Index for January 2022

Volume 21, Issue 1

  • (Global Trade Review, London 19 January 2022) A planned European Union law requiring large and businesses and financial institutions to conduct human rights and environmental due diligence should also apply to export credit agencies (ECAs), activists say. The initiative has strong support from the European Parliament but the Commission’s draft text has been held up twice by a regulatory oversight board that scrutinises proposed laws, according to MEPs. In December last year, four MEPs blamed the delays on lobbying by business groups in France and Denmark, and requested access to the board’s opinions on the draft proposals, which are not usually published until proposals are formally adopted. ECA Watch, a network of global non-government organisations who argue for ECA reform and transparency, sent a letter to the Commission in November urging ECAs to be in scope of the proposed law, noting" “Active obligations from ECAs [under the law] will effectively encourage a significant number of companies to fulfil their due diligence obligations and ensure that also ECAs themselves effectively comply with the human rights and environmental obligations of the member states on whose behalf they operate... Past experience shows that export credit guarantees are repeatedly granted for projects with serious adverse human rights and environmental consequences.” One of the letter’s authors, Heike Drillisch from German human rights and environment initiative CounterCurrent, says that while ECAs judge projects against standards such as the UN Guiding Principles on Business and Human Rights, they may not take an interest in the companies involved and whether they are respecting human rights. “We say that as state money is involved in export credit schemes, there should really be a heightened due diligence process in place and ECAs should be aware of not becoming complicit in human rights violations which occur in the project,” Drillisch tells GTR. Lawmakers want to capture non-EU firms too. A non-binding European Parliament resolution on the proposed law, adopted by 504 votes to 79, called on EU governments not to allow access to ECA support for companies that do not comply with the “objective” of the law. Asked how likely it is that public finance and insurance bodies such as ECAs will be in scope of the legislation, Linklaters associate James Marlow says to the extent that such organisations “are public bodies and extensions of member state governments, it is less likely that they will be directly captured by any regime… on mandatory due diligence”. However, Marlow tells GTR, to avoid reputational damage “it is possible that such bodies would be impacted indirectly as they or their government may look to align their policies and processes with stakeholder expectations and obligations” that apply to their counterparts in the private sector.

  • (Fossil Free ECAs, Amsterdam, 30 January 2022) We can’t solve the climate crisis if export credit agencies (ECAs) continue to bankroll fossil fuels. This campaign is designed to inform the public and tell the governments behind these agencies to immediately end all export credit and other public financial support for oil, gas and coal. In recent years, banks and other private lenders have been backing out of fossil fuel projects as they recognise the huge financial risks posed by climate change. Governments with an interest in seeing these projects succeed are turning to ECAs to bankroll and encourage further investment in the projects. Fossil fuel support from ECAs disproportionately benefits corporations based in the Global North and impedes a just energy transition in the Global South.

  • (Toronto Star, Ottawa, 17 January 2022) By Karen Hamilton, director of ECA Watch member Above Ground, a project of MakeWay Charitable Society that works to ensure companies based in Canada or supported by the Canadian state respect human rights and the environment wherever they operate. Fossil fuel subsidies will likely figure prominently in climate policy debates when Parliament resumes sitting later this month, with particular focus on how Ottawa will fulfil its recent pledge to end fossil fuel subsidies by 2023, two years earlier than originally promised. Equally deserving of public attention is the government’s commitment to phase out public financing of fossil fuels. This support, which the government does not consider a subsidy, has led to Canada being singled out on the world stage as one of the biggest boosters of fossil fuels. At last count, this support totalled $13.6 billion a year on average. Most of Canada’s fossil finance comes from Export Development Canada (EDC), which provides loans, insurance and other forms of support to companies in Canada and abroad. EDC has recently issued billions in loans for controversial projects such as the Trans Mountain and Coastal GasLink pipelines.

  • (RunningAfrica, location unknown, 21 January 2022) The UK Government reportedly hosted the second Africa Investment Conference on January 20th, 2022 to boost the nation’s economic cooperation with African countries and also enhance its role as the continent’s chosen investment partner for climate-friendly, green ventures. Anne-Marie Trevelyan, Secretary of State for International Trade, UK, had hosted the one-day virtual event, which focused on unlocking millions of pounds of new investments, particularly for clean energy sectors in the UK as well as across Africa. UK’s export credit agency, UK Export Finance, has significantly increased support for the African market over the last year, going from £600 million ($815 million) in 2018-19 to over £2.3 billion ($3.1 billion) in 2020-21. The Independent of London notes: "The UK is playing host to an African Investment Conference on Thursday, as it scrambles to retain influence on the continent, an investment battle ground for the world’s largest economies."

