Index for December 2011

Volume 10, Issue 12

  • OECD fails to agree on revised Common Approaches on export credit & the environment

    (ECA Watch, Ottawa, 30 December 2011) In June 2007, the OECD's Export Credit Working Group agreed "in the light of experience, [to] review all elements of [the Common Approaches] Recommendation not later than the end of 2010 and report to Council." After more than a year of negotiations, they have failed to agree on revisions of the standards for addressing environmental issues relating to exports of capital goods and services. ECA Watch presented two sumissions to the 14 November OECD Export Credit Working Group CSO consultation covering our comments on both the Common Approaches and the Sector Understanding on renewable energy, climate change mitigation and water projects.
  • (Independent, London, 11 December 2011) NGOs say Ministers have reneged on a coalition promise to champion British firms investing in clean energy. A deal, which will see UK Export Finance guarantee a loan to the Brazilian oil firm Petrobras for deep-water oil drilling, is contrary to a government commitment that the department would champion British firms involved in green technologies "instead of supporting investment in dirty fossil-fuel energy production".
  • (Eurodad, Brussels, 6 December 2011) Export Credit Agencies are debt-creating agencies. The loans they create are driven by the interests of exporters and their home countries, rather than a concern for whether the loans are useful to the host country. This report shows that export credit guarantees are at the root of most developing country debt owed to European governments. Eurodad assessed the debts owed by developing countries to 4 European countries and found that almost 80 percent of poor countries’ debts to other governments came from export credits, not development loans.
  • (ECA Watch, Ottawa, 8 December 2011) ECA Watch's submission notes, despite growing clarity that there is a state duty to protect human rights, which includes the operations of state institutions, including export credit agencies (ECAs), ECAs continue to finance exports and investments that are associated with human rights abuse. The submission is also available in Spanish
  • (Ekklesia, London, 30 December 2011) The Department for International Development admits that if the UK writes off export credit debt owed by Sudan, the money will be counted as aid. But critics point out that Sudan has made no repayments for 27 years and that nobody realistically expects them to do so. DFID made the admission in an email to the Jubilee Debt Campaign. The NGO calculates that cancellation of Sudan's debt could account for around 7% of the UK's aid budget.
  • (CreditMan, London, 5 December 2011) “Despite the co-ordinated Central Banks’ actions over the last months we need quick and powerful solutions this week”, says Johan Schrijver, President of the Berne Union. This is the world association of export credit insurance companies, insuring annually $ 1.5 trillion, or roughly 10% of world cross-border trade.
  • (Forex News, 6 December 2011) Boeing forcasts airlines will avert a shortfall in aircraft financing next year by relying increasingly on capital markets and alternative sources as pressure grows on European banks... Export credit agencies such as the Export-Import Bank in the United States should see their share remain static at 30 percent... Boeing had proposed that export credit agencies such as ExIm should, for a fee, cover bondholders for the political risk that a country would fail to apply the Cape Town Convention, leaving them with the commercial credit and asset risk.
  • (Brookings Institute, Washington, 6 December 2011) Internally displaced persons (IDPs) are increasingly a product not only of conflicts and natural disasters, but also of a growing number of private or public sector infrastructure projects building mines, plants, dams, roads, etc. with finance made available to private construction companies and banks through, inter alia, the Export Credit Agencies (ECAs) of the 34 OECD countries.
  • (CEDHA, Buenos Aires, 25 November 2011) Barrick Gold’s mining operations in Argentina and Chile, particularly at the Pascua Lama gold project (set to commence in the near future), but also at the adjacent and related Veladero project which has been in operation for several years, fail to comply with the social and environmental norms of the Equator Principles. Export Development Canada (EDC) and the US Export Import Bank (Exim Bank) are considering providing financing to Barrick Gold for the Pascua Lama project.
  • (This Day, Kano, 13 December 2011) Nigerian Export Import Bank (NEXIM Bank) has disclosed that the bank has disbursed a total of about N70 billion (US$431 million) and US$322 Million in supporting over 900 export projects.
  • (Bloomberg, Sydney, 22 December 2011) Santos Ltd., the Australian energy company building the $16 billion Gladstone liquefied natural gas project in Queensland state, obtained $1.2 billion in debt facilities backed by three government export credit agencies. Export credit agencies from Australia, Canada and Italy helped obtain the loans.
  • (Reuters, Washington, 2 December 2011) The U.S. Export-Import Bank, which helps big exporters such as Boeing and Caterpillar make foreign sales, might have to stop operations unless Congress raises its $100 billion "exposure cap," said U.S. government and business officials.