Group blasts weak OECD agreement on environment
Loopholes allow export credit support for harmful projects to continue.
Ottawa, December 11, 2003 – A common agreement among Export Credit Agencies (ECAs), likely to be adopted today at the Organization for Economic Co-operation and Development (OECD), has come under fire by ECA-Watch, an international network of environment and development groups.
The environmental policy, dubbed the “Common Approaches,” allows countries’ ECAs to support massive harmful infrastructure and extractive projects without applying internationally recognized minimal social and environmental standards, or even disclosing public interest information to affected communities and stakeholders, the group says.
“The loopholes in this agreement are so huge that it hardly requires anything of ECAs,” said Sebastian Godinot, with Amis de la Terre France and ECA-Watch. “In fact, it does little to close the gap between the laggards and the leaders”.
Whilst the new agreement does make reference to international standards, it does not require ECAs to apply any specific minimum set of them to projects, deferring rather to a broad list of varying standards which they can elect to apply, or not, at will. And while the new agreement suggests making environmental information publicly available 30 days prior to a final commitment, it allows exceptions to this rule and does not explicitly require companies to publicly disclose this information or consult with affected communities and stakeholders prior to project approval – an international norm and long-standing demand of the ECA-Watch network.
"This agreement confirms that as a class of financial institutions, ECAs still come last on the environment,” said Fraser Reilly-King of the NGO Working Group on EDC, also part of ECA-Watch. “Canada played a positive role in these negotiations, so I am hopeful that EDC will use the changes in this agreement to move its own policies forward. It has a lot to prove.”
The OECD agreement was developed to promote coherence between all ECAs, and develop a level playing field by establishing a common set of environmental standards. However, “Race to the Bottom II”, released as new negotiations began on the agreement, argued that despite the existence of an earlier OECD agreement, in reality it did little to mitigate the devastating social, environmental and human rights impacts of ECA-funded projects. The Cernavoda2 nuclear reactor was one of the projects supported by EDC under the old agreement..
ECAs are the largest public funding source of extractive and infrastructure projects in developing countries.