Press Release - Monday, September 15, 2003



Export Credit Agencies Continue Ecological and Social Race to the Bottom


International Report Spotlights Problems as OECD Negotiations Reopen


Embargoed until September 15, 2003


Paris, September 15, 2003 – As government negotiations reopen September 16 at the Organization for Economic Cooperation and Development (OECD) on the environmental guidelines for Export Credit Agencies (ECAs), an international coalition of NGOs has launched a report entitled “Race to the Bottom II”. The report is highly critical of the current draft environmental framework.*


“Its well known that ECAs are the worst public financial institutions in terms of negative impacts on the environment, local communities and human rights.” said Emilie Cornu Thenard, spokesperson for the international ECA-Watch campaign that launched the report. “Yet, most ECAs who have implemented the voluntary guidelines still operate in secrecy, are not publicly accountable and are indifferent to the participation of affected communities.”


To remedy this, the report recommends, among other things: that ECAs be required to prevent the negative economic, social, human rights, and cultural impacts, and strengthen the fledgling environmental analysis processes, of projects they finance; that public disclosure of sustainable development impact assessments be required prior to project approval; that projects meet the highest international standards and respect host country law; and finally, that projects be monitored for compliance with safeguard conditionalities. The report also presents critiques of eight ECA-backed projects, financed either under the current OECD draft guidelines for ECAs, or that are well into the decision-making stage. Cases, including Romania’s Cernavoda 2 nuclear power plant, show that the guidelines have done little to mitigate environmental degradation or promote sustainable development.


“The ECAs we have talked to don’t seem to care that Cernavoda 2 has violated a number of domestic laws and international agreements on public consultation,” said Codruta Nedelcu, Coordinator for the Romanian Association of Nature Lovers. “Nor do they seem to care that the three separate impact assessments conducted for this project lack information essential to establishing the true impacts of this project on the surrounding area”.


The Sakhalin II oil and gas project in the Russian Far East, offers a similar tale.


“This project may drive the last of the Western Pacific Grey Whales into extinction, is devastating saffron, cod and herring stocks and wild salmon runs, and is compromising the livelihoods and cultural identity of the fishing communities”, said Natalia Barannikova, of the Sakhalin Island-based Sakhalin Environment Watch. “Given this, I find it hard to believe that the ECAs considering financing Sakhalin II are serious about implementing reasonable social or environmental policies!”


Other projects include the Aracruz pulp and paper plant in Brazil, the Bujagili Dam in Uganda, the Baku-Tbilisi-Ceyhan pipeline in Azerbaijan, Georgia and Turkey, the Camisea Gas Pipeline in Peru, the Tehri Dam in India, and the Three Gorges Dam in China.


In contrast to the existing draft guidlines, ECA-Watch has developed an alternative NGO proposal.


“We are confident that under the NGO proposal, none of these eight projects would receive ECA financing.” Ms. Thenard continued, “And without such a framework, and dramatic improvements in project compliance, ECAs will continue to finance more project debacles, and companies will seek the ECA with the lowest standards in an ugly race to the bottom.”


Race to the Bottom II” and the NGO-proposed policy revision are on-line at




For further information, contact:

Emilie Cornu Thenard, ECA-Watch International and FERN, (32) 04 74 52 72 65

Helene Ballande, Les Amis de la Terre (33) 06 62 01 33 61



*Note for Editor: The current draft Environmental Framework is entitled “Draft Common Approaches on Environment and Officially Support Export Credits, Revision 6” and was adopted by OECD countries, except the United States, in December 2001. Negotiations on a revised policy, so-called “Rev. 7,” begin on September 16, following a stakeholder consultation.