The European Ombudsman has asked the European Investment Bank (EIB) to increase transparency in its lending activities.
A group of NGOs has welcomed the decision, published yesterday, but regrets the weak language used, which only makes suggestions and encourages the Bank to adopt certain levels of transparency.
The decision was adopted following a complaint from NGOs ClientEarth, CEE Bankwatch Network and Counter Balance, challenging the non-compliance of the transparency policy of the EIB with international and EU standards applicable to access to information.
The Ombudsman did not conclude that there was maladministration but highlighted two key areas where the EIB should raise the bar: transparency of its investigations and of its operations via financial intermediaries – typically commercial banks and investment funds.
Senior lawyer at ClientEarth, Anaïs Berthier said:
“The EIB should take on board the suggestions of the Ombudsman and bring its transparency regime into line with international and EU law on access to information so that it ensures that it is accountable for every Euro of public money spent.”
Director of Counter Balance, Xavier Sol said:
“We welcome the Ombudsman’s recommendations for the EIB to raise the bar on transparency. It is now time for the EIB to start disclosing more information about its internal inspections, investigations and audits on fraud and corruption cases.
“In recent cases such as controversial loans to Volkswagen or infrastructure projects in Italy, the EIB has systematically hidden behind these restrictive provisions in its transparency policy not to disclose the outcome of its investigations. The culture of secrecy prevailing at the EIB needs to reach an end, as it is key for European taxpayers to know that European funds are spent in the public interest“.
Anna Roggenbuck, Policy officer at CEE Bankwatch Network said:
“We welcome the Ombudsman observation that the current Transparency Policy is misleading to the public as regards access to information on operations through the financial intermediaries.
“We regret the Ombudsman did not review the EIB’s actual practice which contradicts even the current disclosure requirements, as Banwkatch recent research showed. As this practice of confidentiality of projects significantly impacting environment may not be acceptable, we will lodge a new complaint tackling an issue of confidentuiality of financial intermediary operations.“
The EIB, which invests around €80 billion in projects annually, has a huge impact on the environment in the EU and beyond. This calls for the highest standard of transparency and accountability on how these funds are used.
While the language of the decision is quite weak on certain points, the Ombudsman, Ms O’Reilly, made several recommendations to improve the policy – confirming key demands raised by civil society in recent years.
She encourages the EIB to remove from its transparency policy the presumption of non-disclosure related to information and documents collected and generated during inspections, investigations and audits on fraud and corruption, including once these have been closed.
This is welcome, as the huge amount of funds lent to companies, States and national banks have already led to corruption cases.
The Ombudsman also suggests the EIB modify the wording of provisions related to its intermediated loans – which imply financial intermediaries between the EIB and the beneficiaries – in order to clarify that the transparency regime for these indirect financial operations should be similar to the one applicable to direct loans.