal amounts of data about their work with limited data available on their website. UKEF lags far behind other export credit agencies and development banks in transparency initiatives and does not adhere to industry standards of EITI, IFC or the new EU disclosure program.

Changing these policies is significant because of the large budget UKEF has and is investing into extractive industry projects. It was unclear how total spending goes to extractive industry because projects are not coded in a clear way to find an aggregate budget. In spite of this lack of data, we can surmise that the budget is significant given that the total budget of UKEF from 2012-2013 was £4.3 billion, an increase from 2011-2012 when the budget was £2.3 billion.66 Additionally, sample projects of extractive industries that the UKEF is funding further demonstrate that the department is working with large sums of money and should be held accountable to industry standards.

Finally there are opportunities for RWI to help build and join coalitions of other organizations reporting on UKEF’s lack of transparency and doing advocacy work on these issues. Amnesty International released a report in June 2013 criticizing UKEF for their lack of transparency and human rights abuses. They noted in their report that other organizations are also calling for changes to UKEF policy and practice in addition to parliamentarians in the UK that are calling the department’s practices into question. RWI could align and partner with Amnesty International on

66 UK Export Finance. UK Export Finance Support to British Exporters at 12-year High.UK Export Finance. GOV.UK, 20 June 2013. Web. 18 Oct. 2013. <https://www.gov.uk/government/news/uk-export-finance-support-to-british-exporters-at-12-year-high>.

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their UKEF work and learn more about the developing coalition and entry points in parliament to push UKEF.

Korea Export Import Bank

The Korea Export-Import Bank is not a good target for RWI to pursue as they invest a relatively small amount in the extractive sector. Their mission is also wholly nationalistic in nature, accountable only to the government of Korea, and unlikely to yield to pressure when transparency is not in their interests.

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Appendix A: List of EI Project Funded by the Inter-American Development Bank67

67 Inter-American Investment Corporation. Oil, Gas, and Mining Projects. Inter-American Investment Corporation. Web. November 12th, 2013.

Year Company Title of Project Amount of Financing Provided

2007 Delba Drilling International Cooperatie Delba Vessel $488 million (IDB loan)

2009 GB Group S.A. Distributeurs Nationaux S.A. $10 million (ICC loan)

2010 Import-Export America Russ Ltd Refineria Oro Negro $4 million (ICC loan)

2010 Compañías Asociadas Petroleras S.A.

Compañías Asociadas Petroleras S.A. $8 million (ICC loan)

2012 Chevron Caribbean Gulfstram Petroleum Jamaica $3.5 million (ICC loan)

2012 Chevron Caribbean Marlin DR $3.5 million (ICC loan)

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Appendix B: EBRB Draft Mining Strategy

The Draft Mining Strategy of June 23 2012 vs.

Mining Operations Policy of October 17 2012

Have RWI suggestions been met? Has EBRD matched the contract and revenue disclosure standards established by the IFC Sustainability Framework? No Has EBRD ensured that project transparency requirements laid out in the EBRD Energy Policy (2006) are applied to sectors covered by the Mining Strategy? Yes Revenue Transparency Suggestions (on section 3.3): Has EBRD created strong institutional safeguards regarding transparency of revenue payments to governments for its own lending practices? No. Has it defined clear minimum revenue reporting requirements for its extractive industry projects? Yes, however the requirements are somewhat minimal, and have already been addressed in RWI's comments on Capital Resource Review 4 in 2010. “The Bank will require mining companies to publicly disclose their material project payments to the host government as a minimum revenue transparency obligation, both in countries that apply and do not apply to the EITI principals and criteria.”68 The document does not clarify whether the material project payments will cover all the categories listed by RWI. (Royalty payments, taxes, profits/dividends, commodity-based payments, signing bonuses, pipeline/transit tariffs, dividends, acreage fees, rental fees, and social development funds)69 Has EBRD developed clear, comprehensive, and robust mechanisms of its own? No. Has it instead identified the precise international corporate governance standards by which it will strictly adhere regarding its own lending practices? No. It claims to commit to these, but neither identifies nor details which policies will be used, or how they will be enforced. Has it outlined any specific policy reforms concerning investment in metals mining? Yes. Please see above. Has EBRD extended the Energy Operations Policy (2006) requirements regarding Coal/Hydrocarbon projects to “publicly disclose their material project payments to the host government (such as royalties,

