SEEN

March 6, 2000	"India: U.S. Gov't Pays Lip Service to Environmental Protection", Danielle Knight
July 26, 1999	World Bank Setting Up 'Hot-Air' Fund
July 19, 1999	World Bank Pushing Trade Plans
July 19, 1999	World Bank to Overhaul Energy Lending Policy
January 27, 1999	Africa-Rights: Oil Giants under Pressure to Pull out of Nigeria
January 15, 1999	Nigeria: Blood and Oil
December 1, 1998	Finance: Exxon-Mobil Merger Could Poison the Well
May/June 1998	The Aftermath of Kyoto
1996	Microcredit Under The Microscope Wanted: microlenders who empower the poor rather than maintain them on the treadmill of debt. Feature, Himal South Asia

WASHINGTON, Mar. 6 (IPS) -- Environmental policy analysts here caution that a new U.S. government plan to bolster financing of efficient power projects in India does not go far enough to adequately protect the Earth's climate.

During a six-day trip to India last month, James Harmon, chairman of the U.S. Export-Import Bank (Ex-Im), a government agency, signed a Memorandum of Understanding (MOU) with India pledging cooperation on the financing of power projects.

An expected $500 million in new transactions will be financed as a result of the initiative, said Harmon. He told reporters here today that compared to Ex-Im's investment in other Asian countries, like China and South Korea, the U.S. government bank has ignored India.

"I don't know of another country where Ex-Im is as under-invested as it is in India," Harmon said.

Under the agreement, the Power Finance Corporation of India will "identify power projects appropriate for Ex-Im financing, focusing on high efficiency and clean power technologies, goods and services."

According to Ex-Im, the technologies may include environmental and efficiency upgrades, computerization, generation and transmission, distribution systems, hydro- and thermal-generation, and captive and co-generation plants.

Crescencia Maurer, an associate at the World Resources Institute, said she was encouraged by the priority the MOU places on energy efficiency and the environment.

But, she said, the agreement could have done more to steer away from fossil fuel-based projects, which emit heat-trapping "greenhouse gases" blamed for global warming.

"Ex-Im could have gone farther to support renewable energy technologies such as solar, biomass, or wind," said Maurer.

She said that these types of energy sources have historically received little support from export credit agencies, like Ex-Im, but are more likely to benefit India's poorest populations, who are not hooked up to energy grids.

One of the major energy projects funded by Ex-Im is a $2.8 billion gas-fired plant in the state of Maharashtra.

The Dabhol power plant -- the largest single foreign investment in India -- is designed to generate 2,015 megawatts. It is owned by the Dabhol Power Corporation, a joint venture between the Maharashtra government and three U.S. companies --Enron Corporation, General Electric Corporation and Bechtel Incorporated.

Ex-Im provided a $298 million export credit in 1997 for the project.

Jonathan Sohn, a policy analyst with Friends of the Earth here, also supported the initiative to promote energy efficiency, but said he did not endorse Ex-Im's investment in India if it only continued to fund polluting industries.

Friends of the Earth and the Institute for Policy Studies released a report last year that accused Ex-Im and the U.S. Overseas Private Investment Corporation (OPIC) of financing $23 billion worth of fossil fuel projects, ignoring the fact that these projects release greenhouse gases.

Most scientists believe that these gases -- produced through burning oil, natural gas, coal and other mostly carbon-based chemicals -- have been gradually warming the Earth's atmosphere and altering its climate.

If current record-breaking warming trends continue, average global temperatures could rise between one and 3.5 degrees centigrade by the year 2050, according to scientific studies.

The report said that by continuing to finance fossil fuel-based projects, the U.S. government is contradicting its stated foreign policy goals of having developing nations "meaningfully participate" under the Kyoto Protocol, an international treaty on climate change.

Drawn up two years ago in the Japanese city of Kyoto, the Protocol obliges the United States and 37 other industrialized countries to reduce their emissions of greenhouse gases by an average of at least five percent below their 1990 levels by the year 2012.

According to the report, between 1992 and 1996, Ex-Im and OPIC underwrote $23.2 billion in financing for fossil fuel projects worldwide.

During the life of these projects, some 25.5 billion tons of carbon dioxide, an amount equivalent to total global greenhouse gas emissions for 1996, will be released into the atmosphere, the report alleged.

The U.S. rate of financing far outpaced that of the European Bank for Reconstruction and Development which provided $1.2 billion in loans for fossil fuel projects between 1992 and 1997.

According to the report, the World Bank, in comparison, underwrote $13.6 billion in financing for such projects between 1992 and 1998.

WASHINGTON, July 26, 1999 (IPS) - The World Bank is looking for investors in a pioneering scheme to trade emissions of 'greenhouse gases' that are blamed for global warming.

The Bank expects to open its 'Prototype Carbon Fund' (PCF) to a select group of investors in industrialised countries in mid-November and hopes to raise sufficient capital by the end of January 2000 to get the scheme up and running, says Charles Feinstein, chief of the Bank's Global Climate Change Unit.

The PCF, approved by the World Bank's executive board last week, will operate like a mutual fund - except that the securities traded will not be stocks but tonnes of carbon. Investors will help to finance efforts to reduce greenhouse gas emissions in the developing world.

Potential projects, subject to investors' approval, include those in the portfolio of the Bank and the International Finance Corporation, its private sector affiliate, as well as other agencies, says Feinstein.

Eligible investments will include efforts to promote renewable energy such as solar power or to improve existing projects by boosting energy efficiency or replacing 'dirty' technologies with 'clean' alternatives - by switching from incandescent to compact fluorescent light bulbs, for example.

