Written by 17 h 31 min Environment and Climate, Strategic litigation

Uganda Dam project: The EIB in breach of its own operational policies

The Facts…

The Bujagali Hydroelectric project involves the construction and operation of a dam and hydroelectric power plant on the Nile, 10 km from the outflow of Lake Victoria. The project has been criticised for many years because of its potential to pollute the water and negatively impact on surrounding communities. It was founded on flawed analyses in that the dam is unlikely to generate the amount of electricity expected, and risks triggering an increase in electricity costs. Nevertheless, in 2007, the World Bank, the African Development Bank (ADB) and the European Investment Bank (EIB) all agreed to finance this project.

Legal action…

Alerted by a mobilising of local civil society, in May 2007 several international NGOs attempted to convince the EIB to suspend its investment in the form of a €95-million loan. In April 2009, Sherpa and the Counter Balance coalition organised an initial field survey. Based on the evidence found, these groups, together with Uganda’s National Association of Professional Environmentalists (NAPE), filed a complaint with the EIB’s Complaints Office on 2 December 2009.

Bujagali Hydroelectric Dam in Uganda – ©Bujagali Energy Limited

For two years, the Complaints Office continually delayed responding, even as construction on the dam neared completion. Consequently, on 15 November 2011, the groups complained to the European Ombudsman with regard to the Bank’s maladministration in grossly exceeding the prescribed time (140 days) for responding to the complaint, thereby rendering it moot.

On 20 August, 2012, the Complaints Office issued its report, which concluded that overall, the EIB had respected its economic, social, and environmental policies.

The European Ombudsman published a response on 25 September 2013, nearly two years after receiving the complaint. The Ombudsman admitted that the Bank had failed to comply with the time limits, citing problems with human resources and internal conflicts. The report concluded, however, that there was no maladministration of the complaint.

The Ombudsman’s report also found that the EIB had not committed wrongdoing in that any damage caused by the project could eventually be repaired, even though the damage to the population and the environment are irreversible.

The challenge for Sherpa and its partners today is to expose the ‘irresponsible’ investment and the flagrant failure of internal complaint mechanisms in this case.

Procedures & Milestones…

Tags: , , , Last modified: 17 December 2019