25 June 2020
The European Investment Bank (EIB) has fought in court to avoid scrutiny of its environmental funding decisions, in a case brought by environmental lawyers at ClientEarth.
The case was heard in the EU General Court in Luxembourg, the EU’s second highest court.
The EIB, the world’s biggest multilateral lender, has been subject to legal action since it refused ClientEarth’s request to carry out an internal review of its decision to grant a €60 million loan to a Spanish biomass plant. The EIB claimed the request was inadmissible. However, ClientEarth appealed the EIB’s decision, as it denied ClientEarth’s right to ask the Bank to scrutinise its decision, guaranteed under international and EU law.
The lawyers say the EIB’s attempts to avoid scrutiny around these decisions rings alarm bells, particularly considering its new self-professed commitment to be the “world’s first climate bank” – the court also questioned the compatibility of these two positions during the hearing.
Reacting to the hearing, ClientEarth lawyer Anna Heslop said: “It’s disconcerting that the world’s biggest development bank is fighting tooth and nail in court to not scrutinise its own decision-making.
“Today’s hearing has made it clear that the EIB wants to cherry pick the EU rules that apply to it. The Bank claims to want to be the first financier of its type to put the environment at the fore but continues to push back against administrative and judicial scrutiny.
“How can we know the environment is at the heart of its financial decision-making when the Bank believes it is immune to the same standards of accountability as other EU bodies?”
Throughout the legal action, the EIB has pushed back on scrutinising its investments. The Bank has argued that parts of the Aarhus Regulation – which gives NGOs and the public the right to request an internal review of decisions adopted by an EU body under environmental law – do not apply to their decisions.
This raises the question of whether there could be intrinsic issues with how environmentally sound its decision-making procedure really is.
A ruling from the EU General Court is expected within six to nine months.
ClientEarth is a charity that uses the power of the law to protect people and the planet. We are international lawyers finding practical solutions for the world’s biggest environmental challenges. We are fighting climate change, protecting oceans and wildlife, making forest governance stronger, greening energy, making business more responsible and pushing for government transparency. We believe the law is a tool for positive change. From our offices in London, Brussels, Warsaw, Berlin and Beijing, we work on laws throughout their lifetime, from the earliest stages to implementation. And when those laws are broken, we go to court to enforce them.