Welcome to ECA Watch

Export credit agences provide government-backed loans, guarantees and insurance to corporations working internationally in some of the most volatile, controversial and damaging industries on the planet.

Shrouded in mystery, ECAs provide financial backing for risky projects that might never otherwise get off the ground. They are a major source of national debt in developing countries.

ECA Watch is a network of NGOs from around the world. We come together to campaign for ECA reform - better transparency, accountability, and respect for environmental standards and human rights.

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What's New July 2019

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.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today!

£7.8bn of UK foreign aid and export credit spent on fossil fuel projects

 (Guardian, London, 23 July 2019) The British government has spent £680m of its foreign aid budget on fossil fuel projects since 2010, according to analysis that highlights the UK’s failure to align diplomatic, trade and aid policies with the goals of the Paris climate agreement. Britain allocated more overseas development cash to oil and gas in the two years after signing the 2015 agreement than it had in the previous five, according to the study commissioned by the Catholic development agency Cafod and carried out by the Overseas Development Institute. From 2010-17 the UK provided £7.8bn in financial support to foreign energy projects through a mixture of overseas development assistance, export credit guarantees and other official funding flows. The report says 60% of this total went on fossil fuels. Most of this came in the form of export credit guarantees by UK Export Finance. An earlier analysis by DeSmog UK, an investigative environmental journalism outlet, found an elevenfold increase in UK Export Finance support for overseas fossil fuel projects last year, including oil and gas operations in Oman, Kuwait and Brazil.

https://www.theguardian.com/environment/2019/jul/23/680m-of-uk-foreign-aid-spent...


Chinese ECA underwrites US$46 bln Chinese firms' businesses in Africa

(Xinhua, Beijing 2 JJuuly 2019) China Export & Credit Insurance Corporation has underwritten 46.08 billion U.S. dollars worth of insured businesses made by Chinese enterprises in Africa from 2018 to the end May of this year, China Securities Journal reported. Of the total, the insurer offered 26.27 billion U.S. dollars of short-term exports credit insurance and 10.11 billion U.S. dollars of medium-and long-term export credit insurance for exporters, said the paper quoting the latest data from the corporation. The company's insurance for overseas investment totaled 9.7 billion U.S. dollars in the period. During the period, the insurer paid compensation worth of 260 million U.S. dollars for companies in multiple sectors, including railways, roads, power, medicare and education.

http://www.xinhuanet.com/english/2019-07/02/c_138192475.htm


UAE ECA and Italy partner with Chinese financial institutions to boost trade

(Islamic Business and Finance, Dubai, 25 July 2019) UAE ECA Etihad Credit Insurance (ECI) has signed partnership agreements with China Export and Credit Insurance Corporation (SINOSURE), Industrial and Commercial Bank of China (ICBC) and Bank of China to boost trade, investments and bilateral exports between the UAE and China. Under the agreement between ECI and SINOSURE, both countries agreed to collaborate in the areas of insurance and co-insurance, commercial information and credit opinion sharing as well as Shari’ah-compliant solutions, trade promotions and SME programmes. According to the Ministry of Economy, China is the UAE’s main non-oil commodities trade partner accounting for 9.7 per cent of the non-oil bilateral trade in 2018, estimated at over $43 billion. China and Italy have also agreed to enhance financial market cooperation and promote two-way financial market access with support for a cooperation mechanism between their export credit agencies, leading enterprises and financial institutions to provide tailored financing-insurance solutions for cooperation.

https://www.islamicbusinessandfinance.net/en/home/articles/eci-partners-with-thr...


'Hidden debts’ reveal risks of China’s lending spree

(Asia Times, Hong Kong, 23 July 2019) China's US$1 trillion Belt and Road Initiative, along with other foreign funding, has become a magical mystery tour, baffling the World Bank and the International Monetary Fund. Or, according to critics, a diplomatic car crash waiting to happen. “Compared with China’s dominance in world trade, its expanding role in global finance is poorly documented and understood,” a report released last week by the Kiel Institute for the World Economy, noting that "Over the past decades, China has exported record amounts of capital to the rest of the world". Many of these financial flows are not reported to the IMF, the BIS [the Bank for International Settlements] or the World Bank.” China is now the world’s largest creditor. A breakdown of the numbers showed that lending soared to around US$5 trillion by 2018 from roughly $500 billion in 2000, which dwarfs World Bank and IMF credit lines. China is not part of the OECD Export Credit Group, which provides data on long- and short-term trade credit flows. In the past 18 months, the venture has been mired in controversy after being branded a “debt trap” by the US and its key Western allies. The ruling Communist Party has announced plans to expand its anti-corruption campaign to BRI projects. The Central Commission for Discipline Inspection (CCDI) had limited involvement in the program but that is starting to change and its Director General for international cooperation has stated “[We aim to] create a network of law enforcement of all these Belt and Road countries”. Asia Times askes "Will this long and winding road finally have flashing warning signs of “debt” and “corruption?” Or will this continue to be a highway to economic hell? BRI nations might want to buckle up for a bumpy ride."

https://www.asiatimes.com/2019/07/article/hidden-debts-reveal-risks-of-chinas-le...


