“To this day, communities suffer from worsening air and water pollution, deteriorating health conditions, and the loss of their livelihoods, and they face the threat of reprisal. Acceptance of this complaint provides a glimmer of hope to remediation of direct, indirect and cumulative harms. Co-financiers must ultimately be held accountable for adverse investment outcomes—for funding  destructive and harmful projects. There is a real opportunity here for Standard Chartered to realize corrective actions. It must start by acknowledging the problem and its responsibility,” said Aaron Pedrosa, Legal Counsel of the Philippine Movement for Climate Justice, representing the coal affected communities.

The complaint was submitted on behalf of the affected communities by a coalition of non-governmental organizations, including the Philippine Movement for Climate Justice (PMCJ), BankTrack, Inclusive Development International and Recourse. It alleges that Standard Chartered failed to conduct effective due diligence and contributed to human rights violations and a range of adverse environmental and social impacts by financing the plants’ construction, which it now has a responsibility to help remediate.  

High-profile harms

The four coal plants have long been the subject of community opposition and scrutiny from environmental and human rights groups. In addition to the climate impacts of coal-fired power itself, the plants continuously produce fly ash that scatters into the surrounding environment, polluting water sources, croplands, and grazing areas for livestock. Local communities have reported increased respiratory and skin disease, land dispossession, eviction and impoverishment directly resulting from the construction of the power plants. 

An investigation prompted by a 2017 complaint to the Compliance Advisor Ombudsman of the International Finance Corporation (an IFC financial intermediary client was also among the plants’ co-financiers) concluded that the plants had likely caused harm “of a significant nature,” including public health and economic impacts, impacts related to displacement and resettlement, and threats against and intimidation of community activists. Greenpeace protesters have been assaulted by guards protecting one of the plants addressed by the complaint and, tragically, the high-profile murder of Filipino land defender Gloria Capitan occurred following her activism opposing one of the coal plants owned by San Miguel Corporation that was co-financed by Standard Chartered. Standard Chartered has an ongoing banking relationship with San Miguel. 

An opportunity to make amends 

“Standard Chartered financed these plants despite the health and environmental harms it knew—or should have known—would follow. Standard Chartered says in its Human Rights position statement that it will provide remedy or cooperate in remediation processes when it contributes to adverse impacts. So far, it has failed to live up that promise, but now it has an opportunity to come to the table with representatives of the affected communities and put its human rights commitments into practice,” said David Pred, Executive Director of Inclusive Development International.

Complainants are calling on Standard Chartered to enter into mediations aimed at repairing the harms that the communities have suffered, both by using its leverage with the coal companies it financed—and in some cases continues to finance—to implement the remedial recommendations that arose from CAO investigation process and to contribute directly to remedial actions and mitigation measures where it can. The remedial actions sought by complainants include the early closure of three of the coal plants (SMC Limay, SMC Malita and Masinloc), a resettlement audit, health interventions, livelihood restoration programmes, and measures to monitor and improve air and water quality. They are also asking the bank to strengthen its policies and practices on remediation and harm prevention more broadly for the future.

“By continuing to finance San Miguel, Standard Chartered remains entangled with a conglomerate that keeps aggressively expanding fossil fuels. The impacts lamented by these Philippine communities are clear examples of the appalling human rights violations that are often linked to coal-fired power plants and that San Miguel is willingly perpetrating for profit. Standard Chartered should not leave its human rights commitments merely on paper, but instead recognise its role in these violations, join the mediation process, and ensure remedy for the affected communities,” said Camilla Perotti, Banks and Coal Campaigner at BankTrack.

“By financing these coal plants, Standard Chartered not only harmed local communities, but also increased the climate vulnerability of the Philippines which is facing increasingly severe climate impacts and typhoons each year. While Standard Chartered has since recognised the damage that coal finance can do to people and planet, and has committed to stop, it should do the right thing and help to remedy the problems that its past financing has caused,” said Daniel Willis, Finance Campaign Manager, Recourse

Now that it has reviewed and accepted the complaint, acknowledging that the allegations merit further examination, the UK National Contact Point will offer voluntary mediation to both parties. If either party declines, it will then conduct a further examination of the complaint to determine whether the company acted consistently with the OECD Guidelines.

###

For more information, please contact:

Daniel Willis, Finance Campaign Manager, Recourse (UK time zone)

dan[at]re-course.org, +447595054391

Mignon Lamia, Communications Director, Inclusive Development International (U.S. Eastern Standard time zone): mignon@inclusivedevelopment.net 

The post UK Government’s corporate watchdog accepts complaint against Standard Chartered bank for coal financing appeared first on Inclusive Development International.

(MANILA, Philippines – January 21, 2025) – Communities and rights organizations involved in an ongoing complaint against the International Finance Corporation (IFC), the World Bank’s private sector arm, accuse the multilateral development bank of covering up the harms caused by its support for the construction of 10 coal-fired power plants in the Philippines. This follows today’s publication of a progress report by the IFC indicating that it will not disclose the findings and recommendations of its years-long and multi-million dollar assessment of those harms, and that it has no plans to take action to remedy them.

“We are angered by IFC’s resistance and unwillingness to disclose the assessment reports. Affected communities remain unheard and invisible. We are kept in the dark at a time when we are beset with the disastrous impacts of coal plant operations. We face an uphill battle in realizing remedial actions as IFC continues to evade responsibility. We cannot allow the bank to walk away with all the death and destruction it caused to people and planet. It should not be allowed to do business at the expense of our health, environment and future. We have endured long enough. It is time for IFC to pay –  no ifs, no buts!” Aaron Pedrosa, Head of Legal Team, Philippine Movement for Climate Justice

“We are extremely disappointed that the IFC is abandoning its responsibility for financing the coal plants in our communities. This is an insult to all of us who have been fighting for seven years to protect our rights and expose the harm done by these plants to our lives, livelihoods, and environment. The negative impacts of the climate crisis continue to get worse at the global scale and in our community in Bataan. We cannot accept the IFC’s decision because its role is clear in enabling our worse conditions through the continued operations of these plants.” Derek Cabe, Nuclear-Free Bataan Movement (a member organization of the PMCJ)

Between 2011 and 2017, Rizal Commercial Banking Corporation (RCBC), a financial intermediary client of the IFC, financed dozens of new coal fired power plants across the Philippines, in violation of IFC’s social and environmental Performance Standards. This occurred while IFC held a 13% equity stake in the bank and a seat on its board of directors. In 2021, the IFC’s own Compliance Advisor Ombudsman (CAO) concluded, in response to a complaint from project-affected communities and non-governmental organizations, that the IFC had contributed to environmental, social and climate-related harms caused by ten of these power plants, and that it should contribute to remediating the harms.

Yet after spending three years and millions of dollars on a Board-approved Management Action Plan (MAP) that included commissioning third-party assessments of each of the ten coal plants, the IFC’s progress report does not propose any path forward to bring the coal plants into compliance and alleviate the suffering of affected communities. The IFC points to RCBC’s disagreement with the consultant’s findings and recommendations, which confirmed most of CAO’s findings in minute detail. IFC has so far declined to discuss the consultant’s findings and recommendations with the coal plant operators directly, despite having active financial relationships with some of the companies. 

The IFC also refuses to disclose the third party assessments, either publicly or to the Complainants who contributed to them, citing RCBC’s opposition to any such disclosure. Rights groups are calling this an attempt to cover up and avoid accountability for the disastrous impacts of its investment in RCBC. 

