The World Bank has recently published the paper, "Issues in Using Country Systems in Bank Operations", for comment. The following comments have been endorsed by 200 civil society organizations from 58 countries.
What we support
We believe that sound development models integrate social justice, environmental protection, economic progress and democratic governance. The principles of sustainability must be the starting point for the development strategies of governments and financial institutions. Appropriate, well–implemented social and environmental safeguard policies need to be in place to ensure that affected people can participate in decision–making and share in project benefits, and that the environment is protected.
We believe that societies should be able to determine and control their own development path. Societies should own not only the projects, but also the economic and sector policies that are implemented in their countries. However, "country ownership" means more than government ownership. The concept should include ownership by all sectors of society, including civil society. Furthermore, the need for "country ownership" does not negate the need for common environmental, social and human rights minimum standards to be defined globally. Indeed most governments have endorsed and accepted the responsibilities conveyed by international social, environmental and human rights conventions.
We continue to support the strengthening of national capacities to promote social justice and protect the environment in the North and South. However, all institutions must accept responsibility and be accountable for their own actions. World Bank projects must comply with World Bank policies, national laws and regulations, and international conventions and norms. The Bank should not finance projects if it cannot add value, especially in terms of social justice and environmental protection. Compliance mechanisms should ensure that citizens and particularly affected individuals and communities are able to hold governments and the World Bank accountable for the effective implementation of their policies.
We support the harmonization of the standards, policies and guidelines of financial institutions in order to avoid unnecessary costs and bureaucratic delays for borrowing governments. So far, no financial institution has managed to "over–protect" the environment or the rights of communities in its policies and practices. Therefore, policy harmonization must always be upwards.
Current trends at the World Bank
In spite of their many shortcomings, the World Bank’s social and environmental safeguard policies are an important achievement of the past twenty years. However, as the Operations Evaluation Department has found, the Bank has not mainstreamed social and environmental concerns throughout its business model. As a consequence, the Bank has repeatedly developed unsustainable projects within which the objectives of the safeguard policies cannot be achieved. The Bank may go through the motions of implementing safeguard policies, but it often fails to comply with their objectives. For example, the Bank rarely explores alternative options in any balanced way as part of the environmental assessments of projects. And people who are displaced by Bank projects almost invariably end off poorer as a result, rather than becoming project beneficiaries.
The World Bank has decided to re–engage in high–risk projects, and to substantially increase its lending for infrastructure projects. Given these trends, it is even more important that the Bank mainstream social and environmental concerns throughout its business model, and that the safeguard policies designed to prevent repeating past mistakes are strictly upheld. We are strongly opposed to any weakening of the Bank’s safeguard policies under the pretext of "country ownership".
General comments on Issues in Using Country Systems in Bank Operations
We have the following general concerns about the World Bank paper, "Issues in Using Country Systems in Bank Operations":
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The paper claims to promote a strengthening of institutional capacities to deal with social and environmental impacts in borrowing countries. It does however not propose any concrete measures to support such a strengthening, or benchmarks by which progress could be measured. Simply relying on national standards (with which Bank projects have always had to comply) instead of Bank standards will not strengthen institutional capacities.
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In a letter dated June 29, 2004, World Bank President James D. Wolfensohn assured NGOs that "we are determined that this move toward using country systems will not weaken our existing safeguard policies, which our Board of Directors adopted on the basis of considerable experience and extensive consultation". This commitment was confirmed by the Board of Directors on several occasions. As we will elaborate below, the commitment is being seriously undermined by the Bank Management’s proposal.
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The proposal will weaken the accountability of the World Bank to its own standards. The ability of the Inspection Panel to ensure that project activities conform to safeguard policies could be compromised by requiring that national policies rather than the Bank’s safeguard policies be used as the point of reference for investigations. This concern is significantly heightened by the proposal to use a synthesized version of the Bank’s policies in determining whether national policies are equivalent to Bank policies.
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According to the proposal, the Bank will use not only the existing national policies to measure the equivalency of national standards with Bank policies, but also planned improvements in these policies. The proposal’s legally binding Annex B does not mention what the Bank will do if necessary improvements are not carried out, or if national policies that were considered equivalent with Bank policies are weakened.