68 Mining Operations Policy, October 17, 2012. Page 30 http://www.ebrd.com/downloads/policies/sector/mining-operations-policy.pdf

69 RWI's Submission to the European Bank for Reconstruction and Development's Invitation to Comment on the EBRD draft mining strategy, supporting responsible mining, June 23, 2012. Page 3.

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taxes and profit-sharing) as a minimum revenue transparency obligation”70 to projects in the mining sector? Yes. Although they do not specify “royalties, taxes and profit sharing” as they did in the Energy Operations Policy. Contract Disclosure Suggestions: (on section 3.3) Does the Mining Operations Policy require the disclosure of contracts from its clients? No. It makes mention to contract disclosure only in reference to external frameworks, such as PWYP, and does not lay out any Bank policies on the issue. International Best Practice on Legal and Regulatory Framework Suggestions: (on section 3.4) Is EBRD specific in the framework which it chooses as the current “best practice” and commits to enforcing the principals held within? No. All mentions of such frameworks are general, and never is it specified which one the EBRD follows, or how it plans to update its current policies to meet these standards. In The Bank's 6 approaches to the issue of transparency, all of them begin with the term “support.”71 In this context, it means that the initiation of any such efforts come from an external actor, and does not entail any sort of policy commitment on the part of The Bank. Criticism: One of the Bank's approaches to transparency states: “The Bank will implement best international corporate governance standards in its investments.”72 This is clearly untrue, as many standards (like the IFC's) have emerged which are substantially better in practice than EBRD's current policies.

70 Energy Operations Policy. July 11, 2006. Page 14. http://www.ebrd.com/downloads/policies/sector/powerenergy.pdf

71 Mining Operations Policy, October 17, 2012. Page 31 http://www.ebrd.com/downloads/policies/sector/mining-operations-policy.pdf

72 EBRD: Mining Operations Policy, October 17, 2012. Page 30 http://www.ebrd.com/downloads/policies/sector/mining-operations-policy.pdf

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Appendix C: Criticisms of the EBRD Mining Operations Policy

Delivered by CEE Bankwatch:73

The policy fails to address the majority of expectations and commentary surrounding its release.

Despite a 3 year submission period for commentary; comments and responses were not released to the public until the draft strategy was published. This is despite an open letter issued by a number of CSOs to EBRD's President Sir Suma Chakrabart, requesting a two-stage process for feedback on the policy.74 The president replied to this request by saying “I highly appreciate your views on the way we could improve our consultation practices on the Mining Strategy as well as on policies and strategies in general in order to strengthen further the Bank's transparency and accountability. I would strongly encourage you to put your recommendations forward during the revision of the Public Information Policy which will also take place in 2013.”75 The request was not granted, and instead pushed ahead to the 2013 of the PIP.

Instead of setting new standards, the Policy makes reference to other pre-existing EBRD policies.

Regarding transparency specifically, Bankwatch had this to report: “With regards to transparency, the initial public submissions were asking for more inclusive and transparent processes of preparation and reporting on Environmental and Social Action Plans for EBRD mining projects as well as higher transparency standards and requirements for the Bank's clients.”

73 CEE Bankwatch: The EBRD's new Mining Operations Policy: A commentary on consultation process and content. November 2nd, 2012. http://bankwatch.org/publications/ebrds-new-mining-operations-policy-commentary-consultation-process-and-content

74 CEE Bankwatch: Bankwatch letter to EBRD on the transparency of the mining strategy review process. August 3rd, 2012. http://bankwatch.org/publications/bankwatch-letter-ebrd-transparency-mining-strategy-review-process

75 EBRD: Response letter to Bankwatch regarding consultation practices. September 3rd, 2012. http://bankwatch.org/sites/default/files/response-EBRD-MiningStrategyProcess-03Sep2012.pdf

