Wednesday, June 1, 2011

ICBC quiet over controversial dam project in Ethiopia

ICBC quiet over controversial dam project
Toh Han Shih
South China Morning Post, Jun 02, 2011

Industrial and Commercial Bank of China (SEHK: 1398) (ICBC) has remained
tight-lipped about accusations from non-governmental organisations over
the state-owned bank's financing of the controversial Gibe 3 dam in

The US$1.75 billion hydropower project, expected to be completed by
2014, is Ethiopia's largest investment project and the world's
fourth-largest dam under construction.

In July, the world's largest bank by market value extended a US$500
million loan to it, the Hong Kong and Shanghai-listed bank has confirmed
to NGOs.

"The Gibe 3 Dam is Africa's most destructive power project. It will
ravage the fragile ecosystems of the Lower Omo Valley in Ethiopia and
Lake Turkana in Kenya, and the 500,000 poor indigenous people who depend
on them," said Peter Bosshard, policy director of International Rivers,
an international NGO focusing on dams.

"The Gibe 3 dam raises serious technical, economic and financial
questions," said a letter to ICBC chairman Jiang Jianqing on May 21 last
year from three NGOs - International Rivers, Friends of Lake Turkana and
Bank Track.

That letter and another sent to ICBC by International Rivers in
September never received any response, said Bosshard. "We also contacted
ICBC representatives several times by e-mail asking whether they could
meet with us. They never responded to these messages either."

ICBC has not responded to inquiries from the South China Morning Post
(SEHK: 0583, announcements, news) either.

Construction on the Gibe 3 project began in 2006 without an
environmental and social impact assessment, according to a report
commissioned by the African Development Bank, which is not involved in
the project. Since then, there have been studies into the potential
impact of the dam, but these have been inadequate, with questions
unanswered, according to the report.

Bosshard warned the dam would draw water from the Omo River in Ethiopia,
thus depriving Lake Turkana of water. This would deplete scarce
resources there and in the lower Omo Valley, sparking the risk of
conflict in these regions.

No other major international financial institution has financed the dam,
Bosshard said.

"ICBC is the only international financier to provide support to this
project. If ICBC aspires to be a leading global brand and an ambassador
of China's soft power around the world, it needs to follow international
standards and engage in open dialogue with the public."

Ikal Angelei, chair of Friends of Lake Turkana, an NGO working with
local people living around the lake, said: "ICBC is underwriting the
destruction of our people. Their funding is a hideous gesture of the
destruction Chinese funds can bring to Africa's poorest communities."

Sonja Willems, campaign co-ordinator of BankTrack, said: "This loan
makes a mockery of ICBC's actions to establish itself as a socially and
environmentally responsible lender. As the world's largest bank, ICBC
should strive to become an environmental leader, but instead is
financing untouchable projects."

ICBC has issued a "Green Credit Framework" to all its branches to
underscore its "goal of turning ICBC into a leading green financial
institution in the country and top-class in the world", according to the
bank's website. "Being a large publicly traded bank with international
influence, ICBC recognises the far-reaching role of resources and
environment to economic and social development," it says.

Since 2007, China has imposed the so-called Greed Credit Policy under
which Chinese companies that violate the country's environmental laws
stand to forfeit their loans.

Under the guidelines of the State-owned Assets Supervision and
Administration Commission, state-owned enterprises expanding overseas
are required to protect the environment and contribute to the social
development of nations they operate in.

You received this message as a subscriber on the list:

To be removed from the list, please visit:

No comments:

Post a Comment