(Talk Business, Arkansas, 7 March 2024) International Women’s Day provides the opportunity to highlight the social, economic, cultural and political achievements of women and to address the diverse challenges women face every day. For the last 25 years, EXIM’s Minority- and Women-Owned Business division has been hard at work educating U.S. small businesses about the financial services available to help their businesses compete globally. In the last dozen or so years, this small, independent government agency that punches above its weight has provided over financing to about 1,000 women-owned businesses exporting to 150 countries. [Women face unique challenges both in the U.S. and globally, yet the entrepreneurial spirit of woman business owners and leaders remain inspiring, writes former Export–Import Bank of the United States (EXIM) CEO Kimberly Reed.]
Newsletter
Oil Trader Gunvor to Pay More Than $660 Million to Resolve Bribe Cases
(Yahoo Finance, New York, 1 March 2024) Gunvor Group Ltd., one of the world’s top oil traders, will pay more than $660 million to resolve US and Swiss charges that the company paid bribes to Ecuadorian government officials for contracts. The information released by the US is a reminder of the seedy deals made in the not-too-distant-past by some of the biggest firms in commodity trading, which have made billions of dollars in profits on energy market volatility stemming from the Covid-19 pandemic and then the invasion of Ukraine. A shortage of key resources has also seen these companies strengthen ties with governments around the world — just a few months ago, Italy’s export credit agency guaranteed a €400 million ($433 million) loan to Gunvor in return for supplying gas to the country.
Standard Chartered Faces Complaint for Financing Philippine Coal Plants
(BNN Breaking News, Hong Kong, 29 February 2024) Environmental and human rights organizations have taken a stand against Standard Chartered, filing a complaint with Britain’s National Contact Point for Responsible Business Conduct (NCP) over the bank’s financial involvement in four coal-fired power plants in the Philippines. These groups, including the Philippine Movement for Climate Justice, Inclusive Development International (IDI), Recourse, and BankTrack, assert that the bank’s actions have led to detrimental impacts on local communities, including forced evictions, loss of livelihood, and health issues due to pollution. The complaint, lodged with NCP accuses Standard Chartered of failing to perform due diligence that could have prevented the adverse effects experienced by the communities surrounding the coal plants. The NCP, while lacking the authority to enforce action or compensation from Standard Chartered, plays a crucial role in investigating breaches of the OECD Guidelines for Multinational Enterprises. Despite the limitations of the NCP’s powers, the UK’s export credit agency UKEF has indicated that findings from such investigations will influence future decisions on supporting companies and banks involved in financing controversial projects.
Korean ECA to provide $187bn in support to bolster exports
(Pulse News, Seoul, 21 March 2024) The Korea Trade Insurance Corp. (K-SURE), an export credit agency, will provide the largest-ever trade insurance and financial support worth 250 trillion won ($187 billion) to achieve the government‘s target of $700 billion in exports this year. According to sources from the government and the trade industry on Wednesday, K-SURE plans to provide a total of 250 trillion won in support for short-term and medium- to long-term export insurance, export credit guarantees, and exchange rate fluctuation insurance this year.
Total ECA Funders Weigh Mozambique Restart After 3 Year Halt
(Bloomberg, 1 March 2024) Lenders to TotalEnergies SE’s Mozambique liquefied natural gas project are weighing the release of billions of dollars in funding as the company plans to resume construction three years after development was halted by Islamist insurgent attacks. The planned onshore facility designed to export the southern African nation’s major gas discoveries attracted the biggest project financing yet seen in Africa. That was before Islamic State-linked militant attacks near the site in 2021 prompted Total to evacuate its personnel and declare force majeure. The US Export-Import Bank, which committed the biggest share of $4.7 billion in financing — and other lenders that comprise a total of about $15 billion in debt — are conducting assessments on reactivating the funding. The assessment of whether to resume financing coincides with a decision by the Biden administration in January to pause approval of new liquefied natural gas export licenses, in recognition that the climate impact from the fossil fuel needs to be reassessed. The US Eximbank’s loan to the Mozambique project was initially provided in 2020, during the administration of former President Donald Trump. While Russia’s invasion of Ukraine sent Europe on a scramble for alternative energy supplies that boosted interest in upcoming LNG production, projects in nations across Africa are still susceptible to a range of issues including political instability and construction delays. Mozambique has the added obstacle of an insurgency that’s become subdued by armed forces, though the Islamist fighters still carry out sporadic deadly raids. Atradius Dutch State Business, the Amsterdam-based Dutch export-credit agency that’s committed $1 billion to Mozambique LNG, said it’s also assessing the situation. “Due diligence is currently ongoing to assess whether we can allow drawdowns under the loan,” it said.