Investors will be rewarded with corresponding 'credits', or licenses to spew equivalent amounts of carbon into the atmosphere. They could use the credits to avoid having to reduce their own emissions, or sell the permits to other companies or countries unable or unwilling to make carbon reductions mandated by the 1997 'Kyoto Protocol' on climate change.

The PCF's maximum capacity has been set at 150 million dollars and officials expect to attract 75-100 million dollars during the first opening. The governments of Finland, the Netherlands, Norway and Sweden have agreed to participate although none has made a binding commitment to invest, according to Feinstein.

Eighteen corporations also have tentatively agreed to sign on, he says. They include British Petroleum (BP); utilities in Denmark, Finland, Norway and Sweden; and major Japanese firms, including Mitsubishi. ''These are blue-chip firms with significant investment resources but also an underlying interest in the carbon emissions market because they are large-scale energy industries,'' says Feinstein.

The Bank, which has sunk three million dollars into the scheme, expects to recover about 80 percent of its costs through commissions charged on transactions, says PCF team leader Kenneth Newcombe.

Economic analysts say the Bank stands to turn a handsome profit if it remains long eneough in the carbon market. By the lending agency's own estimates, trading could reach 150 billion dollars per year by the year 2020.

Market prospects, however, remain uncertain. 'Emissions trading' is permitted under the Kyoto Protocol but signatories have put off deciding the size and rules of the new commerce until late 2000 or early 2001.

At Kyoto, industrialised countries pledged to reduce their emissions to below 1990 levels by 2008. Some countries already have reached this goal but for those that have not, emissions trading is ''a low-pain option'', says Charlie Kronick, director of Britain's Climate Action Network.

''As currently defined, the central feature of an emissions trading regime will allow for notional pollution reductions, where country one can buy the unused emissions of country two,'' Kronick notes. ''In the period up to 2012, this hot-air trading could actually lead to an increase in global emissions.''

Many environmentalists and some European governments favour limiting the amount of a country's reduction target that can be bought on the emissions market but the United States opposes such limits.

Critics assail emissions trading as enabling recalcitrant wealthy countries to effectively 'buy' all their reductions abroad but supporters say the scheme makes economic sense because carbon-reducing projects are cheapest in the Third World.

The scheme ''gives parties an incentive to inflate artificially their baseline figures - that is, the amount of carbon they are actually emitting,'' says Daphne Wysham, research fellow at the Washington-based Institute for Policy Studies.

Under the PCF, Wysham argues, ''the World Bank could exaggerate the progress on carbon reductions by building inefficiency into its own fossil fuel projects...then provide technology or assistance to make these projects more efficient.''

Greenhouse gases are released mainly when fossil fuels such as coal and oil are burned. Most scientists blame them for raising atmospheric temperatures, with far-reaching implications for climate, health, and economic activity.

The world can afford to keep burning fossil fuels at its current rate - releasing six billion tonnes of carbon per year - for less than 40 years before courting major ecosystem damage, according to the environmental group Greenpeace.

Climate change will be felt most by poor countries, the Bank admits. In coming weeks it plans to unveil a new strategy governing its lending for energy projects in the Third World, Eastern Europe and the former Soviet Union.

The strategy, entitled 'Fuel for Thought', is aimed at weaning the Bank off traditional oil and gas projects and promoting cleaner, more sustainable power-generating technologies such as wind and solar power. The World Bank is the largest public financier of power projects in developing countries and has been assailed for financing major polluters - including 1.35 billion dollars for four new coal-fired power plants in
China in the past year alone, according to Wysham.

Bank lending for renewable power projects stands at about eight percent of its energy portfolio and staff members as well as environmentalists have urged that this be increased to at least 20 percent. However, the new document contains ''no targets in terms of dollar values,'' says Feinstein.

''At the end of the day, what matters most is not the amount of money we commit...but also the advice we give borrowers and the extent to which it is heeded,'' he argues. (END/IPS/aa/mk/99)

WASHINGTON, Jul 19 (IPS) - The World Bank is pushing plans to set up a market in pollution - despite contention over the methods and merits of such a scheme. The Bank will ask its executive board Tuesday to authorise a 'Prototype Carbon Fund' (PCF), intended to become the model for a worldwide market in licenses to emit 'greenhouse gases' that are blamed for global warming.

The PCF would operate like a mutual fund, except that the securities traded would not be stocks but tonnes of carbon, according to Bank Environment Department Director Robert Watson. Once approved, the Bank will sink 60-150 million dollars into projects aimed at reducing greenhouse emissions - and creating corresponding 'credits', or licenses to spew equivalent amounts of carbon.

These then would be bought by companies or countries seeking to use the credits to avoid having to reduce their own emissions. 'Emissions trading' is permitted under the 1997 'Kyoto Protocol' on climate change but signatories have put off deciding the size and rules of the new commerce until next year.

''There is a political tug of war still going on,'' acknowledges Ole Kristian Holthe, Norwegian ambassador for the environment. The PCF, however, will provide ''a primer'' - or early lesson - in how the commerce might be conducted.

Greenhouse gases are released mainly when fossil fuels such as coal and oil are burned. Most scientists blame them for raising atmospheric temperatures, with far-reaching implications for climate, health, and economic activity. ''Fossil-fuel burning from post-1992 World Bank projects will eventually contribute...38 billion tonnes (of carbon), equivalent to 1.7 times the total emitted by all the world's countries in 1996,'' says Daphne Wysham, research fellow at the Institute for Policy Studies here.

