Is the OECD environmentally bankrupt?

When OECD export credit agencies and Finance ministries sit down in Paris next week (March 22-23) to continue negotiations on new environmental standards, they may be faced with the fact that 3 agencies in their midst have just approved support for a controversial €1.2 billion dam in Turkey which contravenes the goals of the old standards.

“Industry, private banks, international financial institutions and export credit agencies claim they have learned lessons from the errors of the past, but their environmental guidelines still fail to address these failures” says Bob Thomson, Facilitator of ECA Watch, a Paris based NGO network. “Their monitoring of compliance is almost non-existent and certainly not transparent. They have done little to make affected communities and environmental groups trust their promises to do better.”

German, Austrian and Swiss export credit agencies (ECAs) have placed 150 secret conditions on their support for the Ilisu project which they say would bring the project into line with international standards, while the Turkish government has demanded they release the credits by March 30th or they will open a new tendering process. The Turkish government plans to move 5000 more troops to the dam site to protect it from mainly Kurdish residents who have not been consulted and know that budgets for their removal and relocation are completely inadequate for their legitimate needs. Their fears are compounded by improper land expropriations and by a lack of consultation with Turkey’s neighbours over the diversion of international waters according to a 19 November 2006 letter from the Iraqi Minister of Water Resources.

And if flying in the face of international environmental and social standards weren't enough, German, Austrian and Swiss ECAs are apparently hoping to claim the dams are renewable energy projects, eligible for greater subsidies approved by the OECD in November 2005. Environmental NGOs, while supporting incentives for renewable energies, vigorously opposed the inclusion of hydro dams unless they met World Commission on Dams standards proposed in November 2000 after lengthy industry, government and NGO consultations.

Up to 78,000 people will be affected, the ancient city of Hasankeyf and dozens of archeological sites will be flooded, and no proper environmental impact assessments have been conducted which meet World Bank Safeguard policies adopted in 2003 by OECD ECAs. Subsidies for large dams NGOs claim, are a Trojan horse for destructive projects which have displaced 40 to 80 million people and led to enormous losses of lands and livelihoods without adequate compensation, as well as species and entire ecosystems. Dam reservoirs have generated methane emissions with greater impact on global warming than equivalent capacity fossil fuel plants.

While praising the Stern Report, OECD Secretary General Angel Gurria leads an institution bogged down by national interests that have blocked progress on new environmental standards which should have been agreed on in 2006 and which could help reduce global warming. New OECD Deputy Secretary General for Policy Coherence Mari Amano will have his hands full encouraging the secretive bankers of the Export Credit Working Group to work more closely with other Directorates trying to harmonize OECD environment, trade and investment policies, despite the potential counter effects of US$125 billion per annum in largely unregulated export credits.

The German Economics Ministry has out-gunned their Ministry of Development on behalf of German exporters in approving funding for Ilisu. The U.S. Export Import Bank, which led the charge for environmental standards in the OECD in the late 90's, appears to have been silenced by the Bush regime. The Japanese are busy reorganizing to use export credits to snatch valuable energy and resource projects away from the Chinese. The Chinese have teamed up with French turbine manufacturer Alstom to build the Merowe Dam in Sudan, and appear to be turning a blind eye while Sudanese militias forcibly remove farmers from their fertile Nile lands and plunk them in the middle of the dessert.

Nero is fiddling while Rome burns. National ECAs, Finance ministries and the OECD regulate US$125 Billion of our annual taxes, more than all OECD development aid and the World Bank's annual budget combined. We must call them to account and demand higher environmental standards for export credit projects.

Bob Thomson is the Facilitator of Export Credit Agency Watch in Paris, an international NGO campaign to monitor ECAs supported by environmental associations in OECD countries. http://www.eca-watch.org

For further information, contact:
Bob Thomson, facilitator@eca-watch.org Tel. +33 1 48 51 18 90 or
Heike Drillisch, WEED heike.drillisch@weed-online.org Tel. +49-177-345 26 11