THE BACKGROUND TO THE COMPLAINT

1. The complaint relates to alleged irregularities committed by the European Investment Bank (the "EIB") in connection with the financing of a project for the construction of a 744-kilometre high-speed railway link from Madrid to the French border, via Barcelona. Specifically, the complaint relates to the financing of the segment of the railway line running through the centre of Barcelona between the stations of Sants and Sagrera.

2. The high-speed railway project is part of the trans-European railway network[1]. The EIB provided a EUR 2 500 million loan for the financing of the project. This amounted to 27% of the total costs. The other costs are financed through the EC Cohesion Fund and by Spain.

THE SUBJECT MATTER OF THE INQUIRY

3. The complainant alleged that the EIB's agreement to finance the high-speed railway connection between Madrid and the French border (Madrid-Barcelona-Figueres) was wrong in view of the fact that the proposed route of the project could have negative effects for the residents of the Barcelona area, including damage to private buildings and environmental pollution, in particular noise pollution. He argued that this was in breach of EU environmental rules.

THE INQUIRY

4. The complaint was lodged on 22 January 2006. On 4 April 2006, the Ombudsman asked the EIB for an opinion. The EIB sent its opinion on 7 June 2006. The Ombudsman forwarded this opinion to the complainant, who sent his observations on 29 June 2006.

5. On 19 July 2007, the Ombudsman asked the EIB for further information, which the EIB sent on 24 September 2007. The Ombudsman forwarded the EIB's second opinion to the complainant, who sent his observations on 25 October 2007.

6 On 23 May 2008, the Ombudsman's services inspected the file at the EIB's premises in Luxembourg. A copy of the report on the inspection was sent to both the complainant and the EIB on 10 June 2008.

7. On 8 July 2008, the Ombudsman addressed a draft recommendation to the EIB. On 30 September 2008 (English original) and 11 November 2008 (translation into Spanish), the EIB sent its detailed opinion. The Ombudsman forwarded the EIB's opinion to the complainant, who sent his observations on 24 November 2008. The complainant sent additional information on 5 and 24 December 2008, as well as in 28 January, 3 February and 4, 7 and 15 March 2009.

THE OMBUDSMAN'S ANALYSIS AND CONCLUSIONS

A. Preliminary remark

8. It is necessary to underline that the EC Treaty empowers the European Ombudsman to inquire into possible instances of maladministration in the activities of Community institutions and bodies only. The Statute of the European Ombudsman specifically provides that no action by any other authority or person may be the subject of a complaint to the Ombudsman.

9. The Ombudsman's inquiries in this complaint have therefore been directed towards examining whether there has been maladministration in the activities of the EIB. The Ombudsman has no competence to inquire into allegations against the Spanish authorities and whether or not actions by these national authorities, in particular as regards the manner in which they carried out the relevant environmental impact assessment ("EIA"), complied with the applicable Community provisions. The Ombudsman points out that the complainant may address allegations against the national authorities to the Spanish Ombudsman who has the powers to start an inquiry into this aspect of the case.

B. The EIB's financing of the high-speed railway project Madrid-France

Arguments presented to the Ombudsman

10. In support of his allegation, the complainant argued that the segment of the project going through Barcelona, by means of several tunnels between the stations of Sants and Sagrera, could cause serious social and environmental damage, including noise and vibrations, which might endanger the nearby buildings and be a nuisance for their inhabitants. The complainant explained that he would be one of the citizens whose home would be affected by the project.

11. The complainant also argued that a number of viable alternatives to the proposed route were available. In his view, any of the alternatives would be safer for the neighbourhood, and indeed more economical. The complainant also pointed out that the responsible authorities had refused to consider additional safety measures. The complainant explained that a number of independent specialists had publicly classified the route chosen for the high-speed train through Barcelona as the worst possible option. In view of these considerations, the complainant took the view that the EIB should not grant financial assistance to the project, and asked the Ombudsman to halt it.

12. In its first opinion, the EIB argued that the lending agreement for the high-speed railway project between Madrid and the French border was approved after the EIB followed the standard EIB appraisal process. As regards the railway segment going through Barcelona, between the railway stations of Sants and Sagrera, the EIB stated that it had not yet disbursed its contribution. According to both the loan contract conditions and the EIB's standard environmental procedures, disbursement is subject to the completion of the appropriate EIA, a process which must include public information and public consultation. The EIB further noted that, on 10 May 2006, the Spanish authorities had launched a public consultation procedure for the Sants-Sagrera segment of the work. Thus, at the time[2], no formal decision had been adopted by the Spanish authorities as regards the exact routing.

