IRM Compliance Review

VLORË THERMAL POWER GENERATION PROJECT

April 2008

Background

• €40m sovereign guaranteed loan, EBRD approved June 2004 (co-financed)

• WB EIA process and consultation under way prior to EBRD involvement

• WB site selection study and consultation completed (October 2002) before EBRD Concept Review (June 2003)

• Complaint received April 2007, EAR approved October 2007, CR approved April 2008

Grounds of Complaint

• EP Section I, paras. 1-3: ‘sustainable development’

• EP Section II, para. 6: ‘precautionary approach’

• EP Section II, para. 11 and Section III, para. 26: information disclosure and public consultation (Annex 2)

• EBRD Policy on Cultural Property – World Bank OPN No. 11.03

Sustainable Development

• Article 2.1 vii EBRD Agreement; EP Section I, para. 2 – sustainable development

• EP Section I, para. 2 – inter-generational equity

• EP Section I, para. 3 – broad understanding of ‘environment’

• Specific obligations re projects - EIA

Precautionary Approach

• EP Section II, para. 6 – natural biodiversity resources

• Conceptual (though uncertain) approach to environmental decision-making (standard-setting; clean technology, etc.)

• Specific obligations re projects – EIA (EP Section III, para. 14 – ‘precautionary approach to assessment of env. Impacts’– (i) identification of risk / requirement for EIA – (ii) broadest possible range of impacts studied

Information Disclosure and Public Consultation

• EP Section II, para. 11: ‘enabling dialogue with stakeholders’ – Aarhus Convention

• EP Section III, para 26: meaningful public consultation re EIA projects, re design, location, technology, timing, etc. (Annex 2 – consultation at each stage of EIA)

Precedential Issues

• ‘material violation’: seriousness of consequences / significant harm

• Determination of substantive / procedural requirements of general principles: sustainable development; intergenerational equity; precautionary approach; EIA

• Relevance of interpretive decisions – ACCC interpretation of Aarhus Convention requirements

• EBRD should take active steps to ensure adequacy of measures taken by co-financiers

Findings

• Adequacy of EIA:– SEETAC Review of 2003 Final EIA; 2004 EIA

Addendum; requirements of Albanian legislation; undertakings re EMP; EP Section III, para. 16; EU and intl. standards (WB / Espoo)

– Scrutiny of impacts: tourism, fisheries, coral, cultural property, Narta Lagoon

– Screening for EIA (300 megawatts)– Broad consideration of impacts (location, mercury

Findings

• Public Consultation– EBRD relied on WB public consultation re plant location– ACCC concluded Albania failed to comply with Art. 6, paras. 3, 4

and 8 due to unclear circumstances re public meeting of October 2002 (announced, meeting records, etc.)

– ACCC expressed further concerns re meetings of April 2003 and September 2003

– ACCC determination: once decision taken (re location), public involvement in later stages of decision cannot meet requirements of Aarhus Conv

– EBRD Env Dept Guidance re meaningful consultation– Material violation warranting remedial changes to EBRD

practices and procedures (but not in scope or implementation of the Project)

Findings

• Cultural Property– Little evidence provided of historical or religious

significance of site– Issue not raised during scoping of EIA– Investigation by WB Inspection Panel – no evidence,

monitoring of ‘chance finds’ during construction excavations only practical option

– Appropriate for WB Inspection Panel to complete investigation (identical safeguard policy – OPN 11.03) – IRM RP 15 ‘avoid duplication’

– ‘wait and see’ – material violation would not affect scope or implementation of Project; measures taken

Proposed Remedial Changes to EBRD Practices and Procedures

• Recruitment of necessary personnel prior to entry into force of new ESP

• Guidance / procedures on cultural property• Requirements re records of public consultation• Guidance note re all aspects of ESP, incl. EIA• Mechanisms for inter-institutional communication

in co-financed projects• Improved role of Resident Offices