Index for October 2011

Volume 10, Issue 10

  • (UN Press Office, New York, 5 August 2011) The UN Third Committee (Social, Humanitarian and Cultural) has received the report of the independent expert on human rightrs on the effects of foreign debt and other related international financial obligations of States of the full enjoyment of all human rights, particularly economic, social and cultural rights (document A/66/271).  The report, by independent expert Cephas Lumina, focuses on the adverse impact of export credit agency supported activities on sustainable development and the realization of human rights, while also examining their contribution to debt burdens of countries where such activities are undertaken. It says in recent years export credit agencies have assumed an increasingly important role in the global economy, particularly in the context of the global financial crisis.  It warns, however, that many projects supported by export credit agencies have harmful environmental, social and human rights consequences and are not financially viable.
  • (Dow Jones, Paris, 11 October 2011) France, Germany, and the U.K. are to offer export-credit guarantees for Airbus aircraft assembled in China, Les Echos reported. Export-credit agencies Coface in France, Euler Hermes in Germany, and ECGD in Britain, will provide credit guarantees for A320 single-aisles planes built at an Airbus factory in Tianjin, China, the newspaper said.
  • (Pacific Environment, San Francisco, 19 October 2011) ECA-Watch groups including Pacific Environment will investigate an October 19, 2011, Memorandum of Understanding between the U.S. Export-Import Bank and the Nigerian Ministry of Power for US $1.5 billion for power project-related exports. The MOU makes no mention of whether affordable renewable energy rather than harmful fossil fuel projects will be financed. In fiscal year 2010 Ex-Im Bank fossil fuel financing dwarfed support for renewable energy projects by more than ten-fold. There are corruption concerns too.
  • (MySanAntonio, San Antonio TX, 30 September 2011) A Wells Fargo Bank loan officer accused of taking a $50,000 bribe in a case involving the largest fraud on the U.S. Export Import Bank, the country's official export credit agency, turned himself in Friday in San Antonio Texas.
  • (Space News, New York, 14 October 2011) The growing popularity of export-credit agency financing for satellite projects has some on Wall Street worried that a kind of bubble has developed that could pop if one of the funded projects cannot meet its loan commitments. “Some of the [export-credit agency-backed] projects could not have been done in the private sector because they don’t, in fact, make sense,” said Fred Turpin, managing director for JPMorgan Chase.
  • (GrowthBusiness, London, 27 October 2011) Manufacturers expect ‘sizeable falls in activity’ over the next three months after a spike in the number of exporters being hampered in accessing credit or finance, CBI research finds... The proportion of respondents citing a constriction on their growth due to a lack of ECA support rose sharply in the latest survey to 18 per cent from 4 per cent – the highest level since October 1968. Insurance News Net also reports that Export Credit Agencies are concerned about the impact Basel III could have on them, as ECA-backed loans will no longer be zero risk weighted in terms of capital requirements. They note companies are looking for new alternatives as existing trade finance capacity tightens.
  • (Atradius, Budapest, 20 October 2011) The international association of export credit and investment insurers - the Berne Union - announced today at its Annual General Meeting in Budapest that Johan Schrijver, Managing Director of Atradius Dutch State Business, was elected President. Schrijver, previously vice president of the Berne Union, was elected unanimously.
  • (Campaign Against the Arms Trade, Amsterdam, 24 October 2011) Vietnam is close to ordering four Sigma-class corvettes from Netherlands based Damen Schelde Naval Shipbuilding (DSNS). According to a DSNS director the contract was "just a matter of financing details", likely arranging export credit insurance from the Dutch government, a necessary condition to obtain credit facilities from commercial banks. The deal is possibly worth around 600 million euros. Vietnam is engaged in a major expansion of its military forces as decades-old disputes between Vietnam, China, Taiwan, Brunei, Malaysia and the Philippines over sovereignty in the South China Sea are driven by the suspected presence of oil and gas. The Dutch camaign against the arms trade believes the Dutch government should acknowledge the potential of military confrontation and refuse an export permit.
  • OECD to negotiate new Common Approaches on ECAs and environment 14 November 2011

    (ECA Watch, Ottawa, 20 October 2011) The OECD's Export Credit Working Group meets in the week of November 14, 2011 to discuss and perhaps finalize negotiations for a revised Recommendation for "Common Approaches on Official Export Credits and Environmental and Social Sustainability". Copies of a draft revised OECD Council Recommendation on the Common Approaches have been provided to ECA Watch members by national members of the Working Group for comment.
  • (India Business News, 31 October 2011) This month, ECGC, the government organisation that provides insurance cover to exporters, reclassified exports to Greece as 'risky' by withdrawing open cover insurance scheme for them. In August, it had issued similar notices for exports to Syria and in February for Egypt, Tunisia and Yemen. Exporters say the situation is worrying, with clouds of another recession in the US adding to their woes.
  • (PressTV, London, 29 October 2011) Despite the British government's promise to refrain from backing investment overseas in “dirty fossil-fuel energy production,” it has emerged that the British official export credit agency ECGD is using taxpayers' money to support a multi-billion pound project helping two coalmines in Siberia enhance their production. The ECGD has underwritten £6.2m of the loan to make sure a French bank will not incur any losses if the Russian firm fails to make timely repayments.
  • (The Independent, London, 30 October 2011) Britain is pursuing Egypt for debts of up to £100m that funded the purchase of arms under the regime of General Hosni Mubarak. Critics say the move contravenes the Government's pledge to audit all outstanding global debt, while writing off any past lending "recklessly given to dictators" or not used for the specific purpose of development. The money lent to Egypt is part of a larger portfolio of more than £150m of Treasury lending that critics say has funded some of the world's most illiberal regimes in countries such as Iraq and the Democratic Republic of Congo. Campaigners yesterday demanded an investigation.