The European Bank for Reconstruction and Development (EBRD) is the first multilateral development bank to have an explicit environmental mandate in its charter. The charter states that the Bank is to “promote in the full range of its activities environmentally sound and sustainable development.” It also proclaims commitments to democracy and democratic
institutions, rule of law, respect for human rights, and market economies. Nevertheless, some of the Bank’s harshest critics have been environmentalists. They contend that the EBRD is not living up to these promises and in some respects is even less progressive in its environmental policies and procedures than other
international lending institutions.
This report supports these claims. It finds that the EBRD has no overarching environmental policy or criteria to guide its project lending. As a consequence, the EBRD has financed projects that are inconsistent with its mandate to promote
sustainable development. The report examines several of these projects: a heavily polluting and energy intensive aluminum smelter; a proposed nuclear power plant project that has drawn intense international criticism from governments and environmentalists; and two oil field development projects that contributed to the tragic oil spill in the Komi region of Russia.
The report finds that the EBRD has inadequate procedures for conducting environmental due diligence-environmental impact assessment, environmental audits, environmental remediation, and monitoring. Not only does the Bank need to improve its environmental procedures, but it must adhere to them more rigorously. Too often the Bank cuts comers in implementing its procedures or fails to implement them altogether.