Revised OECD export credit standards are an empty basket for environment and development NGOs
(ECA Watch, Paris, 26 April 2007) On Monday and Tuesday April 23-24, 2007, the OECD's secretive Export Credit Working Group (ECG) apparently approved revised and weakened environmental and social standards governing projects supported by export credit guarantees or loans of greater than 10 million SDRs (US$15.3 million or 11.2 million). Release of the revised standards is pending internal OECD procedures and they will eventually be submitted to the OECD Council for approval as a formal Recommendation.
Article 13 of the virtually final negotiating draft of these standards, known as the Recommendation on Common Approaches on Environment and Officially Supported Export Credits, allows OECD export credit agencies (ECAs) to opt out of applying any standards at all should they so decide, provided that they report this to the notoriously secretive and effectively unaccountable OECD working group.
Three OECD ECAs from Germany, Austria and Switzerland have just done precisely this in agreeing to support the Ilisu dam project in Turkey. Ilisu has no Environmental Impact Assessment (EIA) that meets accepted international standards, including World Bank Safeguard Policies. Baseline data for the project is almost non-existent and reliable sources indicate that Turkey has not yet consulted with other Tigris riverain nations, contrary to international law.
"ECAs, and in particular Germany, Austria and Switzerland, clearly have no intention of sincerely safeguarding the public interest when they sign on to the Common Approaches," said Heike Drillisch of WEED. "Protecting the environment is simply an unnecessary and expendable obstacle to their clients' private commercial interests."
"The shopping basket of optional standards that OECD ECAs debated for the past 17 months are effectively meaningless, since a gaping hole in the basket allows export credit agencies to do nothing at the check-out counter", says Bob Thomson, Paris based Facilitator of the ECA Watch network.
Not only are standards still "benchmarked" and not mandatory, the monitoring and public reporting on their implementation under the Common Approaches over the past three years has been notoriously vague, with the OECD Secretariat only providing highly aggregated reports, which effectively obscure classification of environmental impacts and do not disclose or ensure compliance with conditions imposed to bring projects up to international standards.
Sixteen environment and development NGOs from Europe, North America and Japan have written to the OECD stating that this final draft fails to meet the objectives of the OECD as outlined in the preamble to the Recommendation. The preamble calls on OECD Members to promote coherence, good environmental practice and a level playing field, as well as to develop common procedures and enhance efficiency.
"The message that this sends to non-member economies from the OECD is clear," added Mr. Thomson, "environmental standards are not an OECD priority, and deviation from even minimal standards brings little fear of sanctions or even reproach from other OECD members."
"This is the wrong message at a time when large infrastructure projects threaten not only locally affected communities, but also the environmental and social health of the entire planet," he continued.
ECA-Watch, an international network of groups that monitor the activities of ECAs, believes that a truly transparent and thorough peer review process, which safeguards public interests and encourages public accountability, must be coupled with mandatory standards which permit international norms to be upheld in all material respects. For the OECD is to retain any credibility whatsoever as a forum for setting environmental and social standards for the US$125 billion per annum budgets of OECD export credit agencies, they believe this would be the minimum outcome of the revisions scheduled for approval next week.
For further information, please contact:
Bob Thomson, Facilitator, ECA Watch www.eca-watch.org
Tel. +33 1 48 51 18 90 Mobile +33 6 09 73 50 90
Email: facilitator at eca-watch.org
ECA Watch members signing the letter to the OECD's Export Credit Working Group include:
The Corner House, UK
Environmental Defense, USA
World Resources Institute, USA
Both Ends, Netherlands
FERN, UK
Pacific Environment, USA
urgewald, Germany
WEED, Germany
Finnish NGO Campaign to Reform the ECAs
Observatorio de la Deuda en la Globalizacion, Spain
The Halifax Initiative, Canada
Friends of the Earth Japan
Proyecto Gato, Belgium
Campagna per la Riforma della Banca Mondiale, Italy
Projecto Eca-Iberia / Euronatura, Portugal
Eca-Watch Austria