Nr. dodgy deals
Banks to stay out of Ilisu Dam Project
Utrecht, Netherlands, May 24 2007
Commercial banks today were warned not to become involved in investing or financing the controversial Ilisu Dam project located in Turkey.
BankTrack, a network of 17 international NGOs in collaboration with civil society organisations WEED (Germany), ECAWatch (Austria), the Berne Declaration (Switzerland), Amis de la Terre (France), and The Corner House (UK) sent letters to major international banks outlining massive stakeholder opposition to construction of the dam and the failure of the project developers and supporting Export Credit Agencies to meet international standards. The groups warn that commercial banks will face extensive reputational risks if they become involved in the project.
A total of 78 000 people, the majority of them Kurds, would be affected by the construction and operation of the dam. However for communities facing relocation as a result of flooded river valleys, the proposed resettlement plans fall well short of minimum international standards required for large-scale development projects of this type. The NGO letter alerts potential financiers to ongoing litigation within Turkey and at the European Court of Human Rights, and to current legal advice pointing to liability of other financial institutions providing finance for facilitating breaches of international law.
The letter was sent to Société Générale (France), Bank Austria and Zürcher Kantonalbank (Switzerland), which are currently known to consider involvement in the project. A similar letter was released to the wider banking community requesting potential investors to take note of the many serious problems that still remain unaddressed by project sponsors.
“Individual banks were warned that if investment were to take place, they would not escape responsibility owed to project affected communities, the banks’ shareholders and the public at large, even by hiding behind a consortium and ECAs” commented Heike Drillisch from BankTrack member group WEED in Germany.
BankTrack advised the banks that ECA contracts have not yet been signed for the project and the Turkish authorities are showing great reluctance to actually commit to fulfilling conditions tied to ECA approval. Further, the faulty environmental assessment and resettlement planning, doubts over the project's compatibility with international law, and widespread community opposition to the project should be enough for any responsible financial institution to refrain from involvement in Ilisu.
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