Thursday, 16 February 2012 - groundWork's letter to the World Bank on its response to the Inspection Panel report into the Medupi project

Reynold Duncan
Energy Program Coordinator, Africa Region
Washington D.C. 20433

 By e-mail: rduncan1@worldbank.org

 CC:         Inspection Panel, Mishka Zaman, Operations Officer
                World Bank, Renosi Mokate, Executive Director

 Dear Reynold

 South Africa Investment Eskom Support Project

World Bank Management meeting with Requestors representatives and community representatives

 We would at the outset like to record our appreciation for the opportunity afforded to us to make input to the World Bank's management response to the Inspection Panel report on the South Africa Investment Eskom Support Project.  We hope that this dialogue was meaningful for the Management and hope that our concerns and issues raised during the meeting will be duly addressed in your action plan.  We would like to record the positive nature of the meeting, as referred to by the South African Country Director in her closing statement.  We are all committed to make sure that we have an open, honest and meaningful engagement throughout this process and beyond.  Our intent is make sure that the local impacts on the communities and environment can be mitigated and minimized.

 In light of wanting to keep this dialogue honest, we cannot concur with the Country Director's statement that 'we are talking from the same side'.  It is evident from the limited response by the Management – focusing only on air pollution and water – that Management has failed to come to grips with the reality on the ground as presented by the Inspection Panel report, or that you choose to purposefully ignore it.  We hope the latter is not the case.  A more detailed and meaningful response by Management would have perhaps brought the parties to the same side.

 We would like to also place on record that despite numerous attempts to get a formal agenda for the meeting it was held without any formal agenda.  Indeed, something that is procedurally inappropriate.  Thus, there was never any certainty as to what really was the objective of the meeting.  Over the course of our discussions in January, the objective of the meeting was blurred.  Drawing from various statements from correspondence that speak about the meeting, it is stated that the meeting will indicate 'how the Management intends to move ahead', to discussion of an 'approach', and or discussing 'actions'.   You also indicated that the Bank's response is confidential until the Board of the Bank makes it public.  This was indeed strange for while you were not willing to share your entire approach, you wanted honesty and transparency from the community. 

 The second procedural issue was that the Inspection Panel report was leaked to the public.  Both parties present in the room knew the contents of the report and thus were speaking from an informed perspective, but you failed to comment on the broader issues in a meaningful manner.  We believe that this was an opportunity lost.  We hope that it is not your intention to ignore these pertinent issues.     

 The critical issue underpinning the entire development is the cumulative impact of the Medupi project on people and their environment in the area.  The South African Country Director also referred to this in her closing comments.  This broad based approach and understanding of cumulative impacts needs to be understood urgently, or else the entire area is set to be an environmental disaster zone.   To ensure that this does not happen, and that there is a meaningful response from the World Bank Board in their quest to find a socially and environmentally just solution,  it is very critical that the South African government and Eskom is supported so that there is informed and proper decision making and management going forward on this project.  We thus propose the following to be considered seriously in your response to the Inspection Panel report.

 The following proposals are made after having gone through the Inspection Panel report.  These issues were raised in the meeting yesterday at various times, particularly by the local communities members, who will be impacted the most by this project.  We would like to place them on record so that there is a clear understanding of what our expectations are.

 Capacity building

 The Inspection Panel report raised concerns about the reliance on self-regulation by Eskom.  Coupling this with their concerns on capacity and implementation of local and provincial government to monitor and enforce, it is certain that a gap exists to secure the integrity of environmental and human rights.  We believe the Bank could assist with staff development in the relevant regulatory agencies at the national (Department of Water and Environmental Affairs; Mineral Resource), provincial and local levels.  As stated in the Inspection Panel report, many of these departments are under-staffed, under-resourced, and also under-skilled.

 Cumulative impacts: Use of Appropriate Management Tools to Manage Cumulative Effects

 The Inspection Panel report highlighted the concerns of cumulative impacts within the environmental and social realm.  With future developments earmarked from the area, and with an increase in coal mining, a broader vision is needed.  For more focused and effective management of critical resources such as water, air and social services more research and planning processes on alternatives (involving local communities) need to be used to supplement existing tools such as the catchment management plans, atmospheric emission licenses, environmental impact assessments and reports, and present town planning strategies.  Integrated Development Plans need to be able to draw on alternative management tools to secure appropriate development for the area.  Considering the Integrated Development Plans have to be reviewed every five years (sometimes mid term reviews are possible) it could be a critical tool to manage the cumulative social impact.

