ECAs are the least examined of all international financing institutions, despite providing by far the largest share of public financial investment from global North to South.
The problem with poor transprency
Many ECAs only disclose information about a small number of the transactions they support, and rarely reveal the name of the companies they support or the financial institutions involved in the operations. Also, no independent external evaluation or monitoring reports are publicly available. This makes it extremely difficult for parliamentarians and the wider public in either the ECA home country or the country hosting the project, to a) express their views concerning ECAs operations; b) assess ECAs decisions based on balanced information; or c) to monitor ECAs activities.
In such a context, there is an increased likelihood of tax-payer money being used against the people, the environment and the economy of the project-recipient country. This risk is particularly evident when ECAs back projects envisioned and operated by financial and political elites, where ECA financing can become a source of odious debt strangling the economic and job creation prospects in a developing country.
Dodgy deals with ECAs and transparency issues
The Aarhus Convention on access to public information, public participation in decision-making and access to justice in environmental matters has been incorporated into European law, and binds EU institutions and bodies, as well as Member State public authorities. It empowers NGOs to scrutinise decisions of EU institutions and Member State public authorities with regards to the activities of European corporations operating outside the EU, including ECAs.
Despite this, ECAs are very reluctant to disclose information. For instance, the Canadian ECA EDC and the Australian EFIC are legally obliged to disclose virtually nothing. In other countries, such as the United Kingdom and the USA, ECA-Watch activists sometimes have been able to obtain information on projects by using Freedom of Information (FOI) laws. Nevertheless, those FOI laws have exemptions that prevent the public from obtaining the information. That has been recently the case for Germany and the Netherlands. Finally, another associated problem is that ECAs are very slow in providing the information requested; the Ex-Im Bank from the USA and CESCE from Spain are examples of this trend.
At the EU level
Since December 2011, the European Commission is required to report to the European Parliament on member States’ ECAs activities (Regulation No. 1233/2011). To this end, member States are required to annually report on their activities. However, while the Commission argues that this reporting aims at stepping up transparency at Union level, ECA-Watch strongly disagrees.
To start with, the Commission uses inadequate standards to measure transparency, namely the Common Approaches of the OECD. In addition, the Common Approaches are not legally-binding, have no status in EU law and, moreover, contain a clause (article 28) that permits ECAs to derogate from its provisions and from any other standards in their entirety. Thirdly, in the report made by the Commission in 2012 about member States ECAs activities in 2011, the Commission failed to identify inconsistencies between what the ECAs reported and what they actually did with regards to complying with the OECD Common Approaches. For instance, while the Netherlands and Portugal stated that they followed the Common Approaches, the former did not provide satisfactory information with regards to two category A projects (projects with highly negative environmental impacts) and the latter did not publish information on a category B project. Those examples show that the reporting enforced under the EU Regulation No. 1233/2011 is not fulfilling its mission with regards to strengthening ECAs transparency.
The same regulation aims to ensure compliance of member States with EU objectives and obligations regarding external action. However, the greatest number of ECAs do not provide data on compliance with these objectives.
What is ECA Watch doing?
The transparency that the ECA Watch campaign demands includes the disclosure of
- Name and description of the project;
- financial transactions related to the project;
- all social, environmental and human rights impact assessments;
- debt impact analyses;
- construction and off-take agreements and
- all project-related information that is relevant to the project risks.
All of this should be disclosed at least 120 days prior to a decision on the project by the board of a given ECA. Transparency to this degree would significantly reduce the social, political, environmental and even economic risks for investors in a project.
In addition, if ECAs are clear that they do not offer support to companies that receive negative assessments, this could promote stronger environmental and social due diligence amongst European companies looking for official export credit support.
ECA-Watch members are constantly advocating for more transparency to their respective ECAs and government departments in charge of export credits. In addition, they periodically request specific information on projects by using FOI laws and even recurring to the court when FOI requests are not satisfied. ECA-Watch activists also work with Parliamentarians in order to: a) create stronger transparency laws; and b) request information on projects, since the government has the duty to reply to Parliamentarians’ requests quite swiftly.
Hosted by the UN Economic Commission for Europe (UNECE), this clearinghouse serves to collect, disseminate, and exchange information on laws and practices relevant to the rights of:
- Public access to environmental information;
- Public participation in environmental decision-making;
- Public access to justice on environmental matters.
The text of the convention:
Other Useful Links on Transparency:
Extractive Industries Transparency Initiative: http://eiti.org/
In April 2013 the EU agreed on rules for greater transparency in the oil, gas and mining sectors. Read about the deal.