''It is these emissions from which the Bank now hopes to profit'' by charging a commission on trading under its carbon fund, she adds. Watson says Wysham's figures are inflated but he acknowledges that the Bank has committed six times more money to fossil fuel projects than to renewable energy since 1992. The agency stands to lose - not profit - from the PCF, he adds. Economic analysts say that will be true only if the lender pulls out of the carbon market early. If it stays in, the Bank stands to reap a five percent return on trading that, by the agency's own estimates, could reach 150 billion dollars per year by 2020.

Lucrative contracts also will be clinched by companies which can verify emissions reductions. This will prove pivotal to the market by establishing the quantity of carbon available for trading. The first such certificate was awarded Jul 8 to a 23-million- dollar project funded by the multi-donor Global Environment Facility, Mexico and Norway. The Mexican project involved replacing traditional incandescent lightbulbs with energy- efficient compact fluorescent bulbs. As a result, some 170 tonnes of carbon dioxide emissions were abated between May 1995, when the project began, and the end of 1998, according to Det Norske Veritas (DNV), a Norway-based industrial compliance monitor.

DNV won a 150,000-dollar contract to verify the emissions reductions. The contract was awarded by the World Bank and funded by a Norwegian government trust fund housed at the Bank. Officials say it is a coincidence that a Norwegian group was given Norwegian funds to verify successes claimed under a project partly funded by Norway but acknowledge that, as a result, DNV is positioned to take an early lead as a certifier in the emerging pollution market.

''The only reason Norway got involved was to produce learning value,'' Holthe says. The world can afford to keep burning fossil fuels at its current rate - releasing six billion tonnes of carbon per year - for less than 40 years before courting major ecosystem damage, says Matthew Spencer, climate and energy campaigner with Greenpeace UK.

Given the high stakes involved, many environmentalists favour direct state intervention to promote renewable energy and curb fossil fuel use and exploration.

Ideas include taxing - or at least withdrawing public subsidies from - activities that contribute to global warming. In the United States alone, such subsidies amount to 21-36 billion dollars per year, according to the Alliance to Save Energy, a watchdog group.

Worldwide, the subsidies near 300 billion dollars. In developing countries, price controls on kerosene and diesel amounted to 65 billion dollars in 1991, according to the Worldwatch Institute. Revenue from a tax on international currency transactions, designed to stabilise financial markets by dampening speculation, could be used to fund the transition from fossil to renewable energy, 'greens' argue.

''A tax of merely 0.25 percent would yield 150-200 billion dollars annually,'' says Edward Goldsmith, an editor of the British magazine 'The Ecologist'. Currency trading is estimated at 1.3 trillion dollars per day.

However, interventions against 'market forces' are not popular in business and policy-making circles, hence the push on behalf of 'market-based' schemes, Spencer notes.

Holthe argues that emissions trading plans show that ''we are approaching the market and industry in a serious and important way to involve them as the key actors that they are.'' Analysts, however, describe the plans as ''a low-pain option'' for those industrialised countries unable or unwilling to commit to carbon reductions at home in the short term.

Demands for a global carbon market have been accommodated ''to ensure and maintain participation in the Kyoto negotiations of the United States - the largest single emitter of greenhouse gases - as well as Canada, Japan, Australia and New Zealand,'' says Charlie Kronick, director of Britain's Climate Action Network. ''Perhaps the most important feature of (these) flexible mechanisms is the ability to provide overall cost savings to the developed countries that use them,'' Kronick adds.

The problem, he argues, is that ''emissions that are avoided (can simply) be traded back into the atmosphere, with no actual emission reduction taking place.''

WASHINGTON, Jul 19 (IPS) - The World Bank is looking to overhaul its lending for energy projects, long criticised for favouring heavy polluters and contributing to global warming. The Bank's 24 executive directors will consider Tuesday a new strategy governing all Bank lending for energy projects in borrowing countries.

Officials say that the new policy, if enacted, will wean the Bank off traditional oil and gas projects and promote lending for cleaner, more sustainable power-generating technologies. At issue is how the largest public financier of power projects in developing countries can help meet the needs of the world's two billion poor people - most of them in rural areas - who have no electricity, without contributing further to climate change.

Robert Watson, environment department director at the World Bank, says the new strategy will boost Bank investment in renewable energy - including wind, solar and geothermal power, which harnesses heat energy from Earth's crust. ''If you look at our portfolio now, it's very much project-by-project. We're trying to achieve a more strategic approach overall,'' Watson says.

Environmentalists, in a letter to the executive directors, acknowledge that the new proposals go further than previous ones but complain that:

- The strategy falls short of their demands that the Bank commit at least 20 percent of its energy lending to renewable power projects.

- It contains targets for the number of new-technology and clean-up projects to be started in coming years but provides no clear rules for judging their sustainability, nor for comparing their environmental pedigree to that of older projects.

- blamed for global warming - resulting from Bank loans. These had been requested by activists, environment ministers from the 'Group of Seven' industrial powers and Russia, and Bank President James Wolfensohn.

- Proposed guidelines remain vague and weak on transparency and public accountability. Before the Bank proceeds any further, it should ''lay out an implementation and monitoring plan which includes an annual review process and provides for the ongoing participation of NGOs,'' or non-governmental organisations, activists say.

Groups signing the letter include Friends of the Earth, the Centre for International Environmental Law and the Sustainable Energy and Economy Network. The Bank's proposed overhaul is several years in the making and is supposed to have been shaped, partly, by consultations with NGOs and other 'stakeholders' over the past two years.

The environmentalists say in their letter, ''we were alarmed by the Bank's decision to reject a staff recommendation that the document be released to the NGO community in advance of the Board meeting.'' As it happens, the environmentalists received late last week a leaked copy of the strategy paper, entitled 'Fuel for Thought'.

