The World Bank yesterday agreed to new rules meant to prevent revenue from oil and gas projects going to corrupt regimes but rejected a call for it to pull out of those projects altogether.
"There was very broad consensus that we should remain engaged, we do add value," Rashad Kaldany, director of the Washington-based World Bank's oil, gas and mining department, said in a conference call with reporters.
The bank will require companies and countries to disclose oil payments, and to publicly disclose how the bank views the corruption in a country before it gets a loan for an oil or gas project. The bank management must still rework some aspects of the changes in the next few weeks, Kaldany said.
"The World Bank has missed a historic opportunity to bring its lending more in line with its mission," said Nadia Martinez, an analyst at the Institute of Policy Studies, which has been critical of the bank's approach in poor nations. "The World Bank opted for a few minor tweaks."
U.S. companies including Halliburton Co. and Exxon Mobil Corp. have benefited through the use of World Bank involvement in projects in Chad, Azerbaijan and other countries. The World Bank approved $11 billion in loans last year.
The bank's independent review panel had recommended that it pull out of oil, gas and coal projects by 2008, saying those programs do not benefit the poorest people in the area of the natural resources and lead to environmental degradation.
The World Bank today agreed to an approach that is "business as usual with marginal changes," according to Emil Salim, the Indonesian official that led the bank's review of those projects.
The Extractive Industries Review found World Bank-funded oil and gas projects have not contributed significantly to poverty alleviation, he wrote in a report to the bank's board in June.