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Dept for International Development

Answer

Mr. Laurence Robertson: To ask the Secretary of State for International Development, what assessment he has made of the impact on (a) the economies and (b) the environment of Third World countries of oil extraction; and if he will make a statement. [222622] Mr. Laurence Robertson: What support his Department gives to Third World countries with regard to oil extraction; and if he will make a statement. [222623] Mr.Gareth Thomas: The Department for International Development (DFID) does not directly fund oil extraction in developing countries. We do support the World Bank's involvement in the extractive industries. The oil and gas extractive industries form a very small part of World Bank Group's lending portfolio. Investments are subject to high social and environmental safeguards that set a standard for the industry at large, as set out in the World Bank Extractive Industries Review published in 2004. We recognise that revenues from oil and gas resources can potentially support economic growth and social development that may lead to reduction in poverty. In some countries, however, the large revenues generated from oil and gas production have been associated with corruption, conflict and increased poverty. The Prime Minister launched the Extractive Industries Transparency Initiative (EITI) in September 2002. It seeks to increase the transparency of payments to Governments by oil, gas, and mining companies; and the transparency in use of revenues by Governments. DFID has led an international coalition of Governments, industry and international organisations, both within and outside countries hosting significant extractive industries, to improve transparency and reporting of revenues. Nine developing countries have committed themselves to implementing the principles of the EITI, with a further four African countries making new commitments at a London conference on 17 March 2005. The World Bank is actively participating. DFID monitors and comments on the environmental and social impacts of projects and programmes funded by the World Bank and other International Financial Institutions (IFIs), where we have stakeholder obligations as contributors. In some cases we have commissioned independent studies to improve our understanding of key economic and environmental issues and evaluate how they are being addressed. One example is the Baku-Tbilisi-Ceyhan (BTC) pipeline. We have also kept in close touch with the issues raised by the proposed Sakhalin Island 2 oil pipeline development in Russia. DFID is working with others (including the IFIs) and the Organisation for Economic Co-operation and Development (OECD) on improved environmental assessment procedures for use at the planning stages of new projects and programmes. This will include the application of such procedures to large-scale projects in oil extraction, where these are funded by the IFIs.

Secondary information

Type

Written question

Reference

432 c635-6W; 222622; 222623

Session

2004-05

Subjects

Developing countries Development aid Environment protection Economic situation Oil Mining Production

Link

View this Written question on www.publications.parliament.uk