First-of-its-kind EU export credit facility to target Ukraine rebuild
(Global Trade Review, London, 25 March 2024) EU officials have revealed that the next phase of a pioneering bloc-wide export credit initiative will target the reconstruction of war-torn Ukraine, an undertaking expected to cost almost half a trillion dollars. The European Commission’s Directorate-General for Trade, last week outlined plans to establish a “complex new policy tool” focused on significant infrastructure projects in the country. Details on how the scheme will operate are still being ironed out, with indications it would operate as a risk-sharing mechanism to support the work of domestic export credit agencies (ECAs). In the past 18 months, European ECAs have collectively pledged hundreds of millions of euros towards Ukraine’s reconstruction, which the World Bank forecasts will cost US$486bn. For the past three years, the Commission has deliberated on plans to establish an export credit strategy, and within this, a pan-EU export credit facility. An independent feasibility study last year concluded the bloc may consider creating a reinsurance function for ECAs.
Dynasty Gold Used Slave Labor in China, Canada Watchdog Says
(Yahoo Finance, New York, 26 March 2024) A Canadian watchdog is calling for penalties against Dynasty Gold Corp. after it concluded the company used forced labor at its Chinese mine, which the miner denies. The Canada Ombudsperson for Responsible Enterprise, an arm of the federal government that investigates possible human rights abuses by companies, conducted a review of the Hatu mine in the Xinjiang region after a coalition of 28 Canadian organizations filed complaints alleging human rights abuses. Sheri Meyerhoffer, the ombudsman, is calling on Canada’s trade minister to refrain from supporting the company in international disputes and ban it from receiving financial support from Export Development Canada.
US & EU differ over the future of fossil fuel subsidies in OECD talks
(Financial Times, London, 26 March 2024) Second round of discussions ends without significant progress on export credit policies. The world’s richest countries are at odds over ending subsidies for oil and gas development as the US and EU differed over the extent of a ban, according to people familiar with the talks. OECD countries have held a second round of closed-door talks in Paris to debate proposals by the EU and UK to cut off most export credit agency loans and guarantees for oil, gas and coal mining projects, which are the biggest source of international public finance for the sector. This would follow an agreement in 2021 to stop providing such support for coal-fired power. A person familiar with the talks said the US was still assessing the EU’s proposals, with discussions scheduled to continue in June and November. The US Treasury declined to comment. The US, Canada, France, Germany and the UK were among countries that agreed around the UN COP26 climate summit in Glasgow in 2021 to align their public finance institutions with a Paris agreement goal to limit global warming to ideally 1.5C above pre-industrial levels. But this could affect the role of Exim, the US’s credit export agency, which will need to secure fresh funding from the US Congress in 2026, opening it to political scrutiny from Republican lawmakers who are resistant to cutting off finance for oil and gas, and progressive lawmakers critical of the bank’s climate record.
No role for export credits in the EU’s development finance
(Counter Balance, Brussels, 13 March 2024) The latest report from Counter Balance titled “No role for export credits in the EU’s development finance” sheds light on the growing presence of Export Credit Agencies (ECAs) in the financing landscape of various EU policy proposals, ranging from development finance to critical raw materials. The report examines recent proposals for greater coordination between export credit and development finance, in particular through initiatives such as the EU’s Global Gateway strategy. It highlights significant concerns about suitability of such coordination for development objectives, particularly in the absence of binding human rights and environmental standards, ands weak rules on transparency, due diligence and accountability of ECAs as well as Development Finance Institutions (DFIs). Alexandra Gerasimcikova, Head of Policy and Advocacy at Counter Balance, said: “This is another example of the EU’s misuse of public development finance to support the European private sector , continuing a well-trodden neo-colonial path in its global South relations. This approach encourages asymmetrical dependencies, where the only concern is to open up new markets for European capital. We need long-term, sustainable financing to support equitable socio-economic transformation globally, not profits of European corporations. ”
Human rights & environmental destruction in Dutch Atradius DSB insured dredging projects
(Both Ends, Utrecht, 25 March) Over the past 12 years (2012-2023), Dutch export support to dredging companies amounted to €8.4 billion. Dutch-supported projects have been linked to human rights violations and environmental destruction worldwide, revealing the systemic failure of Dutch policies to protect people and the environment. The Dutch government and Dutch dredging companies are not complying with international standards on human rights, biodiversity, and sustainable development. The report examines 12 years of resistance to destructive dredging projects in 7 locations worldwide.
