ECA-Watch finds EU ECA compliance reviews insufficient

(ECA-Watch, Amsterdam, 29 June 2020) As part of continued advocacy with the European institutions on Export Credit Agencies (ECAs), European groups are working to enhance the reporting requirements of the EU ECAs under EU Regulation No 1233/2011.

The Regulation requires that the European Commission produce an annual evaluation "regarding the compliance of ECAs with Union objectives and obligations", specifically the "external action" obligations set out in Articles 3 and 21 of the Treaty of the European Union (TEU). These promote, inter alia, the consolidation of democracy, respect for human rights, policy coherence for development and action against climate change

The Commission argues that it is difficult to define a precise benchmark for measuring ‘compliance’ in EU law”. Nonetheless, it has deemed member states compliant on the basis that their ECAs screen projects against the standards laid down in the OECD’s Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (The “Common Approaches”).

This Memorandum argues that the proper benchmark should be the body of EU laws, directive and obligations that enforce the objectives set out in Article 3 and 21 of the TEU.

To date, the Commission has not undertaken any review to identify gaps between the Common Approaches and European legislation of environment and human rights. Yet, without such a gap analysis, claims that compliance with the Common Approaches is an appropriate benchmark for evaluating the compliance of ECAs with EU objectives and obligations lack credibility and constitute maladministration.

To assist the Commission, we have therefore conducted a preliminary gap analysis, comparing the scope of The Common Approaches against the scope of European legislation; and the requirements of the IFC’s Performance Standards (one of the Common Approaches’ recommended international benchmarks) against three key instruments of the European Acquis relating to environmental impact assessment, human rights and climate.

The Memorandum concludes that compliance with the Common Approaches is a wholly insufficient benchmark for evaluating compliance with the EU's External Action obligations.