13. In his observations, the complainant contested the legality of the process opened for the public consultation of the project, since no alternative studies had been considered by the responsible authorities. Accordingly, he argued that the project has not been subject to an "appropriate" EIA as required by the applicable Community legislation.

14. In view of the information thus far available to him, the Ombudsman wrote to the EIB on 19 July 2007 requesting additional information on the following questions:

1. Had the EIB received information from the Spanish authorities in relation to the definitive approval of the segment through the centre of Barcelona?
2. Had the EIB disbursed the loan portion relating to the segment under discussion? If so, had the EIB received and reviewed the EIA, which must have been carried out by the promoter and the Spanish authorities in relation to the segment under discussion? In this context, the EIB was asked to explain the manner in which it had carried out "a due diligence" check on the EIA in order to confirm that the project was acceptable from an environmental perspective. For instance, had the EIB checked that the main alternative routes for the selected segment had been taken into account in the EIA? In this respect, the EIB was asked to comment on the arguments put forward by the complainant in relation to alternative routes.
3. If the EIA of the segment had not yet been received, the EIB was asked to comment on how it planned to carry out its review of the EIA, once it was received.
4. Could the EIB comment on the way it deals with citizens' input in relation to EIA?

15. In its second opinion, the EIB explained that, on 2 August 2007, it was informed by the Spanish authorities of the final approval of both the segment in question and the completion of the EIA corresponding to that part of the work. As regards the EIB's review of the EIA issued by the Spanish authorities, the EIB underlined that it was carried out in accordance with both its first Environmental Statement 2004[3] (the "Environmental Statement") and its Environmental and Social Practices Handbook (the "Environmental Handbook"). In line with the Environmental Statement, the EIB carries out "a due diligence" check on all EIAs, and verifies that the responsible authorities have taken all necessary measures in order to ensure the compliance of the EIA with the EIB's environmental standards, as well as with the relevant Community and national legislation. Moreover, pursuant to Article B.2.2 of its Environmental Handbook, the EIB is responsible for checking whether the promoter has fulfilled the following requirements: ensuring the existence of a full EIA process, including the public consultation and approvals/planning consent; identifying the impacts and appropriate measures designed to avoid, reduce or mitigate them; considering alternatives; proposing mitigation and compensation measures, as well as an associated Mitigation Plan; and providing for public disclosure. As regards alternative options, the EIB argued that it is not competent to exercise any value judgement with regard to the approval or refusal of alternative options, given that this falls within the competence of the national authorities.

16. The EIB underlined that, following a thorough review of the EIA document submitted to it, it concluded that the EIA for the segment under discussion had been carried out in accordance with the above requirements. It pointed out that, in the past, it had refused to disburse loans in the event that the measures taken by the national authorities were insufficient and/or inappropriate, for instance, when the public consultation carried out had been insufficient. In this case, however, the EIB argued that, since 2003, several rounds of public consultations had taken place and that, in the context of these consultations, allegations made by the public, including those concerning alternative routes, had been taken into account by the Spanish authorities when approving the final version of the EIA.

17. As regards its funding, the EIB noted that it had not yet disbursed the loan portion relating to the segment under discussion, since the Spanish authorities had not provided NATURA 2000 certificates, which assess the biodiversity effects of the project.

18. In his observations on the EIB's second opinion, the complainant repeated the allegations made in his complaint. He also restated that the responsible authorities had committed a number of irregularities in the way they had carried out the EIA for the segment of the project in question, in particular as regards their review of the alternative routes proposed by the public.

The Ombudsman's inspection of the file

19. After having carefully examined the available information, the Ombudsman concluded that it was appropriate to carry out an inspection of the file, in particular of the documents, on the basis of which the EIB's services had concluded that the EIA carried out by the Spanish authorities for the EIB's funding of the development of a high-speed railway connection between Madrid and the French border had been carried out in accordance with the EIB's environmental criteria.

20. The inspection took place at the EIB's premises in Luxembourg on 23 May 2008. The EIB's file concerning the project, which contained numerous documents, was made available for inspection. After a review of the documents, the Ombudsman noted that there was no document drafted by the EIB's services bearing out the EIB's assertion that, following a "thorough review" of the EIA document, it had concluded that the EIA for the segment under discussion had been carried out in accordance with the EIB's environmental requirements.

The Ombudsman's assessment leading to his draft recommendation

21. In order to review whether the EIB had acted properly in granting financial assistance to the project, the Ombudsman considered it necessary to identify the Bank's responsibilities as regards environmental considerations when granting loans.