“This case encapsulates the risky nature of financial intermediary lending, whereby a publicly-funded bank hands power over to profit-driven private banks, with catastrophic outcomes for people and the environment. It is a disgrace that the IFC is trying to wash its hands of responsibility for the climate-busting coal boom in the Philippines. The local communities can’t wash away the coal dust nearly as easily.” Daniel Willis, finance campaigner, Recourse. 

In response, the Philippine Movement for Climate Justice, Recourse and Inclusive Development International–which filed the complaint on behalf of affected communities that precipitated the CAO investigation–are calling for the World Bank Group to step in and directly address the adverse impacts of its investments in RCBC. The complainants have called on the public and private sector arms of the World Bank Group to work directly with the coal plant owners, and in partnership with the Philippines government, to mitigate the environmental impacts of the 10 coal plants, treat the medical conditions suffered by front-line communities, ensure safe drinking water, restore the livelihoods of fisherfolk and farmers, and end reprisals against community representatives. 

“The fact is the World Bank Group has profited for thirteen years from its ill-conceived investments in RCBC and the coal bonanza that it financed with the Bank’s capital, so its shareholders have a moral obligation now to clean up their mess. The Board should instruct both the public and private arms of the Bank to use all of the levers, relationships and resources they have at their disposal to implement the remedial recommendations made by the assessments that they funded. This could include working directly with the coal plant owners to reduce harmful emissions and working with the Philippines government to design and fund health and livelihood programs that address the needs of coal-affected communities.”  David Pred, Executive Director, Inclusive Development International

Along with the IFC progress report, the CAO has today published its own monitoring report on the implementation of IFC’s Management Action Plan. The CAO reports that “IFC has made significant efforts to assess the E&S risks and impacts of the 10 power plants. However, the risks and impacts to communities and the environment identified have not been mitigated, despite IFC’s E&S consultant making 186 recommendations to improve power plant E&S performance and/or address underlying complaint issues.”  The CAO noted that IFC’s progress report highlighted 72 recommendations as actions that could be undertaken or initiated with relative ease compared to others, and in some cases, do not require involvement of the power plant operator. 

The CAO also noted that IFC has been unable to assess GHG emissions from the power plants, which it committed to do under its action plan. The Ombudsman observed: “Unless additional action is taken, they will likely emit significant GHG emissions for decades to come, adding to climate change and presenting a lost opportunity to enhance their energy efficiency.”

Further information

• Between 2011 and 2015, IFC made five equity and debt investments in Rizal Commercial Banking Corporation, amounting to USD 228 million. After receiving IFC’s investments, RCBC went on to provide and arrange billions of dollars in financing for 19 coal-fired power plants across the Philippines. 
• In October 2017, the Philippine Movement for Climate Justice, supported by human rights NGOs Inclusive Development International and Recourse, submitted a complaint to the IFC’s Compliance Advisor Ombudsman (CAO), accusing the IFC of fueling global climate change and causing widespread environmental and social harms in the Philippines as a result of these investments. The complainants argued that RCBC’s financing of the coal plants was not in compliance with the IFC’s social and environmental Performance Standards and that IFC had breached its own Sustainability Policy by failing to enforce the standards. 
• In 2022, the CAO published a compliance investigation report in response to the complaint, which concluded that IFC’s failure to ensure that RCBC applied the Performance Standards to the financing of these plants very likely caused serious harm to surrounding communities. 
• The coal plants affected the livelihoods, health and well-being of affected communities due to air and water pollution and physical and economic displacement, among other harms. Local community activists who opposed the projects faced reprisals from the project developers, with one prominent environmental and human rights defender Gloria Capitan being murdered on July 1, 2016. 
• The CAO report also notes that, once operational, the plants will produce approximately 40 million tons of CO₂ annually–roughly 30% of the Philippines’ annual emissions in 2019–exacerbating a global climate crisis to which the Philippines is acutely vulnerable.
• The CAO called on IFC to provide remedy for these impacts and to reform its financial intermediary lending practices to prevent future harm.
• The IFC responded to the CAO report with a Management Action Plan (MAP) detailing how it would address CAO’s findings and recommendations. This was the first MAP to be adopted by the IFC’s Board of Directors under the new CAO Policy (2020). 
• In the MAP, IFC committed to “assess” and “mitigate” the non-compliance-related impacts of the 10 coal subprojects (pp.37-42).  
• IFC retained a third-party firm, Environmental Resources Management (ERM), to undertake multiple studies on the 10 coal subprojects and on RCBC’s wider portfolio of high-risk projects and make recommendations to bring these projects into compliance with the Performance Standards. As summarized in IFC’s progress report released today, ERM’s “gap analysis” assessment of the 10 coal subprojects found that 43 of the 70 issues raised by Complainants could be “attributed” or “likely attributed” to the power plants (many of which are associated with considerable harm to local communities). The consulting firm made 186 recommendations to address these issues. 
• The Complainants were deeply involved in supporting ERM to undertake the assessments, including facilitating access to the affected communities and reviewing and commenting on drafts of the reports.
• According to the IFC report, RCBC disagrees with the findings and recommendations of the gap analysis reports, and as a result it discontinued its initial sharing of the reports with its clients including the power plant operators.  
• According to the CAO monitoring report, the IFC “does not provide a path forward for resolution of these serious and pressing issues,” despite its commitment under the MAP approved by the Board to “assess and mitigate E&S risks and impacts of complaint sub-projects.” Unless further action is taken, the CAO concludes that “the environmental and social impacts associated with the operation of the power plant sub-projects financed by IFC will remain largely unmitigated.” (p. 16)
• Citing client confidentiality agreements and unspecified data privacy laws, IFC refuses to disclose the final gap analysis reports to the Complainants, even though the draft executive summaries were shared with them for their comments. The CAO has called upon IFC to at least share the reports with the Complainants, noting that they are a “major output of the MAP and were prepared using primarily public environmental information and consultation.” (p. 16)  
• This case is particularly pertinent in the context of IFC’s proposed Remedial Action Framework, which has been under discussion now for over two years and awaiting final approval by the Board.

The post BREAKING: World Bank Group guilty of coal cash cover-up despite climate commitments appeared first on Inclusive Development International.

These ‘coal banks’ are the focus of a new campaign and website launched by the coalition today. The website lists all 98 banks and spotlights the ‘dirty dozen’ banks their research suggests could end up backing the highest number of new coal power projects. These include State Bank of India, Bank of India, Mizuho Financial Group, Bank of Baroda, Bank of China, Union Bank of India, DBS Bank, CTBC Bank, Maybank, Indian Bank, Canara Bank, and ICBC.

Inclusive Development International’s research identified 44 coal power projects that have been announced or proposed in India, Indonesia, the Philippines, Laos, Vietnam, Bangladesh, Mongolia, Pakistan, and Thailand. If developed, the projects would expand coal power capacity in these countries by 10%,[1] adding nearly 40GW of new coal capacity, more than Germany or Russia’s operating coal power capacity. 

The group also identified 98 global commercial banks likely to be approached to finance these projects, based on their banking relationships with project developers and their past financing for coal plants in the region. When approached by the End Coal Finance coalition on their potential involvement in financing these 44 coal expansion projects, only 23 banks responded, with only 16 banks committing not to provide direct finance for any of the projects. However, none of the 98 banks offered evidence of having internal policies in place that would prevent financing companies expanding their coal activities, opening the possibility of indirectly financing these projects.

Some of the announced projects, like Udupi power station and Udangudi Super Critical Thermal Power Project in India, or Ha Tinh Formosa Plastics Steel Complex power station in Vietnam, aim at expanding operational coal power stations that have already received backlash and opposition for the severe impacts on the livelihoods of local communities and the environment. Other projects concern the development of greenfield coal-fired power stations, and projects like MP Adani power station or JSW Utkal Steel power station have already experienced strong local resistance.