Most scientists say the prime culprits in global warming are the 'greenhouse gases' released mainly when fossil fuels such as coal, oil and gas are burned. Higher atmospheric temperatures threaten vast portions of the world with extremes of drought and flooding. In some scenarios, entire island nations such as the Maldives could be lost to rising sea levels as Earth's polar ice caps melt.

The Bank and its critics agree that the agency is a leading funder of fossil-fuel projects and the resulting greenhouse gas emissions. Daphne Wysham, research fellow at the Washington-based Institute for Policy Studies, estimates that since 1992 the global lender has ploughed 25 times as much money into fossil fuel projects as it has committed to renewable power efforts. Wysham also maintains that loans in 1992-97 resulted in the release of 9.5 billion tons of carbon into the air. The Bank, however, says the lending ratio is closer to six-to-one and puts the amount of carbon released at 1.4 billion tons.

''The figures are highly distorted,'' says Watson. But, he acknowledges, ''we are lending more for fossil fuels than for renewables.'' Reformists at the Bank fret about the likely consequences of climate change for poor countries and favour increased energy efficiency and greater use of renewable technologies. However, they are hindered by the lending agency's stated mission of economic development, says Wysham.

''Energy consumption is a key indicator of a nation's economic growth, so it is no surprise that roughly one-fifth of the World Bank's lending goes toward increasing energy and power supply in poor nations,'' she explains.

The NGOs' 20-percent goal for renewable-energy lending enjoys the support of a number of Bank staffers - in fact, they first suggested it in 1997. The idea was dropped last year amid internal squabbles, however. As a result, only about eight percent of the Bank's total energy portfolio is allocated to renewable technologies, according to Charles Feinstein, chief of the agency's Global Climate Change Unit.

The latest Bank proposals follow numerous earlier efforts to enact new energy lending policies. Privately, agency staffers agree with outside assessments that these efforts have had limited impact. Strategy papers and guidelines ''are written by Washington- based policy analysts (but) the core of the Bank's operations lies with its task managers and country directors, who process loans and work directly with officials in developing-country governments,'' notes Christopher Flavin, senior vice president at the Worldwatch Institute, a think-tank here. ''These managers and their clients view new directives from the policy staff as impediments to their main task - processing loans,'' Flavin argues.

''Indeed, operations staff and client governments have strongly resisted the new energy policy papers.''

WASHINGTON, (Jan. 26) IPS - Human rights and environmental groups worldwide are demanding that foreign oil companies suspend their operations in Nigeria as reports of human rights abuses against protesters continue to pour out of the oil-rich nation.

More than 200 non-governmental organizations (NGOs) -- including the Sierra Club, a U.S.-based environmental watchdog, and Human Rights Watch, also based here in the States -- are urging transnationals like Shell, Chevron, and Mobil to suspend their operations until the military withdraws from the oil-producing Delta region in southeastern Nigeria.

"The best way for the oil industry to contribute to peace in Nigeria is to immediately suspend operations and to seek a meaningful dialogue that addresses the concerns of the Ijaw and other Delta minorities," says Danny Kennedy, director of the California-based Project Underground.

Besides protesting at gas stations in the United States, Project Underground and other groups are hoping to increase pressure on the companies by placing an advertisement this week in "The Guardian," a Nigerian daily.

Nigeria's army has been clashing with members of the Ijaw ethnic minority, who say the companies are polluting their land and that the Delta region remains poor even as oil royalties flow to the government.

In October, members of the Ijaw community stopped the flow of one-third of the 2 million barrels Nigeria exports per day by occupying oil platforms and flow stations. Nigerian military authorities reacted by declaring a state of emergency in the area and deploying troops there on Dec. 30.

Since then, NGOs here say, between 26 and 240 protesters have been killed in clashes with the government. They contend that U.S.- based oil companies have been involved in the killings by providing helicopters and other equipment to the military forces.

The state of emergency has since been called off, but troops remain in the area, according to rights groups. "All we want is dialogue. What they want is force," says Oronto Douglas, a lawyer who is acting as spokesperson for the Ijaw Youth Council. "We are asking the multinational companies to withdraw from Ijaw areas immediately."

In support of the protesters, the 200-odd organizations -- from the United States, Canada, Mexico and Europe -- are demanding that Shell, Chevron, Mobil Oil, Texaco, Elf and Agip suspend their operations in Nigeria until "all military and paramilitary units are removed, all activists released from prison, and the situation is peacefully resolved.

"We believe that over 40 years of devastating environmental pollution and double standards by the oil companies are the principal causes for the tension," ran a letter they sent to the companies on Jan. 4. "We believe that no responsible oil company can operate behind the terror of armed soldiers."

Chevron spokesperson Fred Gorell told IPS that the San Francisco-based company believes Nigeria is taking positive steps toward democracy and that it is moving forward with addressing the issue of distribution of wealth.

When asked about the government's use of Chevron's equipment in its crackdowns, Gorell said the military has access to company equipment because the Nigerian government owns 60 percent of a joint oil project.

"The fact is, because Chevron and all companies are minority partners with the government, law enforcement has the opportunity to use Chevron helicopters because they have the controlling interest," he said.

In May last year, after protestors occupied one of Chevron's oil platforms, security forces were called in and opened fire from a helicopter that was allegedly owned by the company. Two Nigerian activists were killed and several were wounded.

Shell has also been under close scrutiny by rights and environmental groups since activist Ken Saro-Wiwa and eight other members of the Ogoni minority -- another Delta community -- were executed by the state for their campaign against the corporation.

While the Anglo-Dutch company said it made a last minute plea for clemency, groups argued that it was helping prop up the brutal dictatorship through billions of dollars per year in oil royalties.

