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WestLB pipeline-construction in Ecuadorian rainforest violates World Bank Guidelines

In 2003, an Ecuadorian oil-pipeline worth 900 million euro in total and predominantly financed by the German WestLB was put into operation. The WestLB was a key figure within a consortium of banks which financed the pipeline-construction reaching from the Ecuadorian Amazonas to the Pacific coast. Due to its devastating ecological impacts, this large-scale project was heavily criticised, in particular by environmental activists. The fact that the pipline runs through areas of rainforest crossing several natural resources such as the „Mindo-Nambillo“-reservation has threatened and continues to threaten the local habitants and animals.

It is assumed that the construction of the pipeline threatens a rainforest area of approximately 2.4 million hectare. Although the participating firms and banks have repeatedly stressed that the project is of crucial importance for the poor country, statistics show that the number of people living below the poverty line has doubled and that foreign debt has massively increased after the country’s entry into the oil business. Since the extracted oil is predominantly exported to the US while expected profits are mainly used to service the country’s debts, it is rather unlikely that profits trickle down to the Ecuadorian population. To the contrary, the local population including many indigenous people living in the rainforest areas, has to stand for the pollution and intoxication of the soil, forests and rivers which are essential for their livelihood.

The WestLB has repeatedly stressed that the pipeline-construction adheres to the World Bank standards and declared in 2001: „Indispensable precondition of any financial engagement of the WestLB is the adherence to the environmental standards of the World Bank“. The validity of such a statement has, however, massively been questioned by different stakeholders. Correspondingly, a report initiated by several NGOs and conducted by an internationally reknown expert in the field documented that the WestLB violated various World Bank standards while financing the pipeline-construction. Thus, the report asserts „substantial non-compliance with all four applying social and environmental standards of the World Bank“. Among these violations is also the failure to adequately compile the design of the route causing the least environmental damage. Furthermore, the project neglected the most significant consequences resulting from the construction such as the doubling of Ecuador’s oil production. Moreover, the construction project was characterised by infringements of the World Bank Guidelines on the protection of natural habitats and the Guidelines to forced evictions. After all, the guideline on the protection of indigenous people is also violated.

Now, almost 10 years after the launch of the pipeline-construction co-financed by the WestLB, it can be stated that some apprehensions of environmental activists were far from being unfounded. Caused by several earthquakes in 2009, the pipeline has cracked causing the emission of approximately 11,000 barrel of crude oil into the highly sensitive ecosystem leading to severe environmental damages. In an article published by RP-Online, the environmental speaker of the German Green party commented: „All the hazards we have alluded to together with other environmental organisations have become reality in Ecuador“.