“The willingness of so many commercial banks to continue to finance coal is disheartening, when the science is clear that, to curb the climate crisis, all coal expansion should be immediately stopped. If we also consider the adverse impacts on local communities and the environment that many of these projects are set to cause, the picture becomes even more grim. Crucially, these 44 projects will not materialise without the support of financial institutions and we won’t stop until these banks rule out their involvement,” said Camilla Perotti, Banks and Coal Campaigner at BankTrack.

“This massive new wave of coal power expansion threatens to derail the efforts made across Asia, and globally, to wean the world off coal. These banks must commit to stop financing coal projects and their developers, so that the harm done by coal to communities, livelihoods and the planet can be brought to an end,” said Daniel Willis, Coal Finance Campaigner at Recourse. 

“While many large multinational banks have pledged to stop financing coal in recent years, our research shines a light on the regional and national banks that continue to fund coal in Asia. These banks have slipped under the radar for too long. They must stop providing a lifeline to an industry that has caused such harm globally and to the people of Asia.” Dustin Roasa, Research Director at Inclusive Development International, said.

“The persistence of coal financing by banks will overshadow efforts to achieve Indonesia’s Paris Agreement commitments amid efforts to end this addiction. Furthermore, this financing would only exacerbate the destruction of living space due to extraction activities and further make Indonesia’s existing climate issue worse.” Novita Indri, Fossil Fuels Energy Campaigner at Trend Asia, said.

More details regarding the projects and the banks that may be involved in their financing, as well as the banks’ positions on coal expansion, can be found on the End Coal Finance website, launched today.

Notes to editors:

[1] The project focused on coal power projects identified in South- and Southeast Asia, with the exclusion of China. 

The post Major ‘coal banks’ refuse to stop financing coal power boom in Asia appeared first on Inclusive Development International.

(Banten Province, Indonesia – July 11, 2024) The International Finance Corporation’s internal watchdog, the Compliance Advisor Ombudsman (CAO), announced that it is launching an investigation into the institution’s investments in a commercial bank that is financing construction of two new coal-fired power plants at Indonesia’s Suralaya Power Station. The investigation comes in response to a complaint filed last year by communities in Indonesia’s Banten Province who say the new plants, known as Java 9 and 10, will have catastrophic impacts on their health, livelihoods, and the environment. The complaint was filed with the support of local and international non-governmental organizations PENA Masyarakat, Trend Asia, Inclusive Development International and Recourse. 

“It’s encouraging that the CAO will do a full investigation, which brings us one step closer to justice,” said Sarah Jaffe, senior legal and policy associate at Inclusive Development International. “People’s lives are being upended by this project, and they deserve full and fair redress for the harm they’ve suffered. The IFC has a responsibility to contribute to that and to ensure that, at the very least, the project developer is taking measures to better protect local communities moving forward.” 

According to the CAO’s initial assessment of the complaint, completed in June and published last week, the IFC has supported the construction of Java 9 and 10 through equity investments totalling $46.9 million  in Hana Bank Indonesia, one of the projects’ financiers. By launching an investigation, the CAO is acknowledging that there are indications that IFC has not complied with its environmental and social policies in relation to its most recent investment and that its non-compliance could have contributed to project-related harms. In its report, the CAO raises serious questions about the IFC’s management of predictably high risks associated with investment in Hana Indonesia. The report suggests that the IFC may have underplayed those risks by classifying its investment as “moderate” as opposed to “high” risk, and notes that the IFC failed to ensure, over many years, that known deficiencies in Hana Indonesia’s environmental and social management system were rectified. This calls into question the adequacy of the client’s oversight and reporting on social and environmental risk in its portfolio, including that associated with Java 9 and 10.   

The Java 9 and 10 plants will make an already dire situation worse  

With a combined capacity of 2000 megawatts, completion of the Java 9 and 10 plants will increase the size of the already massive Suralaya coal complex by 50 percent—something advocates say is unnecessary given the current oversupply of energy in the Java-Bali grid. This will compound and add to ongoing harms, including air pollution, acute respiratory infections and other health problems caused by coal dust and toxic waste, and greenhouse gas emissions. The plants are expected to cause thousands of premature deaths and will release an estimated 250 million metric tons of carbon dioxide into the atmosphere over their 30-year lifespan. 

The project has also involved physical and economic displacement without compensation or livelihood restoration. In their complaint to the CAO, local community members described a lack of information and consultation prior to land acquisition by the Java 9 and 10 developer, and evictions conducted under duress and amid fears of retaliation if they did not agree to the terms offered, which amounted to insufficient compensation. They also describe how destruction of the Kelapa Tujuh Beach, the last remaining beach in the area, has destroyed a key source of income from tourism and fishing. Fisherfolk are now forced to fish far from the shore using boats, which greatly increases expenses, and they fear that the project will lead to further declines in their already reduced catch.   

“The new plants will exacerbate already devastating health and environmental problems these communities face,” said Novita Indri, energy campaigner at Trend Asia. “This project brings extreme risk and little to no benefit for the people of Banten Province.”

Not only do the environmental and social risks involved make the project untenable, but as the complaint argues, construction of new coal plants is unnecessary in the region, where electricity supply already exceeds demand.

The IFC has a responsibility to help prevent and remedy harm from the project  

The complainants are confident that the CAO investigation will confirm that the IFC has failed in its due diligence responsibilities to prevent ongoing harm and future risk associated with construction of the Java 9 and 10 plants. They are asking the IFC to use its leverage to halt construction of the coal plants and, if stopping the project is not possible, to ensure that it is upgraded to minimize social and environmental harm. This includes implementing best practices for waste management, which the project has so far failed to do, leading to serious problems for nearby communities. Complainants are also seeking remedy for harm the project has already caused, including restoration of livelihoods and compensation for those forcibly evicted to make way for the plants’ construction. They also want to see an end to Hana Bank Indonesia’s financing of coal projects altogether, along with systemic policy changes by the IFC to eliminate all indirect support for coal projects.

The IFC’s support for Java 9 and 10 via Hana Bank Indonesia violates its Sustainability Framework and Green Equity Approach

As outlined in the complaint, IFC’s failure to appropriately assess the mega coal project being bankrolled by one of its financial intermediary clients against its social and environmental policies represents a serious supervision failure. It also highlights weak points in in IFC’s Green Equity Approach¹ that allowed it to continue indirectly financing new coal up until it closed some of those loopholes. However, even the updated approach with its “no new coal” commitment, allows financial intermediary clients to invest in captive coal power and to underwrite bonds for coal developers. And, while IFC has stated that the approach applies to all existing equity clients, it is unclear whether and how that is being enforced. 

“The IFC’s financing of Java 9 and 10 is yet another example of the risky business of financial intermediary lending,” said Daniel Willis, finance campaign manager at Recourse. “By entrusting public funds to commercial banks that are more concerned with profits than people, the IFC has found itself supporting a monstrous coal project that is both unnecessary for energy supply and disastrous for the environment. The IFC must cooperate with its ombudsman to remedy the harms identified by the investigation and make systemic changes to how it invests in the future.”

Support for Java 9 and 10 also puts the World Bank Group at odds with Indonesia’s Just Energy Transition Partnership, a $20 billion initiative funded by a coalition of wealthy countries and global lenders to help the country speed its transition away from coal, toward cleaner energy sources.

Additional Quotes:

Sarah Jaffe, senior legal and policy associate at Inclusive Development International: “Promoting coal expansion is antithetical to IFC’s mission. The Java 9 and 10 project is so out of line with the bank’s environmental and social standards it’s unlikely it can be brought into compliance. IFC’s responsibility now is to stop further harm from the project and to help remedy the harm already caused.”  

