CEE Bankwatch Network and Pacific Environment and Resources Center

CEE Bankwatch Network and Pacific Environment and Resources Center

Press Release: World Bank Conditions Russian Forest Projects on Restructuring of Environment Agency, But Will it Cave in to Weak Reforms?
(21 September 2000)

Prague, 21 September 2000: In May of this year, Russian President Putin abolished the country’s Federal Forest Service and State Committee on Environmental Protection. In so doing, Putin placed the Russian Ministry of Natural Resources, which has a tradition of aggressive resource exploitation, in charge of the abolished agencies’ environmental protection functions. With this move, Russia’s system of independent government environmental enforcement was effectively halted. Despite this draconian move, seven days later the World Bank approved $60 million loan to the abolished Forest Service. Then, on September 13, announced the approval of $200 million in loan guarantees to Russia’s coal and forestry sectors.

In July, over 60 Russian environmental leaders, including former environmental advisor to Boris Yeltsin, Alexei Yablokov, sent a letter of protest over the situation to World Bank President James Wolfensohn. “It was demolished,” Washington Post later quoted Yablokov saying about the environmental agency abolishment.

Yet, the World Bank supports the abolishment of the agencies, and claims it is making these projects’ implementation conditional on the Russian government restoring these agencies functions its satisfaction. Bloomberg reported that in a press conference earlier this month, World Bank President James Wolfensohn said, “We’re prepared to make a loan, but only, only pay when (Russia has) re-established conditions under which the environmental conditions can be monitored and supervised and supported.”

Environmentalists are skeptical. “Wolfensohn pledged to withhold the loan and guarantees until adequate reforms are in place. Yet the Bank has an internal culture of approval that creates pressure for it to cave in weak reforms in the interest of bureaucratic expediency. Wolfensohn will have to hold his Bank staff’s feet to the fire so they don’t implement the projects without adequate reforms,” said Doug Norlen, Policy Director at Pacific Environment and Resources Center.

Four months after the agency abolishments, there is ample evidence that the reform effort is damaging the country’s already compromised ability to protect the environment. There have been numerous staff cuts. Some employees of the agency have changed their stand on issues in order to retain their jobs in the Ministry of Natural Resources. For instance, one regional head in Kamchatka recently abandoned his support for a United Nations program protecting two key salmon watersheds that are also coveted by the Ministry of Natural Resources for their gold and gas deposits. The reason, local activists say, is that he is concerned about keeping his job under the Ministry of Natural Resources.

Meanwhile, Russia’s leading environmental law firm, Ecojuris, is suing the government, calling the agencies’ abolishment unconstitutional. “By supporting the abolishment of these agencies and the inferior restructuring of their functions under the Natural Resource Ministry, the World Bank is undermining environmental protection and the rule of law in Russia,” said Jozsef Feiler, Policy Coordinator, CEE Bankwatch Network.

From: Rory Cox,
Communications Director
Pacific Environment and Resources Center
1440 Broadway, Suite 30
Oakland, CA 94612


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