Press Release, 18 November 2008
NGOs protest against continuing destruction by OECD export credit agencies
(Paris, 18th November 2008) Today a broad coalition of international non-governmental organisations is protesting outside the OECD to condemn the lack of progress by export credit agencies in implementing strict sustainability guidelines and conducting meaningful consultations with civil society.
“Export credit agencies (ECAs) provide private business with tens of billions of Euros in public subsidies and guarantees annually”, states Bruce Rich of the ECA-Watch coalition. “Both the OECD and its member governments fail however, to tie these subsidies to strict rules of sustainability and public scrutiny.” By providing loans and guarantees to the private sector, export credit agencies support their economies’ business activities in emerging markets and developing countries. Banks are major beneficiaries of ECA guarantees – they take the profit while the public assumes the risk.
ECA-Watch has revealed that many projects supported by export credit agencies cause great harm to people and the environment in affected regions. This includes large dam projects like Nam Theun 2 in Laos, oil and gas exploitation like Sakhalin 2 in the Russian Far East, the Chad-Cameroon and Baku-Tbilisi-Ceyhan pipelines, nuclear projects and arms deals, as well as increasing numbers of coal fired power plants without any consideration for climate impacts. A number of ECA backed contracts are known to have been acquired by corrupt practices.
“Although export credit agencies claim to observe international environmental standards and to consult with affected populations on paper, they continue to approve guarantees and loans for projects that violate basic international standards and where local participation is impossible”, explains Ercan Ayboga from the Initiative to Keep Hasankeyf Alive in Southeast Turkey. Mr. Ayboga is campaigning against the Ilisu dam project in the Kurdish Southeast of Turkey, which will displace over 55,000 people, destroy invaluable cultural heritage including the 10,000 year old town of Hasankeyf, and damage an irreplaceable ecosystem. “Although the export credit agencies from Germany, Austria and Switzerland, which have granted guarantees for the Ilisu project, have issued a ‘final warning’ to Turkey to meet environmental and social conditions, it remains unclear whether they will actually withdraw from the project”, states Heike Drillisch from the German CounterCurrent campaigning on Ilisu.
Contacts:
Sébastien Godinot, finance@amisdelaterre.org, Tel. +33 6 68 98 83 41
Bruce Rich, brich@edf.org
Ercan Ayboga, Initiative to Keep Hasankeyf Alive, hasankeyfgirisimi@gmail.com
Heike Drillisch, CounterCurrent – Ilisu Campaign Germany, heike.drillisch@weed-online.org, Tel. +49–177–345 26 11.
Further Information: www.eca-watch.org
Background information:
Export Credit Agencies and Investment Insurance Agencies, commonly known as ECAs, are public agencies that provide government-backed loans, guarantees, credits and insurance to private corporations from their home countries to do business abroad, particularly in the financially and politically risky developing world. Most industrialized nations have at least one ECA, which is usually an official or quasi-official branch of their government. ECAs from the industrialized countries coordinate their policies within the OECD Export Credit Working Group. They have developed a Recommendation on Common Approaches on Environment and Officially Supported Export Credits which critics say remains full of loopholes and does not prevent ECA support for projects with severe environmental and social impacts.
Collectively, ECAs are among the largest sources of public financial support for foreign corporate involvement in industrial projects in the developing world. ECAs’ medium and long term loans and credits have doubled from 2002 to 2006 to over 120 billion USD, a great portion of which are large industrial and infrastructure projects in developing countries and economies in transition. Many of these projects have very serious environmental and social impacts. For example, ECAs finance greenhouse gas-emitting power plants, large scale dams, mining projects, road development in pristine tropical forests, oil pipelines, chemical and industrial facilities, forestry and plantation schemes, to name a few.
The international ECA-Watch network of environmental and human rights organisations has campaigned since 1996 for ECAs to adopt higher standards and to operate with greater transparency. Its platform document, the 2000 Jakarta declaration, has been signed by over 300 organisations.