Plataforma Ciutadana en defensa de les Tierres del Senia
Individual Spanish resident
* Admissibility date reflects the date the case was officially registered. All other dates pertain to the date in which a stage was completed.
Case Description
Complaint
The EIB Complaints Mechanism (EIB-CM) received two complaints in December 2013 concerning the Bank’s due diligence of the Castor Underground Gas Storage project (the project, or Castor) after the Spanish authorities had ordered the suspension of Castor’s activities in October 2013. The two complaints were submitted by Plataforma Ciutadana en Defensa de las Terres del Sènia (PCDTS), a local civil society association based in Alcanar, Tarragona, and an individual resident of Barcelona (both of them referred to as the Complainants). The complaints concerned the Bank’s appraisal of the project in the light of the EU and EIB energy policies as well as issues concerning the economic, financial and legal due diligence of the project carried out by the Bank. In particular, the Complainants asked the EIB-CM to review the Bank’s project assessment relating to the project’s investment costs, market and alternative investments. The Complainants also raised issues with the Bank’s review of the technical and financial capacity of the main investor and promoter of the project, and the legal framework of the concession.
EIB-CM action
The EIB-CM carried out an independent review of the allegations in accordance with the provisions of its Principles, Terms of Reference and Operating Procedures. The review assessed the complaints with respect to the relevant operational policies and procedures governing the Bank’s due diligence in financing projects. Two separate meetings took place with the Complainants in September 2014.
The EIB-CM has found that the Bank’s services appraised the project in line with the relevant EU and EIB energy policies prevailing at the time. It also found that the Bank had properly identified and assessed risks associated with the investment costs and market forecasts, as well as alternative investments. The Bank’s assessment of the technical and financial capabilities of the investors and promoters of the project as well as the regulatory framework are also considered to be appropriate by the EIB-CM. These analyses were documented in a timely manner and reported to the decision-making bodies of the Bank accordingly. EIB-CM’s review and the points raised by the Complainants have confirmed the importance of the Bank’s project appraisal processes as part of its financing decisions.
Conclusions
The issues raised by the complainants concern the core activity of the Bank in appraising the financial, economic and legal risks. The EIB-CM remarks that the Bank’s due diligence is a process that involves teams of engineers, economists and financial analysts in close cooperation with the promoter. The Bank’s services’ duties of due diligence and internal governance are being defined by its procedure of identifying the added value of its participation in the financing of a project. In addition, and from the perspective of credit risk assessment, it is the Bank’s duty to identify and assess financial and non-financial risks and, should it be necessary, put in place appropriate measures to mitigate those risks.
The EIB-CM’s reviews shows that the issues related to the allegations of the Complainants were properly identified, assessed, mitigated and documented by the Bank at the appraisal stage. The EIB-CM’s review and the points raised by the Complainants have underlined the importance of the Bank’s project appraisal processes as part of its financing decisions.
In light of the above, the EIB-CM concludes that its inquiry did not reveal any instances of non-compliance by the Bank’s services. Therefore, the EIB-CM considers the case settled and closed with no maladministration from the Bank.