Kate Geary, programme director at Recourse: “Support for Java 9 and 10 is completely at odds with the World Bank’s mission—the plants will exacerbate, not reduce, the impacts of both poverty and climate change. IFC’s failure to prevent its client funding two massive new coal plants in the 11th hour of the global climate emergency undermines its commitment to the Paris Agreement on climate change.”     

Novita Indri, energy campaigner at Trend Asia: “The Java 9 and 10 expansion is totally unwarranted—electricity needs in the area are already being met and the Java-Bali grid is already oversupplied—and yet it will devastate local communities and tip the world closer to a climate catastrophe, to which Indonesia and its citizens are uniquely susceptible. That’s the opposite of what’s needed to achieve the net-zero emissions target and undermines the Paris Agreement.”

Mad Haer Effendi, Director of PENA Masyarakat: “I’m confused as to why Java 9 and 10 are being built, because the Suralaya community does not experience any advantageous benefits; in fact, the new projects would worsen existing environmental degradation and lead to respiratory disease. It’s silly for the company to claim that this project will generate prosperity for the community.”

The CAO’s Compliance Appraisal Report can be found here: https://www.cao-ombudsman.org/sites/default/files/downloads/Indonesia-KEB-Hana-CAO-AppraisalReport-June-2024_1.pdf 

The full complaint can be found here: https://www.inclusivedevelopment.net/documents/java-9-and-10-cao-complaint/ 

More information on the impact of the Java 9 and 10 projects and IFC’s role can be found here: https://www.inclusivedevelopment.net/cases/java-9-and-10/

Photos for use with proper accreditation can be downloaded here:  https://drive.google.com/drive/folders/1LW1MkGl0T2opZFtYy4GBn16fwudUgV7H?usp=drive_link  

###

About Trend Asia

Trend Asia is an Indonesian independent civil society organization that, in light of the opportunities and threats posed by global climate change, is working to drive Asia’s energy and development transformation away from fossil fuels and wasteful consumption and production and toward a sustainable, clean and renewable energy, people-powered future. 

About Inclusive Development International

Inclusive Development International is a non-profit organization that works to advance social, economic, and environmental justice by supporting communities around the world to defend their human rights and environment in the face of harmful corporate activities. Learn more at: https://www.inclusivedevelopment.net

About Recourse

Recourse campaigns to redirect international financial flows away from dirty, harmful investments, towards greener and more inclusive development. Recourse works in partnership with others to support communities in their struggle for their rights to be respected and their voices to be heard, and holds financial institutions to account for harms to people and the environment.

1. An initiative launched in 2019 requiring financial intermediary clients to increase climate-related lending and eliminate coal exposure—or reduce it to near zero—by 2030. ↩︎

The post Ombudsman to investigate World Bank Group ties to toxic Indonesia coal project appeared first on Inclusive Development International.

• The International Finance Corporation (the World Bank Group’s private lending arm) has indirectly financed captive coal development in Indonesia, finds a new report released today by climate and human rights organizations. 
• The report highlights the cases of two coal-powered nickel refineries on Obi Island in Indonesia, which are funded by the IFC’s financial intermediary clients. The IFC has indirectly financed at least one of these projects.
• ‘Captive’ coal units [1] are often constructed to power the processing of metals, such as nickel or steel, deemed critical to decarbonisation efforts.
• While nickel processing plants play a role in electric vehicle supply chains, their use of captive coal is undermining energy transition efforts and causing harm to communities. 
• The report argues that the publicly-funded Multilateral Development Banks (MDBs) are at risk of funding a boom in climate-busting ‘captive’ coal, despite commitments to end coal funding and align with global efforts to phase out fossil fuels. 

A new analysis, published today by Recourse, Trend Asia and Inclusive Development International, demonstrates that publicly-funded Multilateral Development Banks are at risk of funding a wave of ‘captive’ coal expansion in climate-vulnerable countries, despite commitments to shift funds from fossil fuels to renewable energy.

Loopholes in existing policy commitments to end coal funding from the World Bank and the International Finance Corporation (the Bank’s private sector arm) mean that these institutions can still fund ‘captive’ coal units designed to support industrial processes [2]. The report highlights two examples of captive coal projects in Indonesia that have been financed by Hana Bank Indonesia and OCBC NISP, financial intermediary clients of the IFC, and argues that the IFC has indirectly financed at least one of these projects.

Captive coal units, usually constructed to support industrial processes such as metal smelting or cement production, are set to become more common in the coming decade. For example, in Indonesia, while the government has committed (under its Just Energy Transition Partnership Plan) to reduce grid-connected coal capacity by almost half between 2030 and 2045, it is set to more than double its captive coal capacity (from 14.2 GW to 32.7 GW) to power its burgeoning transition minerals industry [3]. As a result, captive coal expansion will lead to an overall increase in Indonesia’s coal capacity up until 2045, undermining any reductions in greenhouse emissions achieved through coal decommissioning. 

Daniel Willis, finance campaigner at Recourse, said: “At present, the World Bank Group is blind to the risks that captive coal poses to people and planet. It would be a great irony if, in the name of financing the production of materials needed for the renewable energy transition, multilateral development banks also financed the rapid expansion of climate-busting captive coal. The World Bank Group must focus on supporting climate projects that do no harm, and that accelerate, rather than hold back, the decarbonization of industry.”

The report is published alongside a case study [4] on the impacts of nickel processing and captive coal development on Obi Island in Indonesia, which include air pollution, health problems, biodiversity loss and exacerbated poverty. As the case study details, the IFC has indirectly financed at least one of these projects via a financial intermediary client. Another financial intermediary, which the IFC has funded to invest in climate-friendly projects, has also funded a separate coal-powered nickel facility on the island. 

Novita Indri, energy campaigner at Trend Asia, said: “An energy transition process that still leaves room for coal use is not appropriate or equitable. More coal use will only bring us to the brink of failing to achieve the Paris Agreement goals and will exacerbate the damage and suffering of the environment and people living around Indonesia.”

The report calls on the World Bank Group to close loopholes in its existing policies to ensure that it does support projects related to captive coal, and that it instead supports renewable energy alternatives that do no harm for powering industries. Campaigners are also calling on all Multilateral Development Banks to improve the transparency of financial intermediary investments, and on investors that have supported coal projects to provide remedial action for affected communities. 

David Pred, Executive Director of Inclusive Development International, said:“Captive coal power is still coal power, whatever it’s used for, and comes with the same human and environmental costs. Neither the plants nor the projects that depend on them can be called green and they shouldn’t be getting backing–directly or indirectly–from the World Bank or any institution that is committed to sustainable development.”

END

Photo: Captive coal power plant behind a school on Obi Island. Credit: Esa Setiawan/Trend Asia.

Notes

1. ‘Captive’ coal units are coal-fired power plants that exclusively serve industrial facilities, rather than providing energy to the grid.
2. For example, the IFC’s Green Equity Approach explicitly states that its definition of coal-related projects “excludes captive coal-fired power plants used for industrial applications”. See Page 9: https://www.ifc.org/content/dam/ifc/doc/2023-delta/ifc-approach-to-greening-equity-investments-in-financial-institutions.pdf
3. Just Energy Transition Partnership. (2023). Comprehensive Investment and Policy Plan 2023, p.84. https://jetp-id.org/storage/official-jetp-cipp-2023-vshare_f_en-1700532655.pdf.
4. The two coal-powered nickel smelters in question are the PT Halmahera Jaya Feronikel ferronickel smelter and the PT Halmahera Persada Lygend HPAL nickel refinery.

