(Global Trade Review, London, 31 January 2018) The Australian export credit agency (ECA), Efic, has been armed with A$3.8bn to help companies sell military equipment overseas. Over the years, ECAs have been heavily criticised for selling arms which often help prop up tyrannical regimes and which can fall into the wrong hands. Indeed, the murky track record of the UK’s ECA was reportedly one of the reasons behind its rebranding from the Export Credits Guarantee Department (ECGD) to UK Export Finance (UKEF). ECGD was found to have funded a succession of arms deals involving despotic regimes including a £49mn loan made to Zimbabwean President Robert Mugabe to buy a fleet of fighter jets and police Land Rovers. Alas, its successor UKEF has continued the trend. It was reported in 2015 to have guaranteed £130mn in financing for repressive governments to spend on arms over the previous years. These include loan guarantees for the Indonesian government to purchase anti-aircraft missiles and a bond guarantee for Saudi Arabia to buy unspecified arms amid Saudi Arabia’s ongoing offensive in Yemen. Over half of UKEF support in the last annual report was for defence… and UKEF is by no means the only ECA involved in funding weaponry. Last year, US Ex-IM was questioned over its funding of dual-use goods which ended up in the militaries of Cameroon, Mexico and Qatar. Last year, the Russian ECA Exiar lent US$100mn to the Armenian government for the purchase of Russian-made munitions and French ECA Coface issued a 50% guarantee on a US$5.9bn loan from a group of French banks to the Egyptian air force to buy 24 multi-role fighter jets built by French company Dassault.
Indonesia
Indonesia – Dirty man of Asia deepens addiction to coal
(The Nation, Bangkok, 30 December 2017) Already the world’s fifth-biggest greenhouse gas emitter, Indonesia is leading Southeast Asia’s boom in coal-fired power. Already one of the world’s biggest carbon polluters because of deforestation, Indonesia has back-pedalled on a pledge to cap coal production. The government initially planned to reduce its coal production to 413 million tonnes this year, from 419 million tonnes in 2016. The figure was expected to fall to 406 million tonnes next year, before hovering at only 400 million from 2019. However, this year’s coal production has already reached 477 million tonnes, far outstripping last year’s 434 million tonnes. The boom is being bankrolled by foreign governments and banks, the Guardian reports. Activist group Market Forces examined 22 deals involving 13.1 gigawatts of coal-fired power in Indonesia and found that 91 per cent of the projects had the backing of foreign governments through export credit agencies or development banks. The majority of the money was coming from Japan and China, with the Japan Bank for International Cooperation involved in five deals and the Export-Import Bank of China involved in seven deals.
Japanese Groups Strongly Object to JBIC Premature Loan Disbursement, Ingoring Upcoming Community Lawsuit
(FOE Japan, Tokyo, 14 November 2017) On November 14, The Japan Bank for International Cooperation (JBIC) disbursed the first installment of a loan for the 1000 MW Cirebon coal-fired power plant expansion plan which Marubeni and JERA invested in, known as Cirebon 2. The total loan amount JBIC has signed in the loan agreement is around USD 731 million. However, the validity of the new environment permit, which has only recently been issued, is still in question. The local community and NGO groups, which are opposing the project, are preparing to file an administrative lawsuit next week, demanding the revocation of the new environment permit. This would make it impossible for the Cirebon 2 project to violate the laws of the host country (Indonesia) and the “JBIC Guidelines for Confirmation of Environmental and Social Considerations”. This disrepectful JBIC neglect of the lawsuit by local residents is a repeat of its conclusion of the loan agreement without an adequate EIA. JBIC had a meeting with the local community and NGO groups in Indonesia last October and directly heard their concerns and the judicial risks. Nevertheless, JBIC decided to disburse the loan and just push through with the project ignoring their concerns.
Indonesian Community Reps File Cirebon Coal Plant Objections with JIBC
(Friends of the Earth Japan, Tokyo, 24 May 2017) On May 24, 2017, two Indonesian community representatives affected by the JIBC supported Cirebon Coal-fired Power Plant Project in West Java arrived in Japan and handed their objections to the Japan Bank for International Cooperation (JBIC) with respect to the expansion of the Unit 2 power plant (1,000 MW). At the same time, Indonesian and Japanese NGOs filed their complaints with the Japanese National Contact Point (NCP) under the OECD Guidelines for Multinational Enterprises (MNEs). Japanese public and private sectors, including Marubeni and JERA as investors, have pushed through the project despite already serious damages to the livelihoods of the local community and the April 19 revocation of its environmental permit by the District Court in Bandung.