Behind Russia’s growing influence in Africa

(The Independent, Kampala, 8 July 2019) Russia hosted the Annual General Meeting for the African Export Import Bank (Afreximbank) on June 20-22, the second AGM to be held out of Africa since 2012 in China. The Russian Export Center (REC), purchased shares in Afreximbank in 2017 at an undisclosed amount, becoming the bank’s third-largest non-African financial institution. As Russia’s President, Vladimir Putin, hosts more than 50 African presidents for the first-ever Russia-Africa Summit in Sochi on Oct. 24, top on the agenda will be how to sustain the economic and political ties between the two trading blocs in the wake of declining oil prices and increasing isolation of the transcontinental nation. Whereas Russia’s presence in Africa had weakened in the 1990s, the country had since then done a great deal of groundwork on joint projects in geology and mining, energy, industry, agriculture, fishing and telecommunications, with total investments now standing at US$20bn. Russia’s economy has been on a standstill for a while, with statistics showing that from 2014 to 2018, its GDP grew at an average of 0.4% per annum, with real disposable incomes declining by 10.7% leaving 19 million of the 145 million Russian population in poverty during the same period. On the other hand, Africa’s GDP has been growing at an average of more than 3%, making it one of the fastest growing regions in the world. Moscow, which had a strong influence in Africa alongside US and China, had frozen its relations with the continent following the collapse of the USSR in 1991. It however remains to be seen how far Russia’s reconnection with the continent will go given that China, India, and especially the United States have intensified their involvement in Africa over the last three decades. Russia’s export values to Africa have nearly doubled over the last five years from US$9.3bn in 2014 to US$17.5bn in 2018 while Russian imports from Africa have stagnated, increasing from merely US$2.8bn to US$2.9bn during the same period. Most of Russia's exports to Africa are medicine, food, forestry products, automotive and mixed fertilizer. Since 2015, according to the Swedish Defence Research Agency, Russia has signed over 20 bilateral military cooperation agreements with African states including; Rwanda, Tanzania, Burkina Faso, Burundi, Guinea. Between 2012 and 2016, Russia had become the largest supplier of arms to Africa, accounting for 35% of arms exports to the region, followed by China (17 %), the United States (9.6%), and France (6.9 %).  Some of Russia’s companies that have made inroads in Africa include; Gazprom, Lukoil, Rostec and Rosatom, with most of their operations in Uganda, Algeria, Angola, Egypt and Nigeria. Egypt has also finalised negotiations with Moscow to build the country’s first nuclear plant, while in Namibia, Moscow is developing one of the world’s largest deposits of platinum group metals.

https://www.independent.co.ug/behind-russias-growing-influence-in-africa/


Federal review of EDC finds inadequate disclosure practices

(Globe and Mail, Toronto, 2 July 2019) A federal review of Export Development Canada has exposed serious shortcomings at the Crown corporation, noting its disclosure practices fall far short of other financial institutions, and that the agency is not legally obligated to consider the environmental or human-rights impact of the financial support it provides to exporters. The findings underscore concerns uncovered in a recent Globe and Mail investigation. The Globe reported that the EDC’s client roster includes companies that have faced allegations concerning corruption, human-rights violations and environmental abuses; the federal agency has demonstrated a tendency to continue supporting such companies after other financial institutions have sanctioned them or cut them loose. Critics have also raised concerns about transparency and federal oversight of the Crown corporation. “Ottawa must impose rules on this Crown corporation to make it transparent and accountable,” Lori Waller, spokesperson for Ottawa-based human rights group Above Ground, said in a statement. “Without strong oversight of its export credit agency, the government risks profiting from harmful and illegal business activities. The law should prohibit EDC from supporting companies involved in corruption, human rights abuse or environmental harm.”

https://www.theglobeandmail.com/canada/article-federal-review-slams-export-devel...


EDC lifts "closed" status on Saudi Arabia-related business

(Reuters, Toronto, 3 July 2019) Canada's export credit agency has lifted a "closed" status on Saudi Arabia-related activity after almost a year of frosty relations between the two countries, citing improved business conditions in the Middle Eastern kingdom. The move by Export Development Canada (EDC) on Tuesday paves the way for the state-owned enterprise to resume support for exporters and investors in Saudi Arabia. Saudi Arabia in August suspended new trade and investment with Canada after it urged Riyadh to release arrested civil rights activists, leading to a trade freeze and expulsion of diplomats. "After monitoring for several months we made the decision that business conditions have improved," Amy Minsky, a senior advisor at EDC, said on Wednesday. She noted that risk remains and there was not necessarily more business in the Saudi Arabian market. The EDC said its position on a country is determined among other things, by the Canadian government's assessment of "political, human rights and corruption risks."

https://www.nasdaq.com/article/canada-export-agency-lifts-closed-status-on-saudi...