24. The Ombudsman noted that, as set out in Article 12 of Council Regulation (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds[4] ("Regulation 1260/1999"), operations receiving assistance from the EIB must be in conformity with the provisions of the Treaty and with instruments adopted under it, as well as with Community policies and actions, including the rules on environmental protection. One of the most important Community legislative instruments in the environmental area is Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment[5]. Article 5(1) of the Directive requires Member States to ensure that the developer supplies the information specified in Annex III, which includes "an outline of the main alternatives" and "an indication of the main reasons of his choice, taking into account the environmental effects". Furthermore, Article 6(2) of the Directive states that,

"Member States shall ensure that:

- any request for development consent and any information gathered pursuant to Article 5 are made available to the public,

- the public concerned is given the opportunity to express an opinion before the project is initiated."

25. The Ombudsman further noted that the EIB has issued two policy documents which lay down the environmental standards the EIB applies to its lending: (i) the Environmental Statement and (ii) the Environmental Handbook[6].

26. The EIB's Environmental Statement is a policy note covering the EIB's objectives, operations and approach in the field of environment which was adopted by its Board of Directors on 5 May 2005. According to the Environmental Statement, projects financed by the EIB must comply with the principles and standards set by both EU and national environmental legislation[7]. Among these principles and standards, the need for an EIA in certain projects is of primary importance. The Environmental Statement indicates that,

"The EIB requires that all projects likely to have a significant effect on the environment be subject to an Environmental Impact Assessment (EIA), according to the definitions and requirements of Directive 85/337/EEC, amended by Directive 97/11/EC (...). The EIA, which includes public consultation, is the responsibility of the promoter and the competent authorities. It should be completed and its main findings and recommendations must satisfy the requirements of the [EIB] prior to disbursement. The [EIB] may request more studies if necessary."[8] (Emphasis added).

27. The EIB's internal processes and practices to deal with environmental concerns are described in detail in its Environmental Handbook, which devotes a whole chapter (Chapter B.2) to the procedures to be followed by the EIB services for the review of an EIA. In this regard, paragraph 114 of the Environmental Handbook states that,

"[F]ormally, the EIA should be completed to the satisfaction of the [EIB] and should be a condition of loan signature or disbursement."[9]

28. In order to judge the quality of an EIA, paragraph 120 of the Environmental Handbook requires that the responsible EIB services, namely, the Projects Directorate, must ensure that the following aspects have been adequately covered in the EIA:

"1. The EIA process, including the public consultation and approvals/planning consent.

2. The identification of the impacts and appropriate measures to avoid reduce or mitigate them; all impacts must be examined and this may include project elements not under control of the Promoter, for example, access roads/rail to an airport.

3. Consideration of alternatives.

4. The proposed mitigation and compensation measures and associated Management Plan.

5. Public disclosure, notably "how was this done and when", and "How were stakeholders informed about the consultation process"."[10]

29. Against this background, the Ombudsman concluded that, when granting a loan, the EIB's responsibility is to check whether a proper EIA has been carried out for the project. The Ombudsman noted that, as regards the part of the project which is the object of the complaint, the EIB had emphasised that, after a "thorough review" of the EIA document pertaining to that part of the project, it had concluded that the EIA in question had been carried out in accordance with the Bank's own requirements, including the consideration of alternative routes by the responsible national authorities. However, notwithstanding the specific request made by the Ombudsman on 23 May 2008, in the context of his inspection of the file at the EIB's premises, the Bank was unable to provide any document, such as an appropriate note for the file, which might have supported its position that it had carried out a "thorough review".

30. The Ombudsman did not receive any supporting evidence establishing that the EIB had in fact carried out a review of the EIA submitted by the Spanish authorities. In the absence of such supporting evidence, the Ombudsman had no means of verifying whether or not the EIB had complied, with due diligence, with the legal obligations incumbent upon it.

31. The Ombudsman therefore concluded that the EIB's failure to record properly both the manner in which it carried out its review of the EIA for the segment in question and the reasons which led it to consider that that EIA met the EIB's environmental standards constituted an instance of maladministration. A draft recommendation was thus made in this regard.