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Appendix D: EBRD Public Information Policy

Public Information Policy (2011)76 Currently Under Review: Autumn 2013

The policy was reviewed by RWI on May 31, 2011. RWI had few specific suggestions to make, likely because the PIP (Public Information Policy) doesn't specifically address the extractive industry. Neither of RWI's two broad requests were granted in the revision of the PIP. These requests were:

publication of all contracts, across all sectors, between the EBRD and project loan sponsors

publication of information on sub-projects of IFIs affiliated with EBRD Projects. Note: 2 years is a relatively short turnaround for revisions on a major policy document such as the PIP. This suggests that the EBRD, as a whole, is recognizing the rapidly-shifting norms of information disclosure, although their PIP staff seems very reluctant to make major reforms despite the document's ever-evolving form. The researcher now finds it helpful to review the bank's disclosure promises of the PIP. These promises are assessed for completeness, level of access, and how valuable they are to promoting transparency practices.

1. List of forthcoming Strategy and Policy Reviews and Updates. These are published in an easy to find location, and although they are often unclear as to their exact timetable, EBRD does not seem to marginalizing the invitation to participate in the review process.77

2. Board Minutes. The board minutes are published with exactly the information stated by EBRD: (1) names of attendants, (2) Approval of last meeting's minutes, (3) Agenda item titles, (4) Agreements and Decisions reached. Let it be noted, that although all of this information is provided, it is extremely skeletal and of very little use. It provides no context for decisions, or any mention of decision making process.78

3. Board Committees. Terms of Reference and Membership of the Committees of the Board of Directors. These are published.79

4. Organogram of the Bank: The bank will post a graphic to identify the various departments and components of the institution. No. This could not be found by the researcher. The only somewhat comparable info-graphic depicting organizational structure was this Organizational

76 Public Information Policy. EBRD. July 27th, 2011 http://www.ebrd.com/downloads/ policies/pip/pipe.pdf#page=1&zoom=auto,0,849

77 EBRD Review of the Good Governance Policies. EBRD. Accessed Nov 20, 2013. http://www.ebrd.com/pages/about/policies/governance.shtml 78 Minutes of the Board Meeting 9 May 2012. EBRD. May 9, 2012. http://www.ebrd.com/downloads/board/BDSM1209w.pdf 79 Members of Committees of the Board of Directors as at 1 October 2013. EBRD. October 1, 2013. http://www.ebrd.com/downloads/board/Committees_13-14_(1_Oct).pdf

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Chart.80 This chart is rather basic, and doesn't give the viewer the dynamic depiction of process flows and chain of command which an “Organogram” suggests it would deliver.

5. Administrative Tribunal. The Bank will post on its website details of the Bank's administrate Tribunal, as well as copies of its decisions. The Tribunal is an internal legal system aimed at resolving disputes of an employment or administrative nature, and thus not of particular interest to EI studies at large. However, among the handful of cases disclosed, one very important case stuck-out which may be of interest to RWI. In fact, the researcher found the case to be relevant enough to warrant its own appendix.81

80 EBRD Organization. EBRD. October 2013. http://www.ebrd.com/downloads/orgcharts/ebrd.pdf 81 Administrative Tribunal. EBRD. Accessed Nov. 20, 2013. http://www.ebrd.com/pages/about/principles/tribunal.shtml

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Appendix E: EBRD Administration Tribunal Case Study

Administrative Tribunal Case: Appellant vs. the EBRD

September 17th, 2012 (Corrected on October 22nd, 2012)82

This particular case seemed interesting for a number of reasons. In a nutshell, the case surrounds a Senior Banker with the bank's Natural Resources Team. He was accused, and convicted, of taking a bribe from a shady consultancy firm in exchange for the use of their services in a natural resources project (there was never any proof of services rendered). He subsequently deposited the bribe money into his sister's offshore bank account, where it was discovered by a UK police investigation. Additional Notes from Researcher: There's a lot to be read-into regarding this case.

The senior bank official had been with the bank since 1994 (16 years at the time of accusation), and held a high position of power within the organization. This suggests that the Tribunal is not sparing its old-guard in natural resource corruption proceedings.