EDC claims review clears them of SNC-Lavelin transaction wrongdoing

(iPolitics, Ottawa 25 July 2019) Canada’s export credit agency says a third-party investigation has cleared the organization of any wrongdoing in providing a political risk insurance policy to SNC-Lavalin in 2011 for a dam project in Angola. EDC said Thursday a review by international law firm Fasken failed to find evidence to support allegations that the corporation turned a blind eye to illegal payments allegedly made by SNC-Lavalin to someone it had retained to help secure a $250-million project repairing the hydroelectric Matala Dam. The allegations were first reported by the CBC earlier this year, citing an unnamed SNC-Lavalin insider. They came as the engineering and construction firm faced intense scrutiny for lobbying the upper-echelons of the Trudeau government to broker a deal that would allow it to avoid a criminal trial for bribery charges relating to its work in Libya.

https://ipolitics.ca/2019/07/25/third-party-review-clears-edc-of-wrongdoing-in-s...


As Brexit Looms, UK Doubles ECA Credit To Nigeria

(Sahara Reporters, New York, 24 July 2019) With Boris Johnson, who promised to take the United Kingdom out of the European Union without a deal if necessary now the country's prime minister, the United Kingdom Export Finance (UKEF), has increased the export credit finance agreement it signed with Nigeria in February 2018 by £500 million. In a statement made available to SaharaReporters, UKEF said it had also signed a Memorandum of Understanding with the Nigeria Export-Import Bank (NEXIM) that will "foster greater cooperation in trade through co-financing in the form of guarantees and insurance". In the last ten years, UKEF has enabled companies in Britain to export goods worth £76.5 billion to emerging markets like Nigeria. In 2018 alone, the agency provided guarantees worth £6.8 billion to 181 companies in 72 countries— its best result in 28 years.

http://saharareporters.com/2019/07/24/brexit-looms-uk-doubles-export-finance-cre...


The Poseidon Princples: Will They Affect ECAs?

(Hellenic Shipping News, Cyprus, 2 July 2019) The Poseidon Principles launched on the 18 June 2019, with founding signatories including Citi, DNB, Societe Generale, ABN Amro, Amsterdam Trade Bank, Credit Agricole CIB, Danish Ship Finance, Danske Bank, DVB, ING and Nordea. Together they have a combined shipping loan portfolio of c. US$100bn – roughly 20% of the global total. Additional banks are expected to join them in the near future and it is hoped that ship lessors and financial guarantors including export credit agencies will also become signatories to the Poseidon Principles. The Poseidon Principles establish a global framework for assessing and disclosing whether ship finance portfolios align with the International Maritime Organisation‘s (“IMO”) goal of reducing shipping’s total annual greenhouse gas emissions by at least 50% by 2050.

https://www.hellenicshippingnews.com/the-poseidon-princples-will-they-affect-me/


U.S. Senate targets Ex-Im support for Saudi nuclear technology

(Foreign Policy, Washington, 30 July 2019) A bipartisan group of lawmakers is introducing new legislation aimed at restricting the transfer of nuclear technology to Saudi Arabia, the latest sign of growing congressional backlash to the Trump administration’s close relationship with the wealthy Gulf nation. The bill, put forward by Democratic Sen. Chris Van Hollen and Republican Sen. Lindsey Graham, would bar the U.S. Export-Import Bank from financing the transfer of nuclear technology and equipment to Saudi Arabia, absent nuclear cooperation agreements, and adopting restrictive international standards to safeguard against nuclear proliferation. The Export-Import Bank plays a key role in funding the export of U.S. nuclear energy equipment and technology abroad.

https://foreignpolicy.com/2019/07/30/us-senate-targets-saudi-nuclear-technology-...


Foreign beer lovers get tanked with EXIM assistance

(Craft Brewing Business, Akron, 10 July 2019) Craft breweries are promoting Maine beers in international markets via the world’s largest mobile kegerator a 40-foot refrigerated shipping container which packs in 78 on tap beer tanks and carries local Maine beers to far-away destinations. Its maiden voyage was a trip to Iceland 3 years ago and traveled to Leeds, England last fall. All 4 participating breweries ended up with significant orders for their beer overseas. Traveling as one of many breweries on the Beer Box is one thing, but exporting tens of thousands dollars of beer overseas as an individual brewer can be challenging and exposes the company to risk and financing challenges. EXIM insurance policies allowed peace of mind to these small Maine companies regarding their greatest fear – not getting paid."

https://www.craftbrewingbusiness.com/featured/how-maine-craft-breweries-grew-the...


What's New June 2019

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.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today!