The Ombudsman's draft recommendation

32. On 8 July 2008, the Ombudsman made the following draft recommendation to the EIB, in accordance with Article 3 (6) of his Statute:

"Before disbursing any financial assistance for the high-speed railway segment going through Barcelona, between the stations of Sants and Sagrera, the EIB should proceed to review the EIA prepared by the Spanish authorities for that project, in order to verify whether or not the EIA in question meets the environmental requirements incumbent upon the EIB, as laid down in Article 12 of Regulation 1260/1999, its Statement, and the rules set out in paragraphs 114 and 120 of its Handbook.

The EIB should formally and adequately record in the relevant file its review of the EIA prepared by the Spanish authorities, thereby permitting the Ombudsman to assess whether it has indeed complied with its legal obligations with due diligence."

The EIB's detailed opinion in response to the Ombudsman's draft recommendation

33. In its detailed opinion of 30 September 2008, the EIB first noted that on 24 April 2008 the Ombudsman asked the EIB whether it could produce a "formal document" which might unequivocally confirm the statement made in paragraph 3 of the EIB's second opinion of 25 September 2007 that the services of the Bank had indeed carried out a "thorough review" of the EIA document. The EIB then stated that, prior to the inspection of 23 May 2008, the competent services of the EIB had informed the Ombudsman's services that the EIB's procedures do not require that a formal document be issued at that stage of the procedure, that is, before the EIB has received from the promoter all the necessary environmental certification required for the disbursement of the loan accompanying the request for disbursement. With a view to further clarifying its procedures in the field of environment, the EIB also attached a note outlining the environmental assessment to be performed by the EIB throughout a project cycle.

34. The note states that environmental protection is a key operational priority for the EIB. It goes on to add that work on environmental issues must be undertaken, as appropriate, throughout an entire project cycle.

35. The note also states that:

• The EIB's approach to financing projects is based on the precautionary principle (that is, preventive action rather than curative treatment should be taken).
• All projects financed by the Bank are subject to an Environmental Assessment. For this purpose, projects are screened into four categories, based on the guidelines of the EU Environmental Impact Assessment Directive:
• Category A - those for which an EIA is mandatory (Annex I of the Directive);
• Category B - those for which the competent authority determines the need for an EIA according to specified criteria (Annex II of the Directive, with reference to Annex III);
• Category C - those for which a limited environmental assessment, if any, is required depending on the project's impact (projects outside the scope of the Directive);
• Category D - no environmental assessment required.
• All projects financed by the EIB are also screened according to their potential impact on sites of nature conservation. Inside the EU, that process is facilitated by the provisions of the EU Habitats Directive foreseeing that, where the impact is expected to be significant, a special biodiversity assessment is carried out as part of the environmental approval process.

36. When a project meets the EIB criteria, the appraisal procedure is launched by the Directorate General for Lending Operations. An appraisal team composed of representatives of all Directorates concerned is set up to carry out and report on project appraisal. Following the examination of the financing proposal by the Management Committee, the financing proposal is passed, together with the report of the Appraisal Team, to the Board of Directors for a financing decision. The report includes information on the Environmental Impact of the project. In particular, point 5.7 of the Project Cycle lists the information included in the report:

• the environmental situation with and without the project;
• where appropriate, a review of studies of alternative solutions;
• the project's impact on the natural and human environments;
• a definition of the measures adopted to prevent, reduce or mitigate any adverse effects;
• the compatibility with current or proposed environmental legislation;
• the existence of an environmental management plan and the promoter's ability to implement and manage it;
• the examination of environmental aspects over the life of the project;
• the project's compatibility with sustainable development objectives - including prevention of climate change - to which the European Union is committed.

37. The finance contract incorporates all the key elements forming the basis for the EIB's decision. It includes an appended technical description and any necessary technical, economic, environmental or other conditions. The EIB's Environmental Statement stipulates that after the environmental assessment at the appraisal stage, which determines the acceptability of a project for financing according to the appraisal findings, the EIB may apply specific environmental lending conditions to its loan agreement. The project promoter is bound by contract to comply with appropriate legislation. Once financed, the project is monitored, as appropriate. Such monitoring will include verification of compliance with environmental covenants and environmental mitigation and compensation measures agreed upon.

38. The EIB's Environmental Handbook lays down the Environmental and Social conditions which may be applied to EIB Finance Contracts, in order to ensure the environmental acceptability of the project during implementation and operation. These include the Conditions for disbursement (that is, environmental conditions which must be fulfilled to the satisfaction of the EIB prior to any fund being disbursed by the Bank on either the whole project or a part of the project). Non-compliance with these conditions would block disbursement of the EIB's loan. Finally, the Environmental Handbook states that the wording of specific finance contract conditions should be drafted to ensure compliance with legislative requirements, such as those relating to EIAs or Habitats Directive Assessments.

