World Bank rejects advice to abandon oil and mining projects

A long-awaited World Bank report issued rejected an independent panel's recommendation that it phase out oil and mining projects within the next five years, but introduced safeguards to make sure those projects benefit and protect local communities.
The report by World Bank staff responds to a review commissioned by the bank and carried out by former Indonesian Environment Minister Emil Salim that recommended the bank stop investing in oil and coal projects within five years. The report will be sent to the bank's board of directors for approval after a 30-day comment period.

The report said extractive industries are key to helping developing countries lift themselves out of poverty.
"For many developing countries, oil, gas and mining are important assets that will have to play a role if these countries are to achieve the Millennium Development Goals," it said. However, the report recommended making World Bank investments in extractive industries "more selective, with greater focus on theneeds of poor people and a stronger emphasis on good governance and on promoting environmentally and socially sustainable development".

World Bank staff proposed ensuring community support for projects before investing in them, then making sure revenues benefit local communities and the poor. In line with this, the report proposed requiring disclosure of revenue figures for all large projects.
The report also recommended committing to 20 % annual growth in the bank's energy efficiency portfolio and 20 % annual growth in the renewable energy portfolio over the next five years.

In related news, a study released by London-based think tank New Economics Foundation rapped the World Bank for promoting fossil fuel-generated power in developing countries, saying the strategy would drive them deeper into debt.
Many villages lacking electricity are too far from the national power grid to benefit from the projects that receive World Bank investment, according to the study. Instead, the group said, the bankshould focus on small-scale hydroelectric projects and wind and solar power, which would enable villages to become self-sufficient.