World Bank evaluations have found that relying on future governance improvements for the success of projects is a risky proposition. OED’s 2003 report, "Factoring in Governance", found: "The results of support for governance reforms are too uncertain for the Bank to assume that existing governance problems will be addressed in time to assure a positive development benefit. … [The decision to support increased investment in the extractive industries] should be made on the basis of the quality of sectoral and core governance as it exists and as it has historically been, rather than as the Bank hopes governance will one day be."(pp. 13f.)
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According to the proposal, governments themselves, among other actors, can assess the equivalence of their safeguard systems with Bank policies and the quality of their own compliance with national systems. This makes a mockery of independently and objectively assessing equivalency.
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As the Bank’s first pilot project in Mexico demonstrates, the analysis of policy equivalence and the complex supervision of projects implemented according to country systems will make the new approach more and not less expensive. While the cost for equivalency assessments will decline over time, this is not the case for supervision.
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The new paper presents an overly optimistic picture regarding the current implementation of environmental policies, and ignores important findings of OED reports that document ongoing implementation failures. Consequently, Bank management ignores the need for strengthening rather than weakening the Bank’s safeguard policies.
Numerous cases of policy weakening
The combined length of the Bank’s safeguard policies – Operational Principles, Bank Procedures and Annexes – is 65 pages. Table A1 of Annex A of the Bank paper, which will serve as the basis for assessing equivalency with these policies, is 3 pages long. The Center for International Environmental Law (CIEL) has prepared a matrix comparing Table A1 with the original policies. The CIEL matrix lists about 150 instances where policies will be weakened and about 20 instances where policies will be strengthened by the proposed use of country systems in Bank operations.
The full matrix prepared by CIEL can be viewed at www.ciel.org/Ifi/Matrix_29Nov04.html. The cases of major policy weakening include the following:
Various policies:
Environmental Assessment:
Natural Habitats:
Involuntary Resettlement:
Indigenous peoples:
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The roles and obligations of Bank staff in Bank projects under the current Bank policies on environmental assessment, natural habitats, pest management, involuntary resettlement, indigenous peoples, forests, cultural property, and safety of dams are much clearer and more specific than the new proposal.
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Under the existing OP 4.01, the Bank will not finance projects that contravene the country’s obligations under international environmental agreements. The new proposal does not contain any such language.
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OP 4.12 requires that if adverse social or economic impacts might result from a project, a social assessment should be done and measures to minimize or mitigate such impacts implemented. The country systems proposal does not include any such requirements.
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The country systems proposal drops the classification of proposed projects based on the severity of potential environmental impacts. As a result, all requirements that hinge on whether a project is categorized as A or B, including on consulting project–affected people and NGOs, are lost.
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OP 4.01 requires sectoral and regional environmental assessments if respective impacts are likely to occur. The country systems proposal does not mention any such requirements.
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OP 4.01 favors the prevention of adverse environmental impacts over mitigation and compensation. The country systems proposal does not emphasize prevention over mitigation.
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The country systems proposal does not preserve the expectation of OP 4.04 that borrowers apply a "precautionary approach to natural resource management".
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The current OP 4.04 allows projects that adversely affect natural habitats to go forward only if a comprehensive analysis demonstrates that their overall benefits substantially outweigh their environmental costs. This precondition is dropped in the country systems proposal.
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OP 4.12 prioritizes improving the livelihoods of displaced people over restoring them in cases of resettlement. The country systems proposal does not indicate any such priority.
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If displacement cannot be avoided, resettlement activities under OP 4.12 must be carried out as development programs, enabling the displaced persons to share in the project benefits. The country systems proposal does not include any such requirements.
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OP 4.12 stipulates that preference be given to land–based resettlement for all persons whose livelihoods are land–based. The policy also requires that the needs of vulnerable groups must be given particular attention. The new country systems proposal qualifies the right to land–based resettlement for people who do not hold land titles, and does not require that particular attention be given to the needs of vulnerable groups.
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Under OP 4.12, displaced persons have opportunities for consultation and participation in planning, implementing, and monitoring the entire resettlement program. The country systems proposal does not provide any such opportunities.
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Unlike OP 4.12, the country systems proposal no longer requires that displaced persons and host communities are provided timely and relevant information.
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OP 4.12 stipulates detailed obligations of borrowers to carry out socioeconomic surveys, analyses of the legal and institutional frameworks, and measures to mitigate the impacts of resettlement on host communities. All of these obligations are dropped in the country systems proposal.
