March 2003 Reply to World Bank

Dear Mr. Mertz

Thank you for your reply of December 23 to my letter of December 3. I apologize for the delay in replying to your email, which I have been meaning to do for some time now. I have some comments and additional questions for you.

First, regarding disclosure of the Power Purchase Agreement and Concession Agreement, I would like to point out that your letter only selectively quotes the Inspection Panel�s report on Bujagali. In the same paragraph that you quote from, the Panel states very clearly: "It seems evident that full disclosure of the PPA is vital if the intent is to place the public in a position to analyze, understand, and participate in informed discussion about viability of the Project and its impact on the economy and well-being of Ugandans." (Para. 91, see also para. 337)

If IDA's disclosure policy fails to provide for the release of "vital" information, then the policy itself is flawed. In comparison, IFC's OP 4.01 requires the release of environmental assessments for so-called Category A projects prior to Board consideration even if they are the property of the private project sponsors. "If the project sponsor objects to IFC releasing this information through the World Bank InfoShop, IFC staff do not continue work on the project", IFC's Environmental & Social Review Procedure (para. 43) stipulates. The release of essential economic information is no less vital for civil society than the release of environmental documents. Even if the Bank Group's information policies are silent on the matter of Power Purchase Agreements, the World Bank Board is free to require the project sponsors to release the PPA and Concession Agreement before any further action is taken on the project. A failure by the World Bank to push for disclosure of these documents, particularly when there is no public access to information within Laos, seriously discredits the Bank�s supposed commitment to transparency.

Second, I am still waiting for the logging mission report, which is now almost one year overdue. I have regularly checked the Lao government�s hydropower web site, but it has not been updated since October 2002.

Third, regarding compliance with World Commission on Dams guidelines, your response failed to answer my question. I will restate it. Our analysis shows that the project fails to comply with six out of seven of the WCD�s strategic priorities, and that it would be difficult to bring the project into compliance given the current political climate in Laos. My question is how can the Bank justify its support for a project that fails to meet nearly all of the WCD�s strategic priorities (as you point out, the Bank �concurs with the need to promote the seven strategic priorities�)?

Fourth, I would like to express concern over the conduct of the Nam Theun 2 Panel of Experts over the past several years. According to the Terms of Reference for the Panel, its primary object is to �provide independent review of and guidance on the treatment of environmental and social issues associated with a project under preparation.� The Terms of Reference go on to state that the �POE�s purview is comprehensive; it extends to project siting, design, and plans for construction and operation, mitigation and monitoring plans, resettlement action plans, and plans for indigenous peoples�.

For the past several years, however, the two remaining POE members have become lobbyists for the project, casting into doubt their credibility as independent experts. They have traveled the world, meeting with many key decision-makers and urging them to approve the project immediately. I was last year on a panel with Dr. Talbot, where he lobbied strongly for the project, sounding more like an NTEC lobbyist that an �independent expert�. Dr. Scudder has also been claiming that the project is WCD compliant and falsely representing this as the view of the WCD, when indeed it is his own personal view. The Panel has steered well away from its original mandate of �providing independent review and guidance on the treatment of environmental and social issues� in the project, and has become partisan and pro-project. How can the World Bank continue to claim that this Panel is independent when it is so strongly pushing for project approval?

I look forward to your response to these issues.

Sincerely yours,

Aviva Imhof