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Decision of the European Ombudsman closing her own-initiative inquiry OI/3/2013 concerning the European Investment Bank

In May 2013, a Ukrainian NGO complained to the European Ombudsman that the European Investment Bank had failed to proactively disseminate environmental information on a project which it had financed in 2008 in Ukraine. During the Ombudsman's inquiry, the Bank set up a Public Register and explained in its replies to the Ombudsman what environmental information, as regards the Ukrainian and other projects will be made accessible through the Register. The complainant was satisfied with this outcome and the Ombudsman closed the inquiry after finding that the Bank had taken the necessary measures for the matter to be settled. She suggested in a further remark that the Bank adopt and make public a publication scheme setting out the environmental information to be included in the Register.   

The background to the own-initiative inquiry

1. In 2007, the European Investment Bank approved a EUR 150 million loan to finance the Rivne Kyiv High Voltage Transmission Line Project ('the Project') in Ukraine. This was a multi-scheme project consisting of the design, the construction and the operation of a transmission system that would strengthen the high voltage transmission connection between Western and Central Ukraine and, in the medium term, would enable connections to the Trans-European Energy Networks (TEN-E). The Project had multiple components that were to be implemented in different timeframes. The Bank signed the finance contract with the Ukrainian government in October 2008.

2. On 5 July 2012, a Ukrainian environmental non-governmental organisation ('the Ukrainian NGO'), along with CEE Bankwatch Network, submitted a complaint to the Bank's Complaints Mechanism ('EIB-CM') about the alleged failure to publish on the Bank's website documents that contain environmental information on the Project. The Ukrainian NGO argued that this failure was in breach of the Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters, done at Aarhus on 25 June 1998 ('Aarhus Convention')[1], and Regulation (EC) 1367/2006 of the European Parliament and of the Council of 6 September 2006 on the application of the provisions of Aarhus Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters to Community institutions and bodies ('Aarhus Regulation')[2]. The Ukrainian NGO claimed that the Bank should provide access to that environmental information through its website.

3.  On 21 December 2012, the EIB-CM replied to the Ukrainian NGO's complaint. The EIB-CM did not agree with the complainant. Its view was that the Bank's website generally provides sufficient and accurate information about the Project. In the EIB-CM's view, the Bank complied with its own transparency rules ('The EIB Transparency Policy'). In any event, under these transparency rules, more documents could be made available to the complainant upon a formal request.

4.  The EIB-CM also said that, in June 2007, the Bank had published the non-technical summary of the Project ('NTS'), including the Environmental and Social Impact Assessment ('ESIA') available at that time. The content of the NTS was updated in February 2012 and was sent to the complainant along with the environmental section of the Bank's appraisal report. 

5.  The Ukrainian NGO was not satisfied with the EIB-CM's conclusions.  On 20 May 2013, it submitted a complaint to the European Ombudsman.  But as the complainant is based in Ukraine, outside of the EU, the Ombudsman did not have jurisdiction to deal with it and the complaint had to be rejected[3].  However the Memorandum of Understanding between the European Ombudsman and the Bank[4] provides that "whenever the only reason not to inquire into a complaint alleging maladministration by the EIB is that the complainant is not a citizen or resident of the EU, the European Ombudsman is committed to using the own-initiative power to open an inquiry into the matter." The Ombudsman thus decided to open an own-initiative inquiry into the subject matter of complaint 959/2013/MHZ.

The own-initiative inquiry

6. This own-initiative inquiry was opened by reference to the complaint made by the Ukrainian NGO. The complainant alleged that the Bank did not adequately address its grievance that, by failing to publish proactively certain documents concerning the Project on its website, the Bank failed to comply with Article 4 of the Aarhus Regulation.

7. The Ombudsman also decided to deal with the complainant's two claims. First, that the Bank should update its website and publish the relevant information on the Project. Second, that as regards future projects, and in accordance with Article 4(2)(f) and (g) of the Aarhus Regulation ,the Bank should publish all information relating to (i) environmental impact studies and risk assessments concerning environmental elements; and (ii) authorisations with a significant impact on the environment, and environmental agreements,.