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BP 4.12 explicitly states that a project is not considered complete until resettlement measures have been implemented. The country systems proposal does not say this.
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OD 4.20 requires the preparation of an Indigenous Peoples Development Plan in projects that affect indigenous peoples. OD 4.20 requires, as part of such Plans, the establishment of a baseline regarding the situation of indigenous peoples, an assessment of the legal status of indigenous peoples, and the creation of mechanisms for indigenous participation in project design, implementation and monitoring. OD 4.20 requires the Bank to advise borrowing governments in recognizing traditional land tenure systems of indigenous peoples prior to project implementation, and stipulates that the Bank not appraise projects where adverse impacts are unavoidable and adequate mitigation plans have not been developed. None of these provisions are included in the country systems proposal.
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All these cases of policy weakening contradict the Bank’s stated goal of strengthening social and environmental capacities, and its commitment not to weaken the existing policies.
Conclusion and recommendations
The undersigned NGOs have always supported a strengthening of institutional capacities and social and environmental standards at the national level, and will continue to do so. At the same time, we are strongly opposed to any weakening of the Bank’s safeguard policies, and the Bank’s accountability to these policies, through the use of national safeguard systems in Bank projects. The country systems proposal constitutes a pervasive weakening of the Bank’s safeguard policies. This violates commitments made by the Board of Directors and President Wolfensohn.
In particular, we would like to put forward the following proposals:
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If the "Use of Country Systems in Bank Operations" proposal moves forward, the equivalence of national standards should be determined based on the full set of existing safeguard policies, and not the brief synthesis in Annex A. The full safeguard policies should continue to be the point of reference for future investigations by the Inspection Panel.
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If the "Use of Country Systems in Bank Operations" proposal moves forward, only existing national standards that have a proven implementation track record should be considered in an assessment of equivalency with Bank policies. Planned improvements for which there is no track record should not be used as the basis for equivalency assessments.
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Assessments of equivalency should be carried out by independent parties through transparent, participatory processes. Equivalency tests should not be based on the governments’ own assessments.
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Countries should be selected for pilot projects only if all relevant actors within these countries, including civil society, agree on the use of country systems.
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At the end of the pilot phase, the experience with pilot projects should be evaluated by independent institutions through transparent, participatory processes before any decisions on the future of the use of country systems are taken.
These comments have been endorsed by the following organizations:
Jorge Carpio, FOCO (Foro Ciudadano de Participación por la Justicia y los Derechos Humanos), Argentina
Elba Stancich, Taller Ecologista, Argentina
Kate Walsh, AidWatch, Australia
Ben Pearson, CDM Watch, Australia
Cam Walker, Friends of the Earth Australia
Techa Beaumont, Mineral Policy Institute, Australia
Ruth Rosenhek & John Seed, Rainforest Information Centre, Australia
