Advocacy for the Environment

and Human Rights

Annual report 2002

 2

Heffa Schücking
Biologist, Director
Hermes campaign, international financial institutions,
forests, dams, regional focus on Asia
urgewald@urgewald.de

Barbara Happe
Political scientist
Hermes campaign, international financial institutions,
regional focus on South and Central America
barbara@urgewald.de

Agnes Dieckmann
Nutritional scientist
The team
Environmental education, paper and consumer campaigns
agnes@urgewald.de
Urgewald currently employs
eight staff members. In addition,
interns and volunteers often
offer their time and skills. in Lydia Bartz
2002 special thanks go to Judith Biologist
Neyer for her work in our Berlin International forest campaigns, environmental education
office and to Werner Rolf for lydia@urgewald.de
managing our webpage.

Andrea Soth
Graphic designer, Administrator
Public relations, fundraising and contact for donors
and members
andrea@urgewald.de

Regine Richter
Biologist
Hermes campaign, international ECA campaign,
European Investment Bank
regine@urgewald.de

Maren Jung
BA in Thai and Development Studies
Campaign support, translations
maren@urgewald.de

Knud Vöcking
Historian
World Bank and IMF, regional focus on Central and
Eastern Europe, bookkeeping
knud@urgewald.de
 3

Advocacy for the Environment and Human Rights

... these words more or less sum up urgewald’s pur- their voices are heard in Germany- in meetings with
pose. We ask questions about the underlying cau- decision makers, at shareholder meetings or at public
ses of global environmental destruction and poverty, actions.
and more often than not we find answers in German
politics, society and the economy. In pain-staking urgewald has been around for ten years – and to a
research , we analyse how German banks and com- large degree, that is because you believe in the value
panies contribute to environmental destruction and of our work and have given your help and support in
human rights violations in developing countries and many ways - by making a donation, by lending us
how German policies help determine the develop- your time and ideas or sharing your contacts with us.
ment path of many countries in the "global South". For all this we would like to thank you! In order to
We name names, and we call on those in charge of continue working in the independent, constructive
business and politics to put into practice the promi- and courageous way that has come to be urgewald’s
ses of sustainability that are made in annual reports trademark - we remain dependent on committed indi-
and government programs. One of our main fields of viduals such as yourselves and progressive founda-
action is therefore German economic and develop- tions.
ment policy. Here we can influence global develop-
ment to achieve concrete results that benefit people Independent work needs independent money!
and nature. This is why we call for binding ecological
and social standards in German export promotion or Andrea Soth
raise awareness about the impacts of paper con-
sumption in Germany on the ancient forests of
Canada, Brazil and Indonesia.
*** Please note that the following is an abbreviated
For years we have been working in close co-opera- version of our full Annual Report 2002 which is avai-
tion with affected people. urgewald has become an lable in German.
important contact point for indigenous people in
Canada fighting against big timber companies clear-
cutting their land, for farmers and fishermen in India
who are being driven off their lands for large dams
or for environmentalists in Ecuador who are defen-
ding nature reserves against the interests of interna-
tional oil companies and banks. We make sure that
 4

Urgewald’s "Hot Spots” in 2002

Paper Campaign
The consumer campaign aims at a reduction of paper consump-
tion in Germany as well as an increase in the share of recycled
paper products used by German consumers. The global links bet-
ween forest destruction worldwide and rising consumption can
be easily demonstrated and understood by using the everyday
product paper as an example. Up to now, the focus of this cam-
paign has been the German state of Northrhine-Westphalia.
During the course of 2003, we hope to extend this campaign to
other parts of Germany. News from international forest cam-
paigns are continuously incorporated into the campaign.

Hermes Campaign
Hermes is the name of the German export credit agency (ECA).
The "Hermes Reform Campaign” calls on the German Govern-
ment to adopt social, ecological and developmental criteria for
German export credits. The aim is to establish binding rules that
will exclude projects from Hermes coverage if they are environ-
mentally destructive, create poverty or increases the foreign debt
of the project country. In 2002, we opposed an export credit for
the Brazilian nuclear power plant Angra 3 as well as the hydropo-
wer dam Sawalkote in Kashmir. If a Hermes guarantee is granted
to a controversial project, urgewald continues to make public the
social and ecological problems that occur during and after the
implementation of this project and to call for fair and just com-
pensation for the local population. We demand compensation for
people displaced by large dams such as the Tehri dam in India or
for people whose means of existence are irreversibly destroyed
as in the case of the pulp and paper factories of the company
Asia Pulp & Paper in Indonesia.
 5