The post Policy gaps allow World Bank Group to indirectly finance captive coal appeared first on Inclusive Development International.

A range of new coal power projects, including the 2,000-megawatt expansion of Southeast Asia’s largest and dirtiest coal plant, are getting backing from the Asian Development Bank (ADB), according to a new report from the environmental and human rights groups Inclusive Development International, Recourse, Trend Asia and the NGO Forum on ADB. Inclusive Development International discovered the funding as part of an investigation into development finance support for coal in Asia.  

The ADB describes its $600 million loan to Indonesia’s state-run electricity utility—Perusahaan Listrik Negara, or PLN—as an effort to “promote the use of clean energy,” but as the new report reveals, the 2021 loan is effectively providing support to all of PLN’s 10-year business plan. That plan includes expansion of Indonesia’s notorious Suralaya Power Station through the construction of two massive new plants known as Java 9 & 10, which local communities and environmental advocates staunchly oppose, and more than a dozen other coal projects. 

“ADB’s loan agreement doesn’t just fail to exclude coal. If you look closely, it actually allows PLN to use ADB funding for coal-fired power plants,” said Dustin Roasa, research director at Inclusive Development International and author of the report. “The loan’s eligible expenditures expressly cover anything in PLN’s 10-year plan, which does not shy away from new coal, or other fossil fuel projects.” 

The report notes that the ADB has denied, through a spokesperson, that the loan can be used for coal-fired power plants, but there is no coal exclusion clause in the loan agreement itself. Even if the bank had adequately excluded coal on paper, in practice it would have been unable to enforce such a restriction because the money from the loan is disbursed into PLN’s general bank account, according to company reporting, where it is mixed with the rest of the utility’s funds. This falls short of the ADB’s own green financing standards, which require funds be placed in a separate account, allowing for easy tracing and verification.  

“Publicly funded institutions like the Asian Development Bank must include robust coal exclusions in contracts with clients and financial intermediaries in order to end coal finance for good,” said Daniel Willis, finance campaigner at Recourse. “Without these, general purpose loans, or even funds earmarked for green projects, could end up supporting coal expansion. Given the urgency of the climate emergency, development banks must also add all fossil fuels to their lists of Prohibited Activities for financing.”

The new report is being released days before the ADB’s annual general meeting in Tbilisi, Georgia, next week. At its last annual meeting in May 2023, bank President Masatsugu Asakawa announced $100 billion in climate-friendly financing, including funding for renewable energy projects and the early retirement of coal plants, and reaffirmed the bank’s pledge to stop financing new coal. By backing the Indonesian government’s coal expansion plans, it is not only violating that pledge and, it appears, the no-new-coal commitment in its Energy Policy, it is undermining its investments in clean energy in the country.  

“Any new coal plant built in Indonesia is likely to operate for 35 to 40 years. By backing PLN’s coal development plans, the Asian Development Bank is helping to lock Indonesia—a country that is critical to the fight against global climate change—into a future at least partly dependent on the dirtiest of fossil fuels. The consequences of this decision, which will make it difficult for Indonesia to meet its Paris Agreement emissions targets, are global. But they will be felt most acutely by the people of Banten,” said Novita Indri, energy campaigner at Trend Asia. 

The human cost of the ADB’s support for new coal 

The new report includes original reporting and interviews with residents and environmental defenders in Banten Province, Indonesia, which illustrate the devastating real-life impacts of the ADB’s support for new coal power development there. Residents describe how pollution from an earlier ADB-backed expansion of the Suralaya Power Station has displaced families, reduced fish stocks and agricultural yields, and sickened their children.  

Pollution from the Suralaya complex and other nearby coal plants kills an estimated 2,500 Indonesians per year and causes numerous health problems, including respiratory disease and cancer. Banten Province already has some of the highest rates of acute respiratory infections in the country and it is estimated that the added pollution from the Java 9 & 10 plants will cause between 2,400 and 7,300 premature deaths over their expected 30-year lifespan. 

What the ADB can do instead to support the people of Banten Province 

In addition to ceasing its ongoing support for new coal development, the ADB has the obligation to provide remedy for the impacts of its past coal funding, including its support for earlier development and expansion of the Suralaya Power Station in the 1980s and 1990s. As PLN’s benefactor, the ADB also has considerable leverage over whether and how it moves ahead with elements of its 10-year business plan, including the construction of the Java 9 & 10 plants. While the ADB is not subject to a recent complaint filed against other Java 9 & 10 financiers, it has substantial influence to push for the communities’ demands to be met, including their call for the project to be canceled, phased out early, or at the very least brought into compliance with international standards.

“The facts on the ground are clear, the ADB must seize the opportunity of its upcoming Energy Policy Review to close off loopholes for continued financing of coal and other fossil fuels, including through financial intermediary arrangements. In addition, as asserted by community rights advocates and social movements in Indonesia as well as elsewhere across the region where the ADB has bankrolled the development of coal projects, it is critical that the institution’s management and board—who stand culpable for the harms, losses and damages wrought on affected communities and ecologies—first and foremost prioritise addressing outstanding grievances and demands for reparative justice from those living and working in surrounding areas,” concluded Tanya Roberts-Davis, Just Transitions Advocacy Coordinator at the NGO Forum on ADB.

About Inclusive Development International

Inclusive Development International is a non-profit organization that works to advance social, economic, and environmental justice by supporting communities around the world to defend their human rights and environment in the face of harmful corporate activities. Learn more at: https://www.inclusivedevelopment.net

About NGO Forum on ADB

The NGO Forum on ADB is an international network of over 300 affiliated civil society—most of which are based in the Asia Pacific region—that supports efforts of affected communities and allied groups to expose and oppose the social, environmental and climate harms wrought by projects, plans and policies of the Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB). The Forum also supports collaboration between member and allied groups across national boundaries to challenge regional programs advanced by these banks, such as the ADB’s Energy Transition Mechanism.

About Recourse

Recourse campaigns to redirect international financial flows away from dirty, harmful investments, towards greener and more inclusive development. Recourse works in partnership with others to support communities in their struggle for their rights to be respected and their voices to be heard, and holds financial institutions to account for harms to people and the environment.

About Trend Asia

Trend Asia is an Indonesian independent civil society organization that, in light of the opportunities and threats posed by global climate change, is working to drive Asia’s energy and development transformation away from fossil fuels and wasteful consumption and production and toward a sustainable, clean and renewable energy, people-powered future. 

The post The Asian Development Bank is backing new coal, despite climate pledges appeared first on Inclusive Development International.

Key Points:

• According to a complaint filed with the UK government by human rights and environmental advocates this week, Standard Chartered violated international guidelines for responsible business conduct by co-financing four coal-fired power plants that have devastated local communities in the Philippines.
• The complaint was filed with the UK National Contact Point for Responsible Business Conduct, a government office tasked with investigating breaches of the OECD Guidelines for Multinational Enterprises.
• Local communities have reported increased respiratory and skin disease, land disposession, eviction and impoverishment directly resulting from the construction of the power plants.
• The affected communities and NGOs are calling on Standard Chartered to contribute to the remediation process and strengthen its policy on remediation.

Human rights and environmental advocates filed a formal complaint with the UK government this week accusing Standard Chartered bank of contributing to human rights violations and failing to provide remediation for harms caused by four coal plants it co-financed in the Philippines. The complaint was filed with the OECD’s National Contact Point for Responsible Business Conduct (NCP) in the UK, a government office tasked with investigating breaches of the OECD Guidelines for Multinational Enterprises.

