Working Group response to draft disclosure policy (June 2001)

June 29, 2001

Response to the Export Development Corporation’s
Draft Disclosure Policy

by the

NGO Working Group on the Export Development Corporation
a working group of the Halifax Initiative

The NGO Working Group on the Export Development Corporation (WG) is a coalition of Canadian non-governmental organisations concerned about the social, human and environmental impacts of export credit agencies. The Working Group promotes adherence by export credit agencies, especially Canada’s Export Development Corporation, to internationally accepted standards regarding human rights, the environment and sustainable development. The Working Group is hosted by the Halifax Initiative Coalition.

The WG welcomes EDC’s new draft disclosure policy. It brings EDC’s activities into the sunlight, where the actions of any public financial institution should be. We believe it increases transparency and accountability, and therefore, performance, while ensuring that commerce is not negatively affected. In particular, we welcome the ex-ante release of information in the public interest and the ex-poste disclosure on a transaction basis. This draft disclosure policy has been a long time coming and is an important step.

However, to ensure that EDC adopts existing best practices in regards to disclosure, we present specific recommendations on a section-by-section basis below.

Our comments on the proposed disclosure policy are based on our submission to the July 2000 consultations on disclosure, available on our web site. In turn, our submission to these consultations built on recommendations made by Gowlings, the Standing Committee on Foreign Affairs and International Trade, and the Government response in May 2000.

D2. Individual Transaction Reporting

WG Recommendation 1: The release of individual transaction information must be required as a condition of EDC-support.

The draft policy states that “disclosure of all or part of this information will necessarily depend on EDC’s ability to obtain the necessary legal consents and permission from affected parties.”

The WG welcomes the release of transaction information. However, this point is weakened if companies can choose to withhold information. There should be no exceptions for the release of this information as it is key to public accountability and is not commercially sensitive. As noted in our previous submission, information that is not considered to be commercially sensitive is:

  • Name of company

  • Name of country

  • General description of project

  • Amount and type of financing

  • Environmental and social information

The information listed in Section D2 of the draft disclosure policy was released routinely by EDC until the mid 1980’s, is released by similar agencies routinely, and must be released by EDC ex-poste as a condition of EDC-support.

WG Recommendation 2: The amount of EDC financial support must be given as an exact amount.

The draft policy states that “amount of EDC financial support in approximate dollar ranges” will be disclosed.

The exact amount of public support should be provided to the public as it currently is by EDC on an ad-hoc basis.

WG Recommendation 3: Information on non-performing loans, such as the amount in arrears, must be disclosed on a transaction basis.

This information has been provided by the Department of Finance upon request in regards to loans to highly indebted and poor countries and must be provided by EDC on an annual basis.

D3. Environmental and Social Reporting

WG Recommendation 4: A clear broad definition of the term “project” must be provided to include any export, investment or transaction.

The disclosure requirement for environmental and social information must be triggered by any EDC transaction which has potential or known significant adverse environmental or social impacts. A broad definition of project, combined with an environmental or social trigger, must be used to trigger disclosure as compared to “greenfield or major expansions”.

The use of “greenfield project or major expansion” may not provide the necessary clarity for EDC staff, clients and other stakeholders attempting to determine whether a transaction triggers an environmental assessment process and therefore ex-ante disclosure.

WG Recommendation 5: EDC must release environmental and social information on any project that will have a known or potential significant adverse environmental or social impact, irrespective of the level of involvement.

The draft disclosure policy states that EDC will release environmental and social information for projects for which EDC would potentially provide support exceeding the lesser of US$ 10 million or 10% of the total project cost.

Influence or level of involvement is not an appropriate trigger for disclosure. As clearly stated in the Auditor General’s Report on the EDC’s environmental review framework in May 2001, environmental risk should be the basis for environmental assessment processes: “drop the influence test as a criterion for deciding what level of environmental review is appropriate for a given project” (point 68, page 18). “Influence is not an indicator of environmental risk” (page 15). EDC responded to the Auditor General Report’s point by agreeing that “the influence test should be dropped” (page 19). EDC must not let a financial threshold decide whether or not environmental information should be made public. This must remain solely based on the significance of the impacts of the project.

WG Recommendation 6: Disclosure of environmental and social information must be made at minimum 60 days prior to approval of project.

As previously noted, the WG welcomes the ex-ante disclosure of environmental and social information. However, as recommended in the WG’s submission to EDC’s public consultation on disclosure, disclosure at minimum 60 days prior to approval, instead of 45 days, gives parties such as local communities more time to respond.

WG Recommendation 7: Environmental and social information must be specified to include environmental and social assessments, emergency response plans and other related material, including human rights information provided to EDC on the project to which the investment, export or transaction relates.

All relevant social and environmental information must be disclosed to the public. For example, the public has a right to know and comment on emergency response plans. Similarly, EDC should make public the human rights information received from DFAIT and other sources.

WG Recommendation 8: Environmental and social assessments should be directly released to the project affected communities at least 60 days prior to approval of project, in the local language and in a culturally appropriate manner.

It is unclear in the draft policy if EDC’s website will be the sole means of releasing this information. Since locally affected people may not have reasonable access to EDC’s website, the project proponent should be required to release the information locally, in a culturally appropriate manner and in the local language.

WG Recommendation 9:
Proponents must be required, not only expected, to have consulted with relevant local parties on projects.

The draft policy writes that “proponents of such projects are expected to have consulted with relevant local parties…”.

Public consultation is a key component of environmental assessments, as confirmed most recently by the Office of the Auditor-General: “public consultation and disclosure of environmental information are essential elements of a credible environmental review process” (Auditor General’s Report, page 18). Therefore, consultation with local communities must be a condition to EDC-support for projects where there are known or potential environmental or social impacts.

WG Recommendation 10: Monitoring and evaluation reports must be released to ensure that any contractual obligations related to the environmental and social assessments are being adhered to.

Point E. Treatment of Confidential Information

EDC should presume disclosure unless a client can demonstrate reasonable concern for competitive disadvantage. A publicly-owned organisation offering secrecy as a central attribute is neither publicly accountable nor operating in the public interest. Owing to EDC’s status as a government entity, EDC customers should not expect their relationship with EDC to be entirely shielded from public knowledge.

WG Recommendation 11: To clarify commercial competitive information, EDC’s disclosure policy should make reference to the Federal Guide to the Access to Information Act.

The Federal Guide to the Access to Information Act clarifies such terms as financial, business or proprietary information.

WG Recommendation 12: Minutes of EDC’s Board of Directors, or at minimum, a Chairman’s summary, should be made public.

Four government officials are present on EDC’s Board in their departmental capacities. Therefore the information should be made public as they are acting in a public capacity. Like publicly traded companies who make information on Board of Directors’ meetings available to their shareholders, EDC must disclose minutes or at minimum a summary to its shareholders, the Canadian public. A Chairman’s summary is available from other organisations such as the World Bank.

WG Recommendation 13:
Sub-point (c), Point E, regarding the economic interests of Canada, must be clarified through examples or definition.

Without explanation, definition or clarification, this creates a major loophole.

WG Recommendation 14: All material related to a transaction determined to be in the public interest due to environmental and social concerns should be released to the public on a request basis, including “internal correspondence”.

Relevant internal correspondence must be accessible to disclose decision-making and deliberation processes on projects of public interest. Records to be disclosed as defined by the Access to Information Act consist of any correspondence, memorandum, etc., whether internal or external correspondence. Other crown corporations such as the Business Development Bank (BDC) and the Canadian Commercial Corporation (CCC) are required under the Access to Information Act to disclose records. This should be available from EDC on a request basis.

Point F. Accountability

WG Recommendation 15:
Canada’s Information Commissioner should be tasked with ensuring the implementation and application of EDC’s disclosure policy.

The WG welcomes the draft policy’s recognition that oversight of the policy is critical. The WG, however, believes that Canada’s Information Commissioner is the most appropriate person to oversee the implementation and application of the disclosure policy of a federal agency, including EDC. The public would be guaranteed a familiar process that allows it access to an Information Commissioner for the right to appeal, a Commissioner who is independent and committed to increase public access to government information. The Information Commissioner is the avenue of appeal for information regarding the Canada Account of EDC currently; this should be extended to the Corporate Account.

Point G. Public Information Facilities

WG Recommendation 16: Thirty days should be specified as a reasonable time period for responding to an information request.

General comments

Retroactive disclosure

WG Recommendation 17: EDC should apply this disclosure policy retroactively.

Any non-disclosure agreement signed between EDC and past clients most likely refers to commercially sensitive information, which is not the information found in section D2 of the draft disclosure policy. As most of these transactions are long completed, there would be no commercial impact from the release of this information.

The type of information described in section D2 of this draft policy was released by EDC until the mid-1980’s. This type of information should be released for all of EDC’s past projects. As well, any environmental or social information collected in the past under EDC’s environmental review framework (ERF) should be disclosed.

Access to Information Act

WG Recommendation 18: EDC should be placed under the Access to Information Act.

EDC should be subject to the Access to Information Act, as are the Canadian Commercial Corporation and the Business Development Bank. Inclusion under this Act would create an enforceable right to information but would also provide EDC with the desired protection against inappropriate disclosure. Placing EDC under the Access to Information Act would enable greater government policy coherence. Moreover, as stated in the Access to Information Act, “Canada's access law should apply to any organization that performs important public functions.”

In conclusion, the NGO Working Group on the Export Development Corporation would like to congratulate EDC on this important step forward and hopes that its recommendations are taken into consideration in the final policy.


Émilie Revil,
On behalf of the NGO Working Group on the Export Development Corporation.