EU Ombudsman urges EIB to disclose investigation into Glencore tax allegations in Zambia

1. EIB’s failure to disclose the investigation and respect its own transparency policy is an instance of maladministration, says EU Ombudsman.
   
2. EIB is urged again to make the investigation public.
3. Ruling shows the EU’s public bank needs to become more transparent.

After Glencore’s tax practices, through which it allegedly shifted profits from Zambia to Switzerland, made international headlines, the European Investment Bank (EIB) announced an investigation into Mopani, Glencore’s Zambian copper mine to which the bank had provided a USD 50 million development loan [1].

The EIB closed its investigation already in November 2011 but despite recommendations of its own Complaints Mechanism to make an edited version of the report public, it decided to keep the investigation confidential. EIB’s justification for that refusal was that divulgating the document would undermine the credibility of its investigations.

Following a complaint by Christian Aid filed in March 2014, the EU Ombudsman now rules that the EIB’s failure to justify why and how the disclosure of the report could undermine the investigation, is an instance of maladministration by the bank. The Ombudsman makes similar recommendations to the earlier ones of the EIB Complaints Mechanism [2]:

“The EIB should reconsider its refusal to grant access to the investigation report of its Inspectorate-General and decide either to grant access to a redacted version of the report or, should this not be possible, to at least provide the complainant with a meaningful summary of the main findings of the investigation report.”

The EU Ombudsman further points out that the EIB failed to comply with its own Transparency Policy as it did not respect the prescribed deadlines to reply to the initial request for access and to the complaint lodged with the Complaints Mechanism.

Xavier Sol, Counter Balance director says:

“A public bank should operate in the most transparent way possible. The management’s refusal to make the investigation public shows the EIB is not ready to act accordingly without external pressure. Recently the bank was ranked one of the most opaque multilateral lenders in the world [3] and the ongoing revision of its transparency policy is seen as a further slide towards secrecy [4]. We hope the Ombudsman’s ruling sends out a clear message that this is not the way to go.”

Rachel Baird, spokeswoman for Christian Aid, said:

“We are very pleased with the Ombudsman’s decision. If Mopani-Glencore has systematically evaded tax, then the citizens and tax collectors of Zambia and in Europe need to know about it. If the company is innocent, we also need to hear that. It is a scandal that the EIB, which is owned by EU member states, has hidden this information for so long.”

It is now up to the EIB to send a detailed opinion by 31 March 2015. “The detailed opinion could consist of the acceptance of the draft recommendation and a description of how it has been implemented”, the EU Ombudsman advises.

Notes for editors:

[1] Publicly funded Swiss company is dodging taxes in Zambia

[2]http://www.ombudsman.europa.eu...

[3] European public banks are most opaque multilateral organisations

[4] Europe’s finance ministers urged to stop EIB’s ‘extraordinary’ slide towards secrecy

For more information please contact:

Xavier Sol
Xavier.sol@counter-balance.org
+32 2 893 08 61