LETTER FROM MR. RASHAD KALDANY TO CRUDE ACCOUNTABILITY

June 20, 2005

Ms. Kate Watters
Executive Director
Crude Accountability
PO Box 2345
Alexandria, VA 22301

Dear Ms. Watters,

Re: Your letter to Mr. Wolfensohn and the Board of Directors of the World Bank

Thank you for your January 31, 2005 letter addressed to Mr. Wolfensohn about IFC-financed project in Kazakhstan called Karachaganak. We regret the delay in responding to this letter but given the ongoing investigation by IFC’s Office of the Compliance, Advisor/Ombudsman’s (CAO) review of a complaint filed on this project, that it would be best to wait until the completion of the review.

In your letter you state that Karachaganak project points to the need for IFC to acquire “more independent monitoring of its projects and not simply rely on monitoring data provided by its clients”. As you know from our previous discussions, IFC’s specialists explained that, not only does IFC verify the monitoring data in this Category A project, independent consultants from BMT Cordah provide another layer of control. Neither IFC nor BMT Cordah consultants have been able to ascertain data manipulation or similar wrongdoing by the project operator.

We are pleased that the Office of the Compliance Advisor/Ombudsman has now issued its report in response to the claims filed on October 1, 2004 by the Berezkova (sic) villagers, including those related to adverse health impacts. The report testifieds to the visible overall better quality of life in Berezovka in comparison with other villages around the project. The report also conforms the government’s decision-making powers in relation to the Sanitary Protection Zone (the “SPZ”) established around the project and states that Tungush village resettlement, which gave certain Berezovka villagers hopes, was not necessary based on the project’s activities.

We suggest that you engage with the project operator and use the project’s grievance mechanism for any matters that remain of concern.

Sincerely,

Rashad Kaldany