The Appellant was granted anonymity by EBRD. However, certain bits of information included in the document could lead to his/her disclosure if RWI is interested in pursuing it. The document makes reference to the bribe-giving company (referred to as Y Consulting Inc.) as:

▪ Having “created small businesses in particular selling kitchens and brokering insurance.”

▪ On its website (of Y Consulting) it claims to be “an American consultancy and risk management firm with offices throughout the world.”

▪ Its business address is listed in rural Pennsylvania.

▪ It is not listed on the Dunn & Bradstreet database of businesses. The Tribunal's proceedings and verdict provide some insight into EBRD's values when dealing with issues of corruption. They fired this employee despite his senior position and long track record with the company, which suggests that they are not being selective with who they target in their proceedings. Because this complaint came from the outside, it suggests that the Office of the Chief Compliance Officer (OCCO) – Headed by Enery Quinones83 - is receiving complaints in an effective manner, and genuinely lodging those complaints into the system. It also suggests that those who served as judges for this tribunal have an morally sound attitude regarding abuses of project income in the Natural Resources sector, and that they are now more aware of potential corruption and mismanagement of payments. The names and contact information of the 3 judges are listed below, because they could be good people for RWI to approach for: additional information, insight into EBRD

82 EBRD Appellant v. EBRD, EBRDAT 2011/AT/01. EBRD (Accessed Nov. 15th, 2013)

http://www.ebrd.com/downloads/integrity/2012-10-22-judgement.pdf

83 About us → Who we are → Our Structure → Senior Management → Enery Quinones. EBRD. Accessed

Nov. 17h 2013. http://www.ebrd.com/pages/about/who/structure/management/quinones.shtml

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proceedings, and partnerships for policy reform aimed at avoiding similar abuses in the future using higher levels of project payment transparency: Jan Paulsson (President) - Tel - 305-284-5638. Email: jpaulsson@law.miami.edu Sarah Christie - http://www.zoominfo.com/p/Sarah-Christie/307473102 Stanislaw Soltysinski - Tel - +48 22 608 70 01. Email: stanislaw.soltysinski@skslegal.pl http://www.skslegal.pl/team.php?person=38 It could be re-enforced that if EBRD takes RWI's advice on the PIP commentary and practices “publication of all contracts, across all sectors, between the EBRD and project loan sponsors,” that corruption issues, such as this one, would be easier to identify and mitigate.

Appendix F: EBRD Financed Extractive Industry Projects

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See Excel Worksheet “Appendix F”

Appendix G: Transcript of EBRD Interviews

Interviewer: Jonathan Leonard - Milano School of International Affairs

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Interviewee: Fidanka McGrath - CEE Bankwatch campaign coordinator for monitoring the European Bank of Development and Reconstruction (EBRD). Seen below is an example of a document produced by Fidanka, regarding recent achievements made in regard to EBRD policy.84

Email Interview Part 1 October 21, 2013

Jonathan: Are you satisfied with EBRD's Revenue Disclosure policies for its extractive projects (both mining and energy)? If not, can you point out a few key loopholes or failures to disclose? Jonathan: Are you satisfied with EBRD's Payment disclosures for extractive projects (both mining and energy)? If not, where have they fallen short, either in policy or practice? Jonathan Are you satisfied with EBRD's Contract disclosures of extractive projects (both mining and energy). I don't believe that they disclose these at all, however since the disclosure requirements vary so much from project to project, I was hoping that you might be able to point out the most glaring deficiencies. Fidanka: The EBRD is not obligated by its policies to disclose information on revenues, payments or contracts. Instead it delegates the disclosure responsibilities to its clients. Accordingly, if requested to provide access to such information, the EBRD refers us to its clients or their financial reports, as published on their web sites. Additional to this limited disclosure, the EBRD can decide to provide further confidentiality derogations from its policies to certain projects. In fact the Public Information Policy of the EBRD is more concerned with confidentiality than with transparency. It should be mentioned in EBRD's favor that the bank promotes the EITI and encourages all its clients from the Power &Energy and Natural Resources sectors to join the initiative, or even declines to invest in cases when a country or a company is not willing to do so. For example the EBRD has declined proposals from Kazakhstan for investments in its oil and gas extraction, however, it does still finance projects in the Transport or Manufacturing (chemicals) sectors that are directly linked to oil and gas extraction. (See http://bankwatch.org/publications/bankwatch-mail-48#Kazakhfossils) Additional to lack of obligation for the EBRD to disclose financial information, there are several practices that make its investments in Power & Energy and Natural Resources project even more obscure. First of all, there is the problem with categorisation of EI projects, as so-called brown-field projects get a