39. The EIB noted that the current procedures in place at the Bank, as well as the content of the Finance Contracts, require the performance of monitoring activities throughout the project cycle and prior to the disbursement of any payment to the promoter. As regards the Madrid-Barcelona railway project, the loan may be disbursed through a number of payments in accordance with the project's physical implementation. Accordingly, Paragraph 9 of "The Project Cycle at the EIB" describes the activities relating to the project monitoring during the disbursement phase. It establishes that disbursements may be made immediately following the signature of the contract, in one or more instalments, depending on the project's financing requirements at the time, provided of course that the disbursement conditions laid down in the finance contract (including those of a pricing, technical or environmental nature) have been met.

40. The EIB argued that the current procedures ensure that its services can adequately monitor compliance with national and Community legislation, as well as with the applicable Bank's policies, procedures and standards.

41. Following receipt of all the environmental certification accompanying the request for disbursement to the promoter, the competent services of the EIB carry out a follow-up in relation to the fulfilment of the disbursement conditions. If the disbursement conditions are met satisfactorily, the Bank's competent services give their non-objection to disbursement in writing. This enables other competent services of the EIB to proceed to disbursement.

42. As regards the draft recommendation of the Ombudsman, the EIB noted that the first part the Ombudsman's draft recommendation mentioned the provisions of the EIB's Environmental Statement pertaining to the requirement that the EIA, including public consultation, should be completed and its main findings and recommendations must satisfy the EIB's requirements prior to disbursement. The EIB noted that the Ombudsman also referred to paragraph 114 of the Environmental Handbook, which states that the EIA should be completed to the EIB's satisfaction and should be a condition for signature or disbursement.

43. As regards the first part the Ombudsman's draft recommendation, the EIB noted that the Finance documentation relating to the project includes specific provisions addressing compliance with EIA procedures. Notably, the finance contract establishes that the promoter must, prior to a disbursement, obtain from the competent Spanish authorities the "Declarations of Environmental Impact" of the project, as well as the certificates (Natura Forms A and B) established by the legislation on natural habitats. Equally, the finance contract establishes that, for the entire duration of the loan, the promoter commits itself to implementing and completing all the corrective or mitigation measures in the field of environment and, in general, to perform its activities in conformity with the applicable environmental legislation.

44. The EIB underlined that that the completion of an appropriate EIA by the Spanish authorities clearly constitutes a condition for disbursement. Equally, it is clear that the EIB is not in a position to finance the contested segment before it has received all the necessary environmental certificates and has checked their compliance with the environmental requirements incumbent upon the EIB. The EIB noted in this respect that, in its second opinion to the Ombudsman, as well as during the inspection of 23 May 2008, it informed the Ombudsman's services that it had received only part of the environmental certification required by the Finance Contract as a condition for disbursement (that is, the EIA document) and was still awaiting the remaining certificates (that is, the Natura 2000 certificate).

45. The EIB recalled that it is not competent to exercise any value judgement with regard to the approval or refusal of alternative options because the evaluation of their feasibility solely falls within the competence of the national authorities. In this respect, it stated that if the national authorities ensure that the EIA takes into account such alternative options and provide adequate reasoning in support of their decision, the EIB does not further enquire on the substantive grounds for such decision.

46. The EIB finally confirmed that it had not disbursed the portion of the loan corresponding to the contested segment, since the conditions for disbursement were not yet met (since the Natura 2000 certificates had not yet been supplied). Thus, compliance of each condition with the EIB's environmental standards could not be recorded in a formal document.

47. As such, the EIB concluded that it acted in compliance with EC law as well as with its environmental policies and standards. The EIB thus confirmed that the current procedures in place at the EIB, the contractual conditions laid down for the project under discussion, as well as the activities performed by the EIB's competent services, are in line with the spirit of the first part of the draft recommendation.

48. As regards the second part of the draft recommendation, namely, the recommendation that the EIB should formally and adequately record in the relevant file its review of the EIA prepared by the Spanish authorities, the EIB stated that, in line with established procedures, the Bank's services, including the risk monitoring department, rigorously verify all contractual conditions, prior to any disbursement. With reference to the project under discussion, the EIB stated, for information, that, following the Ombudsman's recommendation, the EIB's services have produced a note for the file summarising the actual status of the Project as concerns EIA. The document was attached to the opinion of the EIB.