Questions? Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • MPs make unprecedented call for end to UKEF overseas fossil fuel support
  • Despite climate pledges, G20 coal subsidies rise
  • See no evil: How EDC is bankrolling companies accused of bid-rigging, graft and human-rights violation
  • Chinese Banks and ECAs Court African Governments
  • Europe’s German-speaking ECAs ink collaboration pact
  • Japanese, US & Australian ECAs begin own 'Belt and Road' in South Pacific
  • Waters backs down in Ex-Im fight after internal struggle
  • U.S. lags in export financing arms race fueled by China: EXIM report
  • Kenyan court blocks Chinese ECA backed power plant on environment grounds
  • Norwegan ECA blacklists shipbuilders over human rights abuses
  • Banks with a combined $100bn shipping portfolio stimulate green change
  • Public and targeted consultations on EU short-term ECA rules

MPs make unprecedented call for end to UKEF overseas fossil fuel support

(EU Today, London, 9 June 2019) For the first time, a Parliamentary committee has called for an end to taxpayer support for overseas fossil fuel projects. The Government must move immediately to end UKEF’s fossil fuel support, or all its talk of a ‘climate emergency’ will be seen as hollow words. The UK Government must act on today’s report by parliament’s Environmental Audit Committee about UK Export Finance, which calls for an end to UK taxpayer support for overseas fossil fuel projects by 2021. UK Export Finance (UKEF), the UK’s export credit agency, underwrites loans and insurance for export deals as part of efforts to help British business overseas. Global Witness was instrumental in calling for Parliament’s Environmental Audit Committee to set up the inquiry into UKEF. (26 June 2019, edie newsroom) Thousands of campaigners across the UK are marching today towards Parliament in a bid to urge MPs and the Government to strengthen commitments to tackling climate change, just days after the House of Commons approved draft recommendations for a national net-zero target.

https://eutoday.net/news/environment/2019/mps-make-unprecedented-call-for-end-to...


Despite climate pledges, G20 coal subsidies rise

(Reuters, London, 24 June 2019) Despite promising a decade ago to phase out fossil fuel subsidies, the world’s leading economies more than doubled subsidies to coal-fired power plants over three years, putting climate goals at risk, energy researchers said Tuesday. Between 2014 and 2017, G20 governments more than halved direct support for coal mining, from $22 billion to about $10 billion on average each year, according to a report by the London-based Overseas Development Institute (ODI), a think tank. But over the same period they boosted backing for coal-fired power plants - particularly supporting construction of the plants in other, often poorer nations - from $17 billion to $47 billion a year. While spending from national budgets on coal fell, as did tax breaks for it, other forms of support - from development finance institutions, export-credit agencies and state-owned enterprises - soared. Four countries alone, the UK, France, Canada and Ireland have all formally recognised a climate crisis but analysis shows they give $27.5bn annually in support for coal, oil and gas, much of it via ECAs.

https://www.reuters.com/article/us-climate-change-coal-subsidies/despite-climate...


See no evil: How EDC is bankrolling companies accused of bid-rigging, graft and human-rights violation

(Globe and Mail, Toronto, 4 June 2019) Export Development Canada once described itself as the country’s ‘secret trade weapon.’ But The Globe’s review of thousands of transactions reveals a pattern of secrecy and lax supervision. In Latin America, billions of dollars in Canadian government-backed loans have been funnelled to two of the region’s most notorious oil companies: the state-owned petroleum corporations of Mexico and Brazil, each riddled with frequent reports of bribery, bid-rigging and inflated contracts. In Africa, hundreds of millions of dollars in financing has been channelled to companies at the heart of South Africa’s worst postapartheid corruption scandal: the state-owned freight rail monopoly and the business empire of the infamous Gupta brothers, whose relationship with ex-president Jacob Zuma triggered a public inquiry into state corruption. And in Canada, billions of dollars in federal export loans have gone to support transactions that benefit Bombardier Inc. and SNC-Lavalin Group Inc., two companies that have been cited in corruption investigations in Asia, Africa and Europe. SNC-Lavalin’s head of compliance says the firm is still hoping to reach an out-of-court settlement on bribery, fraud charges.  EDC has declared itself a leading defender of human rights, but workers groups and advocates say the Crown agency’s long-awaited new policy falls well short of what’s needed.

https://www.theglobeandmail.com/canada/article-export-development-canada-investi...


Chinese Banks and ECAs Court African Governments

(Peace FM Online, Accra, 25 June 2019) African Foreign Ministers attending the Forum for China-Africa Cooperation (FOCAC) Coordinators’ meeting in Beijing yesterday met Chinese financial institutions who introduced them to their array of financial products. This is in line with Chinese President Xi Jinping’s [2015 and then 2018] $60 billion pledge in financial support to African countries. The breakdown showed that $5 billion was free aid and interest-free loans, while $35 billion was for preferential loans and export credit on more favourable terms, and five billion dollars for additional capital for the China Africa development fund. Five billion dollars was also up for initial capital of special loans for the development of African small to medium enterprises each, and $10 billion for China-Africa production capacity cooperation fund.

http://www.peacefmonline.com/pages/business/economy/201906/385516.php


Europe’s German-speaking ECAs ink collaboration pact

(Global Trade Review, London, 19 June 2019) Hermes, OeKB and Serv – the export credit agencies (ECAs) of Germany, Austria and Switzerland respectively – have agreed to join forces to improve opportunities for their exporters in the face of increased competition from Asia. While the statement doesn’t call out China by name, Chinese export credits have long been seen as a competitive threat by Europe’s ECAs. China is not a member of the OECD and is therefore not obliged to comply with the OECD guidelines that stipulate the financial terms and conditions that its members may offer, leaving scope for an unfair advantage for Chinese exporters.

https://www.gtreview.com/news/europe/europes-german-speaking-ecas-ink-collaborat...