The Philippine Movement for Climate Justice (PMCJ), Inclusive Development International (IDI), Recourse and BankTrack submitted the complaint on behalf of local communities that have suffered a wide range of adverse human rights impacts as a result of the development of coal plants, including forced eviction and loss of livelihoods, air- and water pollution-related  respiratory and skin diseases, and intimidation and violence.  

Attn. Aaron Pedrosa, Lead Counsel and Head of the Philippine Movement for Climate Justice (PMCJ) Legal Team, said: “Standard Chartered which professes to adhere to core human rights and business principles must live up to its commitment. Where a higher degree of care is expected for high risk investments, SC must not be allowed to get away with murder by funding polluting and environmentally destructive coal plants without being held to account for harms caused to lives, livelihoods, environment, climate and human rights.”

The complainants argue that Standard Chartered contributed to these harms through its irresponsible financing of the plants—specifically, by failing to identify and prevent the harms through effective due diligence and failing to cooperate in the remediation of harms that arose as a result—in violation of its responsibilities under the OECD Guidelines. As the complaint alleges, the bank therefore has a responsibility to contribute to remedy, for example by providing medical assistance, livelihood support and compensation for lost income, and using its leverage with the coal companies it finances to stop and/or mitigate ongoing air, noise and water pollution.

Kate Geary, Co-Director at Recourse, said: “Banks that are prepared to profit from high risk investments must also be prepared to remedy the harms caused to health, livelihoods and the environment by those investments, as Standard Chartered’s own policies says it will. Communities have articulated a clear vision of how those harms can start to be repaired, it is now up to Standard Chartered, and the other financiers of these coal plants, to step up.”

Will O’Sullivan, climate campaigner at BankTrack, said: “After years seeking a healthy return on these dirty investments, Standard Chartered now wants to wash its hands of them. But the bank invested hundreds of millions of dollars to build these four plants, which will dump millions of tonnes of greenhouse gases into the atmosphere over their lifetime. The people living in these coastal areas deserve to be compensated by Standard Chartered and all the other financial institutions that supported the projects for years.”

David Pred, Executive Director of Inclusive Development International, said: “Standard Chartered knew or ought to have known that these coal plants would wreck the environment and cause serious harm to local communities, but it financed them anyway and then  ignored our repeated requests to contribute to remediation efforts. In its Human Rights position statement, Standard Chartered claims to provide remedy or cooperate in remediation processes when it contributes to adverse impacts—now is the time for the bank to live up to those words with action.”  

Opposition to the coal plants is longstanding and the harm they have caused has been well-established. Standard Chartered has already been made aware of the harms these coal plants have caused. PMCJ has led climate marches that protest the health burden and climate damage resulting from the developments, and nonviolent Greenpeace protesters have been assaulted by guards protecting the Masinloc plant, among those co-financed by Standard Chartered. Tragically, the high-profile murder of Filipino land defender Gloria Capitan occurred after her opposition to coal projects subcontracted by San Miguel Corporation, one of the developers of the coal power plants in this complaint. Standard Chartered has a close financial relationship to San Miguel Corporation, including underwriting multiple bond issuances by the company which are still outstanding. Standard Chartered is the longest established international bank in the Philippines. 

It is also not the first complaint that these communities have filed to seek recourse for the harms they have suffered in relation to the plants. An investigation prompted by a 2017 complaint to the Compliance Advisor Ombudsman of the International Finance Corporation (an IFC financial intermediary client was also among the plants’ co-financiers) concluded that the coal plants Standard Chartered helped finance likely caused a range of harms that were “of a significant nature,” including adverse health impacts due to coal ash pollution of the air and contamination of water; impacts on livelihoods due to coal ash contamination; displacement and resettlement related impacts; threats against and intimidation of community activists and inadequate stakeholder engagement and consultation.

Additional Resources:

Our complaint to the UK NCP against Standard Chartered: https://www.inclusivedevelopment.net/wp-content/uploads/2024/03/complaint_to_uk_ncp_standard_chartered.pdf

Joint complaint to the CAO filed against IFC in 2017: https://www.inclusivedevelopment.net/wp-content/uploads/2020/12/Letter-of-Complaint-to-CAO_Phillippines-Coal-final.pdf

The post UK’s Standard Chartered assailed for financing Philippines coal boom appeared first on Inclusive Development International.

Catatan untuk editor:

Mengenai pinjaman perantara keuangan IFC dan komitmen “tanpa batubara”

Inclusive Development International sebelumnya telah menelusuri aspek finansial dalam
portofolio sektor keuangan IFC dan mempublikasikan temuan-temuan kami dalam seri
investigasi Outsourcing Development yang mengekspos pembangkit listrik tenaga batubara dan
tambang-tambang yang secara tidak langsung didukung oleh IFC.

Sejak saat itu, Grup Bank Dunia telah membuat serangkaian komitmen yang dirancang untuk
mereformasi pendekatannya dalam berinvestasi di lembaga keuangan, mengurangi eksposurnya terhadap batubara, dan menyelaraskan kegiatan dengan Perjanjian Paris. Hal yang paling
menonjol terjadi pada tahun 2019 ketika IFC meluncurkan Pendekatan Ekuitas Hijau.
Pendekatan ini mengharuskan lembaga-lembaga keuangan yang sahamnya dimiliki oleh IFC
untuk mengurangi separuh eksposur batubara mereka pada tahun 2025 dan menghilangkannya
dari portofolio mereka pada akhir dekade ini. Pada tahun 2023, IFC menutup celah utama yang
ditunjukkan oleh Inclusive Development International, Recourse, dan Trend Asia dalam
pendekatan tersebut dengan memperbarui aturan untuk membatasi klien ekuitas agar tidak lagi
mendanai proyek batubara baru.

Namun demikian, pendekatan utama IFC yang berniat menyelaraskan operasi pinjaman tidak
langsung dengan Perjanjian Paris masih mengandung celah hukum dan area rancu lainnya. IFC
masih mengizinkan klien ekuitas untuk menjamin obligasi bagi pengembang batubara dan
mengizinkan klien untuk membiayai proyek-proyek industri yang ditenagai oleh pembangkit
listrik tenaga batubara khusus, sebuah konsep yang dikenal dengan istilah captive coal. Selain
itu, hingga saat ini masih belum jelas bagaimana dan apakah kebijakan “tidak ada batubara baru”
diterapkan pada pembiayaan korporat klien pengembang batubara yang sudah ada. Faktanya,
penelitian dan laporan terbaru kami mengungkapkan bahwa bank-bank yang saham ekuitasnya
dimiliki IFC, termasuk Postal Savings Bank of China, masih terus menyuntikkan dana kepada
para pengembang proyek batubara baru.

Mengenai metodologi kami

Untuk menyusun laporan ini, Inclusive Development International menelusuri dana IFC melalui
sejumlah perantara keuangan ke berbagai pembangkit listrik tenaga batubara yang baru di Asia.
Hasil lengkap penelusuran kami dapat diakses di sini.

Kami membagi pembangkit listrik tenaga batubara baru ke dalam beberapa kategori, yaitu:
proyek-proyek yang telah beroperasi sejak tahun 2019; proyek-proyek yang sedang dalam tahap
konstruksi; dan proyek-proyek yang sudah diumumkan oleh para pengembang. Data ini tidak
termasuk proyek yang terdaftar sebagai proyek yang ditangguhkan atau dibatalkan, meskipun
pengembang secara teratur mengaktifkan kembali proyek yang sudah lama tidak aktif atau
ditangguhkan.