Elfriede Schachner, AGEZ – Arbeitsgemeinschaft Entwicklungszusammenarbeit, Austria
Rudolf Remler, Dreikönigsaktion, Austria
Heinz Hoedl, Koordinierungsstelle der Oe–sterreichischen Bischofskonferenz, Austria
Zakir Kibria, BanglaPraxis, Bangladesh
Ashraf–Ul–Alam Tutu, Coastal Development Partnership (CDP), Bangladesh
Farid Bakht, Futurebangla, Bangladesh
Arup Rahee, LOKOJ Bangladesh
Ahmed Swapan Mahmud, VOICE, Bangladesh
Ann De Jonghe, Broederlijk Delen, Belgium
Jan Cappelle, Proyecto Gato, Belgium
Raoul De Bock, Suria VZW, Belgium
Juan Julio Narváez, ComArt Tukuypaj, Bolivia
Alcides Faria, Ecoa, Brazil
Akong Charles Ndika, Global Village Cameroon
Graham Saul, Friends of the Earth Canada
Ian Baird, Global Association for People and the Environment (GAPE), Canada
Michael Bassett, Halifax Initiative/L’Initiative d’Halifax, Canada
International Organization of Indigenous Resource Development (IOIRD), Canada
Earl C. Stevenson, Peguis First Nation
Carole Pharand, Polaris Institute, Canada
Derek MacCuish, The Social Justice Committee, Canada
Peter Hartmann, CODEFF Filial Aisén, Chile
Margarita Flórez, ILSA (Instituto Latinoamericano de Servicios Legales), Colombia
Isaac Rojas, COECOCeiba / Amigos de la Tierra Costa Rica
Pavel Pribyl, Hnuti DUHA / Friends of the Earth Czech Republic
Victor Geronimo, Colectivo de Organizaciones Populares, Dominican Republic
Carlos Zorrilla, Mining Commision, CEDENMA, Ecuador
Carlos Zorrilla, DECOIN, Ecuador
Ricardo Navarro, CESTA / Friends of the Earth El Salvador
Manuel Gil, Comité de Análisis "Ana Silvia Olán" de Sonsonate, El Salvador
Peep Mardiste, Estonian Green Movement / Friends of the Earth Estonia
Marko Ulvila, Coalition for Environment and Development, Finland
Tove Selin, Finnish ECA Reform Campaign, Finland
Leo Stranius, Friends of the Earth Finland
Sebastien Fourmy, Agir Ici, France
Sebastian Godinot, Les Amis de la Terre, France
François–Xavier Verschave, Survie, France
Kakha Nadiradze, Association for Farmers Rights Defense, Georgia
Nana Janashia, Caucasus Environmental NGO Network (CENN), Georgia
Kate Kvinikadze, Georgian Young Lawyers’ Association, Georgia
Klaus Fritsche, Asienhaus, Germany
Ulrike Bey, German NGO Working Group on the ADB, Germany
Martin Gück, KAIROS Europa e.V., Germany
Knud Voecking, Urgewald, Germany
Kai Schaefer, World Economy, Ecology and Development (WEED), Germany
Noble Wadzah, Friends of the Earth Ghana
Miriam Miranda, Organizacion Fraternal Negra Hondurena (OFRANEH), Honduras
Arni Finnsson, Iceland Nature Conservation Association, Iceland
Podila Parvathi, Action for Girijan Development, India
Malay Dewanji, All India Association of Voluntary Agencies (AIAVA), India
Virgil D’Sami, Arunodhaya Centre for Street and Working Children, India
Roy Laifungbam & Ravindranath, Brahmaputra Barak Rivers Watch, India
Ramananda Wangkheirakpam, Citizens Concern for Dams & Development (CCDD), India
Roy Laifungbam, Centre for Organisation Research & Education (CORE), India
A.Latha, Chalakudy River Protection Samithi, India
Sreedhar Ramamurthi, Environics Trust, India
Leo Saldanha, Environment Support Group, India
R. N. Mukherjee, Gandhi Peace Foundation South Calcutta, India
Rasamoy Hansda, Gramin Unnayan Sanstha, India
Pradip Bhattacharya, Indian Institute of Rural Development, India
Jarjum Ete, Indigenous Women’s Resource Center, India
Ashish Kothari, Kalpavriksh – Environment Action Group, India
Smitu Kothari, Lokayan and Intercultural Resources, India
Shripad Dharmadhikary, Manthan Adhyayan Kendra, India
Vimalbhai, Matu Peoples’ Organisation, India
Ravi Rebbapragada, Mines, Minerals & People, India
Sanjukta Basa, Orissa LAMP, India
Priya Salvi, PRAKRUTI, India
River Basin Friends, India
Ravindranath, Rural Volunteers Center, India
Ravi Rebbapragada, Samata, India
Kisan Mehta, Save Bombay Committee, India
Fr. Joy Areeckal, SEARCH (Society for education, animation and rural care of health), India
