NGO Letter to German Environment and Development Ministers

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Minister Jürgen Tritten
Federal Minister for Environment, Nature Protection and Nuclear Safety

Ms. Heidemarie Wieczorek–Zeul
Federal Minister for Development Cooperation

Dear Minister Tritten,
Dear Minister Wieczorek–Zeul,

We are writing to express our concern at an apparent breach of German CDM policy that requires hydro projects from which Germany sources Certified Emissions Reductions (CERs) to be compliant with the standards outlined in the 2000 Final Report of the World Commission on Dams (WCD).

In February 2003 the Federal Environment Ministry (BMU) published standards for CDM and JI projects which included the requirement: “compliance with standards as they have been defined for the use of hydropower by the World Commission on Dams (WCD) is a precondition for the acceptability of projects regarding the aspects of the environment and sustainability.”1

However, the first CDM project, which has obtained approval of voluntary participation by the German Government, is a hydro project that has not publicly demonstrated how it is in compliance with the WCD. The La Esperanza hydropower project in Honduras has been developed by the World Bank’s Community Development Carbon Fund (CDCF), in which the German Government’s Kreditanstalt für Wiederaufbau (KfW) and BASF Aktiengesellschaft are investors. Germany’s Designated National Authority (DNA) appears to have given approval of voluntary participation in this project and authorised KfW and BASF to act as participants consistent with UNFCCC rules and the CDCF’s Participation Agreement. If there is no objection by a project participant or three members of the CDM’s Executive Board by December 4, 2004, it will be registered as a CDM project and beginning generating CERs, some of which will presumably be used by Germany to meet its Kyoto Protocol reduction target.

However, despite the BMU requirements for CDM hydro projects, the Project Design Document (PDD) for La Esperanza does not even mention the WCD. No additional documentation been made available showing whether this project is in compliance with the WCD. Given KfW’s involvement it is also relevant to note that the June 2004 report from KfW, BMZ and GTZ on “Implementation of the WCD recommendations within German Development Cooperation” made the following commitment:

“In processing any dam–building project, KfW follows the rule of verifying its compatibility with the WCD recommendations, even if the dam in question is so small that – like weirs – it falls short of the minimum structural height of 15 meters named by WCD as the boundary below which a dam is no longer considered an object of the WCD recommendations . . . KfW commissions internationally accredited experts to conduct the investigations.”2

As such, we are writing to ask you to explain to us how the La Esperanza project has demonstrated its compliance with WCD standards and is thus in compliance with BMU’s criteria for CDM hydro projects. If it has not done so, we urge you to immediately stop the project’s registration by seeking a review of the project, as we believe you are able to do under UNFCCC rules. This review would delay the project’s registration so that a study could be prepared demonstrating how the project meets WCD standards, consistent with your government’s policy.

The fact that this is the first CDM project with German involvement that is seeking registration makes it all the more important that it fully comply with the standards you have outlined for CDM projects. We also note that the World Bank has sought to marginalize the WCD standards and does not apply them to their own hydro projects. Your consistent support of the WCD has been an important bulwark against the Bank’s efforts. We would be greatly disappointed to see you not only not apply your pro–WCD policies in this case, but in failing to do so help the World Bank in its efforts to undermine the WCD.

Given that La Esperanza will be registered next week we request an urgent response from you on this matter.

Yours sincerely,

Jürgen Maier, Director
German NGO Forum Environment & Development

This letter is supported by the following international organisations:

International Rivers Network
Climate Action Network, Europe
CDM Watch
Environmental Defence, USA
Manthan Adhyayan Kendra, India
BanglaPraxis, Bangladesh
South Asia Network on Dams, Rivers & People
South Asian Solidarity for Rivers and Peoples (SARP), Nepal
Water and Energy Users’ Federation–Nepal (WAFED), Nepal
Berne Declaration, Switzerland
Friends of the Earth Paraguay
Campagna per la riforma della banca Mondiale, Italy
Chalakudy River protection Council, India
Volta Basin Development Foundation, Ghana
SWAPHEP, Nigeria

Minister Tritten’s response to NGO letter on La Esperanza hydro and WCD

Second NGO letter to Minister Tritten on La Esperanza/WCD