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Over 50 representatives of Indonesian and
international non-governmental organizations (NGOs), and social
movements convened in Jakarta and South Sumatra 1-7 May, 2000, for
a strategy meeting on official export credit and investment insurance
agencies (ECAs). They agreed on the following Declaration, endorsed
by 347 NGOs from 45 countries. [view
complete endorsement list]
May 2000
Introduction
Non-governmental organizations around the world call the
attention of governments and international institutions to the mounting
adverse environmental, social, human rights and economic consequences
of ECA activities. We have directly witnessed the unconscionable
human suffering and environmental devastation that ECAs have produced
in Indonesia, which is only one of many country examples. ECAs have
supported many projects-e.g. in the mining, pulp and paper, oil
and power sectors-which have had devastating social and environmental
impacts. ECAs have supported the export of arms used for human rights
abuses by the Suharto government. In 1996, ECA exposure in Indonesia
was $28 billion, an amount equivalent to 24% of Indonesia's external
debt. The Indonesian ECA debt places an unacceptable burden on the
Indonesian people, crippling their future development. As a 22 September
1999 "Financial Times" article pointed out, careless industrialized
country export credit agencies share a major responsibility for
"violence in East Timor and economic disaster in Indonesia."
Official Export Credit and Investment Insurance Agencies have become
the largest source of public international finance, supporting in
1998 over eight percent of world exports. In 1998 ECAs supported
$391 billion in private sector business and investment, of which
$60 billion was for middle- and long-term guarantees and loans,
mainly supporting large-scale project finance in developing countries.
This exceeds all bilateral and multilateral development assistance
combined, which has averaged some $50 billion over the past decade.
ECAs account for 24 percent of all developing country debt, and
56 percent of the debt owed to official governmental agencies.
In April, 1998, 163 NGOs from 46 countries sent to the finance and
foreign ministries of the major industrialized OECD countries a "Call of National and International Non-Governmental Agencies
for the Reform of Export Credit and Investment Insurance Agencies." The NGOs called for transparency in ECA decision making, environmental
assessment and screening of ECA financial commitments, including
participation of affected populations, social sustainability (equity
and human rights concerns) in appraisal of ECA commitments, and
for an international agreement in the OECD and/or G8 on common environmental
and social standards for ECAs.
Over the past two years the major industrialized countries have
only made the minimal commitment to work towards common environmental
approaches and guidelines in the OECD. The lack of transparency
and meaningful public consultation in the OECD Working Party on
Export Credits and Credit Guarantees, particularly the lack of any
consultation with representatives of affected groups and organizations
from non-OECD recipient countries, has rendered this process a travesty.
ECAs have consistently learned no lessons from the past and continue
to approve financing for environmentally and socially destructive
operations.
The social and environmental negligence, support for human rights
violations, and lack of transparency of ECAs must come to a halt.
ECA financing for major arms transactions, for obsolete technologies
rejected or illegal in their home countries, and for economically
unproductive investments is a scandal of global proportions.
Call for Reform
Based on the experiences of Indonesia and many other countries,
NGOs from around the world reiterate the April, 1998 international
Call for Reform of Export Credit and Investment Insurance Agencies.
We call upon OECD governments, ministers and national legislatures
to undertake with due dispatch the following reform measures for
their ECAs:
1. Transparency, public access to information and consultation with
civil society and affected people in both OECD and recipient countries
at three levels: in the assessment of ongoing and future investments
and projects supported by individual ECAs; in the preparation within
national ECAs of new procedures and standards; and in the negotiation
within the OECD and other fora of common approaches and guidelines.
2. Binding common environmental and social guidelines and standards
no lower and less rigorous than existing international procedures
and standards for public international finance such as those of
the World Bank Group and OECD Development Assistance Committee.
These guidelines and standards need to be coherent with other ongoing
international social and environmental commitments and treaties,
for example, the conventions of the International Labor Organization
and the United Nations Convention on Biological Diversity. In addition
ECAs must conduct full, transparent accounting for climate change
impacts and move to increase investments in sustainable renewable
energy. So far, some governments have established, or are establishing,
environmental and social policies which substantially deviate from,
and are below these internationally recognized standards and guidelines.
3. The adoption of explicit human rights criteria guiding the operations
of ECAs. This should be done in consultation with affected people
and civil society, and based on existing regional and international
human rights conventions. In Indonesia and elsewhere ECAs have not
only supported arms exports directly linked to egregious human rights
abuses, their support for mining, paper and pulp mills and other
major infrastructure investments often has been accompanied by destruction
of indigenous and local peoples' rights to land and livelihood resources,
armed suppression of dissent, and suppression of press freedom to
criticize such abuses.
4. The adoption of binding criteria and guidelines to end ECAs'
abetting of corruption. According to Transparency International,
the continued lack of action by ECAs to address this issue is bringing
some ECA practices "close to complicity with a criminal offense."
We endorse the recommendations of Transparency International submitted
to the OECD and European Union in September, 1999, on how ECAs should
avoid continued complicity in corruption. These include, inter alia,
recommendations that export credit applicants must state in writing
that no illegal payments related to a contract were made, and that
any contravention of the ban on illegal payment should entail cancellation
of the state's obligation to pay. Companies found guilty of corruption
should be banned from further support for five years, and export
credit agencies should not underwrite commissions as part of the
contracts they support.
5. ECAs must cease financing non-productive investments. The massive
ECA support for military purchases and white elephant projects,
such as nuclear power plants, that would be rejected by OECD bilateral
aid agencies and multilateral development agencies such as the World
Bank must end.
6. The cancellation of ECA debt for the poorest countries, much
of which has been incurred for economically unproductive purposes.
We support the call of the Indonesian anti-debt coalition for the
cancellation of Indonesian ECA obligations, now placing an insupportable
burden on the Indonesian people.
Conclusion
The OECD Development Assistance Committee declared in 1996 that
" we should aim for nothing less than to assure that the entire
range of relevant industrialized country policies are consistent
with and do not undermine development objectives." The OECD
ECAs, and the OECD Export Credit Working Party, completely disrespect
this call. These ECAs have so far refused to accept any responsibility
for their past mistakes, and to draw any meaningful lessons from
them. The current practices of the ECAs embody a form of corrupt,
untransparent, environmentally and socially destructive globalization
as serious and reprehensible as the concerns raised by civil society
and activists around the world about the World Trade Organization,
the proposed Multilateral Agreement on Investment, and the International
Monetary Fund and World Bank.
We call upon concerned individuals and organizations around the world
to turn their attention to ECAs and their negotiating forum, the
OECD, and to press their governments to undertake reform without
further delay.
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