Kami mengandalkan Global Energy Monitor yang memantau infrastruktur energi di seluruh
dunia untuk seluruh data pembangkit listrik tenaga batubara, termasuk nama-nama proyek,
kapasitas pembangkit listrik, jadwal pembangunan dan pemilik proyek. Sementara itu, data yang
berkaitan dengan pengembang proyek, kapasitas produksi batubara mereka saat ini, rencana
pembangunan serta penerbitan obligasi kami ambil dari Global Coal Exit List yang juga
digunakan oleh IFC saat membantu klien mereka dalam mengidentifikasi paparan terhadap
sektor batubara pada portofolio mereka.

Data lain yang tercakup dalam laporan ini berasal dari penelitian yang dilakukan oleh Inclusive
Development International, Recourse, dan Trend Asia terhadap pengarsipan perusahaan,
pengungkapan proyek International Finance Corporation, dan kunjungan lapangan di Indonesia.

The post Janji Palsu, Bank Dunia Masih Mendukung Puluhan Proyek Batubara Baru appeared first on Inclusive Development International.

“We found that the IFC is still backing new coal capacity through its investments in banks and other financial institutions despite its commitments to align those investments with the Paris Agreement,” said David Pred, executive director of Inclusive Development International. “This is the opposite of the sustainable development that IFC purports to promote, and it is having a devastating impact on coal-affected communities throughout Asia and the entire planet in this time of climate peril.”

A planned 700-megawatt coal-fired power plant called Jambi 2, to be located in Indonesia’s Jambi province, is among the new coal projects the IFC is indirectly supporting. The new report focuses on Jambi 2 as a case study for how the IFC’s lending ends up supporting new coal development and the impact that has on local communities. According to local advocates and community members interviewed by Inclusive Development International, Jambi 2 is a project the province doesn’t want and doesn’t need—one that will exacerbate the already devastating impacts of coal development in the area, including air and water pollution and related health issues. Yet Postal Savings Bank of China—an IFC intermediary and a major coal financier in the region—has provided a credit line to Jambi 2’s developer, China Huadian. 

“Ongoing coal development in Indonesia, including the Jambi 2 plant, will accelerate climate change and its catastrophic consequences,” said Novita Indri, energy campaigner at Trend Asia. “It’s a slap in the face to Indonesia, an island nation that is uniquely vulnerable to rising sea levels and already suffering from extreme weather events.” 

Postal Savings Bank of China is by far the largest financier of coal developers in the IFC’s portfolio. According to data compiled by Inclusive Development International and published alongside the new report, the IFC purchased a $300 million equity stake in Postal Savings Bank in 2015 and the bank has gone on to provide 418 billion RMB ($57.3 billion) in no-strings-attached credit lines and project loans to companies developing dozens of coal-fired power plants in the region. The bank has provided these loans at a time when much of the financial industry is shifting away from coal, implicating the IFC and the World Bank Group in the last vestiges of coal finance and the devastating impacts it has for coal-affected communities and the climate. The authors of the report are calling on the IFC to leverage its influence as a major shareholder to stop Postal Savings Bank from continuing to finance coal development. 

“It’s hypocritical for the IFC to allow its banking clients to finance projects like Jambi 2 and other coal development in Asia while at the same time promising to align its lending with the Paris Agreement on Climate Change,” said Kate Geary, co-director of Recourse. “While committing to move away from coal on paper, the World Bank Group is failing to ensure that its investments aren’t  supporting coal power projects that are significant contributors to climate change and that wreak devastation on affected communities.” 

These latest revelations come on the heels of reports last month that communities in Indonesia’s Banten province have lodged a formal complaint against the IFC for backing two new massive units in the Suralaya mega-coal complex. Similar complaints have been lodged against the IFC in the past, including regarding its support for coal expansion in the Philippines. 

“The IFC has contributed to serious harms related to coal expansion in many countries,” added Pred. “Now it has a responsibility to repair the damage it has done and prevent future harm by requiring that all of its financial intermediary clients, including Postal Savings Bank of China, stop financing coal development immediately.” 

Notes for editors:

Regarding IFC’s financial intermediary lending and “no coal” commitments

Inclusive Development International previously followed the money in the IFC’s financial-sector portfolio and published our findings in our Outsourcing Development investigative series, which exposed (among other things) the coal plants and mines the IFC was indirectly backing. 

Since then, the World Bank Group has made a series of commitments designed to reform its approach to investing in financial institutions, reduce its exposure to coal and align itself with the Paris Agreement. Most prominently, in 2019 the IFC launched its Green Equity Approach, which requires financial institutions in which it holds shares to halve their coal exposure by 2025 and eliminate it from their portfolios by the end of the decade. In 2023, the IFC closed a major loophole that Inclusive Development International, Recourse and Trend Asia pointed out in the approach by updating the rules to restrict equity clients from financing any new coal projects. 

However, the IFC’s flagship approach aligning its indirect lending operations with the Paris Agreement contains other loopholes and gray areas: it still allows equity clients to underwrite bonds for coal developers, and it allows clients to finance industrial projects that are powered by dedicated coal plants, a concept known as captive coal. And it is unclear how and whether the “no new coal” rule is being applied to existing clients’ corporate financing of coal developers. In fact, as our new research and report show, banks in which the IFC holds equity stakes—including Postal Savings Bank of China—have continued to provide financing to the developers of new coal projects.  

Regarding our methodology

For this report, Inclusive Development International traced the International Finance Corporation’s money through financial intermediaries to new coal-fired power capacity in Asia. The full results are here.

We define new coal capacity as projects that have become operational since 2019; projects that are under construction; and projects that have been announced by developers. This data does not include projects that are listed as shelved or canceled, although developers regularly reactivate shelved projects after long periods of inactivity. 

For all data on coal plants, including project names, generating capacity, development timelines and project owners, we relied on the Global Energy Monitor, which tracks energy infrastructure around the world. For data on project developers, including their current coal-generating capacities, development plans, and issuances of debt securities, we relied on the Global Coal Exit List, which the IFC also uses  to help its clients identify coal exposures in their portfolios.

All other data comes from research conducted by Inclusive Development International, Recourse and Trend Asia into corporate filings, the International Finance Corporation’s project disclosures, and site visits in Indonesia.

The post World Bank is backing dozens of new coal projects, despite climate pledges appeared first on Inclusive Development International.

• Masyarakat Banten, Indonesia secara resmi mengadukan Grup Bank Dunia ke Compliance Advisor Ombudsman (CAO) karena memberikan pembiayaan secara tidak langsung untuk dua pembangkit listrik tenaga uap (PLTU) batu bara baru di Indonesia.
• PLTU baru Jawa 9 dan 10 diperkirakan akan menyebabkan ribuan kematian dini dan menyumbang lebih dari 250 juta metrik ton CO₂ ke atmosfer.
• Masyarakat setempat mengatakan bahwa pembangkit listrik tersebut tidak diperlukan dan dampaknya akan sangat buruk.

Banten, 14 September 2023 – Masyarakat Banten secara resmi telah mengajukan pengaduan terhadap Grup Bank Dunia yang secara tidak langsung mendukung pembangunan dua pembangkit listrik tenaga uap (PLTU) batu bara Jawa 9 dan 10 ke Compliance Advisor Ombudsman (CAO), Rabu (13/9). Pembangunan PLTU baru tersebut akan memperluas wilayah kompleks PLTU Suralaya unit 1-8 sekaligus memasifkan dampak buruk atas kesehatan dan lingkungan yang selama ini dirasakan oleh masyarakat setempat. 