Himanshu Thakkar, South Asia Network on Dams, Rivers & People, India
Aruna Rodrigues, Sunray Harvesters, India
B. Sanjeeva Rao, Velugu Association, India
Shukla Chatterjee, Women and Children Development Programme, LAMP, India
M.V.d. Bogaert, sj, Xavier Institute of Development Action & Studies (XIDAS), India
Anggara, Bandung Legal Aid Institute (LBH Bandung), Indonesia
Athoillah, Indonesian Legal Aid Institute Branch of Surabaya (Surabaya Legal Aid Institute), Indonesia
Nadia Hadad, INFID (International NGO Forum on Indonesian Development), Indonesia
Julia Kam, Institut Dayakologi, Indonesia
Chabib, Serikat Tani Merdeka (SeTAM), Indonesia
Fabby Tumiwa, Working Group on Power Sector Restructuring (WGPSR), Indonesia
Esaol Agustriawan, Yayasan Bimbingan Kesejahteraan Sosial (YBKS), Social Welfare Guidance Foundation, Indonesia
Laura Radiconcini, Amici della Terra / Friends of the Earth Italy
Jaroslava Colajacomo, World Bank Reform Campaign, Italy
Yoshihito Miyakoshi, A SEED Japan
Yuki Tanabe, Japan Center for a Sustainable Environment and Society (JACSES), Japan
Setsuko Kudo, Jubilee Kansai Network, Japan
Satoru Matsumoto, Mekong Watch, Japan
Kalia Moldogazieva, Tree of Life, Kyrgyz Republic
Alda Ozola, Latvian Green Movement, Latvia
Gedrime Kusliene, Center for Environmental Education and Information, Lithuania
Jose Manuel Arias Rodriguez, Asociacion Ecologica Santo Tomás A.C., México
Susana Cruickshank, Centro de Estudios en Cooperación Internacional y Gestión Pública, México
Gustavo Castro Soto, Centro de Investigaciones Económicas y Políticas de Acción Comunitaria (CIEPAC), México
CODICE S.C., México
Arturo Morales Tirado, Consejo Consultivo Allende (AL21Allende), México
Crescencio Reséndiz–Hernández, Las Cuatro Flechas de Mexico, México
Flavio Lazos, Locallis, México
Promotora de Servicios para el Desarrollo S.C., México
Arturo Morales Tirado, Sociedad Audubon de México, A.C., México
Fernando Melo, Trasparencia S.C., México
Unión de Autoridades Municipales del Sector Zoogocho, Villa Alta, Oaxaca, México
Unión de Pueblos y Comunidades Indigenas Contales de Oaxaca, México
Anabela Lemos & Daniel de Lemos Ribeiro, JA! Justica Ambiental, Mozambique
Domenico Liuzzi, Kulima (Organismo para o Desenvolvimento Sócio–Económico Integrado), Mozambique
National Concerns Society, Nepal
Prerna Bomzan, Rural Reconstruction Nepal, Nepal
Gopal Siwakoti, Water and Energy Users’ Federation–Nepal (WAFED), Nepal
Henneke Brink, Both Ends, Netherlands
Paul de Clerck, Friends of the Earth Netherlands
Ellen Verheul, Wemos, Netherlands
David Ugulor, African Network for Environmental and Economic Justice, Nigeria
Babatope Babalobi, The Bread of Life Development Foundation, Nigeria
Igwe Uche, Community Level Environmental Action Network, (CLEAN), Nigeria
Akpan Anthony Johnson, Pan African Vision for the Environment (PAVE), Nigeria
Hope E. Ogbeide, Society for Water & Public Health Protection (SWAPHEP), Nigeria
Andrew Preston, FIVAS (Association for International Water and Forest Studies), Norway
Mustafa Talpur, ActionAid Pakistan
Aly Ercelawn and Muhammad Nauman, Creed Alliance, Pakistan
Hector Huertas G., Programa Juridico de los Pueblos Indigenas de Panama (CEALP), Panama
Damien Ase, Center for Environmental Law and Community Rights Inc. (CELCOR) / Friends of the Earth Papua New Guinea
Elías Díaz Peña, Sobrevivencia, Friends of the Earth Paraguay
Gladys Marquez, Asociacion Civil Labor, Perú
Shapiom Noningo Sesén, Asociación Interétnica de Desarrollo de la Selva Peruana (AIDESEP), Perú
Nilton Deza, Ecovida, Perú
Astrid Cornejo, Red Nacional de Aire Saludable, Perú
Osver Jaime Polo Carrasco, Tierra Vida, Perú
Victoria Tauli Corpuz, Tebtebba Foundation (Indigenous Peoples’ International Centre for Policy Research and Education), Philippines
Joanna Bulawa and Ania Roggenbuck, Green Federation Gaja, Poland
Piotr Dynowski, Polish Tibetan Friendship Association, Poland
Radoslaw Gawlik, Stowarzyszenie Ekologiczne Eko–Unia, Poland