More than 2,000 Ogoni have died in clashes with the military since their campaign against the oil giant began. Thousands of others have fled the country.

"The Ijaw are, like the Ogoni before them, demanding their rights to clean air, water and land by exercising their right to peaceful protest and assembly," the NGOs said in their letter to the transnationals. "Oil operations, backed by the state security apparatus, have denied the Delta communities these rights."

As non-governmental organizations worldwide keep a close watch on the area, they say governments and the United Nations are not paying attention to the government repression against protesters.

"The United Nations is so quick to send high-level officials to Yugoslavia, but there has been virtual silence on the parallel situation in Nigeria," says Daphne Wysham, a research fellow at the Institute for Policy Studies here.

"Despite reports of slaughter which involved multinational oil corporations," she adds, "there has been virtually no response."

BLOOD and oil are flowing once again in the Niger Delta. This time, it's the Ijaws - the fourth largest ethnic minority in Nigeria and the largest in the oil-rich Niger Delta - who are being targeted for repression. As many as 20 Ijaws have been reported killed by the security forces in Nigeria over the past few weeks for non-violently protesting against oil companies in the Niger Delta. Thousands of troops have been ordered into Ijawland, targeting key environmental and human rights activists. Dozens of people have been imprisoned, many with untreated gunshot wounds; thousands of civilians have fled from Yenagoa, the Bayelsa capital. Meanwhile, oil companies - Shell, Chevron, Mobil, Texaco and others - have continued operating behind the protective shield of the Nigerian government.

After 40 years of environmental pollution, poisoned water, polluted land, incessant gas flaring (the single largest gas flaring in the world occurs in Nigeria), and with little invested in electricity, health care or other basic services in their communities, the Ijaw youths mobilised against the oil companies late last year. Just like the Ogoni before them, the Ijaw demanded their rights to clean air, water and land and the right to peaceful protest. On December 11, last year, the Ijaw Youth Council issued the "Kaiama Declaration", a call for solidarity from groups around the world to join the Ijaw in a non-violent campaign for environmental justice targeting the oil and gas companies operating on Ijawland. The Ijaw had had enough and asked the companies to extinguish their flares and leave the Delta by midnight, December 30, or warned they would shut down the oilfields. When the oil companies ignored their declaration, the Ijaw youths launched "Operation Climate Change" and shut down 40 per cent of the gas flares and oil flowstations in Ijawland. Their goal is to shut down all gas polluting flares.

But the response from industry has been less than sympathetic. Allegedly, industry officials are privately urging a strong military response to the Kaiama Declaration. With little need for encouragement, the military has been brutal. On December 30, the Administrator of Bayelsa State, Lt.-Col. Paul Obi, declared a state of emergency, suspending all civil liberties and imposing a dusk-to-dawn curfew on the entire state. The administrator singled out the Ijaw youths - Chicoco (the pan-Niger Delta rights movement), Ijaw Youths Council and the Egbesu Boys of Africa - for unspecified "punishment".

Though the state of emergency has been lifted, it remains unlawful to peacefully assemble in the Niger Delta. Thousands of troops have been massed in towns as Yenagoa, Brass and parts of the Isoko-Urhobo areas of Delta State. Oil giants like Shell, Chevron, Texaco and Mobil are among those who drill and export Nigeria's two million barrels of oil per day from the Niger Delta, making billions in profits from the land of the Ijaw, Itsekiri, Igbo, Urhobo, Isoko, Ibibio and other oppressed minorities. The United States is the single largest consumer of Nigerian crude; one in six barrels of oil entering U.S. markets comes from Nigeria. Ninety per cent of the oil revenue goes directly into the pocket of the Nigerian government.

Though Gen. Abdulsalami Abubakar has been praised by some leaders for pledging to leave office in May, and for allowing "democratic" elections to take place, the people of the Niger Delta are disenfranchised from the political process for clear economic reasons: their freedom directly threatens the revenue source for the Nigerian government, whether "democratic" or dictatorial. The Ijaw and other peoples of the oil-producing Niger Delta have been effectively gerrymandered out of any sort of representative democratic participation at the state and national level for clear economic reasons. They see the writing on the wall and the writing says "ethnocide", by slow, painful poisoning and destitution. With no recognition from within their country for their rights, they are pleading to the world for help as they face a clear danger to their life and environment.

WASHINGTON, Dec 1 (IPS) - The richest merger in history could erode competition in the oil business and poison the well for workers, the environment, and poor countries, warn critics and analysts.

Oil titan Exxon Corp. agreed Tuesday to buy rival Mobil Corp. for 77.2 billion dollars. The result, to be called Exxon Mobil Corp. and boasting 203 billion dollars in combined revenue last year, will surpass Royal Dutch-Shell Group as the world's biggest oil company and replace General Motors as the largest U.S. corporation of any kind.

The firms are banking on reduced costs and increased market share to boost their fortunes. ''This merger will enhance our ability to be an effective global competitor in a volatile world economy and in an industry that is more and more competitive,'' they said in a joint statement.

Exxon expects to save 2.8 billion dollars on its operations as a result of the merger. The companies would not say how many jobs they plan to drop but the accepted estimate on Wall Street is that 10,000 people could be axed from a combined global workforce of 120,000.

''If past performance of mergers is any guide, thousands of workers will lose their jobs while executive bonuses and shareholder profits skyrocket,'' says Daphne Wysham, research fellow at the Institute for Policy Studies here.

The merger in essence would leave three major international players in the private oil industry and give Exxon Mobil command over 20.7 billion barrels of oil and gas reserves, 1.6 million barrels a day in production, and 6.7 million barrels of refining capacity.

