Members of the Export Credit Group
OECD
2, rue André Pascal
F-75775 Paris Cedex 16
Fax: c/o 01 44 30 61 58
Email: c/o Xcred.Secretariat@oecd.org

Paris, 5 November 2007

Dear Sir/Madam,

ECA Watch has always been committed to constructive dialogue to improve the environmental and social policies of official export credit agencies. We strongly believe that progress depends on a willingness to share views, explore differences and, through discussion and mutual learning, expand areas of agreement. If it is to bear fruit, dialogue has to be a two way process: by definition, consultation involves an active exchange of differing views. It presupposes transparency, and good faith engagement to discuss real world situations and problems, from which we can all learn.

We recognise and appreciate the efforts that have been made by successive chairs of the Export Credit Group and by staff of the Secretariat to foster dialogue between NGOs and ECG members. We have built good working relations with a number of individual environmental practioners and officials have shown much-welcomed leadership in introducing procedures that opened space for discussions at the national level, as well as attempting to do so within the ECG.

However, despite our best efforts to foster a working relationship with the ECG, the Working Party as a body has shown itself unwilling to engage in substantive exchanges of views on issues we have raised over the years. We have made every effort to ensure that delegates are fully briefed of our concerns, in good time for national governments to reflect on the issues raised and formulate considered responses. Yet, in the consultations, our requests for feedback have always been met with silence, save for sporadic interventions by a handful of delegates, which in almost every case have failed to catalyze any substantive discussion. Written replies from the Working Party have been equally unsubstantive.

Improvements are possible which could change this dynamic and could improve the credibility of the OECD to coherently and effectively address many broad overlapping issues, from environmental and social standards to debt and bribery, in which ECAs are critical players. In particular we believe there is a growing and urgent credibility crisis in the implementation of the Common Approaches. This crisis is a direct consequence of ineffective peer review, inadequate monitoring and inadequate transparency with respect to specific projects, accentuated by the categorical refusal of the ECG to discuss these very issues in specific cases.

This cannot continue. On repeated occasions over the past decade we have proposed specific measures for improving the consultation process in correspondence and documents, and will not repeat them here. We have highlighted the need for the work of the ECG to be more transparent, and subject to the same more public, substantive, and formal peer review processes used in other OECD fora.

These recommendations remain on the table and, if the ECG responds positively to them, and we have evidence that members are committed to making the dialogue process work, then we will willingly seek to build what we hope will be a fruitful partnership.

Until that time however, we see no purpose in continuing to engage in these meetings with the ECG, since they are not consultations in any accepted, substantive sense of the term. We greatly regret that we have been forced to take this decision. In the meantime we will aim for meaningful consultations concerning guidelines and regulations for ECAs for the cross cutting issues we have identified in other relevant international and regional bodies.

Sincerely,

- Berne Declaration, Switzerland
- Both Ends, Netherlands
- CRBM, Italy
- ECA Watch Austria
- Environmental Defense, USA
- FERN, Belgium
- Friends of the Earth France
- Friends of the Earth Japan
- Halifax Initiative Coalition, Canada
- Observatori del Deute en la Globalitzacio, Barcelona
- Pacific Environment, USA
- The Corner House, UK
- urgewald, Germany
- WEED, Germany

---

NGOs Walk Out of OECD Meeting on Official Export Credits
Groups from 12 OECD Nations Protest ECG's Years of Failure to Address Critical Issues

For immediate release

Paris, Monday 5 November 2007 - Citing their frustrations at years of silence in response to repeated proposals for effective implementation of environmental and social standards, as well as for coherence with related OECD goals and agreements, non-governmental organizations (NGOs) representing hundreds of thousands of taxpayers in OECD member nations, walked out of an OECD meeting called to consult civil society organisations. The groups cited the recent approval by ECG ECAs of projects that flagrantly violate internationally accepted environmental and social standards as well as the failure of most ECG ECAs to take effective action to address sustainable development, corporate social responsibility, corruption, and sustainable debt relief. OECD taxpayers support some $100 billion annually in ECA loans, insurance and guarantees for large scale projects in developing countries and economies in transition.

While appreciating efforts by chairs of the Export Credit Working Party (ECG) and staff of the OECD Secretariat to foster dialogue between NGOs and ECG national Members, and noting good working relations with a number of national ECA environmental practitioners and officials, NGO representatives pointed to ECG members' collective unwillingness to engage in substantive exchanges of views, pointing out that lack of progress threatens the credibility of the OECD to effectively address many broad overlapping issues, from sustainable development to debt and bribery, in which ECAs are critical players.

« The approval this summer of German, Austrian and Swiss export credits for the Ilisu dam in Turkey, which violates World Bank/IFC environmental and social policies on many counts, demonstrates a flagrant disregard for basic environmental and social standards, and for the OECD Recommendation on 'Common Approaches on the Environment and Official Export Credits' » notes Bob Thomson, Paris based Facilitator of ECA Watch. ECA-Watch is an international network of NGOs advocating effective ECA action in avoiding environmental and social harm, and credible ECA measures to fight corruption, cease promotion of unsustainable debt in poor countries, and increased transparency.

In a letter delivered to the OECD ECG today, the NGOs stated, ”there is a growing and urgent credibility crisis in the implementation of the Common Approaches. This crisis is a direct consequence of ineffective peer review, inadequate monitoring and inadequate transparency with respect to specific projects, accentuated by the categorical refusal of the ECG to discuss these very issues in specific cases.”

Proposing greater transparency and more public and formal peer review processes as practiced by other OECD entities, the Groups regretted having to draw attention to the ECG's democracy and development deficit, reiterating their willingness to return to the table, bringing their expertise with respect to international best practices, when appropriate new modes of consultation and greater openness to dialogue are proposed.

For more information, contact:
Bob Thomson,
ECA Watch, Paris,
Telephone +33 (0)1 48 51 18 90
Mobile: +33 (0)6 09 73 50 90,
Email: facilitator@eca-watch.org

A copy of the ECA Watch paper on OECD export credit policy incoherence and weak implementation is available on the ECA Watch web site at http://www.eca-watch.org/problems/fora/oecd/eca-watchmemo_25oct07.pdf

---

Key concerns of ECA-Watch on the lack of coherence between the policies of Export Credit Agencies (ECAs) and the policy commitments of the OECD.


The 5th of November 2007 several member NGOs of the ECA-Watch network attended the 10th informal consultation between civil society organisations, the working party on export credits and credit guarantees (ECG), and the participants to the arrangement on officially supported export credits. At the end of this meeting, the NGOs decided to withdraw from this consultation, as these consultation meetings consistently fall below minimum standards, both in terms of process, as well as in terms of progress on issues of substance.

ECA-Watch wishes to share the following four key issues of concern :

• It is the assessment of ECA-Watch that the members of the ECG show a lack of coherence with OECD policies and objectives, particularly relating to transparency, bribery, environment and development concerns. These concerns have been presented in a separate memorandum that has been made available as room document No. 2/Rev to the participants in the consultation meeting. ECA-Watch is convinced that all OECD policies and objectives should fully apply to the members of the ECG. To contribute to major improvements in this field, ECA-Watch recommends an external review process on all these issues, which should involve NGOs, experts and any other interested stakeholders.
• The ECG prizes itself for the progress it claims to have made over the last 10 years on several issues of public concern. ECA-Watch is making the assessment that such a claim is hard to sustain, as many export credit agencies (ECAs) seem to be paralyzed by an incapacity to balance various public interests against the private interests of the corporate clients they are meant to serve. ECA-Watch shares the opinion that a much more dynamic process is desirable, in which the different ECG members press each other to enhance their performance. ECA-Watch recommends that the ECG effectuate, on a regular basis, transparent peer review procedures (country examinations), similar to those applied by other OECD committees.
• Access to information is an essential requirement for enhancing the dialogue of ECG members with outside stakeholders. It is essential that the ECG and its members substantially increase the transparency of their operations and procedures. To assist transparency and dialogue, ECA-Watch recommends that consultations not just take place in plenary sessions, but also are organised more frequently in the framework of working groups dealing with specific sectoral/thematic issues (e.g., sectoral working groups of environmental practitioners).
• Meaningful dialogue requires a two-way communication. ECA-Watch greatly regrets that the ECG or its members have never responded in a substantive manner to many of the recommendations and suggestions that have been submitted verbally and in writing. It is not the fact that NGO concerns have not been taken on board that caused ECA-Watch to leave the consultation meeting hosted by the ECG. Rather it has been deeply disappointed by the lack of substantial response to the issues presented.

ECA-Watch regrets that this step has been necessary. It will aim for meaningful consultations in other relevant international and regional bodies concerning guidelines and regulations for ECAs for the cross cutting issues that have been identified. Also it will look forward to any contribution that other parts of the OECD may consider to enhance the policy coherence between the policies and procedures of the ECG and the OECD at large.

Paris, 6 November 2007