8. In the course of the inquiry, the Ombudsman received the opinion of the Bank and, subsequently, the comments of the complainant in response to the Bank's opinion. Her services also asked the Bank to clarify, separately, two points made in the complainant's observations. In conducting the inquiry, the Ombudsman has taken into account the arguments and opinions put forward by the parties.

Alleged failure to adequately address the grievances concerning the obligation to proactively disseminate environmental information and claims that the Bank should (1) publish on its website the relevant information on the Project and (2) disseminate proactively environmental information on all future projects financed by it

Relevant legal framework

9. The dispute between the Bank and the Ukrainian NGO concerns the fulfilment by the Bank of the obligations arising from the Aarhus-related regulatory framework concerning the proactive dissemination of environmental information.

10. This framework is composed of the Aarhus Convention, which is binding upon the EU institutions, and the Aarhus Regulation.  Pursuant to the general principle of the primacy of international agreements concluded by the EU over EU secondary legislation, the obligations of the EU institutions and bodies arising from the Aarhus Regulation should be interpreted in light of the provisions of the Aarhus Convention and the interpretation given by its Compliance Committee.

11. The Aarhus Regulation distinguishes between (i) access to environmental information and (ii) active dissemination of environmental information (Article 4 of the Aarhus Regulation).

12. Article 4(1) of the Aarhus Regulation provides as follows:

"Community institutions and bodies shall organise the environmental information which is relevant to their functions and which is held by them, with a view to its active and systematic dissemination to the public, in particular by means of computer telecommunication and/or electronic technology … They shall make this environmental information progressively available in electronic databases that are easily accessible to the public through public telecommunication networks..."

13. Article 4(2) of the Aarhus Regulation lays down that:

"The environmental information to be made available and disseminated shall be updated as appropriate. In addition to the documents listed in Article 12(2) and (3) and in Article 13(1) and (2) of Regulation (EC) No 1049/2001, the databases or registers shall include the following:

[...]

(f) authorisations with a significant impact on the environment, and environmental agreements, or a reference to the place where such information can be requested or accessed;

(g) environmental impact studies and risk assessments concerning environmental elements, or a reference to the place where such information can be requested or accessed."

14. Article 5 of the Aarhus Regulation (entitled "Quality of the environmental information") stipulates as follows:

"1. Community institutions and bodies shall, insofar as is within their power, ensure that any information that is compiled by them, or on their behalf, is up-to-date, accurate and comparable.

2. Community institutions and bodies shall, upon request, inform the applicant of the place where the information on the measurement procedures, including methods of analysis, sampling and pre-treatment of samples, used in compiling the information can be found, if it is available. Alternatively, they may refer them to the standardised procedure that was used."

15. Article 5.3 of the Aarhus Convention lays down that:

"Each Party shall ensure that environmental information progressively becomes available in electronic databases which are easily accessible to the public through public telecommunications networks..."

Arguments presented to the Ombudsman

16. The Ukrainian NGO argued that the documents related to the Project such as the Value Added Sheet, the Environmental Appraisal Report and the Environmental Assessment Forms - D1/D2, contain risk assessments concerning environmental matters made either by the Bank or by the promoter of the Project. As such, they constitute environmental information within the meaning of the Aarhus Regulation and should be proactively disseminated by the Bank. However, they were not disseminated.

17. It also argued that the relevant section of the Finance Contract in respect of the Project should be considered an "authorisation with a significant impact on the environment" and an "environmental agreement" within the meaning of, respectively, Article 4(2)(f) and Article 4(2)g of the Aarhus Regulation. According to the complainant, when dealing with communication ACCC/C/2007/21, the Aarhus Convention Compliance Committee decided that these types of sections of financing agreements must be made public. However, it added, they have not been made public to date.

18. Finally, the complainant argued that the EIB-CM decision was wrong in considering that the possibility of obtaining access to environmental assessments by way of an individual request is sufficient to ensure compliance with Article 4 of the Aarhus Regulation concerning active dissemination. In the complainant's view, persons who could be affected by the Project must be able to learn from the information that is disseminated whether or not the Project will have direct/indirect effects on their health, neighbourhood and environment.

19. In the opinion, the Bank first explained that following the complainant's complaint to the EIB-CM, the latter recommended in its Conclusions Report on the complaint that the information on the Project as published on the Bank's specific website (the WebForm related to Environmental Matters) be updated as soon as possible.  The Bank did so on 8 February 2013. This action was completed on 8 July 2013, when the Bank published on its website a web-link to the announcement that the State Enterprise "National Power Company Ukrenergo" was in the process of organising scoping stakeholder meetings concerning the Project.

20. The Bank also explained that, in accordance with its Transparency Policy, a large number of project-related documents are published on the Bank's WebForm related to Environmental Matters. These are the project summaries of projects financed by it which include environmental and, if appropriate, social data.

21. The Bank also announced that it planned to launch the Public Register in the first quarter of 2014. It stated that it is committed to meet the requirement to pro-actively disseminate environmental information through the implementation of the Public Register.

22.  Furthermore, the Bank agreed with the complainant that, as regards the Project, the Value Added Sheet, the Appraisal Report and Annexes D1 and D2 to the Appraisal Report indeed contain environmental information.  

23. In that respect, the Bank stated that, since 2010, it has been drawing up internal documents called "Environmental and Social Data Sheets". Each Sheet corresponds to a project financed by the Bank. It collates all environmental and social information which is submitted to the Bank as part of the information required in its decision-making process about each project.  These documents thus contain: (i) the environmental information and conditions which would be included in the relevant finance contract as loan conditions; and (ii)  the summarised environmental information included in: (a) the Appraisal Report; (b) Annex D1 and D2 to the Appraisal Report, and (c) the Value Added Sheet.

24. The Bank added that once the Public Register is set up, the Environmental and Social Data Sheets will automatically and proactively be published in the Register.

25. As regards the environmental provisions of finance contracts, the Bank added that in the very few cases where the environmental information contained in a specific finance contract may differ from that given at the time of appraisal and included in the Environmental and Social Data Sheets, the Bank will update such information by means of an addendum to the relevant sheet which will subsequently be published in the Public Register.

26. In this respect, the Bank referred to the assessment made by the Aarhus Convention Compliance Committee in reply to communication ACCC/C/2007/21 concerning the decisional process to finance the construction of a thermo-power plant in Albania. The communication alleged, among other things, that the Bank refused access to a loan agreement between it and Albania in so far as it contained environmental information.  Overall, the Committee found that financing agreements do not constitute environmental information as such and only some parts of this type of document relate to the environment. Although they are not listed explicitly in the definition of 'environmental information' provided in the Aarhus Convention, financing agreements may sometimes amount to measures which affect or are likely to affect the elements of the environment. "[F]or instance if a financing agreement deals with specific measures concerning the environment, such as the protection of a natural site, it is to be seen as containing environmental information. Therefore, whether the provisions of a financing agreement are to be regarded as environmental information cannot be decided in a general manner but has to be determined on a case-by-case basis." The Committee also stated that, where there is a significant public interest in disclosure of certain environmental information and a relatively small amount of harm to the interests involved, the Convention would require disclosure.

27. In light of the above, the Bank stated that, in fact, only parts of the sections of the finance contract which may contain environmental information are drafted exclusively for a given project and are based on the specific assessment carried out by the Bank: a number of clauses containing environmental information are standard and stem directly from the Bank's environmental standards.

28. The Bank added that it thus intends to publish on its website a copy of the environmental sections of the Model finance contract, that is, a template of environmental clauses which are normally present in the finance contracts concluded by the Bank with its clients. If there is a difference between the environmental information contained in a specific finance contract and the environmental information in the Model finance contract, the Bank says it will inform the public of the conditions under which it provides its financial assistance whilst preserving the possible confidentiality of non-environmental information contained in the finance contract which is not subject to the provisions on pro-active dissemination laid down in the Aarhus-related regulatory framework.

