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What's New! Vol. 4, No. 9

  September 2005

"What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide. If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today! Questions? Email info@eca-watch.org
  1) Groundbreaking global warming lawsuit to proceed
  2) Dams and Renewable Energy Incentives Update:
    A. New ECA Watch publication - A Trojan Horse for Large Dams
    B. World Bank standards aren't good enough
    C. Movement of Dam-affected People (MAB) protests lack of compensation
  3) OPIC Board Approves $150 Million to Support Trade Bank of Iraq
  4) Ex-Im Bank gives creditors a reprieve after Katrina
  5) SEC Subpoenas Chicago Bridge On Nigerian Work
  6) Energy efficiency improvements at existing power plants are a more cost-effective way of increasing supply than building new plants
  7) NGOs - effective because of public trust
  8) EU and China Partnership on Climate Change includes ECAs
  9) Connecting Nature, Power and Poverty - WRI Report
  10) NGOs issue statement condemning ECA debt write-off as aid
  11) Indian Ex-Im Bank becoming active in Africa
  12) AirAsia completes loan mandates to finance 33 aircraft
  13) OECD Watch report evaluates OECD MNC Guidelines 5 years after their revision
  View Back Issues of What's New
   
  1. Groundbreaking global warming lawsuit to proceed

August 25, 2005 (Friends of the Earth, Greenpeace) A federal judge in the U.S. District Court for the Northern District of California ruled yesterday against the Bush Administration and allowed a groundbreaking global warming lawsuit to proceed.  The landmark decision is the first time that a federal court has specifically granted legal standing for a lawsuit exclusively alleging injury from global warming and challenging the federal government's failure to evaluate the impacts of its actions on the Earth's climate and US citizens. Four cities have joined Greenpeace and Friends of the Earth in a lawsuit that applies the National Environmental Policy Act to US-backed overseas projects that have global environmental impacts. Their targets are the two main USexport credit and investment insurance agencies. The Overseas Private Investment Corp. and the Export-Import Bank of the United States lost a bid to block the lawsuit on the grounds that environmental legislation should only apply to domestic projects. The District Court’s narrow ruling [PDF] hasn’t decided the issue, but opens the door to a major case against the US government for driving up greenhouse gas emissions worldwide. The court also recognized harm caused by global warming in the US.

   
  2. Dams and Renewable Energy Incentives Update:
The OECD is facilitating negotiations to include hydropower under subsidies for renewable energy projects approved in April 2005. The documents linked below present NGO concerns with this development.
    A. New ECA Watch publication - A Trojan Horse for Large Dams [PDF]
September 2, 2005 (ECA Watch) - This new report demonstrates that the hydropower projects which ECAs financed in the recent past have a bad social and environmental track record. The NGOs argue that providing export subsidies for hydropower under the guise of promoting renewable energy would amount to a Trojan horse for environmental destruction. They propose that all future hydropower projects that are financed by official export credits should follow the recommendations of the World Commission on Dams.
    B. World Bank standards aren't good enough [PDF]
August 2, 2005 (Cornerhouse, UK) ECAs have a long history of granting support for hydroelectric projects in developing countries. Although the total number of dams funded by ECAs is unknown, a preliminary assessment suggests that they have been involved in financing at least 30 major dams, the overwhelming majority of them with severe and adverse environmental and social impacts Many of the projects have been rife with corruption or have left countries saddled with debts that have only been repaid at great cost to the poorest sectors of society. This paper sets out the background to the new subsidies that have been negotiated for hydropower at the OECD; evaluates the accompanying standards that ECAs are currently minded to adopt; and identifies four key areas where ECAs must take action if future funding for dams is not to result in the egregious environmental and social impacts that have characterized the past.
    C. Movement of Dam-affected People (MAB) protests against lack of compensation [PDF]
May, 2005 (Bank Information Center) On the afternoon of the 31st of May, more than 300 people affected by the Caña Brava Hydroelectric project occupied the Inter American Development Bank’s Brazilian headquarters in the nation’s capital, Brazilia. The occupants of the IDB’s offices are demanding that the bank force Tractebel, a Belgian MNC, to pay full and adequate compensation to all those impacted by the construction of the enormous dam. The Brazilian ECA BNDES was involved in the financing of this project.
 

3.

 
OPIC Board Approves $150 Million to Support Trade Bank of Iraq
August 25, 2005 (OPIC Press Release) The board of directors of the Overseas Private Investment Corporation (OPIC) has approved $150 million in financing for a U.S. trust facility established to support efforts by the new Trade Bank of Iraq (TBI) to rebuild the Iraqi economy.
   
