Nijmegen, Jul 10 2009
BankTrack and its
member organisations welcome yesterdays' decision of three leading European
banks - Société Générale, UniCredit/Bank Austria
and DekaBank - to withdraw from the highly contested Ilisu dam project in Turkey. With this
unprecedented step the banks responded to the withdrawal of cover by the
German, Austrian and Swiss export credit guarantees on July 7th.
In a joint press release issued on July 8, the banks stated that: "In line with the decision of the Export Credit
Agencies, the three banks will apply the mechanism foreseen in case the
contractually agreed measures ensuring the World Bank guidelines on
environment, resettlement and cultural heritage are not fully implemented. The
export credit granted by Bank Austria,
DekaBank and Société Générale for the construction of the Ilisu dam is
therefore no longer available."
Société Générale, UniCredit and DekaBank had signed
loan contracts of approximately 450m Euro for the project, after Germany, Austria
awarded export credit guarantees in March 2007. In recognition of
huge deficits in the project planning, the Export Credit Agencies attached no
less than 153 conditions to their cover. Ever since, the experts commissioned by
the Swiss, German and Austrian governments to monitor the project, identified gross
violations of these conditions by the Turkish authorities.
As a consequence, the three governments withdrew the
guarantees and thus rendered the bank loans void. The three banks then had no
choice but to follow suit.
In contrast to the banks, the consortium involved in
the construction of the project including Andritz AG, Alstom and
Strabag/Zueblin is still pondering whether to stay involved in the project. In
a response it voiced its regret over the withdrawal of the export credit
When completed, the Ilisu dam project would displace
over 55,000 people of mostly Kurdish origin and destroy precious environmental
habitat and invaluable cultural heritage, including the 15,000 year old town of
impact of the dam would be felt far downstream in Iraq, which in violation of
international law was not consulted in the project planning and repeatedly
protested the project. After years of planning and preparation, there still
exists no solution for the resettlement of the affected population and the protection
of the cultural heritage.
"The Ilisu project never met international standards.
While the banks should never have gotten involved in the first place, we
greatly welcome that they now draw the consequence from this and step out",
states Heike Drillisch from CounterCurrent, leading the Ilisu Campaign in
"Ilisu became the symbol of failed export politics. Its
reputation now equals zero", states Yann Louvel from Friends of the Earth
France. "So much of this trouble could have been avoided if the ECAs and banks
involved had focused on assessing the projects' numerous failures rather than
bow for political pressure "
"The developments with Ilisu are almost without
precedent, but it is an encouraging sign that leading banks are ready to
retreat when faced with massive violations of conditions", says Johan Frijns,
coordinator of BankTrack. "The proliferation of social and environmental
policies adopted by banks in recent years slowly seems to raise the bar for obtaining
project finance and export credits"
"The European non-governmental organisations which
have campaigned against the Ilisu dam for years will continue to monitor the
project. Any bank or company getting involved in Ilisu again will be faced with
great protest and risk huge reputational damage", says Ulrich Eichelmann from
ECA Watch Austria.
"In order to avoid these blatant mistakes in the
future, private banks should learn lessons from the Ilisu case and immediately
include all recommendations of the World Commission on Dams in their credit
policies", says Antonio Tricarico of CRBM Italy.