(Global Trade Review, London 19 January 2022) A planned European Union law requiring large and businesses and financial institutions to conduct human rights and environmental due diligence should also apply to export credit agencies (ECAs), activists say. The initiative has strong support from the European Parliament but the Commission’s draft text has been held up twice by a regulatory oversight board that scrutinises proposed laws, according to MEPs. In December last year, four MEPs blamed the delays on lobbying by business groups in France and Denmark, and requested access to the board’s opinions on the draft proposals, which are not usually published until proposals are formally adopted. ECA Watch, a network of global non-government organisations who argue for ECA reform and transparency, sent a letter to the Commission in November urging ECAs to be in scope of the proposed law, noting” “Active obligations from ECAs [under the law] will effectively encourage a significant number of companies to fulfil their due diligence obligations and ensure that also ECAs themselves effectively comply with the human rights and environmental obligations of the member states on whose behalf they operate… Past experience shows that export credit guarantees are repeatedly granted for projects with serious adverse human rights and environmental consequences.” One of the letter’s authors, Heike Drillisch from German human rights and environment initiative CounterCurrent, says that while ECAs judge projects against standards such as the UN Guiding Principles on Business and Human Rights, they may not take an interest in the companies involved and whether they are respecting human rights. “We say that as state money is involved in export credit schemes, there should really be a heightened due diligence process in place and ECAs should be aware of not becoming complicit in human rights violations which occur in the project,” Drillisch tells GTR. Lawmakers want to capture non-EU firms too. A non-binding European Parliament resolution on the proposed law, adopted by 504 votes to 79, called on EU governments not to allow access to ECA support for companies that do not comply with the “objective” of the law. Asked how likely it is that public finance and insurance bodies such as ECAs will be in scope of the legislation, Linklaters associate James Marlow says to the extent that such organisations “are public bodies and extensions of member state governments, it is less likely that they will be directly captured by any regime… on mandatory due diligence”. However, Marlow tells GTR, to avoid reputational damage “it is possible that such bodies would be impacted indirectly as they or their government may look to align their policies and processes with stakeholder expectations and obligations” that apply to their counterparts in the private sector.
Counter Current
ECAs, COVID-19 and Climate: Recommendations to Ensure that Economic Support Protects People and the Planet
(ECA Watch members, 10 August 2020) This 9 page report finds that while ECA responses to COVID-19 are still quickly evolving, it’s now clear that these institutions are:
- Providing more favorable financing terms;
- Expanding the geographic scope of the projects and companies they are supporting, including new domestic coverage that was very rare for ECAs prior to COVID-19;
- Failing to ensure proper transparency and oversight of who is getting this support and how it is being used;
- Increasing risks of corruption, human rights abuses, and environmental destruction;
- Potentially increasing support for megaprojects like Mozambique LNG that has already received billions from ECAs; and
- Potentially supporting many oil and gas companies that were already financially unviable even before the COVID-19 crisis.
The report’s recommendations include that ECAs must:
- Ensure that their COVID-19 responses are in line with the Paris Agreement’s 1.5 degree Celsius target and the Sustainable Development Goals;
- Continue progress on climate policies and protections, including explicitly excluding support for fossil fuel related projects;
- Promote transparency by providing detailed, public information on all support provided at the time the support is provided; and
- Uphold all standards on social and environmental due diligence
Export credit and human rights: Failure to Protect
(ECA Watch, Brussels, 18 February 2015) ECA Watch members Halifax Initiative, Both Ends and CounterCurrent, together with Brazilian organisation Forum Suape and Colombian organisation Movimiento Rios Vivos, published a new report entitled Export Credt and Human Rights: Failure to Protect. The report calls on states to fulfill their duty to protect human rights through the operations of their export credit agencies.
Export Credit and Human Rights: Failure to Protect
ECA Watch members Halifax Initiative, Both Ends and CounterCurrent, together with Brazilian organisation Forum Suape and Colombian organisation Movimiento Rios Vivos, published a new report entitled Export Credt and Human Rights: Failure to Protect. The report calls on states to fulfill their duty to protect human rights through the operations of their export credit agencies.
Failure to Protect uses several case studies to illustrate that ECA-supported investments are often associated with human rights abuse, despite the OECD Recommendation known as the Common Approaches, which provides guidance to ECAs and includes a reference to human rights.
The publication includes case studies on the Carajas iron project in the Brazilian Amazon, the Hidrosogamoso dam in Colombia, the Suape port in Brazil and ECA support for investment in Belarus.
You can download the report here.
Press release – International NGO Call on Goverments to #EndCoalFinance
FOR IMMEDIATE RELEASE
11 June 2014
International NGOs Call on Governments to #EndCoalFinance
On Monday, June 16 the Organization for Economic Cooperation and Development (OECD)’s Export Credit Group will meet to discuss climate and energy related financing through Export Credit Agencies – public agencies that fund or guarantee private corporations from their home country to invest or export overseas.
International civil society organizations are targeting governments today, Wednesday, June 11, to call for an end to public finance for coal. A Twitterstorm will urge OECD governments to end financing and guarantees for coal through Export Credit Agencies.
Last week in Brussels, G7 nations confirmed their commitment “to the elimination of inefficient fossil fuel subsidies and continued discussions in the OECD on how export credits can contribute to our common goal to address climate change.”
In the OECD Export Credit Group meeting, governments will be considering a proposal from the United States and the United Kingdom to open a process to adopt restrictions for financing high carbon intensity projects (primarily coal power plants).
This opportunity to end Export Credit Agency financing for coal is a key part of the larger effort to end public financing for fossil fuels and high carbon projects.(1)
Regine Richter, from Urgewald in Germany says: “Guarantees worth billions from the country of energy transition? While climate experts warn that more coal plants mean the end of the 2° C target?! It’s time to stop this contradiction and finish coal support through Hermes guarantees.”
Lucie Pinson, Amis de la Terre France says: “After ending coal support through its development agency last year, France has to finish its job if they are serious about fighting climat change. France could not give the lead to the COP21 in Paris next year if Coface keeps supporting coal power plants overseas whose emissions account for 14% of domestic emissions!”
Between 2007 and 2013 public financial institutions provided at least $51 billion in funding for coal projects abroad. The largest proportion of this comes from national Export Credit Agencies (ECAs) from OECD countries, which have provided at least $32 billion over this period or 63 percent of total public support. (2)
Over the past year, the World Bank, the European Investment Bank, and the European Bank for Reconstruction and Development have committed to ending support for coal projects except in limited circumstances. The US, the UK, the Netherlands and Nordic countries have made similar commitments to end public finance for coal projects overseas.
Given the improvements in multilateral practice, it is increasingly likely that OECD Export Credit Agencies could end up as a place of last resort for carbon intensive industries that are no longer able to secure funding due to their high risk and poor environmental performance.
For more information on the Twitterstorm, go here: http://www.eca-watch.org/node/3600
1. According to the International Energy Agency (IEA), to stay within a 2°C global temperature rise – a level climate scientists believe would allow us to avoid the worst impacts of climate change: at least two thirds of current proven fossil fuel reserves need to stay underground.
2. According to data compiled by the Natural Resources Defense Council (NRDC) and Oil Change International. These staggering statistics probably under-estimate the total amount due to lack of reporting by many of these shadowy institutions.
Asia Pulp & Paper (APP) default on its obligations to Export Credit Agencies
(June 11, 2012) Press release launched on the day that more than 30 European non governmental organisations (NGOs) delivered a letter calling on governments not to fund a new pulp mill proposed by Asia Pulp and Paper (APP), one of the world’s most controversial pulp and paper companies. The plant is planned to be build in Sumatra, Indonesia where APP is estimated to have already pulped more than two million hectares of natural rainforests.
Open Letter to Andritz Company Concerning Construction of the Ilisu Dam
(Save the Tigris, 22 March 2013) Press Release by Campaign to Save the Tigris River and the Iraqi Marshes. On the occasion of Austria’s Andritz AG Annual General Meeting which is being held on World Water Day, the Save the Tigris campaign, a coalition of nongovernmental organizations from Iraq, Iran & Turkey, sent a letter to Andritz’s CEO, Wolfgang Leitner, regarding Andritz’ involvement in the construction of the Ilisu Dam in Turkey; a controversial project which has failed to comply with basic international law. The open letter was signed by 4447 Iraqis and received support from other dam affected communities from Chile, Indonesia, Spain, Turkey, and support from the international community in Italy, UK, the US who endorsed Iraqi demands to stop supplying equipment for the dam construction until compliance with international law and treaties is assured.The Export Credit Agencies of Germany, Austria and Switzerland have suspended credit guarantees due to Turkish failure to comply with required environmental, social and cultural heritage conditions.
Member State compliance with Article 21 of the Lisbon Treaty
On 6 August 2012, ECA Watch and the European Coalition for Corporate Justice sent a letter to the President of the Commission Jose Manuel Barroso requesting a meeting to discuss how the Commission intends to monitor Member State compliance with Article 21 of the Lisbon Treaty and how NGOs can be involved in the elaboration of an appropriate compliance framework
Letter: ECA Watch to Head of Export Credits Division, OECD
(8 November 2011) This letter from ECA Watch outlines the network’s position the OECD Draft Sector Understanding on Renewable Energy, Climate Change Mitigation and Water Projects.
Giving human rights credit: EU countries agree to toughen export loan scrutiny
(June 29, 2011) A press release from ECA-Wach, Amnesty International and Eurodad. It welcomes EU permanent representatives’ endorsement of the European Parliament’s proposal to make national export credit agencies (ECAs) more accountable for the support they give companies doing business around the world. The three organisations believe this move will increase transparency and human rights compliance and hope that this will trigger more ambitious reforms in EU capitals, leading to a general reform in global ECA standards.
