Corruption and bribery have been major and largely accepted features of ECA-backed projects, causing severe economic, social and political damage to importing and exporting countries alike.
The problem with corruption
Corruption in international financing deals and large projects tends to mean that benefits intended for communities do not reach them, that work is not carried out to the high standard required, and that social or environmental concerns are pushed to the back burner.
The price of western companies' bribery is ultimately paid for by people of the Southern countries in which the companies operate. They pay for it in the form of increased debts incurred for overpriced and poorly planned projects that often provide little benefits to people or countries.
Susan Hawley,The Corner House, June 2003
Bribing foreign officials in order to secure overseas export contracts has become a widespread practice: for example, Japanese and Canadian ECAs played a key role in supporting the Suharto regime in Indonesia by financing corrupt foreign investors and projects.
ECAs also indirectly support corruption by turning a blind eye to the track-records of companies they finance. Many ECAs fail to investigate corruption allegations made against companies they support.
In 2000, the OECD Working Party on Export Credits and Credit Guarantees (ECG) issued an“action statement” regarding ECAs and bribery. Transparency International believes the Action Statement has fallen significantly behind what would be regarded as international best practice and OECD staff have admitted that the Statement represents the “least common denominator” for Members’ policies and practices.
Negotiations began in 2005 to enhance the Statement, however some OECD members have opposed and delayed these small steps toward addressing corruption among ECAs despite calls from the G8 to strengthen anti-bribery requirements for those applying for export credits and credit guarantees.
Dodgy deals relating to corruption and ECAs
Japanese and Canadian ECAs played a key role in supporting the Suharto regime in Indonesia by financing corrupt foreign investors and projects.