WestLB/OCP
(Oleoducto de Crudos Pesados or heavy crude oil pipeline)
In this international campaign we co-operate with a broad coali-
tion of NGOs against the construction of a new oil pipeline in
Ecuador. The pipeline and the resulting expansion of oil produc-
tion capacities in the Amazon threatens to increase the debt of
this already poor country as well as the risk of catastrophic oil
spills in the rainforest. This project is implemented against the
will of the affected people by means of intimidation and corrup-
tion and with the help of "security forces” of the oil companies.
Leader of the financial consortium is the Westdeutsche Landes-
bank WestLB, whose major shareholder is the Northrhine-West-
phalian State Government.

In the international Forest Campaign we fight for the protection

of the world’s remaining old growth forests and their inhabitants.
Since the majority of the pulp and paper used in Germany comes
from Canada or Brazil, we support forest peoples from these
regions in their struggle for the recognition of land rights and
against the ongoing destruction of their lands and livelihoods. In
Canada, we work with the Nuxalk Nation in the Great Bear Rain-
forest in the western province of British Columbia as well as the
Anishnabek Nation in Grassy Narrow, Ontario. In Brazil, urgewald
supports a network of NGOs called "Green Desert” in the southe-
astern State of Espírito Santo. Apart from this solidarity work, we
campaign for binding social and ecological forestry standards on
a national and international level together with partner organisa-
tions like the Taiga Rescue Network, in the development, trade
and export credit arenas.

Energy Policy/Eastern Europe

The loopholes in Germany’s exit from nuclear power were the
main focus of our energy policy work in 2002. While the German
and European nuclear industry tried to compensate their dwind-
ling business orders from Western Europe by moving into Eastern
Europe and developing countries such as China, urgewald focu-
sed on blocking public subsidies for these ventures from either
Hermes or the European nuclear power promotion agency Eura-
tom. In the second half of the year urgewald participated in a
campaign of European NGOs, which succeeded in preventing a
replenishment of Euratom’s funds. This victory was extremely sig-
nificant as Euratom was planning to bankroll the construction of
numerous new nuclear plants around the world.
 6
Background

Hermes guarantees are state-backed export credit

NGOs challenge
Export Credit Agencies!
Under the heading "Export Credit Agencies (ECAs) – globalizatio-
n’s dirtiest secret” 70 NGO representatives from 36 countries
came together in Berlin in March 2002. urgewald organised the
six-day strategy meeting of the international campaign for the
reform of export credit agencies and took advantage of the Berlin
setting to stimulate the national debate on a reform of Hermes,
the German ECA. This was significant, as Germany, although often
considered a leader in environmentalprotection, continues to
block international efforts to agree on binding environmental and
social standards relating to export credit guarantees.
guarantees that insure German companies exporting
to developing and newly industrialized countries
against economic and political risk. In the event that
the exporter does not receive payment for his goods,
the German government compensates the German
exporter and then tries to recover the amount from the
debtor state. About one fifth of German exports to
developing countries and transition economies are
secured through Hermes guarantees. Since 1996, a
coalition of over 100 German NGOs has been calling for
strict environmental and social standards for Hermes
as well as the exclusion of weapons exports from Her-
mes coverage.

Forming an effective international network of environmental

watchdogs and agreeing on a common strategy becomes more
and more important as every industrial nation has at least one
export credit agency. The main goal of these agencies is to pro-
mote national exports to developing and newly industrialized
countries, alas often without any consideration to the environ-
mental and social impacts of these deals. At the same time, there
is a growing number of people from the South and the East oppo-
sing ECA-backed projects that violate traditional landrights and
harm the environment. The participants of the workshop were
able to reach agreement on a wide range of issues such as the
role of ECAs in contributing to developing countries’ debt and
their impact on human rights. They discussed and co-ordinated
their demands and strategies and for instance called on ECAs to
abandon their promotion of fossil fuels and nuclear power. More-
over, the workshop served to strengthen the ties between acti-
vists from around the world and to bring new NGOs and new
constituencies into the campaign for a reform of ECAs.
 7

Forests or toilet paper?

