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Ducroire: Summary of Issues

by Proyecto Gato's Jan Cappelle - Sept. 2005

Summary of Issues

In 2003 the members of the OECD signed the ‘Common Approaches,’ an agreement for the OECD export credit agencies in relation to the environmental impact of transactions: the “OECD Common Approaches on Environment and Officially Supported Export Credits.” Nine months after signing on to the ‘Common Approaches’ in December 2003, Ducroire published its standards. Ducroire didn’t have any standards on the environment, health and safety issues, or human rights before that time. In its new standards, Ducroire failed to apply the ‘Common Approaches’ appropriately. In policy and practice:

• Ducroire doesn’t publish all transactions, ex-ante and post-ante, as stipulated in the articles 16§2 and 16§3 of the OECD Common Approaches. In particular, they do not publish transactions in subcontracts (more on this below).
• Ducroire doesn’t have the capacity to screen the Categorie A and B project against the norms of the host country and the World Bank Safety Policies (IFC) .
• The OECD Common Approaches list projects situated on 1) areas with an archeologic or cultural value and 2) important areas for indigenous people and other vulnerable groups as ‘sensitive sectors.’ However Ducroire didn’t recognize those two groups as ‘sensitive sectors.'

Proyecto Gato demands that Ducroire set up a clear set of norms in relation to the environment, health and safety issues, and human rights. The recommendations have to apply on all transactions guaranteed by the State, but also in partnership with other credit insurance agencies, independent of the budget and credit terms.

Important Documents on Ducroire

• Recommendations for Ducroire [PDF] August 2005 By Proyecto Gato, FERN and four other NGOs.
• Read more about Ducroire Projects at the Proyecto Gato website.

Ducroire has been under constant pressure from Proyecto Gato since 2003. Many projects supported by Ducroire involve arms trade, including an ammunition factory in Tanzania, and in human rights scandals (Camisea Project, Houay Ho Project, Dabhol Project). Since 2005, Greenpeace Belgium asks Ducroire to reform its energy policy, including to invest more in renewable energy technologies.

In October 2005, the parliament is to begin discussions about reforming Ducroire. The law proposals are:

• To set up a compliance commission [PDF]
• To guarantee that Ducroire respects the WB Safequard Policies and the OECD Guidelines for Multinational Enterprises and sets up an ethical commission [PDF]
• Governmental reform of the mandates of 1933

More information on projects supported by Ducroire:

• More on the Camisea Project September 2005 Ducroire closed a transaction with Tractebel for the transport and distribution phase in 2002 and is about to issue a transaction for an LNG faclility in Pampa Melchorita
• More on the Dabhol Project 2004 Ducroire came under scrutiny after a 2004 Proyecto Gato report (link to Proyecto Gato site [page in English])
• More on the Houay Ho Project [PDF]
• More on the scandal of Illegal Exploitation of Natural Resources and other Forms of Wealth in the Democratic Republic of the Congo (in Dutch)
• More on the ammunition factory in Tanzania (in Dutch)

Transparency Issues and Ducroire:

On transaction subcontracts

Problem:

Transactions in category A will be published, to be mentioned: the project’s name, country, publishing date, delay for comment (any comment should be transmitted within 30 days) and possibly a hyperlink to an EIA. Ducroire encourages the EIA person in charge to make the EIA known. However Ducroire/Delcredere does not make the EIA available to the general public without the insured consenting. The files accepted under subcontracts will not be published. The main contracting party is responsible for this publication. (website Ducroire)

Response Ducroire during a meeting with Proyecto Gato:

“It is administrational. We do not have the capacity to screen EIAs. If other Multinational Enterprises are involved, and they are head contractor, then it is up to the ECA of the country with the head contractor to publish the EIA. As because in these cases we do not screen the whole EIA, but only the part related to the Belgian involvment, we do not publish the EIA.”

This is in breach of the OECD Common Approaches on Environment and officially supported export credits:

• For a Cat. A project, Members should require an EIA (article 8). The screening of the EIA should identify the overall project(s), to which capital goods and/or services are related (article 4). ECAs should take into account development activities within the project area but not directly connected to the project (Annex 4, §4)
• Cat. A projects includes projects in sensitive sectors or located in or near sensitive areas. It has the potential to have significant adverse environmental impacts. These impacts may affect an area broader than the sites or facilities subject to physical works (article 6).
• When undertaken environmental reviews, Members should benchmark projects against host country standards and against one or more relevant environmental standards and guidelines. Ducroire claims to benchmark projects against the IFC standards and guidelines. By not screening the whole project, Ducroire do not benchmark the project against para 3 of the IFC policy OP 4.01 (1998): take into account the issues required for an environmental assessment under this policy?
• Obviously, Ducroire does not respect article 16, §2 and §3 by not publishing EIAs at least 30 days before final commitment to grant official support and to publish projects classified in Cat. A and B post-ante.

Proyecto Gato, Jan Capelle - www.proyectogato.be