29. In sum, the Bank considers that it has adopted measures in order to ensure full compliance with the requirement to pro-actively disseminate environmental information imposed by the Aarhus-related regulatory framework "bearing in mind the flexible and progressive nature of its implementation".

30. In its observations on the opinion, the complainant welcomed the Bank's decision to set up a Public Register of documents in 2014 and thus to actively disseminate the proposed environmental information. The complainant took the view that, in this way, the Bank will indeed comply with the requirement of proactive dissemination of environmental information provided for in the Aarhus-related regulatory framework. However, the complainant noted that the Public Register would not be set up until 2014, and then only following its complaint and a request from another environmental NGO.

31. The complainant made two remarks as regards the proposed content of the Bank's Public Register. First, the Bank proposes to disseminate summaries only of the Environmental Impact Assessments ('EIAs') while full EIAs should be actively disseminated. Only in this way would the projects financed by the Bank be as transparent as possible and would the Bank be fully accountable (not only in the country where a given project is carried out but also internationally).  Second, there should be no distinction between different types of projects financed by the Bank (such as that between stand-alone investment loans and multi-scheme projects) with regard to the active dissemination of environmental information pertaining to such projects.

32. In reply to these two remarks of the complainant, the Bank said , as regards the first remark, that EIAs are normally extensive and very technical studies which are summarised in the non-technical summaries ('NTS'). The NTS are usually presented as separate documents to facilitate the achievement of their purpose, namely to provide the public and interested parties with easy and non-technical access to relevant information, thus facilitating active public participation in the decision-making process.

33. The Bank does not carry out the EIAs for the projects it finances. This task falls within the competence of the project's promoter, in line with the domestic law governing the project concerned and the Bank's environmental standards (for instance the standard that public participation was ensured, or that alternatives for the location of the project were duly assessed.)

34. The Bank however reviews EIAs, that is, it verifies whether the assessment carried out by the promoter of the project is consistent with the Bank's standards. The results of the Bank's review are reflected in the Environmental and Social Data Sheet which will be published in the Public Register.

35. The review procedure is different for projects located within the EU and those located outside it. In practice, for projects located outside the EU, the Bank publishes the NTS or its equivalent along with the Environmental Impact Study/Statement or provides a link to the website where these documents are found, in accordance with Article 4 of Aarhus Regulation. For projects located within the EU, the Bank not only publishes the NTS or provides the relevant link, but also requires the promoters to make EIA-related documents available to the public in an appropriate location and form. It also encourages the promoters to make public any additional environmental and social information related to the project concerned.

36. The Bank took the view that the proactive publication of full EIAs for lending operations within the EU would lead to a disproportionate administrative burden. As parties to the Aarhus Convention, the EU Member States are subject to the proactive dissemination obligations laid down therein and they are also subject to Directives establishing specific rules on public access to environmental information (Directives 2011/92/EC and 2003/4/EC). This is why, through its own website, the Bank provides wider access to environmental information on the projects it finances outside the EU, where national standards on access to environmental information may differ from those of the Bank.

37. As regards the complainant's second remark, the Bank took the view that, with regard to the proactive dissemination of environmental information, no distinction is made between stand-alone and multi-scheme investments. It said that its Transparency Policy establishes common rules for the disclosure of environmental information for all its investments, be they stand-alone or multi-scheme investments such as programme or framework loans. The extent of environmental information to be published does not depend on the type of investment but on whether the allocation requires an EIA.

38.  The Bank will record in its Public Register the Environmental and Social Data Sheets for both stand-alone investments and programme/framework loans. In addition, when individual subprojects within a multi-scheme loan require an EIA, the Bank publishes the EIA-NTS on its website or provides a link thereto.

The Ombudsman's assessment

39.  At the outset, the Ombudsman congratulates the Bank on having set up a Public Register. The Ombudsman understands that this is a difficult, multi-faceted and time-consuming task. It is encouraging that the Bank established the Public Register after taking into account the concerns voiced by civil society. The smooth functioning of the Public Register will surely result in even better proactive dissemination of environmental information held by the Bank in the exercise of its functions, as required by the Aarhus-related regulatory framework.