Pengaduan itu diajukan oleh LSM lokal dan internasional, yaitu PENA Masyarakat bersama Trend Asia serta Inclusive Development International dan Recourse. Aduan tersebut memaparkan keterlibatan lembaga swasta pemberi pinjaman anak usaha Bank Dunia, International Finance Corporation (IFC) dalam proyek tersebut. IFC tercatat terlibat melalui investasi ekuitas sebesar US$15,36 juta yang diberikan kepada kliennya sekaligus salah satu penyandang dana proyek PLTU Jawa 9 dan 10, Hana Bank Indonesia. Dalam aduannya, gabungan organisasi masyarakat tersebut menuntut agar pembangunan PLTU Jawa 9 dan 10 segera dihentikan serta memberikan kompensasi yang adil dan penuh atas kerugian yang telah diderita masyarakat sekitar PLTU.

Total kapasitas proyek PLTU Jawa 9 dan 10 mencapai 2.000MW atau hampir 50% dari total kapasitas eksisting kompleks PLTU Suralaya unit 1-8. Ekspansi pembangunan PLTU baru ini akan menambah ancaman kesehatan yang telah dirasakan masyarakat, seperti masalah pernapasan (ISPA) akibat polusi udara dari debu batubara dan limbah beracun. Selain itu, proyek PLTU baru ini diperkirakan akan menyebabkan ribuan kematian dini dan akan melepaskan sekitar 250 juta metrik ton karbon dioksida ke atmosfer selama 30 tahun masa operasi.

“Sama sekali tidak ada urgensi untuk terus membangun PLTU Jawa 9 dan 10. Kebutuhan listrik di daerah tersebut sudah terpenuhi dan jaringan listrik Jawa-Bali sudah kelebihan pasokan. Ekspansi ini hanya akan menghancurkan masyarakat setempat dan membawa dunia semakin dekat pada bencana iklim, di mana Indonesia dan warganya sangat rentan. Hal ini juga berlawanan dengan upaya untuk mencapai target net zero emission dan gagalnya target Perjanjian Paris,” ujar Novita Indri, Juru Kampanye Energi Trend Asia. 

Selain menyatakan pembangunan PLTU baru ini tak diperlukan karena pasokan listrik sudah melebihi permintaan, pengaduan tersebut juga menguraikan bahwa PLTU Jawa 9 dan 10 akan memperparah iklim kesehatan dan lingkungan yang sudah buruk di Banten. Hasil pertanian dan perikanan di daerah tersebut menjadi semakin tidak layak untuk dikonsumsi hingga banyak keluarga digusur secara paksa tanpa kompensasi yang memadai hanya untuk memuluskan pembangunan proyek tersebut. Penghancuran pantai yang tersisa di Suralaya juga berdampak signifikan pada sektor pariwisata dan bisnis lokal. Peningkatan emisi karbon dioksida juga sangat memprihatinkan karena Indonesia rentan terhadap perubahan iklim dan cuaca ekstrem. 

“Entah untuk siapa PLTU Jawa 9 dan 10 ini dibangun karena masyarakat Suralaya tidak merasakan manfaat yang menguntungkan. Justru sebaliknya, PLTU baru ini akan makin memperparah kerusakan lingkungan yang sudah terjadi dan meningkatkan penyakit ISPA. Iming-iming proyek ini akan membawa kesejahteraan bagi masyarakat hanya omong kosong belaka,” kata Mad Haer Effendi, Direktur PENA Masyarakat.

Investasi IFC di Hana Bank Indonesia Langgar Kerangka Kerja Keberlanjutan dan Pendekatan Ekuitas Hijau

Pengaduan kepada CAO IFC menggarisbawahi bahwa IFC gagal mengawasi kliennya, Hana Bank Indonesia, karena masih terlibat di proyek batubara Jawa 9 dan 10 yang tidak sejalan dengan kebijakan sosial dan lingkungannya. Meskipun IFC memiliki program Pendekatan Ekuitas Hijau (Green Equity Approach) yang mewajibkan klien perantara keuangan, termasuk Hana Bank, untuk meningkatkan pinjaman untuk proyek yang mengatasi perubahan iklim, proyek yang menghilangkan paparan batu bara atau mengurangi paparannya hingga mendekati nol pada tahun 2030, IFC masih mendanai proyek baru berbasis batu bara. 

“Mendorong ekspansi batu bara bertentangan dengan misi IFC. Proyek Jawa 9 dan 10 sangat tidak sejalan dengan standar lingkungan dan sosial Bank Dunia. Tanggung jawab IFC saat ini adalah menghentikan terjadinya kerusakan lebih lanjut dari proyek ini dan membantu memperbaiki kerusakan yang telah terjadi,” jelas Senior Legal dan Policy Associate Inclusive Development International Sarah Jaffe.

Kendati IFC telah menutup celah pendanaan proyek batu bara dalam Green Equity Approach dan memperbarui komitmennya dengan ‘tak ada proyek batu bara baru’, nyatanya Hana Bank Indonesia masih memungkinkan untuk mendanai proyek PLTU di Pulau Jawa 9 dan 10. Begitu pula dengan klien IFC lainnya dan perantara keuangan untuk berinvestasi pada pembangkit listrik tenaga batu bara dan menjamin obligasi untuk pengembang batubara. Lebih jauh lagi, meskipun IFC telah menyatakan bahwa pendekatan ini berlaku untuk semua klien ekuitas yang ada, masih belum jelas apa dan bagaimana pendekatan ini diterapkan.

“Dukungan terhadap PLTU Jawa 9 dan 10 sangat bertentangan dengan misi Bank Dunia – PLTU tersebut akan memperburuk, bukan mengurangi, dampak kemiskinan dan perubahan iklim. Kegagalan IFC untuk mencegah kliennya mendanai dua PLTU baru yang masif di tengah keadaan darurat iklim global ini melemahkan komitmennya terhadap Perjanjian Paris tentang perubahan iklim,” ujar Kate Geary, Co-director Recourse. 

Proyek-proyek tersebut membuat Grup Bank Dunia berseberangan dengan Kemitraan Transisi Energi Berkeadilan (Just Energy Transition Partnership) Indonesia, sebuah inisiatif senilai US$20 miliar yang didanai oleh koalisi negara-negara maju dan para pemberi pinjaman global untuk membantu Indonesia mempercepat peralihan dari batu bara ke sumber energi yang lebih bersih dan terbarukan.

Para pengadu berpendapat bahwa ekspansi PLTU Jawa 9 & 10 seharusnya tidak perlu dilakukan dan harus segera dihentikan. Jika penghentian proyek tidak memungkinkan, maka IFC dituntut untuk memastikan bahwa proyek tersebut ditingkatkan dan dimodifikasi agar dapat mengurangi kerugian sosial dan lingkungan yang ditimbulkan oleh pembangunan tersebut, dan sedapat mungkin mendekati kepatuhan. 

Para pelapor menuntut ganti rugi penuh dan adil atas kerugian yang telah diderita masyarakat setempat serta mengakhiri pembiayaan Hana Bank Indonesia ke proyek-proyek batu bara. IFC juga dituntut untuk melakukan perubahan kebijakan sistemik untuk menghapuskan semua dukungan tidak langsung terhadap proyek-proyek batu bara.   

###

Dokumen aduan lengkapnya dapat diakses melalui tautan ini. 

Informasi lebih lanjut mengenai dampak dari proyek Java 9 dan 10 dan peran IFC dapat diakses di sini.

Foto yang dapat digunakan dengan credit yang tepat dapat diunduh di sini.

The post Limbah Beracun dari PLTU Ancam Kesehatan dan Lingkungan, Masyarakat Banten Kecam Bank Dunia Karena Dukung Proyek Batu Bara Jawa 9-10 appeared first on Inclusive Development International.