The consequences of wasteful paper consumption can be seen discussions with German importers of pulp from Brazil and with
everywhere on earth: People and nature suffer from the destruc- other representatives from industry and civil society about possi-
tion of ancient forests to produce office paper and magazines ble ways out of the "Green Desert”. The debate circled around
and from the conversion of natural forests into plantations to three central points: binding ecological and social standards for
produce toilet paper in Canada’s coastal rain forest, in the tropi- the export of German pulp and paper technologies, the reduction
cal rain forest on Sumatra or in Brazil. The world’s biggest produ- of paper consumption and a shift from using solely virgin fibre
cer of pulp and paper, ARACRUZ, has already converted an area paper to recycled paper.
of 300.00 hectares of rain forest and cultivable land in Brazil into
monotonous eucalyptus plantations. "Our future lies in toilet
paper” is the slogan of the multinational company. "Our future
most certainly does not lie in toilet paper” said the people affec-
ted by ARACRUZ and began active resistance. Since the end of
2002, urgewald in cooperation with our Brazilian partner FASE
has supported a local project as a counterweight to the aggres-
sive expansion of this company. Involving the local population,
small-scale farmers learn about sustainable and traditional agri-
culture and receive support to adopt these practices on their
farms. Moreover, local communities are being encouraged to
form links and support one another.

Pack your bags for Johannesburg

In the run-up to the UN world summit on sustainable develop-
ment in South Africa in August, numerous preparatory events
were held during the first half of 2002. "Pack your bags for Johan- Background
nesburg” was the slogan of the first of a series of public events
A pulp and paper boom to the detriment of people and
which took place in the state of Northrhine-Westphalia beginning
the environment: The distribution of profits and losses
in April 2002.
in the paper industry is highly unequal. Industrial
countries such as Germany export paper and pulp mills
The fight against a "Green Desert”
to the South, where these give rise to a multitude of
Winnie Overbeek, a representative of our Brazilian partner net-
environmental and social problems. The industrial
work "Deserto Verde” (English: Green Desert), gave a talk on the
countries depend on the import of pulp and paper to
activities of the pulp and paper company ARACRUZ in the Brazi-
satisfy their unsatiable and unsustainable demand for
lian state of Espirito Santo. Over 90% of the pulp produced in this
paper products. The ones that lose out are mainly the
state is exported; over 35% ends up as hygienic paper on the
people in the South, whose rain forests are sacrificed
European market. urgewald was invited to present its paper cam-
for the satisfaction of Northern consumption and con-
paign and to make suggestions on the restructuring of the paper
verted into "green deserts” (plantations in the form of
production cycle towards greater sustainability. It is high noon
mono-cultures), and whose means of subsistence are
that we readjust our thinking as far as paper production and con-
diminished and destroyed.
sumption are concerned. At this event and in the ensuing lobby-
ing week we were able to have what were at times very engaged
 8

