An Inter Press Service Commentary

GENEVA, Mar 17 1994 (IPS) - Delegates from 87 countries this week agreed to create a Global Environmental Facility (GEF) based at the World Bank -- and while the objective is laudable, some environmentalists remain pessimistic.

In the words of Nicholas Hildyard of ''The Ecologist'' in England, the facility will turn out to be no more than a ''green menace''.

Other activists who followed this week's three-day meeting ending here Wednesday also expressed disappointment with the final compromise agreement, and said that the decision should have been postponed until further talks were held.

Indeed, ever since the idea of the facility came up four-and-a- half years ago, it has been a contentious North-South issue.

It came out of a September 1989 joint World Bank-International Monetary Fund annual meeting in Washington DC, when the French government, with backing from the Germans, suggested that the Bank set up a financing facility for global environmental issues.

The Bank subsequently invited the United Nations Development Programme (UNDP) and the United Nations Environment Programme (UNEP) to a meeting with 17 donor countries in Paris in March 1990 where an agreement was forged to set up a pilot project for such a facility.

At the Earth Summit in 1992, the future GEF won approval as the interim financial mechanism to pay for the convention on biodiversity and climate change.

Three meetings of the Participant's Assembly have since been held to shape the new GEF -- one in Abidjan, Cote D'Ivoire in December 1992, one in Beijing, China in May 1993, and most recently in Cartagena, Colombia in December 1993. The number of governments involved has gradually increased at the successive meetings.

The formal legal existence of GEF pilot projects began in November 1990 when the donor countries pledged the equivalent of 812.7 million dollars to the GEF's core fund. Because some countries were unwilling to give money directly to the Bank, two other mechanisms were devised -- co-financing and parallel financing -- which amount to another 325 million dollars.

The pilot phase was set to last from July 1991 to June 1994 although the distribution of grants is expected to continue until 1998. GEF projects were invited into four areas: to tackle emissions of greenhouse gas or ozone-destroying chemicals, protect biodiversity, or reduce pollution of international waters.

GEF money is given as grants to countries with a per capita income of less than 4,000 dollars a year. This is very different from the vast majority of World Bank money, which is given out as loans that have to be paid back and which provide the Bank with profits of one billion dollars a year.

This money was not supposed to simply pay for any biodiversity or climate change project but simply for those that would not normally be funded that would have an impact on the global environment, or for the incremental costs of a project that has both local and global effects.

Two-thirds of the money is allocated to the World Bank and a third is allocated to the UNDP. Of the World Bank money, there are two types of projects -- free standing grants and those associated with other World Bank loans.

This is a major area of contention for activists like Hildyard. He says the grants are only intended to ''green'' the larger loans which are very environmentally destructive.

Estimates provided by the Bank operations officer Charles Feinstein in 1992 showed that 85 percent of the money of World Bank GEF projects are estimated to be associated with larger loans.

Activist concerns would then be about projects like last year's GEF approved 30 million dollar grant to India for alternative sources of energy. Months later the Bank's board of directors approved the first of a series of new loans to India to build up coal fired electricity generating capacity.

The U.S. based Environmental Defense Fund estimates that the new projects will add the single biggest new source of greenhouse gas emissions on the entire planet -- 2.5 percent to the global carbon emissions total.

Also, in Laos the GEF wants to give five million dollars for forestry protection. The catch is that it only comes with the loan from the Bank itself, which requires that the government fulfill certain conditions, like a new law which requires the country's forests to be divided up into Resource Management Areas for logging.

And in Kenya, a GEF plan to protect two monkey species -- the Red Colubus and the Tana River Crested Mangabey -- in the Tana river area in Kenya, will require the resettlement of 5,000 tribal people.

Nehemiah Rotich, a Kenyan representative of the East Africa Wildlife Society, said of this: ''What it (the GEF) calls community development is in fact community manipulation and the so-called voluntary resettlement is reality an eviction programme.''

Notably, the GEF was forced to cancel a 2.5 million dollar project for mixed native species tree farms in Ecuador which was supposed to help the local Chachi peoples, but in fact it financed the richest forestry company in the country and violated the Bank's own guidelines on protecting the community's rights.

Indeed, an independent evaluation of the GEF by a team picked by GEF chairman Mohammed El-Ashry reported in November 1993 that ''no further allocation of funds to new projects should be made'' until proper strategies are developed.

For example, the evaluators said that the GEF's commitment to paying for ''incremental'' global benefits has resulted in its ignoring local and regional issues and failing to develop local or regional strategies.

What's more the report said that the GEF's work had been marked by ''unproductive competition and antagonisms and independent rather than cooperative endeavours'' between the three implementing agencies.

A recent internal memo from UNDP said the GEF ''has to a large extent failed to take into account input from the other implementing agencies'' (other than the Bank). It detailed six meetings that the these agencies held on this subject, where it complained that the GEF chairman ''imposed consensus'' on the other agencies.

The memo also accused the World Bank of trying to pull wool over the eyes of governments in order to wrest control of the GEF by advocating that the GEF be legally set up by the Bank.

So, were environmentalists happy Wednesday when donor governments committed another two billion dollars to the GEF? Not really.

For while the Northern and Southern delegates wrangled endlessly about the structure and control of the organisation before finally reaching a compromise, actual environmental concerns were said to have been put on the backburner.

One U.N. official who asked not to be identified told IPS: ''I have yet to hear anybody talk about the environment here. It is money that is talking,'' she said.

Swiss activist Peter Bosschard of the Bern Declaration told IPS: ''The chairman said that the conditions of the evaluation report have been met. This is completely untrue and I am disappointed that governments have disregarded the evaluation they commissioned.''

Korinna Horta, staff economist at EDF said: ''The new GEF has postponed decisions on essential matters like access to information and participation of affected communities. The deal should have been postponed.''(END/IPS/EN/PC/CPG/94)

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