  • (Jersey Evening Post, St Helier, 12 January 2022) The UK and Italy have started discussions on a new export and investment partnership aimed at boosting trade between the two countries, the International Trade Secretary announced. Italy is the world’s eighth-largest economy and trade between Rome and London was worth £38 billion last year. Italy is the UK's ninth-largest trading partner, while the UK is Italy’s fifth-largest export market. London and Rome will also try to boost collaboration and sharing of best practice between the two countries’ export credit organisations – UK Export Finance and the Italian Export Credit Agency [SACE] – helping SMEs and companies looking to grow. At the meeting of G20 trade ministers on Tuesday, the International Trade Secretary made the case that British businesses that “play by the rules” should not be “damaged and undercut by market-distorting practices from other countries”. The announcement comes after Ms Trevelyan, UK International Trade Secretary called for greater transparency at the World Trade Organisation and reform of its rules around state subsidies.

  • (Asharq Al-Awsat, London, 27 January 2022) The Arab Investment and Export Credit Guarantee Corporation (Dhaman) said it is ready to boost trade and investment cooperation between Arab states and Russia through its diverse insurance, information and research services. This came in a worksheet presented by Head of Research and Publishing Unit Ahmed Eldabaa on behalf of Dhaman’s Director-General Abdullah Ahmad al-Sabeeh in the opening session of the Russian-Arab Business Council, which kicked off on Tuesday at the Dubai EXPO Exhibition Center. The sheet revealed that the value of Russian-Arab trade ties stood at $14.7 billion, according to UNCTAD data, during the period between 2011 and 2020. This represents 2.1% of Russia’s foreign trade volume and 0.8% of the Arab countries' foreign trade volume in the Mediterranean.

  • (Market Screener, 14 January 2022) The Swedish Export Credit Corporation, SEK, establishes a new role in the executive management to accelerate work on sustainability, and has recruited Maria Simonson as Head of Sustainability. Maria has joined SEK from Danske Bank where she was Head of Group Sustainability. The Swedish Export Credit Corporation (SEK) is a state-owned company that finances Swedish exporters, their suppliers, and international buyers of Swedish products and services. SEK states that "Sustainability is central to SEK's operations, and therefore it is a natural step to finance the industry's transition to a fossil-free society; a development that also creates new export opportunities."

  • (National News, Abu Dhabi, 17 January 2022) Etihad Credit Insurance has signed an agreement with the Korea Trade Insurance Corporation, better known as K-Sure, to boost investment in the development of sustainable green energy. The partnership will focus on hydrogen projects and seek to boost trade relations between the UAE and South Korea.

  • (Digital Journal, New Jersey, 17 January 2022) A new intelligence report released by HTF MI with the title “Credit Insurance Market Survey & Outlook” is designed covering micro level of analysis by Insurers and key business segments, offerings and sales channels. Some of the key players profiled in the study are Euler Hermes, Sinosure, Atradius, Coface, Zurich, Credendo Group, QBE Insurance & Cesce. The global Credit Insurance market was valued at US$12,610 million in 2021 and is projected to reach US$14,500 million by 2028. This study mainly helps understand which market segments or Country; Insurance carriers, Aggregators should focus in years to come to channelize their efforts and investments in Credit Insurance to maximize growth and profitability. [The cost of this report is not advertised and my efforts to access an advertised summary were blocked.]

  • (Global Times, Beijing, 12 January 2022) China's cabinet, on Tuesday called for efforts to ensure domestic supplies of commodities, as part of guidelines to stabilize exports and imports as a countercyclical buffer against uncertainty clouding the trade landscape. Presently, the country's exports and imports are facing increased uncertainty, instability and imbalance, and the fundamentals of its trade operations remain unsound, the State Council said in an announcement on Tuesday while releasing a slew of countercyclical measures to prop up micro, small and medium-sized trade businesses. Among the measures that are intended to secure orders, stabilize expectations and foster stable trade are efforts to coordinate and ensure stable commodity imports, revise and improve the list of retail imports via cross-border e-commerce, and broaden the import categories to better meet diversified consumption needs. On top of that, the guidelines proposed an acceleration of export tax rebates and the improvement of export credit insurance services to better protect smaller trade firms against the cancellation of orders before shipments.

  • (Bharat Express News, Punjab, 11 January 2022) MV Werften, the German cruise ship builder controlled by Malaysian billionaire Lim Kok Thay’s Genting Hong Kong, has filed for bankruptcy after failing to strike a deal with the German government to support additional funding for a mega cruise ship that the company built for Genting Hong Kong. As the travel industry grapples with the lingering impact of the Covid-19 pandemic, Genting Hong Kong requested additional funding to complete construction of the 342-meter-long cruise ship, dubbed the Global Dream, which could accommodate up to 9,500 passengers. While agreements were reached with creditors in June 2021, Euler Hermes, the German government’s export credit insurance agency, refused to confirm insurance coverage for the finance facility, preventing creditors to disburse the loan in December, the operator of Star Cruises said in a regulatory statement. deposit Monday. “The company understands that Euler Hermes’ rejection is based on a review of the group’s five-year outlook prepared at the request of Euler Hermes, which took into account various stress scenarios affecting the group, in particular a persistent and sustained reduction in activities as a result of Covid-19, ”said Genting Hong Kong.

  • (OECD, Paris, 28 January 2022) The health, economic and social crisis triggered by the pandemic created new opportunities for integrity violations and corruption to thrive, prioritising integrity in governance like never before. How can we renew governance, business, development aid, anti-corruption efforts and taxation with integrity, and establish a renewed sense of social purpose? Anti-corruption NGO Our World in Data notes that: "Many firms from high-income countries engage in bribery across the world. Their official records show that US firms have paid bribes in 80 countries since 1977 - including in many OECD countries. See also Transparency International's Corruption Perception Index.

  • (Renewables Now, Fresno, 18 January 2022) Renewable energy producer EDP Renewables (ELI:EDPR) said today it has sealed a deal to obtain debt funding for a 149.4-MW portfolio of wind projects in Poland. The project financing was arranged by the European Investment Bank (EIB), Spain’s Banco Santander and Caixabank SA. Denmark’s EKF acted as export credit agency (ECA) coverage provider. The obtained funds will be directed towards the development, construction and operation of six wind parks in southeastern, northwestern and northern parts of Poland.

  • (Epoch Times, New York, 10 January 2022) Commentary: Thomas McArdle - While it’s bad enough that President Joe Biden has nominated in Reta Jo Lewis a longtime, committed appeaser of the oppressive, genocidal, and expansionist People’s Republic of China to chair the Export-Import Bank of the United States, it’s probably worse that prominent U.S. business entities continue to gulp the Kool-Aid about the long widely-accepted but now thoroughly discredited notion that capitalism is wooing China into democratic reform and lawfulness. EXIM’s China Program, mandated by Congress, was intended to make EXIM’s private loan guarantees and other products for U.S. exporters “fully competitive with rates, terms, and other conditions established by the People’s Republic of China” for its export business interests, utilizing 20 percent of EXIM’s total financing authority–some $27 billion out of $135 billion–and to advance competition with China in “innovation, employment, and technological standards” focused on 10 industries ranging from 5G to fintech to renewable energy to biotechnology. [The Epoch Times was started in 2000 as a Chinese language newspaper associated with the Fulan Gong, a Chinese religious order that opposes communism and is banned from practicing in China.]

Volume 20, Issue 12

  • (ECA Watch, Amsterdam, 25 November 2021) The European Commission is working on a proposal for a directive on corporate social governance, which will include a regulation of the human rights and environmental due diligence (HREDD) obligations of corporations. We urge the proposed new regulation to become legally binding on the due diligence obligations of ECAs of member states, to make ECAs liable for its implementation and to implement export credit insurance as an enforcement mechanism for the legislation., This directive should oblige ECAs to monitor and follow HREDD policies and would ban companies, that have violated their duties under the directive, from ECA support.

  • (Reuters, Moscow, 8 December 2021)  Russia's Amur Gas Chemical Complex (Amur GCC) has secured $9.1 billion in loans maturing in 2035, Sibur, which co-owns the plant with China's Sinopec, said in a statement on Wednesday. International banks will provide $2.6 billion for the Amur GCC with coverage from export credit agencies SACE of Italy and Germany's Euler Hermes, Sibur said, while Chinese and Russian banks will issue the remaining $6.5 billion.

  • (Market Screener, Annecy, 2 December 2021) General Electric announced that the Dogger Bank Wind Farm, between 130km and 190km off the north-east coast of England in the North Sea, reached financial close on debt financing for phase C, the third 1.2 GW phase. Upon completion, Dogger Bank is expected to be the world's largest offshore wind farm with the total number of Haliade-X units to be installed at Dogger Bank reaching 277.  GE Energy Financial Services ("GE EFS") partnered with the co-sponsors to support insurance cover from Bpifrance, which insured a portion of the ECA debt financing. Separate debt facilities structured by the co-sponsors are supported by EKN, the Swedish export credit agency and Export Finance Norway (Eksfin), the Norwegian export credit agency. Dogger Bank C will connect to the grid at Lackenby England.