Environmental Assessment and EDC: The Shock of the Possible (March 2001)

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Submitted as part of EDC's consultations on the environment, this report makes a case for placing EDC under the provisions of the Canadian Environmental Assessment Act.


The environmental implications [1] of lending practices of export credit agencies (ECAs) are under scrutiny. These public financial institutions are a form of de facto international economic development policy. Until recently, they have operated with minimal public oversight. As a result of NGO pressure, the policies of ECAs are being opened up to more broad public review. A key concern of civil society, both domestically and internationally, is the environmental impacts of projects supported by these institutions. ECAs routinely support projects with potential for serious adverse environmental impacts. Yet the Export Development Corporation of Canada (EDC), a publicly-owned financial institution, conducted its affairs with no environmental policy statement whatsoever until 1999 when it released its Environmental Review Framework (ERF).

However, the ERF does not establish a set of clear and binding environmental standards to govern EDC practices, nor does it define the basic elements of how the real environmental impacts of its financing decisions can be evaluated. An appropriate environmental assessment (EA) regime, which is more substantial than the current ERF, needs to be established to make meaningful EA an integral part of EDC’s operations. The form of an EA regime for the EDC is the subject of a public policy debate that will be resolved this spring by the Canadian government.

This study outlines the essential elements of an EA regime for the EDC, and makes recommendations as to how the government can best ensure that these components are adopted and implemented by the EDC. The CEAA option is considered the most appropriate method to formalize the requirement that the EDC conduct EAs of its financing decisions. Strengthening the ERF and transforming it into a CEAA process is the most appropriate method for ensuring that the EDC’s activities are consistent with Canadian social and environmental policies and values.


[1] The NGO Working Group on the Export Development Corporation takes a broad definition of environment, one that includes social impacts, such as changes to economic, health and cultural status of affected populations.