Welcome to ECA Watch

Export credit agences provide government-backed loans, guarantees and insurance to corporations working internationally in some of the most volatile, controversial and damaging industries on the planet.

Shrouded in mystery, ECAs provide financial backing for risky projects that might never otherwise get off the ground. They are a major source of national debt in developing countries.

ECA Watch is a network of NGOs from around the world. We come together to campaign for ECA reform - better transparency, accountability, and respect for environmental standards and human rights.

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What's New January 2014

What's New! is a periodic update to keep you informed of the latest on the ECA Watch website. What's New features a wide range of materials related to the reform of Export Credit Agencies (ECAs), including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

If you would like to receive What's New! you can subscribe at www.eca-watch.org  Questions? Email info@eca-watch.org

  • OECD Agreement on Export Credits for Rail Infrastructure enters into force
  • Controversial Danish railway purchase guaranteed by SACE
  • Italy's SACE willing to cooperate with Belarusbank
  • Czech export bank and insurer targeted in police swoop
  • India's SBI & the Export-Import Bank of Korea sign agreement for Line of Credit
  • Indian ECA reluctant to take up $6-bn export deal

OECD Agreement on Export Credits for Rail Infrastructure enters into force

The EU and several other OECD members have agreed to allow their export credit agencies to underwrite longer repayment terms for loans financing infrastructure. The deal, entered into force on 1 January 2014, will cover the export of trains, tracks, rail IT and related material and will be a boost for railway industries.

The EU is home to some of the world's leading manufacturers of rolling stock, such as Alstom, Bombardier, Siemens, Talgo, Skoda and AnsaldoBreda. Europe is one of the world's largest markets for rail products.

For further details see:
http://www.oecd.org/tad/xcred/rsu.htm and Railway Gazette, 13 January 2014

http://trade.ec.europa.eu/eutn/psendmessage.htm?tranid=9009


Controversial Danish railway purchase guaranteed by SACE

Italy's "Ansaldobreda was awarded a contract in 2004 by Danish railways for 83 intercity trains worth a total of EUR 488 million, including an option for a further 67 trains. To guarantee this contract, SACE issued bonds for EUR 50 million. Ansaldobreda, a Finmeccanica company, is a world leader in the transport/mechanical sector and produces the new intercity trains in association with Pininfarina."  From page 39 of the SACE 2005 Annual Report  Following lengthy delays in delivery, including a report that AnsaldoBreda and then Italian prime minister Silvio Berlusconi gave Libyan dictator Muammar Gaddafi one missing trainset as a present on the occasion of the 40th anniversary of Gaddafi's revolution in 2009, Danish State Railways has taken over completion of the trains itself. Ansaldobreda has also been involved in the controversial cancelled sale of high speed trains to Dutch and Belgian rail operators. It is not known if SACE was involved in that sale.

http://tinyurl.com/lp37ajn


Italy’s SACE willing to cooperate with Belarusbank

(BelTA, Minsk, 11 January 2014) – The Italian financial community is interested in cooperation with Belarusbank following the visit of a Belarusbank delegation to Italy's state-run export credit agency SACE. The visit was arranged with the assistance of Italian bank Intesa Sanpaolo. During talks with the Italian bank and the export credit agency the parties discussed a possibility to provide financial and insurance coverage for joint projects and a number of technicalities. “The representatives of SACE said they are ready to continue cooperation with Belarusbank within the framework of the existing projects. They also said they would provide insurance coverage on individual projects,” the press service informed. SACE is controlled by the Italian Ministry of Economy and Finance and facilitates and promotes trade relations of Italian companies with their partners worldwide through credit insurance, investment protection, the provision of sureties and financial guarantees. Belarusbank is Belarus’ biggest multi-business financial institution that offers over 100 banking products and services to individual and corporate clients. The Republic of Belarus holds nearly 98% of the authorized capital of the bank.

http://news.belta.by/en/news/econom?id=737289


Czech export bank and insurer targeted in police swoop

(Czech Radio, Prague, 15 January 2014) Two state controlled Czech export credit and insurance institutions are at the centre of plans to boost the country’s export growth. But an expected strengthening of their role would appear to depend on dealing with problems from the recent past. Czech police swooped on the Prague headquarters of both institutions in dawn raids on January 15. State insurance company EGAP’s spokeswoman said police were primarily interested in contracts concerning around 10 export projects, which likely included the already well publicized problems concerning insurance for a Czech exporter to build glass works in Russia and Ukraine. The daily Lidové Noviny reported that one of the cases under investigation is the crashed deal to sell three Boeing 737 aircraft owned by Czech Airlines to Armenian airline Armavia.The incoming coalition government made up of Social Democrats, ANO, and the Christian Democrats has pledged to expand the role of ČEB and EGAP and use them to the utmost to help direct Czech exports away from the slumbering economies of the European Union to the high growth likes of Brazil, Russia, India, China, and South Africa.

http://www.radio.cz/en/section/business/czech-export-bank-and-insurer-targeted-i...