84 Bacheva-McGrath, Fidanka. When god is high and the king is far. How NGOs and local communities can make their voices heard? Mega Projects Conference, Istanbul. October 27, 2013. http://web.yesildusunce.org/wp-content/uploads/2013/11/fidanka-McGrath.pdf

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category B, which have lesser requirements on disclosure and shorter periods for public consultation. The problem is that 'brown-field' projects are usually associated with a legacy of heavy historic pollution and dodgy privatization agreements, issues that raise significant public interest that is not matched by the level of transparency provided for category B investments. Projects that BW has followed that are examples of the B categorization problem are: Chelopech Mining (http://www.ebrd.com/english/pages/project/psd/2004/4468.shtml) DPM Term Loan (http://www.ebrd.com/english/pages/project/psd/2010/36793.shtml), Centerra Gold Revolver (http://www.ebrd.com/english/pages/project/psd/2010/41543.shtml) Additionally there are projects that we've spotted but not monitored closely: Hambeldon Mining debt and equity, post controversial cyanide spill: http://www.ebrd.com/english/pages/project/psd/2012/43886.shtml http://www.ebrd.com/english/pages/project/psd/2012/42831.shtml So for example as part of the Centerra gold revolving debt facility the EBRD provided a pot of money for several of the company's activities in Kyrgyzstan and Mongolia, but it did not provide information about the exact nature of the activities. When asked by Bankwatch, if any money has been disbursed, the reply was 'check the client's website.' It is not always easy to find or to understand financial reports of EI companies. And it should be fairly simple for the EBRD to say 'yes, we did – this much for this and that.' or 'no, we did not disburse any moneys yet.' Once we saw that money has been disbursed we requested information about the exact activities that the investment was covering, but instead of clear information we received a Project Summary Document up-date. PSD up-dates are rare and very non-informative – especially if compared to project pages of the IFC for example.

Second there is the problem of setting the project area of influence. For example the bank may choose an energy efficiency component of a dirty lignite mine project and may argue that equipment purchased with the loan is limiting its responsibility to only a small area of the mine, thus excluding from its area of responsibility developments of other fields of the mine, carried out in serious clashes with local communities. A good example here is the Kolubara lignite mine Environmental Improvement Project: (http://www.ebrd.com/english/pages/project/psd/2011/41923.shtml) Jonathan: Has EBRD been able to meet their own transparency requirements as laid out in their policies? If not, when did this occur? Fidanka: As mentioned above, the EBRD does not bind itself to very high requirements of transparency, and furthermore it can relatively easily avail of the possibility to provide a derogation from its transparency requirements and declare project information as 'confidential'. Attempts to access information, based on the EBRD's commitment to apply the Aarhus Convention, on loan conditions that are considered non-commercial, but strictly environmental and social conditionalities, have failed in the past. For example our recent attempts to receive environmental and social information on the loan conditions for the Nuclear Safety Upgrade project in Ukraine have failed completely.

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Jonathan: Is there adequate recourse and response from the EBRD when information disclosure issues have been brought to their attention? Fidanka: Concerns with information disclosure are taken to the Secretary General of the EBRD, who has never resolved any requests in our favor. Therefore Bankwatch is currently preparing a complaint to the Project Complaints Mechanism on the above mentioned Nuclear Safety Upgrade project in Ukraine, but otherwise we have not tested this option so far. (Researcher Note: This PCM effort was abandoned, because the documents in question were attained through other means. These means are explained in the 2nd interview) Jonathan: Has the EBRD's Civil Society Engagement Unit been helpful and cooperative during your interactions with them? Have they been readily available? Fidanka: Yes, the CSO department has been mostly very helpful.