The deal reunites two major components of John D. Rockefeller's Standard Oil trust, the oil monopoly dismantled by the U.S. government nearly 90 years ago. Last year, Exxon and Mobil accounted for 20 percent of all U.S. gasoline sales, according to the trade publication 'National Petroleum News'.

The Federal Trade Commission could insist that the new conglomerate sell off some gas stations and refineries to limit the loss of competition resulting from the merger, but industry and political analysts expect little effective political resistance.

''Members of the U.S. Congress, eager to please potential campaign financiers, will remain quiet about the dangerous concentration of power created by this merger,'' Wysham predicts.

''Nobody's saying the deal won't go through,'' says Robert Stimpson, equity markets analyst at IDEA Inc. in New York.

With global markets unsteady, oil and other commodities depressed and economic prospects uncertain, mergers are a favoured way of ''scampering around to maintain profitability,'' according to Stimpson. ''Everybody's teaming up.''

Since the 1920s, however, mergers have ''tended not to produce quite the results their boosters have claimed they would, especially in mature industries with an over-capacity problem,'' says Doug Henwood, author of 'Wall Street' and publisher of 'Left Business Observer'. The reasons are many but ''even strong firms in a declining industry are still in a declining industry.''

Nevertheless, mergers and acquisitions have reached a ''breathtaking'' scale, Henwood notes. ''A small oil-producing country never had great bargaining power to begin with but after this kind of truly gigantic consolidation, they'll have even less.''

In some ways, ''that might not be such a bad thing,'' says Simon Billenness, senior analyst at Franklin Research and Development Corp., a Boston-based firm specialising in socially responsible investing.

''If stronger companies strike a hard deal with the military junta in Burma or the Taliban in Afghanistan, it would be good from our point of view because it would deprive repressive regimes of hard currency,'' Billenness reasons.

The sword could cut the other way, however, with companies ''getting tough even with more representative and democratic governments that need the fee and tax revenues,'' he cautions.

Billenness, a veteran of numerous attempts to pass shareholder resolutions urging companies to improve their environmental and labour performance, is especially concerned that Exxon's ''corporate culture'' will dominate the new company.

''Exxon has a culture of completely stonewalling concerned shareholders whereas Mobil has at least been willing to sit down and talk,'' he says. Exxon spokespersons have repeatedly defended their company's track record and have maintained that it is willing to listen to ''stakeholders.''

Wysham, however, notes that both companies ''are among the most prominent members of the anti-environmental Global Climate Coalition.'' This business bloc opposes international agreements such as the Kyoto Protocol, which mandates reduced emissions of 'greenhouse gases', blamed for global warming.

The coalition has used newspaper and television advertisements to argue that international environmental treaties demand that U.S. consumers make sacrifices while the majority of humanity living in poorer countries is excused.

In so doing, the companies have ''whipped up xenophobic sentiment when, in fact, 25 percent of the greenhouse gases come from the United States,'' says Fred Krupp, executive director of the Environmental Defence Fund in New York.

Mergers in the oil industry are being driven by weak prices and high operating costs. Oil prices - expected to average 12.37 dollars per barrel this year - are hovering at their lowest levels in 25 years. Hopes of recovery hinge on Asia's embattled economies. (END/IPS/aa/kb/98)

The December Kyoto climate conference created an historic agreement: industrialized countries agreed to reduce their greenhouse gas emissions by, on average, 5.2% below 1990 levels by 2008-2012. Nevertheless, the Kyoto accord fell far short of achieving the greenhouse gas emissions reductions recommended by the Intergovernmental Panel on Climate Change in order to begin to restore balance to the Earth's climate--60% below 1990 levels by 2000. Furthermore, the conditions for U.S. participation in the Treaty will prove, at least, problematic, and, at worst, may so water down the treaty as to make it meaningless.

The U.S., the number one greenhouse gas emitter, contributing over 22% of global emissions, agreed to binding restrictions on its emissions of 7% below 1990 levels. However, the U.S. made this commitment to participate in the Kyoto Protocol with two contingencies: 1) the U.S.and other rich countries are to be allowed to trade emissions credits and debits to meet these reductions; and 2) "meaningful participation" by key developing countries, such as China and India, sought without success by U.S. negotiators at Kyoto, will be sought in future negotiations before the U.S. will enthusiastically embrace the emissions reductions targets.

These contingencies were tabled by U.S. negotiators in response to the Byrd-Hagel Senate Resolution, which passed in June 1997 95-0. This "sense of the Senate resolution," is not legally binding, but it charged negotiators not to reach any agreement at Kyoto that did not include "meaningful participation" by key developing countries. Organized labor joined the oil, gas, chemical, and auto industries in support of the Byrd Resolution, arguing that without such universal participation in the Protocol, jobs would be lost to developing countries.

It is true that China and India will likely surpass the U.S. in greenhouse gas emissions by 2015. But, ironically, China and other developing countries are choosing to develop their economies using fossil fuels such as coal, in part due to financial aid packages which create strong incentives to do so. In fact, the U.S. is the number one underwriter of fossil fuel-driven development in developing countries via the World Bank and other international financial institutions. China is now the number one recipient of World Bank loans, followed by India, also a heavy user of carbon-rich coal, and the U.S. is the number one contributor to the World Bank's coffers. The energy portfolio is the World Bank's largest lending portfolio, of which fossil fuels comprise 78%. In effect, U.S. taxpayers are subsidizing these polluting, carbon-intensive industries to set up shop in developing countries.

