OECD negotiations on export credit environment standards break down

(ECA Watch, Paris, 28 November 2006) With world attention increasingly focussed on the climate impact of energy projects, dams, resource extraction, aircraft emissions and other infrastructure projects, many of which are supported by export credit agencies, OECD ECAs have failed again to reach consensus on revisions to the OECD Recommendation on Common Approaches on Environment and Officially Supported Export Credits. Beginning in late 2005 and targeted for completion in November 2006, negotiations have been extended to early 2007 with wide differences remaining between OECD Members on necessary changes.

ECA Watch has learned that at meetings on the 13-14 November 2006, the Export Credit Working Group made little progress on a range of issues still under discussion. Some ECAs are pressing for improvements, while others, notably Germany and to a lesser extent Italy, are actively lobbying for the removal of a number of changes currently in the draft text.

ECG consultations with civil society organizations such as ECA Watch members, TUAC and BIAC have taken place over this year of negotiations, and were complemented recently by national level consultations as well. This was a welcome change to the secrecy of the ECG in the past. However ECA Watch has concerns that some OECD Members are not approaching the negotiations in good faith, with a view to furthering the objectives of the Recommendation, namely to promote coherence, a level playing field and good environmental and social practices.

While negotiating a text to ostensibly strengthen standards and monitoring, a number of OECD ECAs are at the same time actively considering support for the Ilisu and Yusefeli dams in Turkey, the Sakhalin II oil and gas project in eastern Russia and the Camisea II pipeline and Liquified Natural Gas project in Peru. These projects, according to their own studies, grossly deviate from OECD standards, and if approved will require the invocation of the current and proposed revised OECD Common Approaches Recommendation's derogation clauses.

Prior to this meeting, ECA Watch had expressed its concern to the Secretary General of the OECD that the ECG's draft negotiating text allows them to freely deviate from whatever environmental and social standards they might commit to, requiring only that they report such deviations once a year to the OECD - but not even share such information publicly.