(The Corner House, Dorset, 18 February 2008) On 14-15 February 2008, two UK High Court judges heard arguments in a judicial review requested by Campaign Against Arms Trade (CAAT) and The Corner House, who argue that the decision to drop the BAE corruption investigation into UK export credit supported arms sales to Saudi Arabia was illegal. They did not give a ruling but said they would do so "as soon as possible". Documents released on the first day of the hearing (14 February 2008) reveal that BAE Systems wrote to the Attorney General on a "strictly private and confidential" basis urging him to halt the Serious Fraud Office investigation into allegations that BAE had bribed Saudi Arabian officials to secure the Al Yamamah arms deal. The company argued that the investigation should be dropped on commercial and diplomatic grounds. To see these and other documents, go to the 'Control BAE' website at the above link.
Index for February 2008
Volume 7, Issue 2
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(OECD, Paris, 16 January 2008) Official export credits to public and publicly guaranteed buyers in low income countries should reflect Sustainable Lending practices, i.e. lending which doesn't endanger LDC financial futures and long-term development prospects. ECG Members have agreed to apply principles to avoid lending decisions that might contribute to future debt distress for official export credits with repayment terms of one year or more. While ECA Watch welcomes this decision, we will monitor it's implementation and ask that loan conditions be fair and transparent to parliaments and the taxpaying public. This is particularly important since there have been major shortcomings in this field as part of standard practice with many OECD ECAs.
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(Dow Jones, Berlin, 22 February 2008) Germany has made it easier for German companies to apply for public export credit guarantees by including local costs and foreign delivery. The new rules extend the coverage for equipment and services obtained in ordering countries, as well as supply from countries outside the European Union, the ministry said. At their 7 November 2007 meeting, Participants in the OECD Arrangement on Export Credits agreed to modernise some provisions in the Arrangement to allow for more flexibility in the financing of local expenditures (i.e. equipment and services locally sourced in buyer countries); the current ceiling will be increased with effect from 1 January 2008, for a three-year trial period.
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(Earthtimes, Washington, 20 February 2008) Zurich, a leader in political risk and trade credit insurance in emerging markets, has announced it will provide political risk insurance for carbon credit projects. However, NGOs argue that carbon trading and offsets distract attention from the wider, systemic changes and political action that needs to be taken in the transition to a low-carbon economy, e.g. promoting more effective and empowering approaches to climate change requires moving away from the false-economy of supposed quick fixes.
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(Marketwire, Perth, 13 February 2008) Paladin Energy has announced that bank approval and export credit from the Export Credit Insurance Corporation (ECIC) of South Africa have been obtained for the Kayelekera Uranium Project in Malawi. A resurgent interest in nuclear power is causing companies to race to provide radioactive fuel for an expected nuclear power renaissance. French President Sarkozy visited South Africa this week accompanied by 40 French business leaders, including the chief executive officer of Areva which built South Africa's Koeberg nuclear power plant and has bid against a consortium led by Westinghouse of the United States to build a second one. South Africa is suffering from energy shortages that have badly hurt its mining sector, and sees the expansion of its nuclear energy program as the way to solve the crisis in the long term.
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(Stop Ilisu, Vienna, January 2008) A new Ilisu Dam campaign website has been opened to focus attention on this controversial project supported by export credit agencies in Germany, Austria and Switzerland. Construction of the dam has not yet started, although forced resettlement with inadequate compensation has begun. Turkish authorities, in proceeding without respect for this important condition, one of 150 conditions supposedly imposed by european ECAs, raise concerns about whether standards agreed under the OECD's Common Approaches on the environment and official export credits will be respected.
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(Business Credit Management, Southampton, 27 February 2008) ECGD, the UK's official export credit agency, has signed an agreement to co-operate more widely with its Chinese counterpart, Sinosure, enabling co-operation on specific projects where export credit facilities are provided to support exporters from the United Kingdom and China.
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(European Parliament, Strasbourg, 27 February 2008) The EU should encourage Chinese export-credit agencies, including the Exim Bank, to conduct systematic environmental assessments of infrastructure projects in Africa, such as dams, roads and mines, says an EP Development Committee report.
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Washington, USA, 28 Feb – The United States’ Export-Import bank has changed its policy towards Angola, and now covers medium-term projects (up to seven years), both in the public and private sector, the US embassy said in Luanda Tuesday. According to a statement from the US embassy, the expansion of the bank’s coverage policy in Angola came into force on 15 February, 2008 and is the result of Angola stronger macroeconomic position. “Over the last few years, Angola has had budget surpluses and has lowered inflation. The rise in GDP has been robust and the country has systematically paid off its external debt. Some of these successes are due to higher oil prices, but reforms and measures taken by the Government have also had an influence," the statement said.