Water

 It is welcomed that the Management consider water to be a major challenge.  There is a concern however on the Bank's reliance on the Department of Water Affairs to be able to meaningfully respond to the challenge.  The water debate in South Africa is well documented, and the Department of Water Affairs has failed society.  The most recent scandal has been the acid mine drainage impacts on the Vaal catchment area. 

 The Bank needs to pay close attention during upcoming supervision missions on how Eskom, the Department of Environmental Affairs and Department of Waster Affairs would resolve the water availability issue and decide on the ultimate installation schedule for the flue gas desulfurization units.

 We therefore, propose that a rigorous and complementary studies be conducted, with the following characteristics.

 Investigate the water availability from the Mokolo dam, and specifically regarding the water users from the Mokolo river upstream from the Medupi area.  This should be done regardless of whether Mokolo and Crocodile River (West): Water Augmentation Project Phase 2 will be implemented or not.

 Investigate water-usage by poor and small-scale irrigation farmers, mainly women, in the area north of Lephalale. As mentioned in: 'Transforming Water Management in South Africa' (in the journal Water Policy), which clarifies that the poor farmers who were supposed to get more water as a result of a more equitable allocation of water in the country, are not necessarily getting their due share.   We only know that the irrigation allocation is still to be verified. In other words, no-one knows with any degree of certainty how much water is used in irrigation, nor how dependent these people are on the water for their livelihoods.  

 The study should include a survey/assessment of the water storage capacity in the Mokolo reservoir. It is likely that the storage capacity is much less then the design capacity because of accumulation of silt and especially sand in the reservoir during the approximately 30 years since the construction of the dam. The actual storage capacity has a direct bearing on how much water can be stored during periods of high flow and made available during subsequent periods of drought, and hence also only the available water for Medupi and the municipality before the completion of Mokolo and Crocodile River (West): Water Augmentation Project Phase 2.

 The study must consider the erratic rainfall, and the cumulative demands on water from coal mining expansion, influx of workers, power stations (etc), a 'reality check' on availability of return flows, to determine more reliably the probable impacts on the system from the downstream users view plus from the reserve perspective.

 The study must consider the sand mining issues to understand its impact on water security in the area and to develop systems with the provincial environment authority that monitors and enforces regulations on sand mining issues.

 Sewage

 The strain on the system was articulated in our meeting.  Water quality as a result of untreated sewage inflows is a major issue.  An assessment of water quality needs to be done and responsibility for water treatment assigned. This may have improved with reference to Lephalale as the capacity of the treatment plant was or is expanded by Eskom. Monitoring the outflow from the wastewater plant as function of the water supply to the municipality would throw some light on the claim that 50% of the inflow would be available for Medupi during the period of delay in the construction of Mokolo and Crocodile River (West): Water Augmentation Phase 2. Little is known about the quality of the water that will pass from the Gauteng area (considering the acid mine drainage challenge) through the Crocodile River to the Medupi, once Mokolo and Crocodile River (West): Water Augmentation is on line. This would be a good time to ascertain who is responsible for what and who is expected to pay for cleanup. 

 Waste Disposal

 Hazardous waste management in South Africa is an ongoing challenge.  Close on 50% of South African landfill sites are not permitted. Wastes disposal is of sources of pollution linked directly and indirectly to the Medupi development and operations.  For example, sewage treatment, waste sites, gypsum disposal, waste ash.  This will need strong enforcement.

 Air Quality

 The belief that particulate matter air pollution determined at the Maropeng monitoring station is as a result of ground level pollution sources and does not arise from tall stacks such as the Matimba coal fired power station is falsely premised for the following reasons:

Particulate matter air pollution in the Highveld Priority Airshed is generally out of compliance with the South African ambient AQ standards during the winter periods and according to the Department of Environmental Affairs themselves (Dr. Patience Gwaze) the nature of the pollution is regional rather than local which generally implies an industrial source rather than local domestic burning. Specifically Dr Gwaze has indicated that there is a strong correlation between PM2.5 and PM10, which indicates that the sources of these two pollutants are probably the same.