The Deal Of The Year

...was how the financial press characterized the Westdeutsche Landes- study was published in September 2002 and caused enormous pro-
bank’s (WestLB) achievement in putting together a project finance loan blems for WestLB and the other banks as it concluded that at least four
for the "Oleoducto de Crudos Pesados” Project – a controversial new oil of the World Bank's key safeguard standards were violated by OCP. The
pipeline that will lead through some of Ecuador’s most diverse rain German press subsequently ran headlines like "The Pope of World Bank
forest areas. standards condemns OCP Project". The report was also launched inter-
nationally and received coverage in Ecuador, Canada, Italy and the US.
The OCP project entails building a 500 km long oil pipeline from the
town of Lago Agrio in the Ecuadorian Amazon to the coastal town of NGOs want WestLB to withdraw from the OCP project, acknowledging
Esmeraldas on the Pacific Ocean. The OCP Project has met huge resi- that this is not the "Deal” but rather the "Disaster of the Year”. WestLB
stance within Ecuador as the pipeline will traverse 11 protected areas, and its owners, including the state of Northrhine-Westphalia, ought to
among them the Mindo-Nambillo Cloud Forest Reserve which has the accept political responsibility for the impacts the construction of the
highest number of bird species of any protected area worldwide. In addi- pipeline has already caused. urgewald and our (inter-)national partners
tion, the pipeline will open up the last remaining indigenous reserves in the coalition will continue to criticize the OCP-Pipeline and the expan-
and national parks in the Ecuadorian Amazon for oil production. This is sion of oil production in Ecuador’s indigenous territories and nature con-
leading to massive and violent social conflicts as indigenous communi- servation areas. Meanwhile, urgewald has begun to raise public
ties are refusing to cede their lands to the oil companies. Another major awareness that not only the involvement in OCP, but actually the entire
issue are the safety hazards that the pipeline poses as it will transverse project finance portfolio of WestLB is flawed
92 seismic faults and pass by six active volcanoes. The German Bank
WestLB is the lead financier of OCP and arranged a loan of 900 million
US-Dollars for the project in 2001.
WestLB is one of the major players in international project finance and
according to its own figures, was involved in 1/6 of project finance deals
last year. The major shareholder of the Bank is the Government of the
German State of North Rhine Westphalia.
Urgewald began its work on OCP in early 2002 and quickly took on a lea-
ding role both within the German and the international campaign
against this project. Throughout 2002 urgewald and other NGOs have
managed to mobilize enormous public concern in Germany, with over
135,000 German citizens writing to the Prime Minister of North Rhine-
Westphalia to protest WestLB's involvement in OCP. There have been
numerous hearings on OCP in the State Parliament and the problems of
the project have received unprecedented coverage in the German media
and press. Aside from creating massive pressure on the WestLB, the
OCP campaign is also clearly having ripple effects as the entire German
banking community is closely following this 'power struggle' between
NGOs and the WestLB. In fact, this is one of the campaigns that has led
several large international banks to recently draft the "Equator princi-
ples", a document that defines common standards for banks active in
project finance.
As WestLB and other banks in the financing consortium had continually
justified their involvement in OCP by claiming that the project fulfills
World Bank standards, Urgewald undertook a number of initiatives to
disprove this claim. Most importantly, in August 2002, Urgewald com-
missioned Dr. Robert Goodland to undertake an independent field study
of OCP. This was very significant as Dr. Goodland had been the World
Bank's chief environmental advisor for 25 years and was the principal
author of the World Bank's environmental and social standards. His
 9

Angra 3 – An obsolete Project rears its head

For over 20 years there have been joint plans by the govern-
ments of Germany and Brazil to build the nuclear power plant
"Angra 3”near the metropolis of Rio de Janeiro in Brazil. In 2002
the nuclear power lobby pressured the Brazilian government and
international financiers like the German bank KfW (Kreditanstalt
für Wiederaufbau), for financial commitments. However, thanks
to protest letters, public actions and lobbying by NGOs in both
countries, the project was put on hold.

Revival of plans for Brazilian nuclear power plant

The plans to build a third nuclear power plant in Brazil had long
died – but during the energy crisis at the beginning of 2001 the
nuclear industry managed to revive the discussion around Angra
3. In Germany the company Siemens KWU, a shareholder of Fra-
matome ANP, is an important proponent of the project as it aims
to provide equipment for around $550 million to Angra 3. Howe-
ver, on account of the enormous foreign debt of Brazil and the fact that the current German Government was opposed to such a
questionable economic viability of the project, German banks guarantee for Angra 3. In a meeting on September 17, 2002 the
were reluctant to fund the project without a guarantee from Ger- Brazilian energy council – not least because of the information
many’s export credit agency Hermes to back them up. Germany’s campaign of German and Brazilian NGOs – postponed the deci-
red-green coalition government had in turn repeatedly signalled sion about Angra 3 to the summer of 2003. One of the reasons
Siemens that it did not intend to support Angra 3 with a Hermes given was the lack of an unconditional financial offer.
guarantee.
Together with our Brazilian partner organizations, urgewald cele-
Yet proponents of nuclear power were hoping to overcome this brated this decision as an important success of many Davids
difficulty (no doubt also speculating that the September 2002 against the seemingly almighty Goliath Siemens! The German
elections might bring a change of Government in Germany) and government underlined once again after the elections that they
lobbied persistently for Angra 3, especially in Brazil. There, the do not intend to finance Angra 3 with official means. urgewald
responsible energy council had commissioned a new assessment will make every effort to make sure this decision is not reversed.
of the economic viability and the safety of the plant in December
2001. In September 2002 a final decision was to be made in Bra-
zil whether or not to build the plant. This decision would clearly
also depend on the financing prospects for the project.