Email Interview Part 2 November 24, 2013

Jonathan: In the Mining and Energy policies, EBRD states that extractive project clients must: “...publicly disclose their material project payments to the host government (such as royalties, taxes and profit-sharing) as a minimum revenue transparency obligation...” I have a few questions regarding this statement: (a) Where is this information made public? Fidanka: from my experience usually it is on their website in their quarterly or annual reports. But this counts for companies listed on stock exchanges, like Centerra and Dundee Precious Metals. For other companies it may be hard to get this kind of info. (b) How does EBRD monitor its clients to ensure that this disclosure takes place? Fidanka: Good question, but I am not really sure. (c) Have you had any issues accessing this information for any projects? If yes, which ones? Fidanka: As I said for companies that are not listed on stock exchanges it may be harder to get this kind of information. For example for state owned energy giants like the Serbian EPS in Kolubara, there have been several corruption scandals. And sometimes accessing the information is not the problem, but understanding it, as in the case with Centerra where we could see they have drawn from the EBRD revolver facility, but could not work out what activities it was for exactly. (d) What does EBRD do if this requirements is not met? Fidanka: I am not sure. They often like to say that the point of giving most of the responsibility to the client is to increase their capacity and to improve their CSR, and I guess it does work in some cases - for

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example increasingly we see clients publishing ESIA or various operational management plans, Env&Soc Action Plans, Stakeholder Engagement Plans - on their web sites. But we do wonder - in general the impression is that if disclosure requirements are not met, or ESAP implementation is not progressing, then the EBRD can use some carrots but not really any sticks, even though ESAPs are part of the contract / loan agreement. (ESAP and SEPs can include disclosure and consultation activities.) For example the Serbian EPS is not advancing on the ESAP - not publishing a grievance mechanism for example - then there do not seem to be any consequences, so we have to go to the Project Complaint Mechanism (2 cases not yet resolved). In the past Arcelor Mittal has been a very stubborn client that was impossible to get to disclose any kind of information, and the EBRD was not very successful making them do it. (e) Are payments disaggregated in payments to national/local/municipal governments, or is it all lumped together? Fidanka: To be honest I have not looked into it. Jonathan: Who is the CSO "Transparent World?" I've seen their name included on commentary documents, but haven't been able to pull up any information on them on the web. Are you familiar with this organization? If so, can you provide me with a document/link/description so that I might learn more? Fidanka: I have no idea who they are. Jonathan: What information can you offer about the Secretary General? They seem to have a lot of power over disclosure of information. Have they been a worthwhile advocacy avenue? Fidanka: Yes, the Secretary General's office is in charge of PIP and its implementation - currently in charge of PIP revision. Unfortunately they have not been a worthwhile avenue. For example in the case with Centerra's revolving debt facility we complained several times that the PSD was not updated after we figured that money has been drawn from the financial reports published on-line. As a result the PSD was updated with some minimal and very unclear information that still did not allow us to understand what activities exactly did the money went towards. Such type of facilities are extremely obscure. Jonathan: Are there any updates on your PCM exercise regarding the nuclear safety upgrade project in Ukraine? Are there any documents you could send me which provide insight into the proceedings? Fidanka: So a solution was sought through the Secretary General's office, not through the PCM. But at the end it was easier to get the document leaked from a friendly capital/treasury. Once we got the document we did not continue pushing for disclosure. We have increasingly directed more of our advocacy work to the capitals of some of the big shareholding countries and it is paying off with some useful leaks - eg. drafts of policies, board documents. Jonathan: What are your plans for the upcoming/current reviews on the policy documents? Is there anything which you would like RWI to be aware of, or to work in collusion with, regarding policy commentary proceedings?