 Figure 1 below supports this belief that most particulate air pollution recorded by monitoring station is from industrial sources.  Figure 1 and 2 similarly also demonstrates a worrying trend among the air quality monitoring stations generally in SA demonstrating gaps in monitoring because of malfunctioning equipment and the lack of dedicated oversight and management of these networks.

Figure 1: PM10 24 hour concentrations for the months of May, June & July 2009

Figure 2: PM10 24 hour concentrations for the months of May, June & July 2010

 The World Bank must work with the district municipality, which has a draft air quality management plan, to help implement and monitor this plan and enforce compliance. Also, development of a comprehensive emissions inventory and characterization of existing air quality in the Waterberg Airshed (the airshed plan is yet to be developed) could be another consideration.  From the history of other airshed's that have these plans, such as the Vaal Triangle and the Highveld area (where Kusile is being developed), there has been very little meaningful change in the pollution loads in these areas.

 Health

 From the  experience of other priority airsheds in South Africa the challenge around health has been a major component of the work undertaken.  It is critical that the status of the peoples' health is understood in advance.  The establishment of a baseline epidemiology  to record existing respiratory diseases against which to evaluate possible negative health effects (such effects could arise from a number of 'drivers', but one could at least check trends pre and post Medupi) is critical.

 The research should put additional resources into studying and resolving issues of cumulative impacts upon various measures of environmental health in the Waterberg region and in the trans-boundary Limpopo River basin. 

 Transparency

 Transparency was a major part of our debate yesterday.  Indeed the manner in which yesterday's meeting was called and facilitated – without an agenda – highlights the World Bank's opaque practice.  We hope that this will change and suggest the following:

-  Improved transparency on the environmental side would be very helpful, both in terms of public posting of environmental air and water monitoring results on the web and in public spaces in Lephalale, and the posting of the conclusions by Bank monitoring missions about the state of the project's compliance with Bank standards.

- The Bank should insist on public consultations with regard to the evolving Environmental Management Plans. The current Plans (both construction and operations) are in the process of revision.  It was clear from the meeting yesterday that people have little information about what happened.  They only knew about it when construction started.

- It was recognised that the Environmental Monitoring Committee set up by Eskom is critical and people are willing to participate in it if it seeks meaningful engagement with action as a result.  The Bank should ensure that there is adequate and appropriate representation from all sectors of the affected community on the Environmental Management Committee.  The proactive sharing of all environmental information and particularly monitoring data from air and water sources with the Environmental Management Committee and the public will ensure that the borrower – all parts of the affected community – and the Bank are informed about all relevant environmental and social impacts and issues related to the project.

- Supervision missions to date have not engaged with the local people or have done so in a selective manner.  In all future supervision missions, the Bank staff should ensure that they communicate to all relevant sectors of the Lephalale community in timely, culturally and socially appropriate ways that they will be visiting the Lephalale community and invite the community to meet with them to discuss the project or to communicate any information they deem appropriate to the Bank staff. 

 We hope that you consider our comments above not merely as impacted and concerned people, but also in light of our reading of the leaked Inspection Panel Report.

 Our understanding is the World Bank sought a more proactive role while giving USD 3.75 billion to Eskom, and your current hand's off approach is contrary to earlier public position taken during the loan approval. If the World Bank's intention was to take 'South Africa to low carbon development' and this loan was 'down payment' on as greener future, then it should be reflected in the World Bank's action plan for Medupi particular and Laphalale region in general.  As indicated yesterday, it would be critical that your response is not rushed. So please request more time from the Inspection Panel or the World Bank Board – whoever is tasked to grant this time.  We support a call for additional time to respond meaningfully to our concerns so that indeed we are 'talking from the same side'.

Finally, we note that the Bank has not taken the concerns of the Inspection Panel on board in a meaningful way.  We want to state that we might have to seek redress for harm caused and continuing if the response does not meaningfully lead to a change of action and outcome from the present.

 Regards,

  S. Peek
On behalf of groundWork and Earthlife Africa