Japanese, US & Australian ECAs begin own 'Belt and Road' in South Pacific

(Kikkei Asian Review, Tokyo, 25 June 2019) Japan, the U.S. and Australia have picked a liquefied natural gas project in Papua New Guinea as their first case for joint financing in the Indo-Pacific region, planning to lend over $1 billion, Nikkei has learned. Three government-backed lenders -- Japan Bank for International Cooperation, the U.S. Overseas Private Investment Corp. and Australia's Export Finance and Insurance Corp. -- plan to issue a statement on Tuesday regarding their joint infrastructure efforts. The three countries agreed in November to join hands in financing infrastructure projects in the Indo-Pacific to offer an alternative to China's Belt and Road initiative. The LNG project in Papua New Guinea marks the first project in this three-way cooperation.

https://asia.nikkei.com/Politics/International-relations/Japan-US-and-Australia-...


Waters backs down in Ex-Im fight after internal struggle

(Politico, Washington, 26 June 2019) House Financial Services Chairwoman Maxine Waters (D-CA) on Wednesday shelved a bipartisan Export-Import Bank bill that sparked a fierce backlash from her own caucus. The original compromise she drafted with Patrick McHenry (R-N.C.) ignited criticism from a wide swath of the Democrats on the committee — centrists and progressives alike, from the most senior members to newly elected freshmen, including Rep. Alexandria Ocasio-Cortez (D-N.Y.), who objected to new restrictions that would be imposed on the bank and big manufacturers such as Boeing, that benefit from its loan guarantees, as well as the lack of tougher environmental safeguards for energy projects financed abroad. Reps. Ocasio-Cortez and Rashida Tlaib (D-Mich.) were preparing to offer amendments that would impose new limits on the agency's financing of fossil fuel power plants abroad with the political backing of dozens of environmental groups. Limits on sales to China were a must-have for McHenry, who argued that it was a way to curb what he saw as a subsidy for an economic competitor. The bank is only now returning to full operation after years of being hobbled by conservative Republican lawmakers who criticized the agency as engaging in "crony capitalism" and posing a risk to taxpayers, even though it returns money to the Treasury. McHenry had predicted a strong Republican vote in favor of the bill thanks to the compromises Waters agreed to, while disgruntled Democrats were frustrated that Waters negotiated the bill with the Republicans and expected Democrats to fall in line without more of their input.

https://www.politico.com/story/2019/06/26/maxine-waters-emport-import-bank-13837...


U.S. lags in export financing arms race fueled by China: EXIM report

(Reuters, Washington, 28 June 2019) China provided as much as $130 billion in government export financing support in 2018, dwarfing every other country and fueling a new export lending arms race, the U.S. Export-Import Bank said in a report on Friday. In the last full year that EXIM had complete lending powers, fiscal 2014, the agency provided $20.5 billion in financing support for $27.5 billion worth of U.S. exports. During the fiscal year ended Sept. 30, 2018, EXIM authorized only $3.3 billion in financing, supporting $6.8 billion worth of U.S. exports, according to EXIM’s most recent annual report. EXIM has been a popular target for conservatives, who have branded it as a provider of “corporate welfare” and “crony capitalism.” The reinstatement of its lending powers is a boon for large U.S. manufacturers such as Boeing Co (BA.N), General Electric (GE.N) and Caterpillar Inc (CAT.N), which can once again offer U.S.-government-backed financing for overseas customers.

https://www.reuters.com/article/us-usa-trade-china-finance/u-s-lags-in-export-fi...


Kenyan court blocks Chinese ECA backed power plant on environment grounds

(Financial Times, London, 27 June 2019) A Kenyan court has halted construction of the country’s first coal-fired power station on environmental grounds in a blow for the $2bn project’s Chinese backers and the green credentials of China’s Belt and Road Initiative. Owned by the Kenya-based Amu Power and funded with export credit from the Industrial and Commercial Bank of China, the contentious project has sparked a heated debate in Kenya about the potential impact of coal-based power on the country’s ecosystem. Located on Kenya’s Indian Ocean coast approximately 14 miles north of Lamu town, a tourist destination and Unesco World Heritage site, environmentalists say the plant will pollute the air and destroy mangroves and the breeding grounds of endangered species.

https://www.ft.com/content/9313068e-98dc-11e9-8cfb-30c211dcd229


Norwegan ECA blacklists shipbuilders over human rights abuses

(Asia Shipping Media, Singapore, 5 June 2019)  Norway is pushing to create a shipbuilding regulation akin to the ship recycling sector’s Hong Kong Convention whereby yards will be blacklisted for financing if they are found to have deficient labour and human rights standards. The initiative is being led by the Norwegian Export Credit Guarantee Agency (GIEK), the giant Norwegian state-run financing institution. Speaking at a human rights in shipping seminar yesterday on the sidelines of the Nor-Shipping exhibition just outside Oslo, Sigrid Brynestad, GIEK’s senior sustainability expert, revealed her organisation has already blacklisted two yards for their human rights abuses. GIEK will not help finance any Norwegian ships at the two yards.

