Index for December 2014

Volume , Issue

  • ECA Watch releases report 'ECAs and Human Rights: Failure to Protect'

    GENEVA - December 3, 2014.

    International civil society network ECA Watch released a new report today titled Export Credit and Human Rights: Failure to Protect at the UN Forum on Business and Human Rights. The report calls on states to fulfill their duty to protect human rights through the operations of their export credit agencies.                   

    ECA Watch and Brazilian network Justiça nos Trilhos shared analysis regarding export credit agencies (ECAs) - public entities that provide multinational companies with financing, insurance and guarantees - on a panel today at the annual UN event.

    Failure to Protectuses 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 massive Carajás iron project in the Brazilian Amazon has harmed local indigenous and Afro-descendant populations, in contravention of local laws,” said Danilo Chammas of Justiça nos Trilhos. “Yet the company that operates the project, Brazilian mining giant Vale S.A., received financing from Export Development Canada, the Canadian export credit agency.”

    “The German government provided a guarantee for the Hidrosogamoso dam, which is under construction in Colombia, through its export credit agency, Euler Hermes. The project has devastated the local economy. Since 2009, six community leaders who oppose the project have been killed or disappeared,” said Heike Drillisch from CounterCurrent.

    The ECA Watch publication also includes case studies on the Sasan power project in India, which received financing from the US Export-Import Bank; the Suape seaport in Brazil, which was insured by the Dutch ECA, Atradius; and ECA support for investments in Belarus.

    Failure to Protect shows that states must do more to prevent complicity in human rights abuse,” said Karyn Keenan from the Halifax Initiative. “ECAs must be required to undertake effective and transparent human rights due diligence.”

    Export Credit and Human Rights: Failure to Protect

  • (The Finacial Express, Dhaka, 29 November 2014) Nearly 40 per cent of the Tk 25.19 billion (US$323.4 M) sought for a proposed power sector project are set to be spent for less-important matters, including purchase of vehicles and foreign training, officials said Wednesday. Such huge spending of the project money on ancillary things has given rise to questions about proper cost estimation and economic viability of the project, they said... Power Division officials said the PDB signed deal with Swiss company Alstom and Chinese company CMC on January 12 this year for the re-powering of the Ghorashal 3rd power unit... The PDB has also selected the Swiss Export Credit Agency (SERV) and the China Export and Credit Insurance Corporation (SINOSURE) for borrowing Tk 20.19 billion ($259.75 million) buyer's credits.

Volume 13, Issue 12

  • (24/7 Wall Street, London, 9 December 2014) Boeing on Tuesday morning released its 2015 aircraft finance market outlook. The headline number is $124 billion and the forecast amount for 1300 new commercial deliveries in 2015, up from $115 billion in 2014. The company’s Boeing Capital Corporation also forecasts deliveries totaling $156 billion in 2019. How all these airplanes will be paid for is the subject of Tuesday’s release. Boeing expects bank debt and capital markets to fund about 60% of all 2015 deliveries, with cash accounting for another 23% of funding and export credit to cover another 15%... An issue for the U.S. plane maker is that the U.S. Export-Impact Bank has ceased new dealings with Russia, Mr. Myer said. European export credit agencies are still open to backing Airbus Group NV deliveries to Russia... Another concern for the Chicago-based plane maker is continued uncertainty over the fate of ExIm in the U.S.

  • (Bloomberg, Moscow, 23 December 2014) Total SA (FP) and its partners will use a record 16 ice-breaking tankers to smash through floes en route to and from the Arctic’s biggest liquefied natural-gas development. They’re still looking for a way around a freeze in U.S. financing... The U.S. Export-Import Bank this year halted a study into funding the plans to ship gas from Yamal, or End of Earth in the native Nenets tongue, to buyers around the world as President Barack Obama’s administration imposed sanctions on Russia. The action by the bank, which offers credit assistance to companies buying the nation’s goods and services, effectively blocked the project from borrowing in the U.S. currency... European governments, reliant on gas from Russia, have had to tread a fine line in their relations with the country since its annexation of Ukrainian Crimea led to sanctions. The U.S. and Europe have mostly targeted the Russian oil industry and individuals with ties to President Vladimir Putin rather than impose measures that could strangle the nation’s gas exports... One option for Paris-based Total is to look for help from home. Coface SA (COFA) is France’s answer to the U.S. Exim bank.

  • (Both Ends, Amsterdam, 24 December 2014)
    by: Wiert Wiertsema, Both ENDS

    The Brazilian oil company Petrobras is currently involved in a corruption scandal that affects all companies it has been working with. The Dutch enterprise SBM Offshore paid bribes to Petrobras, and recently settled this matter with the Dutch Public Prosecution for US$240 million. But SBM Offshore is still under further investigation in Brazil and, for now, cannot do business there. In addition, the US Justice Department has started to fully investigate all Dutch companies that have done business with Petrobras. Companies such as Boskalis, Van Oord, IHC Merwede and Fugro - showpieces of the internationally renowned Dutch water and shipbuilding sectors – are at risk of getting large penalties or being excluded from new procurements abroad.

  • (The Economist, Castel del Piano, 2 January 2015) The smaller, often family-owned manufacturers that are the backbone of the Italian economy have been hit especially hard: between 2008 and the first half of 2014, a fifth of them went bankrupt or into administration, or were voluntarily wound up. One of the main reasons so many have gone to the wall is that they are too focused on the home market. Italian businesses of all sizes are much less likely to have export customers than German or Spanish ones, according to a recent study by SACE, Italy’s official export-credit agency. Italian cuisine is popular all over the world, but Italy’s countless small food producers get only a morsel of this huge global market: exports account for a smaller share of the Italian food industry’s output than in either France or Germany... Businesses are looking abroad for customers, and for saviours. Italy does not have a globalised food retailer on the same scale as other European countries and its domestic market is fragmented: even those chains with national coverage often stock different products in different regions, chosen by different local purchasing managers... Deep discounters like Aldi and Lidl, which offer only a restricted range of products, most of them under their own labels, have been taking market share from conventional grocers which sell a broader range, including many products bearing their manufacturers’ brands... Over four-fifths of Italian food manufacturers are family-run and with annual revenues of less than €10m. With their home market still struggling, a rich foreign backer may be just what they need.

  • (Creditman, London, 19 December 2014) UK Export Finance (UKEF), the UK’s export credit agency, has appointed David Ludlow as its new Head of international business development... Of his new challenge, Ludlow said: “I have seen how export credit agencies can play a key role in effectively opening up new markets for exporters. I’m looking forward to ensuring that more companies are aware of the financial support available from UKEF to exporters, and helping those businesses make a major contribution in the global marketplace.”

  • (Business Wire, Stockholm, 5 December 2014) The Swedish Export Credit Corporation's (SEK) wholly owned subsidiary AB SEK Securities has been merged (by absorption of a wholly owned subsidiary) into SEK. The merger results in SEK taking on the assets and debts of AB SEK Securities. AB SEK Securities has been licensed by the Swedish Financial Supervisory Authority since 2002 to conduct securities trading. Its operations are being transferred to the parent company now that SEK is licensed to conduct this type of business.

  • (PRNewswire-USNewswire, Washington, 11 December 2014) The Export-Import Bank of the United States will guarantee a $50 million loan to finance the export of 55 American made bridge sets to Cameroon and support 200 U.S. jobs. The loan, extended by Société Générale to Cameroon's Ministry of Public Works, facilitates the export of modular steel bridges manufactured by the Acrow Corporation of America, a small business based in Parsippany, N.J.