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Fidanka: On PIP in general we want to see less stress on confidentiality - it would require a bit of a change of attitude as the bank is very stuck into its 'unique business-sensitive approach.' We would like to see more accountability of Directors, especially of the EU ED - in short we want more EDs to publish their votes and positions / elaborations on justification for a vote. We would like to see disclosure of loan agreements or at least any environmental and social conditionalities that are part of the contract. Then the new president of the bank is very keen on having better understanding and communication of the real impact of projects, so we will be pressing for more transparency on results from monitoring and evaluations, better and more regular up-dates of PSDs. Jonathan: Has the Civil Society dialogue exchange phase for policy revisions been made more participatory, as per Bankwatch request? I saw in a letter from the president that you should address the procedure's inadequacies in the upcoming PIP review. Have you/will you do this? Is there anything you would like to see from RWI in this regard? Fidanka: Sorry, I am not sure I understand the question. Can you give me the links, so I know what it is about? Jonathan: This Grant: http://www.revenuewatch.org/grants/training-journalists-mdbs-and-ebrd. Did monitoring and evaluation of media sources find that EBRD was being more thoroughly reported on? How was M & E conducted for this project? Did Bankwatch find the project valuable in hindsight? Should RWI use its money on similar journalistic training, or are there more effective uses of money? Fidanka: Yes, this particular training was very successful. Journalists from the training did publish pieces about the EBRD and projects in their countries. Also in Astana they were active in attending the press events at the bank's AGM and raising questions with the chief economics and the president. As a result of this training and of long-term media outreach in the region the EBRD is well known and problems surrounding its projects are fairly well reported. (But to be honest last year in Istanbul it was not as easy with journalists from the bank's new region of operation - maybe because in Astana we had our Russian speaking team that knew the region very well, while we still do not have wide contacts in the MENA region, in-house Arab speakers etc. Also the EBRD is only starting there and we do not have a handful of controversial projects to discuss with media in the region (as we do in the FSU), so I guess it is just the beginning.) So I'd say that journalistic trainings are a good idea, but it really depends on how they are organized, and if they are a part of a longer-term process of building media contacts etc. As to alternative projects - in Bankwatch we are currently expanding our work on tax justice, and we will be paying much more attention to contracts and revenue disclosure than we have so far. Jonathan: Has EBRD made any noteworthy progress towards greater transparency within the last year? (even minor noteworthy examples are good) Fidanka: Yes, as I mentioned above, more ESIA documentation can now be found on clients' web sites. But we still have to rely on local communities and environmental groups, on media reports, to spot problems. For example few weeks ago we heard from local activists in Turkey about a coal plant that is part of the SOCAR Aegean Refinery in Turkey - neither PSD, not ESIA documentation mentioned any such associated coal plant, and the consultants who did the due diligence only degraded documentation provided by SOCAR, in spite of the fact that information about public opposition to the coal plant is easy to find (esp. in Turkish language).

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Jonathan: Have you seen the tribunal findings where the Natural Resources project Senior-Banker was fired (after 14 years of employment) for embezzling money from a shady "consultancy" firm, and put it in his sister's offshore bank account? http://www.ebrd.com/downloads/integrity/2012-10-22-judgement.pdf. Aside from being an entertaining story, do you find it useful from an advocacy standpoint? Did this willingness to terminate veteran employees over corruption scandals raise your opinion of EBRD, and does it hold any significance towards policies of information disclosure? Should the judges who ruled against the banker be considered as potential partners for creation of more transparent information and financial policies? Fidanka: Unfortunately, we know very little about the case to be able to use it in any way.

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Appendix H: UKEF Extractive Industry Projects Funded from 2010-2013

In 2010-2011 the projects in the extractive industry included85: Nigeria Company: Well Trade Services Ltd Buyer: WTS Broadcasts Ltd Project: Outside broadcast trucks Cost: £5,225,000 Russia Company: Rolls-Royce Power Eng’g Ltd Buyer: Gazprom Project: Steam compressor station Cost: £330,255,780 Saudi Arabia Company: Fluor Ltd and other UK exporters Buyer: Saudi Kayan Petrochemical Company Project: Kayan petrochemical complex Cost: £62,434,280 Slovakia Company: Rolls-Royce Power Eng’g Ltd Buyer: PPC Energy Project: Gas turbine Cost: £15,285,959 South Africa Company: BNP Paribas Buyer: N/A Project: Loan to Mozal Aluminium Smelter Cost: £6,567,953 Company: Deutsche Bank AG

85 UK Export Finance- Export Credit Guarantee Department: Annual Report and Accounts 2011-2012. Rep. UK Government, 19 June 2012. Web. 17 Nov. 2013. <https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/222383/uk-export-finance-annual-report-and-accounts-2011-12.pdf>.