49. The EIB underlined that it regarded the Ombudsman's draft recommendation as a positive input towards the enhancement of its policies applying to the environmental assessment of projects. Therefore, in line with its commitment to consider good administration as a centrepiece of its policies, the EIB agreed to seek to define appropriate measures with a view to improving the way it documents its review of EIAs when these constitute conditions for disbursement and to inform the concerned staff accordingly.

The complainant's observations on the EIB's detailed opinion

50. In his observations on the EIB's detailed opinion, the complainant restated the arguments made in his complaint. In effect, he underlined that the environmental impact declaration made by the developer ignored the existence of potential alternatives to the project chosen and that the responsible Spanish authorities had not asked him to provide information on that essential aspect of the environmental impact assessment.

Final assessment by the Ombudsman

51. In his draft recommendation, the Ombudsman stated that the EIB should, before disbursing any financial assistance for the high-speed railway segment going through Barcelona between the stations of Sants and Sagrera, review the EIA prepared by the Spanish authorities for that project, in order to verify whether or not the EIA in question meets the environmental requirements incumbent upon the EIB, as laid down in Article 12 of Regulation 1260/1999, the Bank's Environmental Statement, and the rules set out in paragraphs 114 and 120 of its Environmental Handbook.

52. As a general rule, the Ombudsman is of the view that the issue of precisely when a thorough review of an EIA submitted to the EIB is carried out falls within the latter's discretion, provided, of course, that the thorough review is always carried out before disbursement. However, the Ombudsmen notes that the exercise of discretion by the EIB as regards the exact time when it carries out its thorough review should take into consideration that, as noted by the EIB in its opinion to the Ombudsman, preventative action is better than curative treatment (see paragraph 35 above). Therefore, if the EIB, by carrying out its thorough review of an EIA soon after it receives the EIA, can quickly provide useful information to the Member State authorities as regards possible deficiencies in the EIA, it would be good administrative practice for the EIB to carry out such a review at an early stage in order to inform the Member State of any deficiencies found. In addition to permitting the Member State to correct such deficiencies at an early stage, such a policy would also avoid potential delays in disbursement, which might occur if deficiencies in an EIA were only noted at a later stage.

53. Once such a thorough review of an EIA has been carried out, it is good administrative practise to document that review appropriately. The documentation of such a review can then be used by the EIB in its eventual decision regarding disbursement. The documentation of such a review also permits verification as to whether the EIB has fully complied with its obligations with respect to ensuring that EU environmental rules have been complied with.

54. The relevant section of the EIB's second opinion dated 24 September 2007 reads as follows:

"Whilst carrying out a due diligence on the EIA approved by the competent national authorities, the Bank verifies that the latter ones have taken all necessary measures in order to ensure the compliance of the assessment with the ElB's environmental standards as well as with the relevant Community and national legislation (e.g. the setting up and the execution of a public consultation of all relevant stakeholders, the elaboration of studies on alternative options, etc.). Following a thorough review of the EIA document by our services, it appears that the EIA for the segment under discussion was carried out in accordance with the above requirements. Since 2003, several waves of public consultation took place and the allegations made by national/local institutions and bodies, political organisations, NGOs and citizens, including those concerning alternative routes, were taken into account when approving the final version of the EIA. In the past, the EIB has refused to disburse loans when it deemed that the measures taken by the national authorities in relation to the EIA were insufficient and/or inappropriate (for instance, insufficient coverage of the public consultation)." (Emphasis added by the Ombudsman)

The Ombudsman notes that the second opinion of the EIB stated categorically that the EIB had already carried out a "thorough review" of the relevant EIA.

55. Although the EIB had, in its second opinion, assured the Ombudsman that it had already carried out a "thorough review" of the EIA, the Ombudsman notes that, when the inspection of the file took place on 23 May 2008, the EIB had yet to draft an appropriate note for the file to support its position that it had already carried out a "thorough review". Given that the Ombudsman did not find any evidence that such a review had been documented, he, in his Draft Recommendation to the EIB, advised the Bank that it should formally and adequately record its review of the EIA.

56. The Ombudsman notes that, following his draft recommendation, the EIB instructed its services to produce a note for the file setting out the actual status of the project for the development of a high-speed railway connection between Madrid and the French border. The note included an assessment of the EIA issued by the Spanish authorities.

57. The Ombudsman is of the view that principles of good administration require of institutions to be willing to "raise the bar" constantly, that is, to seek to improve constantly the manner in which they work. In this respect, the Ombudsman strongly welcomes the positive attitude taken by the EIB in respect to his Draft Recommendation, namely its willingness to improve the current practices of its services, in accordance with principles of good administration.