India’s SBI and the Export-Import Bank of Korea sign agreement for Line of Credit

India's largest lender State Bank of India (SBI) and the Export-Import Bank of Korea (Korea Eximbank) today signed a loan agreement under which SBI would access a $200 million revolving line of credit from Korea Eximbank. A press release from SBI said it would utilise the line of credit, or interbank export loan, to finance the foreign currency requirements of Indian companies importing goods and services from South Korea.

http://netindian.in/news/2014/01/16/00027591/sbi-export-import-bank-korea-sign-a...


Indian ECA reluctant to take up $6-bn export deal

(Indian Express, 27 January, Mumbai) At a time when India is leaving no stones unturned to boost exports and bring down current account deficit, Essar Steel is unable to execute a $6 billion steel products export deal as the domestic general insurers are reluctant to provide cover to the deal. Such a cover is necessary for the deal to ensure that if overseas buyers fail to pay the export proceeds, the banks which will be funding the deal can recover the amount from insurance companies. Without such a cover, banks and financial institutions will be  hesitant to take up financing big export deals. According to industry sources, Essar had approached state-owned Export Credit Guarantee Corporation (ECGC) which has a  monopoly in providing such covers but the latter responded with reluctance. “We were not comfortable with the idea taking up such a big export deal. If we take such a huge cover, it will exceed our exposure norms,” said a senior ECGC official.

http://indianexpress.com/article/business/companies/insurers-reluctant-to-take-u...


What's New December 2013

What's New! is a periodic update to keep you informed of the latest on the ECA Watch website. What's New features a wide range of materials related to the reform of Export Credit Agencies (ECAs), including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

If you would like to receive What's New! you can subscribe at www.eca-watch.org  Questions? Email info@eca-watch.org

  • German human rights organizations sue Ministry of Economics over ECA transparency
  • Boeing sees export credits waning as aircraft funding source
  • US Export-Import Bank Board Adopts Revised Environmental Guidelines to Reduce Greenhouse Gas Emissions
  • Why US Export-Import Bank Backs Australian Billionaire Heiress Gina Rinehart
  • Aman Union Launches Export Credit Database
  • Russia's VTB Bank boosts trade and export finance business
  • Novel structure for Chinese export credit bond

German human rights organizations sue Ministry of Economics over ECA transparency

Three organizations want to enforce access to information regarding documents on export credit guarantees - Human rights assessments not disclosed
 
BERLIN, 9 December 2013 – Human rights organizations, Amnesty International Germany, urgewaldand and CounterCurrent have filed a suit against the federal government for the first time.The government had rejected a freedom of information request from the organizations to disclose information on human rights protection in the allocation of export credit guarantees. "The relevant Economics Ministry claims that it takes sufficiently into account the human rights situation on the ground when allocating guarantees. At the same time they refuse to publish the relevant information. "That doesn’t create confidence", says Verena Haan, responsible for business and human rights with Amnesty Germany.
             
Through the lawsuit at the Administrative Court of Berlin, the three organizations seek to understand how the Federal Government assesses the human rights impacts of the projects they support. In July 2012, they had requested access to the due diligence reports for a number of projects. They asked, for example, about mining and dam projects and power plants in countries such as Kazakhstan, Mauritania, Tajikistan, Azerbaijan and Turkey, as well as for projects in Belarus. "In these countries and sectors human rights violations are likely or even regular. Forced resettlement and environmental destruction take place, labour rights or freedom of expression are ignored. We therefore want to know exactly how the companies and the federal government fulfil their human rights duty of care. However, the federal government treats this information like a state secret" criticizes Regine Richter of urgewald.
 
The basis of the lawsuit are the Freedom of Information Act and the Environmental Information Act, which are supposed to grant free and unfettered access to information held by administrations. In its rejection of the application the Ministry of Economy cited as reasons the protection of intra-governmental consultations, confidentially collected information, international relations and business confidentiality. "We have made ​​clear that our request is limited to the environmental and social part of the due diligence reports and that we are not interested in further sensitive data. The fact that our request is completely rejected, is unacceptable and contradicts the law. Therefore we are now going to court" explained Heike Drillisch of CounterCurrent.
 
In 2012 the federal government supported exports and investments of German companies to developing and emerging countries through guarantees worth nearly 30 billion Euro. The Ministry of Economics decides upon guarantees together with the Ministry of Finance, the Ministry for Economic Development and Cooperation and the Foreign Office. The UN Guiding Principles on Business and Human Rights of 2011 stress export promotion as an area in which highest human rights duty of care should prevail.
 
http://www.eca-watch.org/node/3538


Boeing sees export credits waning as aircraft funding source

(Reuters, 10 December 2013, Seattle) - More commercial jet buyers will tap rapidly-expanding capital markets to finance $112 billion of jet sales in 2014 as state-backed export credits become pricier and more politically sensitive, Boeing Co (BA.N) said on Tuesday. Money from government-backed export credit agencies (ECA), once used to pay for the bulk of jet deals, will make up 18 percent of plane financing next year, down from 23 percent in 2013, the U.S. aircraft maker said in an annual forecast.

http://www.reuters.com/article/2013/12/10/us-boeing-finance-idUSBRE9B90ML2013121...


US Export-Import Bank Board Adopts Revised Environmental Guidelines to Reduce Greenhouse Gas Emissions

(PR Newswire, 12 December 2013, Washington) The board of directors of the Export-Import Bank of the United States (Ex-Im Bank) has adopted revisions to its environmental procedures and guidelines governing high-carbon intensity projects, claiming this aligns the Bank with President Obama's goal of reducing carbon pollution, while maintaining the Bank's focus on continuing to help create and support American export-related jobs.

http://www.digitaljournal.com/pr/1638059


Why US Export-Import Bank Backs Australian Billionaire Heiress Gina Rinehart

(International Business Times, 20 December 2013, Washington) Heavy equipment maker Caterpillar Inc., General Electric and Atlas Copco AB, a Swedish industrial holding company, are the latest beneficiaries of credit financing from the U.S. Export-Import Bank. The federal government’s export-promoting agency said Thursday it would extend $694.4 million in loans (backed by the full faith and credit of the U.S. taxpayer should the lending go sour) to Australia’s Roy Hill Holdings. The mining giant controlled by Australian heiress Gina Rinehart is trying to shore up $6.2 billion in capital before the end of the year to fund a massive $8.9 billion iron ore project in Pilbara, a mineral-rich region in the arid western part of the country. The announcement came two days after the Korea Export-Import Bank committed $1 billion to one of the world’s largest financing deals to fund a private project.

http://www.ibtimes.com/why-us-export-import-bank-backs-australian-billionaire-he...


Aman Union Launches Export Credit Database

(Zawya, 10 December 2013, Qatar) During the 4th Annual Meeting of the Aman Union Dr. Abdel Rahman El-Tayeb Taha, the Secretary General of the Aman Union, who is also the Chief Executive Officer of the Islamic Corporation for the insurance of Investment and Export Credit Insurance (ICIEC), and Mr. Abdulaziz Bin Nasser Al-Khalifa, Chief Executive Officer of Qatar Development Bank launched the Aman Union Database... The Database is the first of its kind in the Arab and Islamic region, established for the benefit of national export credit insurance agencies in the region and will enable the Subscribers in the Database to share and purchase credit information reports, credit opinions on entities worldwide and to exchange their underwriting experience on buyers and banks.

http://www.zawya.com/story/AMAN_UNION_Launches_its_Database-ZAWYA20131211071304/


Russian VTB Bank boosts trade and export finance business

(4traders.com, 31 December 2013, Moscow) VTB Bank arranged deals worth more than US$ 4 billion in 2013 as part of a large-scale project to develop its trade and export finance business, thereby increasing the relevant portfolio by over 150%. The project was advanced by new financial solutions for corporate clients, consistent development of relations with foreign financial institutions, priority development of new products and optimisation of the trade and export finance business process... VTB Bank has been working efficiently to optimise and expand cooperation with several Export Credit Agencies, including the Export Insurance Agency of Russia (EXIAR).

http://www.4-traders.com/BANK-AVTB-OAO-6499155/news/Bank-VTB-OAO--VTB-boosts-tra...