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Buyer: N/A Project: Loan to Mozal Aluminium Smelter3 Cost: £7,820,247 In 2011- 2012 the projects in the extractive industry included86: Brazil Company: Unknown Buyer: Petrobras Project: Petrobras oil and gas exploration and production facilities in the South Atlantic Cost: £920,720,8943 Company: Siemens VAI Metals Technologies Ltd Buyer: Gerdau Açominas S.A. Project: New combined plate and Steckel mill Cost: £216,184,768 Italy Company: Clyde Union Holdings Ltd Buyer: Saipem Energy Services SpA Project: Spare parts for pumps Cost: £54,519 Nigeria Company: Gentec Energy Ltd Buyer: Green Fuels Ltd Project: Compressed natural gas delivery system Cost: £6,002,010 Philippines Company: ABN Amro Bank Buyer: N/A Project: Loan to Gas Power Project4 Cost: £21,377,671 Qatar Company: WRG Creative Communication Ltd Buyer: Qatar Petroleum

86 UK Export Finance- Export Credit Guarantee Department: Annual Report and Accounts 2011-2012. Rep. UK Government, 19 June 2012. Web. 17 Nov. 2013. <https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/222383/uk-export-finance-annual-report-and-accounts-2011-12.pdf>.

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Project: Social events ceremony Cost: £791,005 Russia Company: Joy Mining Ltd Buyer: Siberian Coal Energy Co Project: Mining equipment Cost: £4,808,863 Company: Joy Mining Ltd Buyer: Southern Kuzbass Coal Co OAO Project: Mining equipment Cost: £8,742,166 Saudi Arabia Company: Fluor Ltd Buyer: Saudi Kayan Petrochemical Co Project: Kayan petrochemical complex Cost: £65,674,438 South Africa Company: Deutsche Bank AG Buyer: N/A Project: Loan to Mozal Aluminium Smelter4 Cost: £4,791,957 In 2012- 2013 the projects in the extractive industry included87: Abu Dhabi Company: Altek Europe Ltd Buyer: Emirates Aluminium Co Project: Dross presses Cost: £28,588 Bangladesh Company: See note Buyer: See note Project: Design of a refuel rig Cost: £182,875

87 UK Export Finance- Export Credit Guarantee Department: Annual Report and Accounts 2012-2013. Rep. UK Government, 19 June 2013. Web. 17 Nov. 2013. <https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/207721/ecgd-ukef-annual-report-and-accounts-2012-to-2013.pdf>.

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(Note: Details not disclosed e.g. for reasons of commercial confidentiality) Brazil Company: Dolphin Drilling Ltd Buyer: Petrobras Project: Oil and gas exploration Cost: £147,363,250 Germany Company: Viper Subsea LLP Buyer: Cameron GmbH Project: Oil & gas distribution connection plates Cost: £95,758 Philippines Company: ABN Amro Bank Buyer: N/A Project: Gas Power Project Cost: £15,017,473 Russia Company: Joy Mining Ltd Buyer: Siberian Coal & Energy Co Project: Mining equipment Cost: £53,627,280 Saudi Arabia Company: KW Designed Solutions Ltd Buyer: Saudi Archirondon Ltd Project: Pressure test vessel Cost: £61,160 Sierra Leone Company: Dawnus Sierra Leone Ltd Buyer: London Mining Co Ltd Project: Iron ore mine Cost: £4,614,959 South Africa Company: Deutsche Bank AG Buyer: N/A Project: Mozal Aluminium Smelter Cost: £2,390,684