Wolfensohn, in an unusual intervention, directed IFC executive vice president Peter Woicke to drop loan negotiations two weeks ago, during the World Bank's annual meeting, according to a Bank official. The IFC, which was still studying the project's possible environmental impact, began formally advising involved parties of the decision yesterday. The Bank's involvement wouldn't have exceeded $100-million.
The IFC was negotiating with Toronto-based Gabriel Resources to back a project creating the largest open-pit gold mine in Europe, notes the story. The $400-million Rosia Montana project would displace more than 2 000 people and tear down nearly 900 homes where the mine is planned.
Environmentalists also opposed plans to build a 1 000-acre reservoir to collect cyanide tailings left over from the mining process.
Wolfensohn decided against the project after talking briefly with two Romanian environmental activists who met him at the end of a seminar, the Bank official said. The Romanian government, which supports the project, fought to bar the activists from attending the World Bank meetings, the official said.
The Bank has come under heavy criticism for backing environmentally dubious projects around the world. Activists who demonstrated against the Bank during the annual meeting singled out the Rosia Montana project as one example of how it invests in disruptive projects. The World Bank official, citing environment and social concerns in its decision to back away from the project, said the case was "an example of how we're seeking to have an open dialogue with all our development partners".
Carol Welch, deputy international director at the environmental group Friends of the Earth, said the decision is "definitely a victory”, but added that it also shows how much pressure the Bank faces to stay out of big mining projects.
The news comes as Wolfensohn comments on the anti-globalization debate in an interview with the Stuttgarter Zeitung (Germany), saying that it is not the World Bank that has changed but that as there are more people who feel the importance of development policy, they can see what the real problems are. After September 11, he says, everybody could understand that what was happening in developing countries had an impact on the industrialized world.
When asked about the criticisms of the International Monetary Fund (IMF) and the World Bank’s rigorous policies, Wolfensohn says that what has changed in the World Bank is that it has learned to listen: today the poor countries it works with have more rights to propose their own strategies.