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NGOs urge OECD General Secretary to intervene in export credit environmental standard negotiations

ECA Watch Press Advisory, Paris, 10 November 2006

On Monday November 13th and Tuesday November 14th, OECD export credit agencies (ECAs) and national government representatives will sit down for another round of negotiations on a revised OECD Recommendation on Common Approaches to the Environment and Officially Supported Export Credits.

The OECD Secretary General Angel Gurria has stated that "acting now is imperative to confront the many problems which will flow from climate change". The negotiations within the OECD's Export Credit Working Group (ECG) however, are based on a draft text which permits OECD Member ECAs to freely deviate from already weak environmental and social standards, with no provision for public disclosure of these deviations.

The Chief of the OECD supports an urgent approach to environmental regulation, while the not so well known ECG eschews the application of meaningful standards to export credit programmes worth some US$125 Billion annually!

ECA Watch has written to Mr. Gurria, asking him to intervene, to impress on OECD Members that these negotiations "must come to terms with the enormous gap between their suggested text and the imminent environmental and social crisis which demands serious standards and regulation."

ECG consultations with civil society organizations such as ECA Watch members have taken place during these negotiations, and have been complemented recently by national level consultations as well. This has been a welcome change to the secrecy of the ECG in the past, although we have 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.

The high international public visibility of this contradiction can only contribute to public concern about the OECD's ability to maintain the most minimal coherence with its stated developmental, social and environmental goals.

Bob Thomson, ECA Watch Facilitator based in Paris, stated that: "Failure to live up to their own standards puts the OECD's reputation as the house of best practices at risk."

ECA Watch has also asked Mr. Gurria to institute a formal peer review of the ECG’s monitoring of the Participant’s adherence to the terms of the Arrangement on Officially Supported Export Credits.

The Arrangement is a gentlemen’s agreement amongst its Participants, most OECD Member Governments, which sets forth the most generous export credit terms and conditions that may be supported by its Participants. It is recognized by Article K of Annex I of the WTO Agreement on Subsidies and Countervailing Measures (ASCM) as providing a safe haven for limited subsidies.

It is an open secret that many of the credit facilities on offer from OECD ECAs breach the Arrangement and thus the WTO ASCM.

Bob Thomson notes that: "There is no serious peer review process taking place in the OECD to monitor ECA expenditures to subsidize export sales, and therefore no effective means of ensuring adherence to either OECD or WTO policies against trade subsidies."

For further information, please contact:

Bob Thomson, Facilitator, ECA Watch Tel. +33 (0)1 48 51 18 90 Email: facilitator@eca-watch.org

National media may contact local ECA Watch members at the email addresses below: