Index for January 2006

Volume 5, Issue 1

  • (ECA Watch, Paris, 6 January 2006) The OECD is to review its Recommendation on Common Approaches to the Environment and ECAs in 2006. ECA Watch advocates a broad scope examination of the Common Approaches.
  • (Sakhalin Environment Watch, 20 January 2006) (Sakhalin Environment Watch, 28 January 2006) Over 300 people, including the Sakhalin Governor, gathered to close down the Sakhalin II LNG plant on Saturday. They were peacefully protesting the damage caused by the Sakhalin II project on the environment and communities of Sakhalin Island, and demanding a reevaluation of compensation for damages. Sakhalin II is seeking up to US$5B in public financing from the Export Credit Agencies of the US, UK, and Japan, and the European Bank for Reconstruction and Development. This photo graphically illustrates the "protection" offered to salmon spawning streams.
  • (Antara News, Jakarta, 19 January 2006) Protests against an Atradius supported sale of Dutch built naval corvettes have sent Indonesian military officials looking for other sellers in Russia, Germany and Italy. See also previous What's New articles on the lifting of a US embargo on export credit for military sales to Indonesia and a New York Times analysis of the role of Indonesia's military in human rights violations.
  • (Sify Finance, Taramani, 17 January 2006) India's state-run National Hydroelectric Power Corporation about to finalise a US$100 million (about Rs 450 crore) concessional loan (3.4-4%) as export credit assistance from Coface of France for its 2,000 MW Subansiri (Lower) power project in Arunachal Pradesh.
  • (Japan Times, Tokyo, 30 November 2006) Under a plan announced on November 29, 2005, two of Japan's eight government-controlled financial institutions would be privatized, one dissolved and the remaining five consolidated into one new organization. The Japan Bank for International Cooperation (JBIC) will be merged with four other institutions, with the ODA part of its operations likely to be merged with the Japan International Cooperation Agency (JICA), and its ECA functions likely to be absorbed by a new organization together with several functions from other financial institutions. It is not clear what will happen to NEXI in this restructuring.
  • (Chadian Association for the Promotion and Defense of Human Rights, N’Djamena, 9 January 2006) The World Bank suspended all loans to Chad on January 6, 2006, after its parliament approved legislation that altered a World Bank-supported oil revenue law to access more of the profits from the pipeline. Chadian NGOs welcomed this decision, but warn that there is an urgent need to address problems of social disruption, public health and environmental damage resulting from the controversial Chad-Cameroon oil and pipeline project, which has received export credit support from France's Coface and the US Ex-Im Bank.
  • (International Herald Tribune, Paris, 29 December 2005) Russian arms exporters should get cheap government loans to help finance customer purchases, President Putin told a government panel on military issues on December 27, 2005. China and India are Russia's largest weapons customers. MiG and Sukhoi fighter jets and naval warships account for the bulk of sales, which have exceeded US$5 billion in each of the past three years. Such support would include export credit loans and guarantees.
  • (Flight International, Surrey, 23 January 2006) The total debt of Garuda, Indonesia's national airline, stands at US$826.5 million, more than US$500 million of which is owed to European export credit agencies, forcing it to default on principal payments at the end of December 2005.
  • (Reuters, Ottawa, 5 January 2006) Two US airlines are returning 42 regional jets to Canada's export lending agency EDC, which guaranteed the sale of the 50-seat Bombardier aircraft, an agency spokesman said on January 5, 2006. Air transport, at 35-40% of total ECA portfolios, is the largest sector of ECA investment, and rumours abound that some ECAs own over 100 aircraft.
  • (BBC, London, 8 December, 2005) The Center for International Environmental Law (CIEL) has filed a petition for the Inuit Circumpolar Conference (ICC), that blames the US for failing to control its greenhouse gas emissions, which has been impacting the livelihood of the Inuit by destroying their fish supplies and houses with seasonal melting induced by global warming. A similar application by Friends of the Earth Germany would force the German government to declare what greenhouse gas emissions are produced by projects supported by its export credit agency Hermes.
  • (BankTrack, Utrecht, 26 January 2006) As the OECD reviews its environmental standards for ECAs in 2006, a new study released by BankTrack and WWF at the World Economic Forum in Davos highlights many of the best practices that NGOs believe should be considered by project finance entities. The study shows that the international banking sector is doing a poor job in adopting financing policies that advance sustainability. Within the banking sector, addressing environmental and social issues is now considered critical to the proper management of transaction, portfolio and reputational risks. The question is no longer whether commercial banks should take these aspects of the activities they support into account, but how they should do it ­ What standards to apply? How to implement them and how to assure compliance?
  • (Business Law News, New Zealand, 10 January 2006) Hardman Resources, an independent Australian oil exploration firm, has secured a US$100m seven-year financing to fund its share of the US$500m development costs of the offshore Chinguetti oil field in the Islamic Republic of Mauritania. Without any foreign government or Export Credit Agency underwriting of the financing, this project follows an increasingly common trend whereby the private sector is moving into markets and risk management traditionally limited to official ECAs.