Jacek Bozek, Stowarzyszenie Ekologiczno–Kulturalne Klub Gaja, Poland
ECA Iberia Campaign, Portugal
Renato Roldão, Euronatura, Portugal
Andrey Laletin, Friends of the Siberian Forests, Russia
Aboubacry Mbodji, Coalition des Organisations de la Société civile pour la Défense de l’Environnement et le Développement du Bassin du fleuve Sénégal (CODESEN), Senegal
Demba Moussa Dembele, Forum for African Alternatives, Senegal
Rencontre Africaine pour la Défense des Droits de l’Homme (RADDHO), Senegal
Olivia Andrews, Earthlife Africa Cape Town, South Africa
Liane Greeff, Environmental Monitoring Group, South Africa
Tebogo Mahapa, Group for Environmental Monitoring (GEM), South Africa
Nicole Venter, The Southern Health & Ecology Institute, South Africa
Patricia Borraz, ALMACIGA Grupo de Trabajo Intercultural, Spain
Mailer Mattie, SELVAS.ORG, Spain
Rosa Sala, Intermón Oxfam, Spain
Hemantha Withanage, Centre for Environmental Justice, Sri Lanka
Sri Lankan Working Group on Trade and IFIs, Sri Lanka
Penny Davies, Diakonia, Sweden
Svante Axelsson, Swedish Society for Nature Conservation, Sweden
Christine Eberlein, Berne Declaration, Switzerland
Bernhard Herold, Bread for all, Switzerland
Sonja Ribi, Pro Natura / Friends of the Earth Switzerland
Peter Niggli, Swiss Coalition of Development Organizations, Switzerland
Caroline Morel, SWISSAID, Switzerland
Chacha Benedict, Foundation HELP, Tanzania
Chana Maung & Carol Ransley, EarthRights International (Southeast Asia), Thailand
Chainarong Sretthachau, Southeast Asia Rivers Network, Thailand
Frank Muramuzi, National Association of Professional Environmentalists (NAPE), Uganda
Nicholas Hildyard, The Corner House, United Kingdom
Emily Caruso, Forest Peoples Programme, United Kingdom
Hannah Ellis, Friends of the Earth England, Wales & Northern Ireland
Richard Harkinson, Minewatch, United Kingdom
Peter Hardstaff, World Development Movement (WDM), United Kingdom
Beverly Bell, Center for Economic Justice, Unites States
Anne Perrault, Center for International Environmental Law (CIEL), United States
Nancy Alexander, Citizens’ Network on Essential Services, United States
Kathryn Mulvey, Corporate Accountability International (formerly Infact), United States
Steve Hellinger, The Development GAP, United States
Bruce Rich, Environmental Defense, United States
David Waskow, Friends of the Earth, United States
Paula Palmer, Global Response, United States
Shiney Varghese, Institute for Agriculture and Trade Policy, United States
Alberto Saldamando, International Indian Treaty Council, United States
Douglas Norlen, Pacific Environment, United States
Wenonah Hauter, Sara Grusky & Maj Fiil–Flynn, Public Citizen, United States
Michael Brune, Rainforest Action Network, United States
Gloria Flora, Sustainable Obtainable Solutions, United States
Holly Spaulding, Sweetwater Alliance, United States
Tashi Tsering, Tibet Justice Center, United States
Sonam Wangdu, U.S. Tibet Committee, United States
Peter Sinkamba, Citizens for a Better Environment (CBE), Zambia
International NGOs:
Filka Sekulova, A SEED Europe, Netherlands
Magda Stoczkiewicz, CEE Bankwatch Network, Belgium
Victor Geronimo, Convergence of Movements of Peoples of the Americas, Dominican Republic
Michelle Kinman, Crude Accountability – International, United States
Saskia Ozinga, FERN, Belgium/United Kingdom
Janneke Bruil, Longgena Ginting, Friends of the Earth International, Netherlands
Peter Bosshard, International Rivers, United States
Gopal Siwakoti, South Asian Solidarity for Rivers and Peoples (SARP), Nepal
Doug Hellinger, Structural Adjustment Participatory Review International Network (SAPRIN) Secretariat, United States
Individual endorsements:
Cristian Opaso, Chile
Juan Pablo Orrego Silva, Chile
María Luisa Etchart, Costa Rica
Sankar Ray, journalist/environmentalist, India
Ana Cecilia Zamora, anthropologist, Nicaragua
Angana Chatterji, California Institute of Integral Studies, United States