40. The Ombudsman is also satisfied with the detailed description, which the Bank gave in the opinion and additional reply, of which environmental information it will make available in the Public Register.

41. Moreover, the Ombudsman considers that, although at the time of the complainant's complaint to the EIB-CM, not all environmental information related to the Project of the type specified in Article 4 of the Aarhus Regulation was proactively disseminated by the Bank, the Bank subsequently remedied this failure.

42. First, in 2013, following the recommendation of the EIB-CM, the Bank updated the environmental information on the Project and published it on its website.

43. Second, in 2014, it decided to disseminate through its Public Register the remaining environmental information concerning the Project outlined in points 16 and 17 above, as required by the complainant.

44.  The Ombudsman is pleased, in particular, that in the course of her inquiry, the Bank agreed with the complainant that the content of documents related to the Project such as the Value Added Sheet, the Environmental Appraisal Report, the Environmental Assessment Forms -D1/D2 and the environmental conditions included in the Finance contract contain environmental information and should be actively disseminated. In this respect, the Ombudsman finds the Bank's explanation as to why the summaries and not the full EIA have to be published through the Sheets (points 32-36 above) convincing.

 45.  Similarly, the Ombudsman welcomes the fact that the Bank published in its Public Register the environmental clauses of the Model finance contract and declared that in the event of divergence between the environmental clauses of a specific finance contract and the Model finance contract, it will provide additional environmental information. Since the complainant did not comment on these specific issues in its observations, the Ombudsman understands that it is also satisfied with the measures adopted by the Bank in this regard, which also apply to the Finance contract in respect of the Project.

46.  It follows that the Bank has settled the first claim on the active dissemination of the relevant environmental information concerning the Project and the second claim concerning other projects.

47.  Finally, the Ombudsman fully agrees with the complainant's argument that, in substance, the possibility of obtaining access to environmental information is not the same as the active dissemination of that information. Transparency indeed imposes two parallel obligations on public authorities: one proactive and the other reactive. The first obligation is to take the initiative to communicate effectively with citizens and the second is to react properly when citizens themselves take the initiative by asking for information or a document that is not already in the public domain. Since, in its opinion and additional reply, the Bank focused on the proactive dissemination of environmental information and the complainant did not come back to its original argument in its observations, the Ombudsman understands that this argument could have resulted from a misunderstanding between the complainant and the Bank. The Ombudsman will thus not pursue this issue. Nevertheless, she considers that it may be useful for the Bank to adopt and publish a publication scheme setting out the type of environmental information it intends to record in the Public Register. The measures adopted by the Bank as described in its replies to the Ombudsman in the course of this inquiry could provide the basis for such a scheme.

Conclusion

On the basis of the inquiry into this matter, the Ombudsman closes it with the following conclusion:

The Bank has taken the necessary measures for the matter to be settled.

The complainant and the European Investment Bank will be informed of this decision.

Further remark

The Bank could consider adopting and publishing a publication scheme setting out the type of environmental information it intends to record in the Public Register.

 

Emily O'Reilly

Done in Strasbourg on 25 June 2014


[1] Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters, done at Aarhus, Denmark, on 25 June 1998. The (former) European Community acceded to the Aarhus Convention in February 2005. See Council Decision of 17 February 2005 on the conclusion, on behalf of the European Community, of the Convention on access to information, public participation in decision-making and access to justice in environmental matters (2005/370/EC), OJ 2005 L 124, p.1

[2] Regulation (EC) No 1367/2006 of the European Parliament and of the Council of 6 September 2006 on the application of the provisions of the Aarhus Convention on Access to information, Public Participation in Decision-making and Access to Justice in Environmental Matters to Community institutions and bodies, OJ 2006 L 264, p. 13.

[3] In accordance with Article 228 TFEU, complainants must either be EU citizens or a "natural or legal person residing or having its registered office in a Member State".

[4] Memorandum of Understanding between the European Ombudsman and the European Investment Bank concerning information on the Bank's policies, standards and procedures and the handling of complaints, including complaints from non-citizens and non-residents of the European Union, OJ 2008 C 244 p.1