Several weeks before this deadline, research by urgewald revea-

led that the two German banks Kreditanstalt für Wiederaufbau
(KfW) and Dresdner Bank had made a financial offer for Angra 3,
thus insinuating that German Government support would be
available for the completion of the project. Our enquiries at the
respective ministries showed that this move had come as a com-
plete surprise to the Government as the state-owned bank KfW
had not bothered to consult the ministries beforehand. While the
KfW’s offer to Brazil mentioned that their involvement was sub-
ject to the issuing of a Hermes guarantee, it did not mention the
 10

Financial Report 2002

Elected to Urgewald’s board in 1994, Hedwig Tarner has helped
guide the development of the organization over the past 8
years. The other board members are Marlene Robecke (since
2000) and Christoph Benze (since 2002). Together, the three
oversee Urgewald’s finances, the structure of the organization,
team development and working conditions.

Income Explanatory notes

Membershipfees 1.150,00 D
Donations 19.750,00 D
Services 10.450,00 D Income from lectures, slide rental, trainings
Sales 1.000,00 D books, brochures
Interest earned 4.550,00 D
Revenue from events 13.300,00 D participant fees
Grant Mott Foundation 80.650,00 D
Grant Alton Jones Foundation 60.450,00 D
Grant Wallace Global Fund 50.400,00 D
Grant Grassroots Foundation 33.450,00 D
Grant International Rivers Network 25.200,00 D joint campaign on large dams
Grant Misereor 12.500,00 D
Grant Stiftung Umwelt und Entwicklung NRW 10.000,00 D
Small grants 20.950,00 D e.g. Heinrich-Böll-Stiftung, Bewegungsstiftung, City of Sassenberg
State subsidy for job creation 10.200,00 D ASSH-position, district of Warendorf
Other income 600,00 D

Total income 354.600,00 D

Expenses Explanatory notes

Staff 273.100,00 D on average 7 staff members plus hired-out contract work
Travel 28.150,00 D travel of team members and visitors
Rent plus heating, electricity and water 11.450,00 D offices in Sassenberg and Berlin
Office supplies/photocopies 6.500,00 D
Telecommunication 8.650,00 D telephone, internet
Postage 3.250,00 D
Media tools 2.450,00 D books, magazines, photos
Office equipment 8.250,00 D purchase, maintenance, repairs
Printing 6.150,00 D campaign material etc.
Tax Counselling 2.400,00 D oversight of book-keeping
Membership dues 550,00 D
Service charges for money transfer 1.300,00 D mainly fees for international currency transfer
Project cooperation 4.000,00 D for instance with the Nuxalk in Canada
Events 4.350,00 D membership meetings, press conferences, team meetings,
10-year anniversary of urgewald
ECA-Workshop 54.950,00 D in Berlin in March
OCP-Workshop 8.650,00 D in Sassenberg in November
Initiative 2000 plus 2.250,00 D
Other expenses 2.200,00 D

Total Expenses: 428.600,00 D

Difference: 74.000,00 D covered through financial reserves from the previous year

All amounts are rounded off to 50 Euro.

 11

urgewald e.V. Editors: Donations can be made to the

Andrea Soth (v.i.S.d.P.), Barbara Happe following account:
Main office: Mit Texten von Barbara Happe, Regine Richter,
Von Galen Str. 4 Lydia Bartz, Andrea Soth, Knud Vöcking Volksbank Sassenberg
48336 Sassenberg Account number 64 339 900
02583/1031 Photo credits: Bank transfer number 412 625 01
www.urgewald.de urgewald, Nathalie Weemaels, Rainer Hörig,
urgewald@urgewald.de Jutta Kill, James Hardy, Klaus Schenck, Rettet urgewald is a registered non-profit organisa-
den Regenwald, FAN (Forest Action Network), tion certified by the German financial autho-
urgewald e.V. – Berlin office: ARA (Arbeitsgemeinschaft Regenwald und rities. Donations to us are tax-deductable.
Im Grünen Haus Artenschutz), Trotz-Alledem-Theater Bielefeld, Donation certificates are issued automati-
Prenzlauer Allee 230 Greenpeace Brazil, Walhi Indonesia cally every January for donations made in
10405 Berlin Special thanks to Ian McAllister the past year.
030/443391-68/9 (www.raincoast.org)
Design:
Kirsten Everwien, [konzept+gestaltung], Köln

This brochure is printed on Envirotop –

100% recycled paper.

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