https://splash247.com/norway-blacklists-shipbuilders-over-human-rights-abuses/


Banks with a combined $100bn shipping portfolio stimulate green change

(Asia Shipping Media, Singapore, 18 June 2019) Eleven major shipping banks have joined a global framework called the Poseidon Principles to integrate climate considerations into lending decisions in line with IMO’s greenhouse gas (GHG) strategy to slash the industry’s carbon footprint by 50% by 2050. The Poseidon Principles are applicable to lenders, relevant lessors, and financial guarantors including export credit agencies. Around 90% of global trade by volume is carried by ships - making the maritime industry a vital player in economic growth, but at a cost. If it were a country, shipping would equal Germany for greenhouse gas (GHG) emissions. Together they represent a bank loan portfolio to global shipping of approximately $100 billion – around 20% of the global ship finance portfolio.

https://splash247.com/eleven-shipping-banks-join-framework-to-promote-green-ship...


Public and targeted consultations on EU short-term ECA rules

(Lexology, Brussels, 24 June 2019) In January 2019, the European Commission announced its intention to extend, for a period of two years, 7 sets of State aid rules, which were due to expire in 2020, [including the Communication on Short-Term Export Credit Insurance]. In this respect, the European Commission launched public and targeted consultations to assess the relevance, effectiveness and coherence of these sets of rules and to check whether they are still appropriate for the objective pursued. The Commission, as the guardian of competition under the Treaty, has always strongly condemned export aid for intra-Union trade and for exports outside the Union... to prevent Member States’ support for export-credit insurance from distorting competition

https://www.lexology.com/library/detail.aspx?g=720453c5-17bb-4335-9914-678646b8c...


What's New May 2019

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.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today!

Questions? Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • Senate Confirmation of Export-Import Bank Directors Means Billions More Dollars in Federal Fossil Fuel Financing
  • Pity the Export-Import Bank, caught between warring Republican factions
  • Liberals caught again in SNC Lavalin EDC Scandal
  • Canada strikes alliance with U.S. counterweight to China’s Belt and Road Initiative
  • Aid and UKEF funding must be coherent & recognise climate change emergency, say MPs
  • China’s export insurance giant is taking a risk on coal
  • Legal challenge mounted against Kosovo coal project
  • China, Japan and South Korea, while vowing to go green at home, promote coal abroad
  • European ECAs may loose out to Russian and/or Chinese sales of fighter jets to Malaysia
  • EXIM Should Explore Using Available Data to Identify Applicants with Delinquent Federal Debt
  • New EDC human-rights policy lacks power, say workers and watchdogs

Senate Confirmation of Export-Import Bank Directors Means Billions More Dollars in Federal Fossil Fuel Financing

(Friends of the Earth, Washington, 8 May 2019) The U.S. Senate today voted to confirm 3 nominees to the Board of Directors of the U.S. Export-Import Bank. The confirmation allows Ex-Im to establish a board quorum, clearing the way for the bank to revive its financing of billions of dollars in fossil fuel projects abroad. After nearly four years without full authority to operate, today’s Senate vote paves the way for 12 fossil fuel projects in the agency’s queue to progress forward to a board vote — with many more applications for financing likely to come. These dirty projects will result in tens of millions of tons of carbon dioxide emitted into the atmosphere annually. “By approving these new directors, the Senate is letting the Export-Import Bank fuel the crisis of climate change,” said Doug Norlen, economic policy program director at Friends of the Earth. “The bank will return to its past practice of supporting projects that damage the global climate, harm community health, violate human rights and hasten corruption. Rather than addressing the threat of climate change proactively, this is a vote to make the Export-Import Bank Trump’s billion-dollar fossil fuel slush fund.” Two Presidential Candidates have now said they want Ex-Im Bank's fossil fuel financing halted.  Sen. Bernie Sanders voted against Trump's nominees and is quoted in this article saying Ex-Im “should not be providing low-interest loans and loan guarantees to big fossil fuel companies that are endangering the planet.”  And, Washington State Governor and Presidential Candidate Jay Inslee just released his Evergreen Economy for America Plan which pledges "to cease all support for new fossil energy projects" by Ex-Im Bank and OPIC. Ex-Im's Congressional authorization expires Sept. 30, so the fight is brewing again!

https://foe.org/news/senate-confirmation-export-import-bank-directors-means-bill...


Pity the Export-Import Bank, caught between warring Republican factions

(ctpost, Norwalk, 8 May 019) No federal agency has lived such a bizarre state of suspended animation as has the Export-Import Bank, a long-obscure bureau that provides loan guarantees to U.S. companies doing business abroad. Rather than heralding it as a force for job creation, free-market conservatives turned Ex-Im into an ideological rallying cry that led to some of the most bitter disputes in Republican circles this decade. GOP senators called each other liars. House conservatives threatened to oust the speaker. Rank-and-file Republicans rebelled against the rebellion to save the bank. That changed Wednesday, when Senate Majority Leader Mitch McConnell, R-Ky., allowed confirmation votes on three board members, each of whom passed with near-unanimous Democratic support and sizeable Republican opposition. Once again, Ex-Im is back in business, able to support loans larger than $10 million for some of the largest U.S. exporters. But the fight is far from over. Just as it is finally getting a board, the Ex-Im Bank faces another fight over its very existence, as the 2015 legislation reauthorizing the agency is set to expire in the fall, setting up a debate that never seems to end and has left the bank's supporters continually puzzled.

https://www.ctpost.com/news/article/Pity-the-Export-Import-Bank-caught-between-1...


