International Rivers Network
April 28, 2006

Morgan Stanley Dean Witter receives Chinese New Year greeting: Stop financing of Three Gorges dam. Petitioners call for Boycott of MSDW’s Discover Credit Card Services.

In the spirit of the Chinese New Year tradition of no monetary loans during the New Year’s period, Morgan Stanley Dean Witter, CEO Philip J. Purcell, received a red envelope from over 1000 petitioners urging the firm to publicly commit to no more financing of the highly controversial Three Gorges Dam. Petitioners declared a boycott of the firm‚Äôs Discover Card and customer services until written confirmation is provided that the firm will not provide any further financing, direct or indirect, for the scheme to build the world’s largest dam on the Yangtze River. Petitioners are also calling for the firm to adopt environmental and social policies to govern core business practices, including underwriting. IRN launched the boycott of the Discover Card as a means to pressure the firm to commit to a public policy of not participating in any direct or indirect financing of the Three Gorges Dam project. "The Three Gorges Dam is an egregious environmental and social debacle that even the US Export-Import Bank and World Bank, the largest financier of mega-dams worldwide, has refused to fund," said Doris Shen, campaigner for IRN. "With the Three Gorges dam, Wall Street’s bottom line is the end of the line for close to two million people and the Yangtze River ecosystem. Internationally recognized environmental and social criteria needs to be adopted by all private investment firms to stop funding of disastrous projects," continued Ms. Shen. University students, a primary marketing group for the Discover Card, comprised a large number of the petition signatures. Morgan Stanley Dean Witter and other Wall St. firms underwrote a total of $830 million in bonds to the China Development Bank (CDB) the single largest funding arm for the dam in 1997 and 1999. Morgan Stanley’s continued involvement with the dam is through their joint venture with the China International Capital Corporation (CICC), the lead advisor on overseas capital raising for the dam. CICC is managed and 35% owned by MSDW. Wall St. firms have made an estimated $5.4 million in profits underwriting the deal. The Chinese government guarantees all bonds. "We will not allow MSDW to shirk its responsibilities for the dam‚Äôs impacts on people and ecosystems. We plan to maintain and increase the level of outreach and education about Morgan Stanley Dean Witter‚Äôs lack of environmental and social ethics in its lending and underwriting practices", said Doris Shen. The cost of building the dam is estimated at $25 billion but could run as high as $72 billion. The project is already burdened with cost overruns and technical difficulties. Reports have shown the dam is rife with corruption and embezzlement of funds originally allocated for relocation and compensation for hundreds of thousands of people.