Behind the Lines

Stop Banking on Coal

An independent review commissioned by the World Bank calls on the Bank to stop financing all coal and oil projects in developing countries.

The Bank initiated the "Extractive Industries Review" to analyze its involvement in oil, mining and gas projects, following longstanding complaints from nongovernmental groups that such projects are socially and environmentally destructive.

Initiated in 2001, the Extractive Industries Review finalized its report in November 2003.

The report calls for more Bank support for renewable energy projects, and downgrading and fundamental refashioning of those mining and natural gas projects that continue to receive World Bank support. Among many other measures, it calls for:

• more disclosure of project documents;
• transparency in revenue flows (i.e., clear accounting of who gets the money generated from natural resource projects);
• revenue sharing with local communities;
• measuring projects' success based on their poverty impact; and
• more rigorous controls over mine and other wastes.

"At the moment, the World Bank Group is not set up to effectively facilitate and promote poverty alleviation through sustainable development in extractive industries in the countries it assists," the Review warns.

The Review also calls for the Bank to mandate respect for international human rights standards in the projects it finances, and to monitor corporations carrying out Bank-financed projects to make sure they respect human rights.

The Review's recommendations are not binding.

Friends of the Earth said it "strongly encourages the World Bank shareholder countries to adopt and support this ëphase out investments in oil production' recommendation without delay," but urged the Bank to end its support for mining altogether.

Industry groups reacted angrily to the report.

The review's recommendations, said Roger Wicks, chair of the UK-based World Coal Institute, "are inconsistent with the World Bank's primary aim of poverty reduction. Coal has played a major role in bringing energy, especially electricity, to the world's poor, bringing enormous benefits in health, economic activity, education and quality of life."

FTC Rules Against Schering

The U.S. Federal Trade Commission ruled in December that Schering-Plough Corporation, Upsher-Smith Laboratories, and American Home Products (AHP) entered into illegal agreements in 1997 and 1998 to delay the entry of lower-cost generic competition for Schering's prescription drug K-Dur 20, which is used to treat people with low potassium.

Schering and its potential generic competitors, Upsher and AHP, settled patent litigation with terms that included unconditional payments by Schering in return for agreements to defer introduction of the generic products. In a unanimous opinion, the Commission held that these provisions were unfair methods of competition, and entered an order that would bar similar conduct in the future.

The companies had argued vociferously that the settlement merely resolved the patent litigation, and was not a pay-off to keep generics off the market, and an administrative judge had issued an initial decision in the company's favor in June 2002 [see " The Evergreen Patent System: Pharmaceutical Company Tactics to Extend Patent Protection" Multinational Monitor, June 2002; and "Behind the Lines," Multinational Monitor, July/August 2002].

Biotech and Pesticide Use

The planting of 550 million acres of genetically engineered (GE) corn, soybeans and cotton in the United States since 1996 has increased pesticide use by about 50 million pounds, according to a November report by the Northwest Science and Environmental Policy Center.

The report, authored by the Center's Dr. Charles Benbrook, former executive director of the National Academy of Sciences Board on Agriculture, draws on official U.S. Department of Agriculture data on pesticide use.

The report calculates the difference between the average pounds of pesticides applied on acres planted to GE crops compared to the pounds applied to otherwise similar conventional crops. In their first three years of commercial sales (1996-1998), GE crops reduced pesticide use by about 25.4 million pounds but in the last three years (2001-2003), over 73 million more pounds of pesticides were applied on GE acres, according to the report.

Substantial increases in herbicide use on "Herbicide Tolerant" crops, especially soybeans, accounted for the increase in pesticide use on GE acres compared to acres planted to conventional plant varieties. (These crops are often known as "Roundup Ready," after the herbicide with which they are paired.) Many farmers have had to spray incrementally more herbicides on GE acres in order to keep up with shifts in weeds toward tougher-to-control species, coupled with the emergence of genetic resistance in certain weed populations, the report concludes.

"For years weed scientists have warned that heavy reliance on herbicide tolerant crops would trigger ecological changes in farm fields that would incrementally erode the technology's effectiveness. It now appears that this process began in 2001 in the United States in the case of herbicide tolerant crops," according to Benbrook.