Index for May 2014

Volume 13, Issue 5

  • (ECA Watch, Brussels, 20 May 2014) more than 30s NGO have endorsed recommendations provided by the briefing "Ending Fossil Fuel Support: the way forward". This briefing was developed by ECA Watch members in close collaboration with other international and regional organisations. The March 2014 IPCC report stated that annual investments in conventional fossil fuel power plants must decline by an average of $30 billion/year over the next two decades, and simultaniously investments in the extraction of fossil fuels have to decline by an average of $110 billion. Coal is the most carbon intensive fossil fuel, and several countries have already moved to end public finance for coal. The briefing urges OECD countries to lead, showing by exemple and acting consistently with their climate claims - before the COP21 of the UNFCCC in Paris in 2015. They must commit to not support coal projects with public finance – and more broadly all carbon intensive projects, including mines and associated infrastructure. Such a step forward by OECD countries is a must before any similar action can be effective with non-OECD countries like China. To ensure common consistent action by developed countries, they should also support a multilateral OECD agreement to effectively prevent any support for high carbon projects from OECD Export Credit Agencies. For more information on this briefing, please contact:

  • (Reuters, Sydney, 27 May 2014) Dozens of protesters caused tens of millions of dollars in damage to vehicles, equipment and buildings at Vale's nickel mining site in New Caledonia, as anger boiled over at a chemical spill into a local river. The $6 billion Vale plant at Goro was closed earlier this month after some 100,000 litres of acid-tainted effluent spilled, killing about 1,000 fish and sparking protests at the mine site. Vale and previous owner INCO's Security and Exchange Commission K-10 reports indicated clearly that local opposition was a risk. What's New in June and November and the Wall Street Journal highlighted these problems in 2006: a court order annulled the project's operating permit based on inadequate environmental impact assessments, previous incidents of equipment sabotage and New Caledonian indigenous groups lobbying the French government to withdraw a $500 million tax subsidy did not stop some OECD ECAs from consideration of support for the controversial project. Despite the latest violent reaction to the damage caused by the mine, Canada's Scotiabank continues to support Vale.

  • (Huffington Post, 2 May 2014) The Nation, Huffington Post, Guardian and Jubilee Australia have just published a scathing exposé revealing shocking new details about ExxonMobil’s deadly natural gas pipeline project in Papua New Guinea. The reports reveal that the ExxonMobil subsidiary leading Papua New Guinea LNG was aware that a poorly managed quarry it operated could cause a landslide. Then, on January 24, 2012, the massive landslide occurred, killing 27 people. The reports also reveal that a supply road was quickly reconstructed over the landslide—directly over the buried bodies—under the protection of Exxon-funded mobile security forces sent to defend the project from angry villagers. Among other funders, Papua New Guinea LNG was financed by the ECAs of the US, China, Japan, Australia and Italy.

  • (Both Ends, Amsterdam, 7 May 2014) As reported by Dutch ECA Watch member Both Ends in 2013, a Dutch company, Van Oord, supported by Atradius DSB is dredging the Suape harbour in Brazil with dramatic social and environmental impacts affecting the livelihoods of local communities. Both Ends partners in the region have produced a 23 minute video "Tatuoca, a stolen island" with testemonies of local people affected by the expansion of Suape harbour.

  • (Reuters, Moscow, 30 April 2014) Chinese investors are committed to financing part of Novatek's $27 billion Russian gas project, ensuring it has sufficient backing despite losing U.S. support because of sanctions, the company said on Wednesday. The U.S. export credit agency Ex-Im pulled out in March. Russian borrowing has languished this year on lenders' concern over becoming caught up in U.S. and EU sanctions imposed on Russian individuals in retaliation for Moscow's annexation of Crimea and support for separatists in eastern Ukraine. Reports indicate that another deal, worth $1 trillion and 10 years in the making, would be inked during Russian President Vladimir Putin's May visit to Beijing. In it, the giant, state-controlled Russian energy giant Gazprom would agree to supply the giant state-controlled China National Petroleum Corporation (CNPC) with 3.75 billion cubic feet of liquefied natural gas a day for no less than 30 years, starting in 2018. That’s the equivalent of a quarter of Russia’s massive gas exports to all of Europe. China’s current daily gas demand is around 16 billion cubic feet a day, and imports account for 31.6% of total consumption. Some predict this could lead to a major shift in US global energy influence and even the role of the US dollar in world trade. It is obvious that export credit and ECAs will play a major role in these investments.

  • (Paris Club, Paris, 29 May 2014) The representatives of Paris Club creditors and of the Government of the Argentine Republic met on 28 and 29 May 2014 and agreed on an arrangement to clear debt in arrears due to Paris Club creditors over a five year period. Realization of initial payment under a formal commitment of Argentina to fully clear its arrears is a necessary and important step for the normalization of financial relationships between Paris Club creditors and Argentina. Paris Club members’ export credit agencies that wish to do so will resume their export credit activities.

  • (European Commission, Brussels, 7 March 2014) Regulation (EU) No 1233/2011 of the European Parliament and of the Council of 16 November 2011 on the application of certain guidelines in the field of officially supported export credits foresees that Member States shall make available to the Commission an Annual Activity Report in order to step up transparency at Union level. The Commission produces an annual review for the European Parliament based on this information and the present annual review covers the calendar year 2012. Annual Activity Reports have been received from the following Member States: Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Italy, Luxemburg, Netherlands, Poland, Portugal, Romania, Slovenia, Slovak Republic, Spain, Sweden and the United Kingdom.

  • (Oman Observer, Muscat, 29 May 2014) Italian export credit agency SACE has pledged $100 million allocated by HSBC Bank for financing the modernisation of Sohar Refinery, owned and operated by Oman Oil Refineries and Petroleum Industries (ORPIC). The aid granted by SACE, which supports the internationalisation of Italian firms, is part of a project to modernise and expand the Sohar refinery. It will be allocated by the Oman company to fund provisions by Italian firms producing equipment for oil and gas industries as part of the Engineering, Procurement and Construction contract.

  • (Business Wire, Stockholm, 12 May 2014) Swedish Export Credit Corporation (SEK) and Bank of China have entered into a EUR 100 million Master Export Credit Facility Agreement for the financing of environmental projects and Swedish clean technology. The purpose of this agreement is to facilitate the development of new, sustainable Swedish-Chinese solutions to meet the challenges for climate change and environmental degradation while promoting sustainable economic growth, responsible business conduct and new employment both in China and in Sweden. SEK grants financing to Bank of China that provides loans to Chinese buyers with respect to their purchases under Swedish contracts. Environmental projects and Swedish clean technologies are defined according to EU´s Eco-innovation Action Plan (2011).