Novel structure for Chinese export credit bond

(International Financing Review, 14 December 2013, London) Standard Chartered has come up with a novel way of transferring the risk of lending to unrated Chinese exporters and importers to the capital markets. The bank has brought two structured financings to the international markets in recent months backed by loans to Chinese entities. Each loan benefits from a Chinese export credit agency guarantee... The most logical candidates for these deals are exporters and importers, which would be eligible for guarantees from credit agencies, such as Sinosure and the Export-Import Bank of China.

http://www.ifre.com/novel-structure-for-china-bond/21124786.article


What's New November 2013

What's New! is a periodic update to keep you informed of the latest on the ECA Watch website. What's New features a wide range of materials related to the reform of Export Credit Agencies (ECAs), including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

If you would like to receive What's New! you can subscribe at www.eca-watch.org  Questions? Email info@eca-watch.org

  • Still exporting destruction: A civil society assessment of Export Credit Agencies’ compliance with EU Regulation (PE-CONS 46/11)
  • Hold the applause on UK no-coal finance announcement
  • Do Swedish ECAs support exports at the expense of human rights?
  • US Caterpillar jobs bouyed by Australian Roy Hill iron mine and US Ex-Im
  • Aircraft orders focus attention on export credit
  • Australian ECA EFIC annual report shows rising loans
  • Human rights Institutes concerned about OECD Common Approaches
  • Sri Lanka foreign export credits led by China
  • UK Export Finance and Korea

Still exporting destruction: A civil society assessment of Export Credit Agencies’ compliance with EU Regulation (PE-CONS 46/11)

November 14, 2013

ECA Watch has prepared this ‘shadow report’ — with the support of other civil society groups — in order to assess current ECA practice in relation to issues such as transparency, public accountability and more generally, their compliance with the EU’s objectives on external action. It is based on ECAs’ own annual public reports, questionnaires sent to Export Credit Agencies (ECA), and freedom of information requests. The report starts by giving some background information regarding ECAs and how they are regulated. It analyses ECAs’ answers to ECA Watch’s questionnaires, and highlights a couple of case studies to illustrate our concerns. It analyses the annualreports that Member States sent to the EC and highlights points that should be investigated further by the EC. It concludes by indicating options for the European Commission, Council and Parliament to improve the regulatory framework for EU ECAs.

http://www.fern.org/stillexportingdestruction


Hold the applause on UK no-coal finance announcement

(Guardian, 20 November 2013, Warsaw) British taxpayers' money will no longer be used to build coal-fired power stations in developing countries, the energy secretary Ed Davey pledged November 20th, as the fortnight-long United Nations climate talks in Poland entered their final phase. The UK has provided about $500m (£300m) for such projects in the past seven years, mostly through its funding for development banks, according to research by the US Natural Resources Defence Council. Ending that is meant to encourage countries to move to low-carbon energy. However critics have said 'hold the applause", noting that, contrary to Ed Davey's announcement, British taxpayer's money can still be used to fund coal power stations because the new policy explicitly excludes UK Export Finance, the main part of the UK government which backs loans to other countries. It is like pledging not to eat sugary food, but exempting chocolate.

http://www.theguardian.com/environment/2013/nov/20/uk-coal-fired-power-stations


Do Swedish ECAs support exports at the expense of human rights?

Through its export credit agencies (ECAs) EKN and SEK, the Swedish state insures and finances Swedish companies' export. These operations are extensive. The Swedish ECAs have in their portfolios the responsibility for hundreds of billions of Swedish kronor, and in 2012 alone EKN guaranteed transactions of a value of 49 billion SEK in 123 countries. In two previous reports, Amnesty International and Diakonia examined and followed up the extent to which EKN and SEK take account of human rights in their credit assessments. Although the follow-up report from 2012 showed that steps had been taken in the right direction such as greater transparency, new procedures and new policy documents, we can note in our third report that large gaps still exist.

Read the report here.

http://www.eca-watch.org/publications/newsletter-items/do-swedish-ecas-support-e...


US Caterpillar jobs bouyed by Australian Roy Hill iron mine and US Ex-Im

(Herald Review, 15 November 2013, Decatur) After a year as gloomy as the bottom of a mineshaft, Caterpillar Inc. woke up to a bright ray of sunshine Thursday. The U.S. Export-Import Bank wants to say “yes” to making a $694 million loan that will help support more than 3,000 jobs, including hundreds in Decatur. The Washington, D.C.-based bank is the official export credit agency of the nation and steps in to aid American businesses hunting big overseas orders. The $694 million in financing will enable the controversial Roy Hill iron ore mine in Australia to buy boatloads of Caterpillar mining equipment, especially the giant off-road trucks, the world’s biggest, built at its Decatur factory.

http://herald-review.com/news/local/import-export-loan-holds-out-hope-for-caterp...


