Credit insurer Atradius concludes cooperation agreement with Petrobras

Credit insurer Atradius concluded a cooperation agreement with Petrobras on November 23 in Rio de Janeiro . The Brazilian oil company gets a credit insurance of US $1 billion for purchases in the Netherlands."That allows Dutch companies a lead over competition from other countries. We provide exporters the opportunity to bring along the financing for the sale of products to Petrobras”, according to general director Johan Schrijver after signing [the agreement].The last couple of days there has been intense negotiation about the agreement between Atradius Dutch State Business - the credit insurer of the government - and Petrobras. ,,We wanted to sign that one at the closure of the economic mission and the Prince's visit to Brazil. That added healthy pressure to the talks”, said Schrijver.Petrobras, the largest company of Brazil, now can come to the Netherlands with a substantial shopping list and is ensured beforehand of favourable financial conditions. "This may concern ships, investments in ports, high-tech, you name it”, according to a very pleased Schrijver.Prince Willem-Alexander and Princess Máxima were present at the signing, as was Foreign Trade and Development Cooperation Minister Lilianne Ploumen. Atradius Dutch State Business insures credits offered by Dutch exporters of capital goods and services to buyers abroad on behalf of the Dutch State. Petrobras has the fourth largest oil and gas reserves in the world.(translation by Both ENDS)This news raises various questions on how such a deal fits other international rules and regulations:
  1. The "lead" provided to Dutch exporters to Petrobras over their competitors in other countries makes one wonder how this would fit the WTO commitments for free trade.
  2. It also raises questions about the status of the OECD Arrangement on Officially Supported Export Credits. While this 'gentleman's agreement' aims for a level playing field between the various signatories to the Arrangement, this bilateral agreement of one of the signatories seems to undercut this aim. It also sheds a whole new light on official efforts from the OECD-ECG for outreach to non-OECD ECAs - in particular from countries like Brazil - to urge them to join the framework of the Arrangement.
  3. In addition it raises questions how this would fit the EU regulation on ECAs of EU Member States. This bilateral agreement between Atradius DSB and Petrobras clearly does not help in creating a level playing field for exporting companies from countries within the EU.
  4. It also leaves one wondering how this kind of blank cheque for suppliers to a major fossil fuel producer fits the CSR policies that Atradius DSB officially commits itself to.