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UK bill 'dangerous and short-sighted'

Campaigners, including Amnesty International, Jubilee Debt Campaign and WWF, have expressed grave concern at a Government attempt to rush changes to the Export Credit Guarantee Department (ECGD)(2) procedures through Parliament tomorrow.

The changes would give the ECGD, the department responsible for underwriting UK industry overseas, new powers to retrospectively support projects. Campaigners fear that this would water down standards that currently exist to prevent UK involvement in projects which compromise environmental and human rights standards.

The network of human rights, anti-poverty and environmental groups has called on MPs to support a Liberal Democrat amendment, sponsored by Lorely Burt MP, which would ensure ECGD would still have to assess the environmental, social, and human rights impacts of projects.

The agreement of the G20 earlier this month to make available $250billion to ‘facilitate trade’ internationally, will mean far more money flowing through export credit agencies like ECGD. Campaigners have warned that while stimulating trade may be necessary for the economy, it must not come at the expense of people and planet.

ECGD has been the focus of many campaigns in recent years, targeting specific ECGD-supported projects which have had a detrimental impact on local communities and their environments (3).

Lorely Burt MP, who is tabling tomorrow’s amendment said:

“While fully supporting the need for this bill, I’m concerned that the lack of language on due diligence could be used as a loophole for unscrupulous companies. I want to ensure that anyone receiving government assistance should have to satisfy ethical business requirements – whether they receive assistance before they go ahead or retrospectively.”

Nick Dearden of Jubilee Debt Campaign said:

“The ECGD is an organisation which needs to be brought into the twenty-first century. The vast majority of the ECGD’s funds still go to help the arms industry and climate intensive projects. Giving ECGD more power, without fundamental reform, is the equivalent of giving sub-prime mortgage lenders the job of re-starting the housing market.”

David Norman, Director of Campaigns at WWF said:

"Whatever the government's intentions are in rushing this bill through parliament, it is clear that it will undermine the environmental and human rights checks currently in place, which were hard won in the first place. By allowing funding at any stage, it will also make it incredibly difficult to retrospectively audit the overall impact of a project to an acceptable level, which is very worrying indeed."

Peter Frankental, Programme Director at Amnesty International UK:

“ECGD’s current weak human rights protections must not be further undermined, in the government’s rush to support the ailing UK economy”

Notes

(1) The Industry and Exports (Financial Support) Bill was introduced into the House of Commons on 4 March. It is expected to have its Committee and Remaining stages on 21 April. As a ‘money bill’ the House of Lords cannot block its passage. It will allow for the ECGD to retrospectively support projects (i.e. projects which are already underway) and will increase the amounts of support the Department can give.

(2) The Export Credit Guarantee Department is the British export credit agency – a government department which provides government-backed financial guarantees and insurance to British projects overseas in areas considered too risky to receive commercial insurance. Large infrastructure projects, such as oil and gas extraction, in developing countries are common recipients of ECA support. In recent years, arms and carbon-intensive industries, including aerospace and fossil fuel developments, have typically made up over 75% of ECGD’s custom

(3) Campaigns include those against the Baku-Tbilisi-Ceyhan pipeline, criticised for environmental damage and infringing human rights in its construction, and for the cancellation of Indonesian debt run up underwriting arms sales to General Suharto.