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GAP Releases USAID FOIA Documents About Controversial Kosovo Coal Plant

Shelley Walden, September 07, 2012

Today, GAP is releasing nearly 2,000 pages of documents obtained through a Freedom of Information Act (FOIA) request filed with the United States Agency for International Development (USAID). The request sought specific records related to the KEK Network and Supply Project in Kosovo and the work of the Kosovo Energy Corporation JSC.

In submitting this FOIA request, GAP sought to identify the rationale behind the commitment of U.S. government funds (including USAID financing) to the Kosovar Energy Corporation. The Corporation fails to provide uninterrupted electrical supply to its consumers and independent surveys show the Kosovar public regards it  as corrupt. Through this FOIA request, GAP also obtained information about a controversial coal power plant in Kosovo (known as Kosovo C) that various environmental groups, including the Sierra Club, oppose. The Sierra Club argues that opportunities exist in Kosovo to provide cleaner power, which do not put communities or the environment at risk. In contrast, the U.S. government and the World Bank support Kosovo C.

The documents obtained through GAP’s FOIA request include:

GAP shared these documents with the Sierra Club, which released an analysis of them yesterday. The Sierra Club found that these documents reveal the coal plant’s supporters are using:

Inaccurate, and unreliable data in order to ensure the plant is fast-tracked. They are cutting corners and recklessly endangering the health of Kosovar citizens and it’s time this controversial project was stopped. According to the documents, the USAID contractor, PA Government Services Inc. (now Tetra Tech Inc.), warned USAID that an existing plant – called Kosovo ‘B’ – had an emissions monitoring system that was deficient as early as 2010…The documents express grave concerns about the accuracy of the intermittent emissions data that they were able to collect, calling it ‘questionable.’  The data USAID was collecting was erratic and unreliable, featuring major discrepancies between units within the same year as well as within the same unit from one year to the next.  Even worse, the reported climate pollution vastly exceeded limits set by the European Union, sometimes by as much as 900%. This shows that building another highly polluting coal plant right next door would only make air quality worse, no matter how ‘clean’ it is promised to be…

The existing coal plant is still operating without continuous monitoring systems. What’s worse, the World Bank is now relying on the faulty Kosovo ‘B’ emissions data to move forward with the new coal project – called KRPP –  to be funded by the World Bank which is right next door to the Kosovo ‘B’ plant… The negligence on behalf of USAID and the World Bank in failing to ensure that their projects meet international air quality and pollution standards is bad enough, but the clear desire to ignore warnings and red flags appears to be an intentional attempt to quietly fast-track a dirty, dangerous, and increasingly controversial project. 

The documents also reveal political interference, fraud and other shortcomings in KEK’s operations. According to the Statement of Work, which begins on page 53:

  • There is “frequent government interference in KEK’s operations (e.g., instructions from the Ministry of Energy and Mines to KEK to provide uninterrupted power to non paying customers during politically-sensitive periods; instructions to reinstate individual KEK employees who had been dismissed for malfeasance, etc.).”
  • There are “acute systemic inadequacies” that “were not identified at the time of original program design,” and “ineffectual management and organizational hierarchy … that avoids any meaningful individual accountability for decisions or performance.”  
  •  “Much of KEK’s poor performance is rooted in endemic waste, abuse and fraud that to date appears to have been largely ignored by a succession of management teams at KEK.” (page 12 of this document)

At least one whistleblower has raised concerns about the Kosovo C project. The United Nations Dispute Tribunal, which reviews employee grievances, has recently issued a judgment regarding a whistleblower formerly employed by the United Nations Interim Administration Mission in Kosovo (UNMIK) who reported “a possible kickback scheme concerning a proposed new power plant and mine in Kosovo, involving high-level politicians and senior UNMIK officials.” (paragraph 24) The whistleblower “began to hear worrying rumours about corruption in connection with the proposed new power plant and mine, known as Kosovo C, over time a multibillion euro project… The rumours concerned the payment of what was called a ‘facilitation fee’ in the hundreds of millions of euros to a local partner should that bidder win the tender.” The decision reveals that the World Bank expressed concerns about this corruption and threatened to walk away from the project, but ultimately failed to. (paragraph 5)

The UN Office of Internal Oversight Services (OIOS) investigated some of the whistleblower’s concerns. Although the report has not been publicly released, OIOS’ website states that:

Approximately $4.3 million in embezzled funds was recovered and returned to the UN Mission in Kosovo (UNMIK) as result of an investigation OIOS conducted in collaboration with the Anti-Fraud Office (OLAF) of the European Commission. The investigation revealed that a former senior staff member of UNMIK had initiated the transfer of $4.3 million due to the Kosovo Energy Company to a bank account under his control in Gibraltar. OIOS referred the case to the authorities in Germany and the staff member was subsequently prosecuted and sentenced to a prison term of three years and six months.

Meanwhile, the World Bank and U.S. government continue to support the dirty coal plant project. The Sierra Club has urged the parties to withdraw their support and to conduct a new “environmental impact assessment of the air quality around the Kosovo ‘B’ plant and proposed KRPP site (as the contractor recommended in 2010). Kosovars deserve this basic modicum of transparency.”

GAP agrees that transparency is needed and believes that additional investments should not be made in these projects until major governance deficiencies are addressed.

 

Shelley Walden is International Officer for the Governent Accountability Project, the nation's leadingwhistleblower protection and advocacy organization.