Liberals caught again in SNC Lavalin EDC Scandal

(Yorkton This Week, Yorkton SK, 15 May 2019) Export Development Canada (EDC), Canada's export credit agency, was created in 1944 to promote Canadian business overseas. It has 12 offices across Canada and 19 regional offices around the world. According to CBC reports SNC Lavelin have borrowed billions of dollars since the mid 1990’s from EDC. SNC Lavalin resulted from a merger of Surveyor, Nenniger, Chenevert and Lavalin all based in Quebec in 1991 instantly becoming one of the five largest engineering/construction companies in the world. They have been doing work in countries where bribery and corruption are common practice. They conform to the culture of the country and perform with their own questionable behavior. SNC Lavalin have been working on a slippery and shady slope. Even when applying for loans, they insert unsupported contingencies which seem to infer bribery money. Their worsening reputation worldwide was highlighted in 2011 and 2012 with high profile executives being arrested and jailed in Switzerland, the corporate head office of their construction division. Corruption had been uncovered for work being done in Mexico, Libya and Bangledesh. A result of this incident was the World Bank suspending a 1.2 billion dollar loan application for a proposed project in Bangledesh. In April, 2012 the World Bank suspended SNC Lavalin from bidding on any other bank projects. It would be interesting to see a complete list of their ongoing allegations!

https://www.yorktonthisweek.com/opinion/letters/liberals-caught-again-in-snc-lav...


Canada strikes alliance with U.S. counterweight to China’s Belt and Road Initiative

(Globe and Mail, Toronto, 14 May 2019) Canada’s overseas development finance arm is joining forces with a U.S. government agency that is being set up to act as a counterweight to China’s Belt and Road Initiative, a state-sponsored foreign-investment scheme by Beijing. The U.S. government’s Overseas Private Investment Corp. (OPIC) says in a statement the agreement it signed with both Canada’s FinDev and the European Union last month creates an alliance of development finance institutions that will enhance co-operation and underscore their collective commitment to "providing a robust alternative to unsustainable state-led models.” The Canadian government’s development finance arm is being funded with $300-million from the retained earnings of Export Development Canada, the federal government’s export credit agency.

https://www.theglobeandmail.com/politics/article-canada-strikes-alliance-with-us...


Aid and UKEF funding must be coherent & recognise climate change emergency, say MPs

(Guardian, London, 8 May 2019) The British government’s aid spending is failing to recognise the “scale and urgency” of the climate change challenge facing the world, MPs warn. Climate change must be placed at the centre of aid strategy and funding, if it is to address the seriousness of threats facing developing countries, the committee said. It urged a minimum spend of £1.76bn annually and a halt to funding fossil fuel projects in developing countries, unless they can demonstrate they support transition to zero emissions by 2050. The report highlighted “incoherent policy” by, showing the government spent £4.8bn on support for fossil fuel projects in 2010-16 via UK Export Finance, almost matching the £4.9bn spent on its International Climate Fund in a similar period, 2011-17. It has created a situation where “the UK government is providing climate aid with one hand and exporting the UK’s fossil fuel pollution with the other”, the report found. Ban Ki-moon, the former UN secretary general, urged Britain to stop funding fossil fuels overseas earlier this year.

https://www.theguardian.com/global-development/2019/may/08/aid-funding-must-reco...


China’s export insurance giant is taking a risk on coal

(Resource China, New York, 25 April 2019) Worldwide, a growing list of insurers now refuse to cover coal projects, citing risks from climate change and overcapacity. But Sinosure, the sole underwriter of coal-fired power plants along China’s Belt and Road Initiative (BRI), has yet to show any indicator of leaving coal behind. China’s foreign direct investment has more than doubled over the past three years, with much of it funneled into energy development. Coal has dominated these investments, combining coal-rich resources in many Belt and Road countries and China’s coal tech. Observers tend to focus on the role of financiers and power companies in overseas coal projects, but the importance of insurers should not be overlooked. Because insurance is a prerequisite for obtaining a loan on an overseas investment project, support from an insurer is needed for a project to move forward. State-owned China Export & Credit Insurance Corporation, known as Sinosure, acts as gatekeeper of energy investments along the BRI. Sinosure is China’s only policy insurer to cover overseas coal-fired power projects, meaning that overseas coal power projects require a green light from Sinosure to go ahead. By the end of 2018, Sinosure had underwritten 28 gigawatts of coal power capacity worldwide, exceeding the entire coal capacity of Australia.

https://medium.com/resource-china/chinas-export-insurance-giant-is-taking-a-risk...


