Dutch NCP rules that Dutch ECA is subject to OECD Guidelines for Multinational Enterprises

(ECA Watch, 30 November 2016, Ottawa) In a report dated November 30th 2016 the Dutch National Contact Point (NCP), official monitoring body of the OECD Guidelines for Multinational Enterprises in the Netherlands, found that the Dutch official ECA, Atradius State Business (ADSB), may not have exercised sufficient due diligence or fulfilled its duty to use its leverage over its client, the Dutch dredging company Van Oord Marine, to prevent or mitigate possible adverse impacts of its dredging activities in Brazil's Suape Industrial Port Complex, two projects insured with ADSB by Van Oord.

Following lengthy discussions mediated by the Dutch NCP between ADSB, Van Oord and Dutch ECA Watch member Both ENDS, together with Brazilian NGOs representing the affected communities and the Brazilian NCP, the report notes that "adverse impacts have occurred", but avoids taking an "opinion on the parties' respective degree of responsibility for this", believing that "the Brazilian NCP has the primary responsibility to ascertain the causality of the adverse impacts referred to in the complaint."

The Dutch NCP found that ADSB is an MNE under the OECD Guidelines and that ADSB "is 'directly linked' to the possible adverse impacts 'contributed to or caused by a business relationship' (Van Oord) under paragraph II.A.11, and therefore, has an
independent duty to use its leverage on such business relationships to prevent or mitigate adverse impacts resulting from the dredging activities." This is an important precedent, as national ECAs have traditionally claimed to exercise due diligence on the social and environmental impacts of the projects they support solely via the OECD Export Credit Working Group's Common Approaches, a set of non-binding recommendations which apply only to a limited set of OECD ECA supported projects and are monitored by a secretive ECA peer review body akin to foxes choosing which hen houses they might protect.

Both ENDS submission on the “Gaps between the Common Approaches and the OECD Guidelines” has been shared with the Dutch NCP, the OECD and other interested stakeholders. It should be noted that the OECD Guidelines are grounded in an OECD Council Decision that has a similar status to a treaty or a convention. A Council Decision is therefore firmly anchored in international law. Unlike the OECD Guidelines, the Common Approaches are incorporated in an OECD council recommendation, which is a political commitment only, and not anchored in international law. In addition, the Common Approaches only call for a one-time due diligence moment, while the OECD Guidelines clearly call for an ongoing process.

The OECD Guidelines oblige government established NCPs to contribute to the resolution of issues that arise from alleged non-observance of the Guidelines in specific instances and have built-in grievance mechanisms. In this case, the Dutch NCP has recommended that an evaluation of outcomes of the discussions and agreements of the parties be conducted in October 2017, ensuring that there is ongoing follow-up on the adverse impacts that have been alleged: lack of consultation with affected communities, the destruction of fisheries, endangerment of fishing crews, unannounced deep sea explosions, soil and water contamination, lack of mitigating and compensatory measures and remuneration for lost livelihoods and lands, etc.