What's New November 2018

What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

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  • Bringing Accountability and Transparency to Export Development Canada’s Practice
  • Report highlights EDC’s multibillion dollar support for oil and gas industries
  • Trading away EU principles in the name of national export interests
  • ECA Support for Coal in the Face of OECD Financing Restrictions
  • The World Needs to Quit Coal. Why Is It So Hard?
  • UK Government considering UKEF deal with Saudi Aramco
  • EXIM Bank's fate tied to the outcome of Senate midterms
  • Uganda expects ECA pipeline financing deal by June 2019
  • Middle East Politics and Export Credits
  • Australia splashes ECA cash in the Pacific as China fears loom

Bringing Accountability and Transparency to Export Development Canada’s Practice

(Above Ground, Ottawa, 12 November 2018) Canada’s Export Development Act is under review. In our submission (pdf) to the government, Above Ground and other Canadian civil society groups call for legal reforms to bolster the accountability and transparency of Export Development Canada (EDC). EDC’s policies state that it screens and monitors the business it supports for associated social, environmental and business ethics risks. Yet over the years we have identified multiple companies that receive support from EDC despite credible or proven allegations involving environmental damage, corruption and human rights violations. In this submission we urge Parliament to adopt legislative reforms that include prohibiting EDC from supporting firms involved in wrongdoing, subjecting it to judicial oversight and expanding the Auditor General’s mandate regarding EDC. We have also made a second submission (pdf) calling for reforms to address the climate impacts of business supported by EDC. In addition, Both ENDS and other CSOs working from a number of countries made a joint submission as formal input to the EDC legislative review regarding EDC support for fossil fuels. The submission emphasized the Canadian governments' ambition to show leadership on climate change and to prioritise climate change action and clean economic growth.

https://aboveground.ngo/accountability-transparency-export-development-canada/


Report highlights EDC’s multibillion dollar support for oil and gas industries

(Windsor Star, Ottawa, 22 November 2018) A new report shows Canada’s export credit agency provides far greater backing to oil and gas companies than to makers of clean technology, a trend the authors contend undermines the country’s commitment to fight climate change under the Paris Agreement. Released Thursday and sponsored by a host of environmental groups, the report from the research and advocacy organization Oil Change International casts light on how Export Development Canada facilitated $62 billion in financial support for Canadian oil and gas companies from 2012 to 2017. That’s 12 times more support than the $5 billion the agency facilitated for clean technologies during that time, the report says, citing the agency’s own data.

https://www.ourwindsor.ca/news-story/9046135-report-highlights-crown-corporation...


Trading away EU principles in the name of national export interests

(Euractiv,  Brussels, 20 November 2018) MEPs need to follow the lead of the European Ombudsman and force the European Commission to shine light on the opaque role of national Export Credit Agencies. An important milestone in this direction was set by recent decisions of the Ombudsman Emily O’Reilly, which she spoke of at a public hearing of the International Trade Committee of the European Parliament. Following an appeal filed by the ECA-watch network – the Ombudsman detected severe shortcomings in the European Commission’s monitoring of national Export Credit Agencies (ECAs), including “maladministration”, failure to acquire adequate information to formulate its judgement, failure to include environmental and human rights standards when it comes to supporting coal projects and the necessity to keep a written record of its analysis and assessment. ECA’s activities have so far been exempt from human rights-related considerations to the point that arms export for cross-border conflicts could have well fit among their activities. There is a long way to go to ensure that European Export Credit Agencies respond to the much needed demand for accountability and transparency, and the European Parliament has a big role to play. It will have to take a firm stand and make sure the Commission does its homework and complies with the Ombudsman’s recommendations. It is a matter of democratic control and the credibility of the European institutions.

https://www.euractiv.com/section/economy-jobs/opinion/trading-away-the-eu-princi...


ECA Support for Coal in the Face of OECD Financing Restrictions

(Friends of the Earth USA, Washington, 13 November 2018) In order to avoid the worst impacts of climate change, no new fossil fuel power plants should have been built after 2017. Despite this, little-known government agencies called export credit agencies (ECAs) are still providing many billions in financing to fossil fuel projects all over the globe. From 2013 to 2015, the world’s largest ECAs provided an annual average of USD 38 billion in support of fossil fuels. Eighty-eight percent of ECA support for energy projects went toward fossil fuels, compared to seven percent for clean energy projects. A new report available here (pdf) analyzes potential and current support for coal plants by ECAs in the Organization for Economic Cooperation and Development (OECD), which includes most of the world’s largest ECAs (though, notably, not China).

https://foe.org/resources/eca-support-coal-face-oecd-financing-restrictions/


The World Needs to Quit Coal. Why Is It So Hard?