Aircraft orders focus attention on export credit

(Wall Street Journal, 19 November 2013, Dubai) The $200 billion aircraft order bonanza at the Dubai Airshow has focused attention on the little-known system of government export credit agencies, which are used to help fund planes and other big-ticket equipment such as power generators. Proponents such as Boeing - a big winner at the show - maintain that ECAs are a crucial part of doing business, and competing with overseas rivals such as Airbus. Critics insist they distort industries, since not all airlines can access the support, while proponents of small government in the U.S. reckon they should be closed down.

http://stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-386413/


Australian ECA EFIC annual report shows rising loans

(Sydney Morning Herald, 25 November 2013, Sydney) Australia's export credit agency wrote more loans in the 2013 financial year than the year before, despite almost halving the total amount of taxpayers' funds it provided. The mining sector comprised almost half of its financial assistance, with EFIC's single biggest commitment being a $US150 million loan for the Ichthys LNG project in Darwin. EFIC was among eight export credit agencies and 24 commercial banks to participate in the $US20 billion financing of the project, the world's biggest. EFIC has been criticised in recent times for loaning to large corporations such as Exxon Mobil and Leighton Holdings, and it was urged by a Productivity Commission report in 2012 to ''substantially reorientate'' its focus towards small exporters, rather than big companies that can easily source money elsewhere at low interest rates.

http://www.smh.com.au/business/export-finance-and-insurance-corporation-annual-r...


Human rights Institutes concerned about OECD Common Approaches

In their submission to the OECD ECWG consultation with CSOs on 19 November 2013, the Danish, French and German national human rights Institutes identified the following main issues of concern regarding the consistency of actions of the OECD Working Party and national export credit agencies with the requirements of the UN Guiding Principles on Business and Human Rights3:

  • Integration of human rights: How is respect for human rights being effectively integrated as an evaluative criterion for ECA-sponsored activities at national level, in line with the state duty to protect human rights, as set out in Pillar I of the UN Guiding Principles on Business and Human Rights, and the corporate responsibility to respect, under Pillar II?
  • Improving transparency: Transparency is prerequisite to accountability of state and private sector duty bearers to human rights standards, but is currently lacking in relation to export-credit supported activities. What role will the Common Approaches, and the Working Party, play in resolving this?
  • Grievance mechanisms: What steps are the Working Party and national authorities taking to meet the requirement for effective mechanisms to provide a remedy for any complaints relating to ECA-sponsored activities, in line with the requirements of Pillar III of the UN Guiding Principles on Business and Human Rights?
http://tinyurl.com/nhdp4fj


Sri Lanka foreign export credits led by China

(Lanka Business Online, 28 November 2013, Colombo) Sri Lanka has US$1.9 billion of new bilateral and multilateral commitments up to September 2013 led by China with export credit from other countries also showing increases, a finance ministry report showed. China has committed US$517.9 million up to September, Japan US$421.5 million, Asian Development Bank US$371.2 million, the World Bank US$196.4 million, the United Kingdom US$103.7 millionand USA US$64.9 million. While Japan, the ADB and World Bank give long term loans at low interest China gives export credits at semi-commercial terms. Sri Lanka has been using large volumes of export credits and supplier finance for infrastructure from the Exim Bank of China, but other countries are now also giving larger volumes of export credits.

http://www.lankabusinessonline.com/news/sri-lanka-foreign-lenders-led-by-china,-...


UK Export Finance and Korea

UK Export Finance has signed Memoranda of Understanding (MOU) on reinsurance with the Korean export credit agency, Korea Trade Insurance Corporation and with Korea Eximbank on mutual support.
The agreement sets out how UK Export Finance (UKEF) and the Korea Trade Insurance Corporation (K-Sure) will cooperate in the field of export credits, facilitate collaboration, and better co-ordinate efforts on projects in other markets where there are export opportunities for both the UK and Korea. The signing was witnessed by Business Secretary, Vince Cable, and the Korean Minister of Trade, Industry and Energy, Yoon Sang-jick.

This MOU follows the signing yesterday of a separate MOU on Mutual Support between UK Export Finance and Korea Eximbank, the Export-Import Bank of Korea.




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