JBIC Must Immediately Review and Repeal its Loan Agreement for Illegal Indonesian Coal Project
(Friends of the Earth Japan, Tokyo, 19 April 2017) Following objections from local affected villagers, on April 19th the regional court in Bandung, West Java revoked the environmental permit for the 1000MW Cirebon coal-fired power plant expansion plan known as Cirebon 2 (which Marubeni and JERA invested in). The Japan Bank for International Cooperation (JBIC) had concluded a loan agreement for Cirebon 2 on April 18, the day immediately before the court verdict was due. JBIC now must sincerely take into account the local villagers’ rights and the judicial decision in the host country. JIBC must immediately review and repeal its decision to provide financing for Cirebon 2, as the project is illegal according to local law and in violation of the “JBIC Guidelines for Confirmation of Environmental and Social Considerations” (Guidelines) which require “the compliance with environmental laws of the host nation and local governments concerned” and “the submission of environmental permit certificates issued by the host governments.”
280 CSOs from 47 Countries Call on Japanese Government to Reject Support for Indonesian Coal Plants
(FOE Japan, Tokyo, 27 March 2017) On March 23, Indonesian and Japanese CSOs submitted an international petition signed by 280 CSOs from 47 countries to the Japanese government, calling on JBIC and JICA not to finance the Cirebon expansion coal-fired power plant (1,000 MW) and the Indramayu expansion coal-fired power plant (1,000 MW), both located in West Java, Indonesia.
Japanese ECA finances Indonesian coal plant despite widespread opposition
(Banktrack, Nijmegen, 28 February 2017) As financial close was announced on the Tanjung Jati B 2 (TJB2) coal expansion power project in Indonesia yesterday, BankTrack, Friends of the Earth Japan and 350.org Japan criticised the Japan Bank for International Cooperation (JBIC) and several Japanese and Singaporean banks for their support for the project. JBIC’s approval of a USD 1.7 billion loan agreement for the project, with further backing from the “big three” Japanese commercial banks – Mizuho Bank, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation – as well as other Japanese banks and Singapore’s OCBC, comes after French banks Société Générale and Crédit Agricole withdrew from the bank consortium in December. The building of two new coal power units will make the already hard-felt impacts of the existing Tanjung Jati B coal power station worse. The local fishing community cites reduced catches, damage to the coral reef and collisions between fishing boats and coal transport barges. It will also worsen the impacts of air pollution. A Greenpeace report has estimated that the first four units are already responsible for 1,020 premature deaths per year because of respiratory infections caused by air pollution from the plant.
Indonesian Batang Villagers file objection against JBIC coal-fired power project
(FOE Japan, Tokyo, 5 December 2016) On December 5, eleven local Indonesian community leaders, who have continued to oppose the “Batang Coal-fired Power Plant Project” over five years now, visited the Japan Bank for International Cooperation (JBIC) Jakarta office and submitted their objections against JBIC. (18 villagers signed on as community representatives and the signatures of more than 900 villagers who supported this objection were also attached.) In their objection, the villagers pointed out that the project has failed to comply with “JBIC Guidelines for Confirmation of Environmental and Social Considerations”, has made their lives worse and has caused the violations of human rights.
Stopping coal financing for Indonesian coal plants is crucial in the fight against climate change
(Friends of the Earth Japan, 17 November 2016, Tokyo) Within the next couple of months, the Japan Bank for International Cooperation (JBIC) will decide whether to fund two giant dirty coal-fired power plants in Indonesia. These power plants will have a total capacity of 3000 Megawatts. They are the Cirebon 2 coal-fired power plant is in West Java and the Tanjung Jati B coal-fired power plant is in Jepara, Central Java. Six months ago, JBIC approved funding for one of Southeast Asia’s largest coal-fired power plants in Batang in Central Java, which is already having terrible negative social and environmental impacts, and will make a massive contribution to climate change. French Bank Crédit Agricole also wants to join JBIC in funding the coal power plant in Cirebon and the Tanjung Jati B power plant. This is in spite of a very recent public commitment made by Crédit Agricole to stop providing finance to new coal plants. Civil society groups from across the world, including Friends of the Earth France, Banktrack and Oxfam France, have criticized the double standards of Crédit Agricole in making new climate commitments a few weeks before COP22 in Marrakech, whilst continuing with its coal finance business as usual. They argue Crédit Agricole must not finance these two damaging power plants.
Indonesian Villagers File Objection against JBIC
(Friends of the Earth Japan, 10 November 2016, Jakarta) On November 10, 2016, three villagers affected by “Cirebon coal-fired power plant project in West Java, Indonesia” (*1) handed their objection to the Japan Bank for International Cooperation (JBIC) at its Representative Office in Jakarta. They also took their protest action in front of Japanese Embassy, calling on JBIC not to decide its loan for the expansion project in Cirebon which is slated to commence the construction within this year or early next year. In the Project, the Unit 1 power plant (660 MW, invested by Marubeni), for which JBIC provided its loan, has already caused serious damages to the community’s livelihood, such as small-scale fishing and salt making. In addition, the expansion or Unit 2 power plant (1000 MW, invested by Marubeni and Chubu Electric Power) has been criticized for the issue of land acquisition and the illegality of its environmental permission.