Furthermore, the Protocol has compounded the existing perverse incentive for energy-intensive industries to migrate to less developed countries and the economies in transition of Eastern Europe and the former Soviet Union by allowing them to gain economically from carbon emissions trading with carbon-intensive industries in rich countries. It also allows institutions like the World Bank to profit from carbon trading between countries. Unless modified to prohibit a conflict of interest, the new Protocol would allow these lending institutions to profit both at the front end of fossil fuel investment and at the tail end, by earning cash for "capturing" emissions in developing countries then selling those emissions as "credits" to polluters in rich countries.

Carbon emissions trading, essentially a privatization of the Earth's atmosphere, is now enshrined under the Kyoto Protocol. It allows the "right [of multinational corporations] to pollute," while turning a blind eye to the thousands of communities and ecosystems destroyed by exploitation of fossil fuels.

Fossil fuels--oil, gas, and coal--are among the most popular investments made by international financial institutions. Institutions such as the World Bank and the U.S. Overseas Private Investment Corporation invest a significant percentage of their development dollars in fossil fuels because they are cheaper and less controversial than other forms of energy and are readily turned into hard currency to repay loans. As a result, and despite concerns expressed in the Byrd Resolution, and in Kyoto over the particular hardship that developing countries will suffer in a warmer world, lenders' support for fossil fuels remains strong.

This investment in fossil fuels is continuing unabated against a startling backdrop: Around the world, over 2 billion people, largely the poor living in rural areas in developing countries, cannot meet their basic energy needs for cooking, heating or lighting. Their energy crisis has environmental and social consequences of its own, including deforestation, and soil erosion.

Climate change threatens the very web of life itself, with rapid changes in temperature and moisture in the atmosphere that could have cataclysmic consequences. The forest fires raging in the Amazon, where most of the world's biodiversity is concentrated, the floods in the southeastern U.S., the droughts in the Pacific, the El Nino storms that continue to plague California's coast--consistent with all scientific predictions of climate change-- are a foretaste of stronger, more violent weather to come. Even if we stopped producing greenhouse gases today, the Earth's climate would continue to change rapidly, and would not return to stability for decades or centuries.

At Kyoto, the entire world looked to the U.S., and in particular, to Vice President Al Gore, for leadership on climate change, recognizing that what hangs in the balance, as Gore eloquently wrote in his book by the same name, is the fate of the Earth itself. Unfortunately, Gore's message at Kyoto was hardly commensurate with the passionate intensity he brought to his book. He counseled his negotiators to show flexibility, code for telling them, at the eleventh hour, to stop their brinkmanship and bluffing and begin negotiating in earnest. "Negotiating in earnest" meant that the world's leading consumer of fossil fuels would agree to curtail its emissions by a measure far short of that needed to bring the Earth back into balance.

It is unlikely that Al Gore's lack of leadership in Kyoto will have political consequences. He will invariably tell environmentalists it was the fault of the Byrd Resolution, which could be true. And anti-environmentalists will likely never get the satisfaction of railing against presidential candidate Gore for the severe economic consequences they will suffer under the Kyoto Protocol, as it would be political suicide for Gore to bring the Treaty to the Senate for ratification until key developing countries begin to participate in the Protocol in some fashion. (The same anti-environmentalists who claimed a small carbon tax would destroy the U.S. economy were conspicuously unfazed when OPEC nations, together with Mexico and Nigeria, announced a price hike in March to drive up oil prices by as much as 48%; most newspaper headlines claimed the hike would have no discernable effect on the U.S. economy.

Meanwhile, there is a lot that can be done at the grassroots level, with or without Senate ratification of the Protocol. Nationally, there is a real need for groups to counter a growing anti-environmental agenda and disinformation campaign being waged by the fossil fuel industry in state legislatures. Posing as "grassroots" organizations, the fossil fuel lobby is pushing through resolutions at the state level calling for state governments not to participate in the Climate Convention. Environmentalists at the state level, coordinated by the Sierra Club are successfully mounting challenges. Activists are particularly needed in the following states where anti-Kyoto resolutions have passed or are expected to pass: Arizona, Ohio, South Dakota, Utah, Virginia, Georgia, Indiana, Washington, West Virginia, and Wyoming. To get involved call your local Sierra Club chapter. or e-mail: steve.pedery@sfsierra.sierraclub.org.

Internationally, to stop the migration of transnational corporations, exploiting the "right to pollute" in developing countries (with no commensurate obligation to clean up this pollution nor to provide energy for human needs), there is a strong case to be made for developing country participation in the Kyoto Protocol. However, the U.S. must do two things first: 1) it must lead by example with real reductions, not paper reductions via emissions trading, and other schemes that benefit big industries; 2) it must stop fueling climate change in developing countries and "decarbonize" development aid.

For more information, or to get involved in the activist network on climate change, contact Daphne Wysham at: 202-234-9382, x208.

Feature, Himal South Asia
by Kavaljit Singh, Nan Dawkins-Scully and Daphne Wysham

SUDDENLY, IT appears, everyone is jumping on the microcredit bandwagon. The Microcredit Summit, organised in early February in Washington DC was only the latest and most high-profile activity (see accompanying article). The reasons for this trend are as varied as the players.

Microcredit has the support of many women's advocates who view expansion of microcredit as a potential bellweather for women's empowerment. Multilateral development banks, in an era of budget cuts and disbursement reductions, are embracing microcredit as an opportunity for them to move away from the capital-intensive "development as charity" model to the potentially more profitable "development as business". But perhaps most significantly, the financial community has woken up to the fact that there is a great deal of money to be made in microlending, where interest rates can range from 20 to 100 percent.