Legal challenge mounted against Kosovo coal project

(Bank Watch, Prishtina 13 May 2019) Kosovar and international non-governmental organisations have today submitted an official complaint to the Energy Community dispute settlement mechanism challenging the legality of the power purchase agreement for the planned Kosova e Re coal power project, which is currently awaiting ratification by the Kosovo parliament. The complaint alleges that the 20-year power purchase agreement, signed by the Kosovar government with ContourGlobal in December 2017 fails to comply with the Energy Community Treaty rules on state  aid because it provides ContourGlobal a range of benefits that give it an unfair advantage over other energy producers. The contract would also put an unbearable strain on the state budget and Kosovar electricity consumers as it guarantees that a state-owned company will buy all the electricity generated by ContourGlobal at a “target price” of EUR 80/MWh – much higher than current electricity prices in the region. The World Bank and the European Bank for Reconstruction and Development (EBRD) have refused to provide support for the 500 MW New Kosovo coal power plant. Kosovo and London-listed power firm ContourGlobal said on Friday May 10 they had chosen a consortium of General Electric subsidiaries to build and equip a new 500 megawatt (MW) coal-fired power plant in the Balkan country. Kosovo has turned to the Trump administration for help to build a coal-fired power plant after losing the backing of the World Bank and the EBRD.

https://bankwatch.org/press_release/legal-challenge-mounted-against-kosovo-coal-...


China, Japan and South Korea, while vowing to go green at home, promote coal abroad

(Los Angeles Times, Suralaya, 13 May 2019) In the last-ditch global battle against climate change, China, Japan and South Korea have joined other industrialized nations in promising to reduce their use of fossil fuels. Yet even as they take steps to promote renewable energy at home, these three countries are facing growing scrutiny for financing dozens of new coal-fired power plants in foreign countries, primarily underwritten by their export credit agencies. Most of the plants are being built in Southeast Asia and Africa, in emerging economies where the growing demand for cheap, reliable electricity is most easily met by coal, the single largest source of the greenhouse gas emissions blamed for warming the planet. Environmental groups accuse the three Asian giants of climate hypocrisy.

https://www.latimes.com/world/asia/la-fg-indonesia-south-korea-coal-energy-finan...


European ECAs may loose out to Russian and/or Chinese sales of fighter jets to Malaysia

(Deutsche Welle, Bonn, 29 May 2019) Financial troubles may force Malaysia to drop its plans to buy highly capable multirole combat aircraft (MRCA) and settle for cheaper, less capable fighter jets to replace its current fleet of Russian MiG 29s that are mostly grounded. Europe's MRCA makers Eurofighter and Dassault Aviation have been wooing Malaysia for almost a decade for a deal. Kuala Lumpur has threatened to boycott EU goods, if the 28-nation bloc goes ahead with its plan to phase out palm oil from transport fuel after the European Commission concluded that palm oil cultivation, with some exceptions, caused deforestation and that its use in transport fuels could not be counted toward its renewable energy goals. Malaysia has said China, Russia and Pakistan have expressed their willingness to be partly paid in palm oil for their fighter jets. This is likely to complicate matters for the RMAF, which has traditionally preferred using Western equipment, including on its Russian Sukhoi jets. Malaysia's latest attempt at barter trade could be beneficial for Russia, which has seen China walk away with many defense deals in the region and undercut Moscow's arm supplies. Russia has a long track record of swapping weapons for commodities in the region, including as part of its fighter jet deals with Indonesia and Vietnam.

https://www.dw.com/en/setback-for-eu-fighter-jets-as-malaysia-bets-on-palm-oil-b...


EXIM Should Explore Using Available Data to Identify Applicants with Delinquent Federal Debt

(US General Accounting Office, Washington, 23 May 2019) The Export-Import Bank (EXIM) of the United States provides financing to support U.S. jobs and companies selling U.S. goods and services abroad. EXIM requires companies applying for certain financing to self-certify that they do not have delinquent federal debt. Financial pressures that stem from such debt can tempt companies to fraudulently apply for financing. However, after analyzing federal data, we identified billions of dollars in authorized EXIM transactions associated with dozens of companies that potentially had such debt. We recommended EXIM explore opportunities to use federal data when verifying companies' program eligibility.

https://www.gao.gov/products/GAO-19-337


New EDC human-rights policy lacks power, say workers and watchdogs

(National Post, Ottawa,  May 2019) OTTAWA — Export Development Canada is declaring itself a leading defender of human rights, but workers groups and advocates say the Crown agency’s long-awaited new policy falls well short of what’s needed. The United Steel Workers of Canada declared it a missed chance to show leadership in global finance, business and human rights. The arrival of the new policy comes as Canadian businesses and human-rights advocates await a legal review by International Trade Minister Jim Carr that will determine the powers of the government’s new “ombudsperson for responsible enterprise.” Karen Hamilton, the spokeswoman for Above Ground, a non-governmental agency that specializes in tracking human rights infractions involving businesses, said the group hopes Carr’s legal review leads to a change in EDC’s legislation to make stronger human rights obligations mandatory. “If we really want to see change, it has to be legislated,” Hamilton said.

https://nationalpost.com/pmn/news-pmn/canada-news-pmn/new-edc-human-rights-polic...


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