  4. Ex-Im Bank gives creditors a reprieve after Katrina
Sept.2, 2005 (Washington/PRNewswire) The Export-Import Bank of the United States (Ex-Im Bank) today announced relief provisions for exporters and financial institutions located in those portions of Mississippi, Louisiana and Alabama that have been declared federal disaster areas by the Federal Emergency Management Agency.
   
  5. SEC Subpoenas Chicago Bridge On ECA funded Nigerian Work
August 22, 2005 (Reuters) The SEC is investigating payments made by a construction consortium led by Halliburton Co. to determine whether any Nigerian officials were bribed to win the Bonny Island LNG contract which received extensive support from Ex-Im Bank, ECGD and other European ECAs
   
  6. Energy efficiency improvements at existing power plants are a more cost-effective way of increasing supply than building new plants
August 25, 2005 (China Development Brief) A recent Asian Development Bank research report shows that energy efficiency improvements at existing power plants are a more cost-effective way of increasing supply than building new plants.
   
  7. NGOs - effective because of public trust

Op-ed by Peter Bosshard, International Rivers Network, The International Journal of Hydropower & Dams, Issue 3/2005: Bashing non-governmental organizations has become popular, but the stereotype of rich dogmatic NGOs does not explain why they enjoy strong popular support. It absolves dam builders from their own responsibilities, and from engaging in a dialogue with their critics. A global opinion poll recently stated that advocacy groups such as Amnesty International and Greenpeace enjoy the highest public trust among all institutions. Their credibility by far outstrips the credibility of private corporations. NGOs enjoy strong popular support because people trust they are less beholden to vested interests than the private sector, that they are closer to ground realities, and in a better position to address the world's unresolved social and environmental problems.

   
  8. EU and China Partnership on Climate Change includes ECAs
Sept.5, 2005 (iSNet) The EU and China agreed on a Partnership on Climate Change as one of the major outcomes of the China-EU Summit. The Partnership will strengthen cooperation and dialogue on climate change and energy between the EU and China. These efforts will be strengthened through the involvement of the private sector, bilateral and multilateral financing instruments and export credit agencies
   
  9. Connecting Nature, Power and Poverty FPIC for ECAs
August 31, 2005 (World Resources Institute) A major Washington-based think tank is calling for greater local and democratic control over environmental resources as the most effective means to lift some two billion people out of rural poverty. The report calls for the mandatory adoption by all parties, such as multilateral agencies, export credit agencies (ECAs), and private banks and investors, of "free, prior, and informed consent" (FPIC) practices that would guarantee local communities a formal role.
   
  10. NGOs issue statement condemning ECA debt write-off as aid

September 14, 2005 (Eurodad, Brussels) Some 57 non-governmental organizations world wide released today a statement challenging world leaders at the UN World Summit on their efforts to finance the Millennium Development Goals. The statement charges that “many governments are falsely inflating their aid figures by including risky commercial debt write-offs”. It urges leaders “to change the way they report aid statistics so that their citizens get a true picture”.

   
 

11.

 

Indian Ex-Im Bank becoming active in Africa
Export-Import Bank of India (Exim Bank) has, at the behest of government of India, extended a 'line of credit' (LOC) of $15 million to the government of Equatorial Guinea under a Team-9 initiative. Team-9 is aimed at developing a special co-operation model between India and eight countries of West Africa (Burkina Faso, Chad, Cote d'Ivoire, Equatorial Guinea, Ghana, Guinea Bissau, Mali and Senegal). Under the Team-9 initiative, the Indian government provides LOCs through Exim Bank to the member countries to finance setting up of various projects by Indian companies in those countries. Exim Bank will reimburse 100 per cent of contract value to the Indian exporters, upfront upon the shipment of goods.
   
 

12.

 

AirAsia completes loan mandates to finance 33 aircraft
 

AirAsia Bhd said on Sept 5 it has completed the loan mandating process to finance 33 out of 60 Airbus A320-200 aircraft to be purchased from Airbus SAS over the next four years, with a two-year delivery schedule for the 33 aircraft. These loans will be a mixture of Export Credit Agency (ECA) backed loans, pure commercial loans and Islamic loans. See the June 2005 What's New for more on ECA support for air transport.

   
  13. OECD Watch report evaluates OECD MNC Guidelines 5 years after their revision [PDF]
    The OECD ‘Guidelines for Multinational Enterprises’ are not an adequate instrument for curbing corporate misconduct. This is the stark conclusion of OECD Watch in its report ‘Five Years On: A Review of the OECD Guidelines for Multinational Enterprises and National Contact Points,’ released on Oct.22 to coincide with the OECD’s Investment Committee’s meeting in Paris. The international NGO coalition calls for legally binding international social and environmental standards for corporations to help stop corporate abuses, particularly in developing countries.
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