Microcredit is often portrayed as a "win-win" option, wherein investors profit handsomely while the poor gain access to resources that allow them to help themselves. The reality, however, is not always so rosy.

In India, a number of self-help groups (SHGs) were created in the 1980s to provide credit facilities to the poor, especially women, in both urban and rural areas. These SHGs stumbled upon a surprising finding: by targeting women, repayment rates came in well over 95 percent, higher than most traditional banks. Impressed by those repayment rates, institutions like National Bank for Agriculture and Rural Development (NABARD) and Small Industries Development Bank of India (SIDBI) began increasing their lending to SHGs in India. However, the lending rates of SHGs to borrowers were not cheap. For example, SIDBI lent to NGOs at 9 percent; NGOs were allowed to onlend to SHGs at rates up to 15 percent; and SHGs, in turn, were allowed to charge up to 30 percent to individual borrowers. Although such high-interest credit is touted as a vehicle for poverty alleviation wherein the poor use the funds to undertake commercial ventures, studies have found that the loans are largely used by poor people to meet their daily consumption needs.

Nevertheless, similar microcredit operations are now being established elsewhere in India, with liberal grants from international donor agencies like the Ford Foundation, UNDP and the Swiss Agency for Development and Cooperation (SDC). This seed money, in turn, will attract additional capital from the corporate sector and financial institutions. Loans are to be provided to borrowers through a network of subsidiary lending institutions. In order to assure investors a good rate of economic return, these corporate entities will lend at market rates. Critics charge that such microcredit, rather than resulting in poverty alleviation, will simply keep the poor on the treadmill of debt or bypass them altogether in favour of those who can afford credit at market rates.

Assist the Poorest
The World Bank last year launched its own microlending arm, the Consultative Group to Assist the Poorest (CGAP), with the goal of "systematically increasing resources in microfinance". The Bank's President James Wolfensohn announced the programme at the 1995 Fourth World Conference on Women in Beijing, claiming CGAP would improve access to microcredit for "the globe's poorest citizens, particularly women".

In order to evaluate whether CGAP and other microlending programmes will actually achieve the goals they set for themselves, it is important to distinguish between the two types of microlenders: those whose primary goal is to empower the poor and those whose primary goal is profit. The field is already crowded with microlenders of the latter variety whose exorbitant interest rates keep the poor trapped in a downward spiral of debt. What is desperately needed are more microlenders committed to the empowerment of the poor.

The laudable successes of microcredit programmes like the Self-Employed Women's Association (SEWA) of Ahmedabad was not won overnight, nor was it derived from a simple process of making small loans to the poor. Microlenders like SEWA combine low-interest microloans with labour advocacy on behalf of women employed in the informal sector for provision of health care, training and other services, thereby raising the wages, educational levels, and standard of living for the women it serves. Access to credit is only a small part of the picture of SEWA's success.

The World Bank's CGAP, by contrast, appears to be narrowly focused on microlending as an end in itself. And the means to that end, critics charge, may do more damage to "empowerment lenders" like SEWA and Grameen than good. A recent report produced by the Washington DC-based Institute for Policy Studies, found that 46 percent of CGAP's expenditures in its first year of operation was spent on policy reforms which may benefit lenders but end up hurting poor borrowers, particularly women. For example, CGAP views microlending as unviable in the presence of usury laws�laws which provide ceilings on interest rates. Thus, its first order of business at a USD 500,000 conference in Mali was to get government officials to repeal their nations' usury laws.

CGAP also calls on countries to completely privatise their microlending institutions, removing all subsidies for banks which service the poor. Such reforms would force banks such as the Grameen, which relied on subsidies for 17 years before becoming financially viable, to shut down or charge much higher interest rates to reach self-sufficiency in a shorter time-span. CGAP also advocates stronger debt collection laws�specifically collateral laws�which will result in a safer environment for bankers but which could exclude the poorest, and poor women in particular, from access to small loans.

CGAP is arguably a small programme�whose total budget approximates one-tenth of one percent of overall World Bank lending. Yet, if past performance is any guide, this small programme could prove to wield significant clout in defining the parameters and practices for microlenders.

In the current global economic climate, microcredit as a poverty alleviation tool, by itself, is analogous to giving a man a fishing pole, and telling him to go fish�in the wake of a giant trawler whose net spans the horizon. Macroeconomic policies of liberalisation and globalisation have destroyed many formal sector jobs; drastic cuts in social sector spending under the rubric of World Bank-imposed structural adjustment programmes coupled with the absence of any social safety net has further aggravated poverty for the world's poorest.

The only option for many poor is self-employment, which microcredit aims to foster. But the odds are stacked against the self-employed in the global marketplace. Consumer trends fluctuate nearly as wildly as the economy, which is becoming more prone to external factors as India, for one, opens its markets. Aggressive brand selling and marketing coupled with the strong financial clout of transnational corporations places the poor, especially poor women, at a particularly unfair advantage in the global marketplace.

Against this background, microcredit can, at best, lead to micro-solutions. This is not to say that microcredit cannot play a valuable role in poverty alleviation. But any developmental strategy will require far more than the "band-aid" of microcredit on the gaping wound of poverty and unemployment. As microlenders chasing the growing ranks of the poor multiply, a proper regulatory and supervisory framework under which these entities should function must be developed in order to ensure that intermediaries, corporate bodies and others involved in microcredit come under close public scrutiny. Otherwise, these new entities may simply lend legitimacy and greater financial clout to an exploitative form of organised money-lending.

K. Singh is the coordinator of the Public Interest Research Group, Delhi. N. Dawkins-Scully and D. Wysham are colleagues at the Women's Power Project, Institute for Policy Studies, Washington DC.