Index for February 2013

Volume 12, Issue 2

  • (Eurodad, Brussels, 8 February 2013) Campaigners are calling for a fundamental overhaul of World Bank lending to financial markets actors, following the publication of an Ombudsman's audit showing that the International Finance Corporation (IFC) “knows very little” about the environmental or social impacts of its financial market lending. The IFC is the World Bank’s private sector lending arm with a stated objective to ensure that any financing does not result in harm to communities and the environment and its Performance Standards form the core of the OECD's Common Approaches for official export credit agencies.
  • (Both ENDS, Amsterdam, 19 February 2013) In 2012 Both ENDS organised a 'fact finding mission' to review the social and environmental impacts of dredging activities in the Suape harbor in Brazil. The Dutch dredging company Van Oord is currently executing two dredging projects in this harbour, supported with an export credit insurance on behalf of the Dutch government through the export credit agency Atradius DSB. The dredging activities have dramatic social and environmental impacts affecting the livelihoods of local communities. This raises several doubts regarding the implementation of corporate social responsibility (CSR) standards and policies by Atradius DSB.
  • (Bloomberg, Beijing, 28 February 2013) China has issued environmental protection guidelines for Chinese companies to follow when investing overseas, calling on them to pay more attention to pollution and its impact on local communities. The guidelines call on companies to follow local environmental laws, assess the environmental risks of their projects, minimize the impact on local heritage and draft plans for handling emergencies. A number of countries have cancelled Chinese projects because of safety and environmental concerns and the President of Botswana has cited "bad experiences with Chinese companies". Another private Western media review of China's Green Credit Policy notes that Beijing is trying to give teeth to its environmental policies by enlisting the help of the banking sector, but suggests that one year on it has yet to be taken seriously by China’s regulators or by the country’s banks.
  • (Other News, Rome, 4 February 2013) Michael Pettis argues in "The Great Rebalancing" that in a globalised economy everything connects with everything else. He notes that the US trade deficit is not generated mainly by Americans gorging on consumer products made by hardworking Chinese. It is also created by Beijing's sustained promotion of production and suppression of consumption, creating surpluses for export. This promotion includes record breaking financial support for Chinese investment, and while the table of contents and index do not mention ECAs, record levels of Chinese export finance must play a role in this dynamic. He also claims that Greek deficits are born not of the population’s imagined laziness, but result from Berlin’s policies to boost competitiveness to cut the job losses created by unification, noting that wages were held down, limiting domestic consumption and increasing the export of extra production, notably to the eurozone, where a favourable exchange rate benefited Germany.
  • (Probe International, Toronto, 7 January 2013) Canada’s Access to Information Act perversely gives Export Development Canada (EDC) the legal power to keep records of its operations secret, charges Probe International. In its submission to the Office of the Information Commissioner’s review of Canada’s 30-year-old Access to Information Act, Probe International declares it is time to reform the Act and remove EDC’s extraordinary privileges.
  • (4-Traders, Annecy, 30 January 2013) The EFTA Surveillance Authority has adopted new guidelines for the assessment of state aid in the context of short-term export-credit insurance. The new guidelines are based on experience gained in applying the previous guidelines on short-term export-credit insurance, in particular during the financial crisis between 2009 and 2011. The rules set out in these guidelines will help to ensure that state aid does not distort competition among private and public or publicly supported export-credit insurers and to create a level-playing field among exporters.
  • (This Day Live, Lagos, 24 February 2013) In a world increasingly defined by economic strength at the individual or national level, it is imperative to recognise institutions that make national economic growth possible. In Nigeria, such Institutions include the Nigeria Export and Import Bank (NEXIM), an export credit agency (ECA), offering support to Nigerian exporters who need to raise capital for their businesses. The management has turned around its losses and reported an audited profit of N189m (US$1.2m). The African Development Bank (AfDB) agreed at the end of January to provide a sovereign-guaranteed multi-tranche line of credit of US $200 million to NEXIM to support the modernization and expansion of export-oriented small and medium enterprises (SMEs).
  • (Windpower Monthly, London, 28 February 20130) Europe's wind turbine manufacturers need to push outside of their traditional onshore markets is creating an ever-greater role for export credit agencies (ECAs) in project financing. With banks now highly risk averse, ECAs are being asked to increase their participation in wind financings in new Eastern European markets, Anna Marie Owie, chief underwriter at Danish export credit agency EKF, told delegates at the European Wind Energy Association (EWEA) conference in Vienna, Austria, last month.
  • (RigZone, Houston, 20 February 2013) Pacific Drilling has announced the signing of a $1 billion senior secured credit facility agreement to finance construction of 2 offshore oil drilling rigs, the Pacific Sharav (Chevron, US Gulf of Mexico) and Pacific Meltem. The transaction was led and structured by Citibank and DNB, and supported by the Norwegian export credit agencies Garanti-Instituttet for Eksportkreditt (GIEK) and Eksportkreditt Norge AS. Also acting as Mandated Lead Arrangers were ABN AMRO, ING, SEB and Standard Chartered Bank.