58. While the Ombudsman strongly welcomes the positive attitude taken by the EIB, he must nonetheless examine whether the note for the file provided to the Ombudsman constitutes an adequate reflection of a "thorough review" of an EIA.

59. The Ombudsman has noted that paragraph 120 of the EIB's Environmental Handbook requires that the Bank's services, namely, the Projects Directorate, must ensure that the following aspects have been adequately covered in the EIA:

1. The EIA process, including the public consultation and approvals/planning consent.
2. The identification of the impacts and appropriate measures to avoid reduce or mitigate them. All impacts must be examined.
3. Consideration of alternatives.
4. The proposed mitigation and compensation measures and associated Management Plan.
5. Public disclosure, notably "how was this done and when", and "How were stakeholders informed about the consultation process".

60. In its note for the file drafted subsequent to his draft recommendation, the EIB confirmed to the Ombudsman that it had examined the EIA and that it contained the following sections.

1. Project information (promoter, localisation, description) and its justification.
2. The main environmental elements the areas of the project: hydrogeology and cultural heritage.
3. A summary of the assessment procedure. This included the previous public consultations of 2000 and 2003, the public consultation of 2006 and an additional consultation in 2007. The summary also included the alternatives analysed; the consultation with the public and the Institutions and the latters' main comments/claims; the responses from the environmental authorities.
4. An assessment of the procedure. This included the quality of the EIA, namely, an analysis of alternatives, a description of possible impacts (hydrogeology, soil, landscape, cultural heritage, socio-economic) and a description of remedial and mitigating measures;
5. Mandatory conditions imposed on the project detailed design; and
6. Monitoring, namely, a description of the environmental monitoring plan during the construction and the operation.

61. The note for the file stated that the conclusion reached therein was that the project should be authorised subject to compliance with the conditions mentioned in the EIA concerning the need to adequately protect the environment and natural resources. On this basis, the EIB came to the conclusions that:

• the EIA process, including the public consultation and approvals/planning consent is now completed;
• the impacts and the measures to avoid/reduce/mitigate them have been examined;
• appropriate mitigation and compensation measures and the management plan associated with them have been identified;
• alternatives have been considered;
• the above were published in the Spanish Official Journal.

62. As regards whether the note for the file provided to the Ombudsman contained an adequate evaluation of alternative routes (which is an important element of an EIA and the key concern of the complainant), the Ombudsman first of all observes that the EIB has stated that it is not competent to exercise any "value judgement" with regard to the approval or refusal of alternative options. It went on to state that the evaluation of the feasibility of alternative options falls exclusively within the competence of the national authorities. In this respect, the Ombudsman also notes that the EIB is of the view that, if national authorities ensure that the EIA takes into account such alternative options, and provide adequate reasoning in support of their decision, the EIB does not enquire further into substantive grounds for such decision.

63. The Ombudsmen agrees with the EIB's interpretation of the scope and nature of its review. In effect, the Ombudsman agrees that the review of the EIA by the EIB does not require that the EIB replace the "value judgments" of national authorities with its own "value judgments". Further, the EIB is not required to question the accuracy of the technical assessments made in relation to each alternative route. Rather, in the Ombudsman's view, it is both sufficient and appropriate for the EIB to verify that all the necessary elements of an adequate EIA are included in the documentation submitted to it by the national authorities. In sum, the Ombudsman agrees that the review of the EIB will be adequate if it verifies that (i) the EIA takes into account alternative options, and (ii) the EIA contains adequate reasoning in support of the decisions contained therein. It is also necessary that the EIB verifies that the national authorities have adequately responded to cogent comments from citizens.

64. In order to determine precisely how the EIB's review should be carried out in accordance with the outline analysis set out above, the Ombudsman also examined the guidelines for reviewing environmental impact statements, which is publicly available through the European Commission's Environment Directorate-General[11]. This review guide provides a useful benchmark for assessing EIAs. For example, section 2 of the Review Checklist contained in the review guide, asks the following specific questions with regard to alternative routes:

1. Is the process by which the Project was developed described and are alternatives considered during this process described?
2. Is the baseline situation in the "No Project situation" described?
3. Are the alternatives realistic and genuine alternatives to the Project?
4. Are the main reasons for the choice of the proposed Project explained, including any environmental reasons for the choice?
5. Are the main environmental effects of the alternatives compared with those of the proposed Project?

The Ombudsman considers that the Review Checklist provides a useful tool for the purpose of giving effect to the system of review described by the EIB.