(New York Times, Hanoi, 24 November 2018) Coal, the fuel that powered the industrial age, has led the planet to the brink of catastrophic climate change. Scientists have repeatedly warned of its looming dangers, most recently on Friday, when a major scientific report issued by 13 United States government agencies warned that the damage from climate change could knock as much as 10 % off the size of the American economy by century’s end if significant steps aren’t taken to rein in warming. An October report from the United Nations’ scientific panel on global warming found that avoiding the worst devastation would require a radical transformation of the world economy in just a few years. Central to that transformation: Getting out of coal, and fast. According to the latest assessment by the International Energy Agency, it is not on track to happen anywhere fast enough to avert the worst effects of climate change. Last year, in fact, global production and consumption increased after two years of decline. Home to half the world’s population, Asia accounts for 3/4 of global coal consumption today. More important, it accounts for more than 3/4 of coal plants that are either under construction or in the planning stages — a whopping 1,200 of them, according to ECA Watch member Urgewald, a German advocacy group that tracks coal development. Heffa Schücking, who heads Urgewald, called those plants “an assault on the Paris goals.” [OECD coal support abroad is mainly provided by national export credit agencies.]

https://www.nytimes.com/2018/11/24/climate/coal-global-warming.html


UK Government considering UKEF deal with Saudi Aramco

(Ekklesia, London, 16 November 2018) In the wake of the alleged murder of Jamal Khashoggi and international warnings on climate change, the UK Government is discreetly considering supporting a Saudi Arabian oil company with a petrochemical project. UK Export Finance (UKEF), the controversial export credit agency which underwrites risky export deals to boost the UK’s international trade, recently announced that it could use public funds to help develop a large petrochemical refinery in Malaysia. The project, PRefChem, is a joint venture between Petronas, the Malaysian state oil company, and Saudi Aramco, the Saudi Arabian oil giant.

http://www.ekklesia.co.uk/node/27190


EXIM Bank's fate tied to the outcome of Senate midterms

(The Hill, Washington, 30 October 2018) Pollsters are predicting that Kavanaugh’s US Senate confirmation has galvanized Republicans and enhanced Senate Majority Leader Mitch McConnell's (R-Ky.) chances of retaining Senate control. For the last three years, and with little notice, McConnell has deployed tactics to contravene the support of the president and bipartisan congressional majorities to cripple the U.S. Export-Import Bank (EXIM). Because of McConnell’s block of board nominees, EXIM lacks the quorum needed to support deals over $10 million, which historically comprise 80 percent of bank lending. Ten years ago, EXIM responded to the Great Recession by tripling export support, financing $30 billion annually of U.S. exports over a five-year period, creating over a million jobs. Because big deals make money, EXIM made a $3.8 billion profit under Obama. But without a quorum, authorizations fell to $3.4 billion last year. Limited to small, less-profitable deals, EXIM now costs taxpayers money.

https://thehill.com/opinion/finance/413910-exim-banks-fate-is-tied-to-outcome-of...


Uganda expects ECA pipeline financing deal by June 2019

(The East African, Nairobi, 26 November 2018) Uganda and Tanzania signed an agreement in May 2017 to jointly develop the $3.5 billion pipeline that has been described as the longest electrically heated crude oil pipeline in the world. The balance of $1 billion is expected to come from shareholders in equity. Stanbic Uganda secured the role of joint arranger and adviser with Japan’s Sumitomo Mitsui Banking Corp. The two banks had previously planned to raise $3 billion by June this year from export credit agencies.

https://www.theeastafrican.co.ke/business/Uganda-expects-pipeline-financing-deal...


Middle East Politics and Export Credits

(Washington Post, Berlin, 31 October 2018) At the end of last year, the Danish Export Credit Agency had approved eight Iranian banks for credit lines or guarantees and vowed to resist U.S. pressure to dismantle those ties. However, Denmark is now leading a push for new E.U. sanctions against Iran, after its intelligence agencies blamed Tehran for a foiled plot to assassinate an Iranian dissident on Danish soil. In a darkly ironic twist, Iran has condemned the Saudi killing of dissident Khashoggi even as it has a long track record of pursuing operations against opponents living abroad itself. The Jerusalem Post on 6 November noted that the German government defied US sanctions on Iran’s clerical regime on Monday 5 November, by continuing to insure its companies with export credit – 911 million euro for 58 companies.

https://www.washingtonpost.com/world/2018/10/31/foiled-assassination-plot-denmar...


Australia splashes ECA cash in the Pacific as China fears loom

(Sydney Morning Herald, Sydney, 8 November 2018) Australia has announced that at least A$2 billion has been earmarked for grants and long-term projects in the Pacific and Timor Leste, to be administered by a new Australian Infrastructure Financing Facility. An extra A$1 billion will be made available for Australia’s export credit agency EFIC which helps Australian companies invest and expand overseas by giving them loans and guarantees. The announcements in a speech to soldiers in Townsville will be widely read as aiming to edge out growing Chinese infrastructure-building in Pacific nations. Prime Minister Scott Morrison noted that "Australia has an abiding interest in a south-west Pacific that is secure strategically, stable economically and sovereign politically." Raising questions about sovereignty have in the past been a way for Western leaders to express concern that China is loading developing countries up with infrastructure-related debt they cannot handle, making them politically beholden to Beijing, though Mr Morrison stresses Australia will co-operate with other countries including China.

https://www.smh.com.au/politics/federal/scott-morrison-splashes-cash-in-the-paci...