65. The Ombudsman observes that the note for the file, drafted by the EIB subsequent to his Draft Recommendation, specifically refers to an "analysis of alternatives". In the Ombudsman's view, this statement expressly confirms that the EIB has verified that the EIA in question takes into account alternative options. The note for the file does not, however, expressly state that the EIB has verified that reasons were given in the EIA concerning the decision of the national authorities[12]. The note for the file merely states that alternatives have been "considered". While this statement could be understood to mean that the EIA contains reasons for the decision of the national authorities, it would be preferable for the EIB to have made a clearer statement in this regard.

66. The Ombudsman notes that, in its opinion submitted subsequent to the Ombudsman's Draft Recommendation, the EIB stated that the note for the file provided to the Ombudsman summarises the "actual" status of the project as concerns the EIA. It also states that, all contractual conditions, are rigorously verified by the EIB's services, prior to any disbursement, to ensure that they are fully met. The Ombudsman notes that disbursement has not yet taken place as regards the segment of the rail project under consideration. The Ombudsman is also mindful of the fact that the EIB has expressly stated that it is its policy to verify that EIAs contain adequate reasoning in support of decisions taken. In this context, the Ombudsman understands that the EIB still has the opportunity to confirm expressly, prior to disbursement, that reasons were given in the EIA for the decision of the national authorities regarding the route chosen. In this context and with a view to constructively encouraging the EIB to record its assessment in a more systematic manner (see paragraph 57 above), the Ombudsman will make a further remark below.

68. On the basis of his inquiries into this complaint, the Ombudsman concludes that the EIB has already taken significant steps to implement his Draft Recommendation.

69. The Ombudsman tales also the view that the EIB can also raise the bar further. More specifically, he believes that the Bank can further improve its review mechanisms if, prior to disbursement, it establishes a comprehensive check list, which would include confirmation that, in the future, reasons are given in the EIA for the decision of the national authorities regarding the route chosen.

70. In light of the above, the Ombudsman does not consider it necessary to inquire further into the complainant's allegation.

C. Conclusions

On the basis of his inquiries into this complaint, the Ombudsman concludes that he does not need to inquire further into the complainant's allegation.

However, he makes the following further remark:

The EIB should consider recording its assessment of EIAs in a more systematic manner by using a comprehensive checklist of conditions which an EIA must comply with.

The complainant and the EIB will be informed of this decision.

 

P. Nikiforos DIAMANDOUROS

Done in Strasbourg on 4 May 2009

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[1] The Trans-European high-speed rail network is one of the European Union's three Trans-European transport networks, the other two being road and waterways networks. The Madrid-Barcelona-Perpignan-Montpellier railway axis was one of the 14 priority trans-European Network projects. The project was reconfirmed as a European priority in the Guidelines for the development of the trans-European transport network adopted by a decision of the Council and the European Parliament in 2004 (see Decision 884/2004/EC of the European Parliament and of the Council of 29 April 2004 amending Decision 1692/96/EC on Community guidelines for the development of the trans-European transport network (OJ 2004 L 167, p. 1)).

[2] The EIB's first opinion was sent to the Ombudsman in June 2006.

[3] The Environmental Statement 2004 is available on the EIB's website:

http://www.eib.org/about/publications/environmental-statement.htm

[4] See OJ 1999 L 161, p. 1.

[5] See OJ 1985 L 175, p. 40, as amended by Council Directive 97/11/EC of 3 March 1997 amending Directive 85/337/EEC on the assessment of the effects of certain public and private projects on the environment (OJ 1997 L 73, p. 5) and Directive 2003/35/EC of the European Parliament and of the Council of 26 May 2003 providing for public participation in respect of the drawing up of certain plans and programmes relating to the environment and amending with regard to public participation and access to justice Council Directives 85/337/EEC and 96/61/EC (OJ 2003 L 156, p. 17).

[6] The Environmental Handbook is available on the EIB's website: http://www.eib.org/about/publications/environmental-and-social-practices-handbook.htm

[7] The Environmental Statement, cited above, p. 3.

[8] The Environmental Statement, cited above, p. 4.

[9] The Environmental Handbook, cited above, p. 38.

[10] The Environmental Handbook, cited above, p. 39.

[11] Available at http://ec.europa.eu/environment/eia/eia-guidelines/g-review-full-text.pdf

[12] In contrast, for example, an affirmative answer to Question 4) on the Review Checklist described in paragraph 64 herein would clearly confirm that reasons were given in the EIA for the decision of the national authorities.