Mr. Ian Gillespie

President and CEO

Export Development Canada

151 O’Connor, Ottawa, ON  K1A 1K3

Fax: (613) 598-3080

March 18, 2003

Re: Disclosure policies at EDC

Dear Mr. Gillespie:

It is my understanding that Export Development Canada will be reviewing its disclosure policy later in the year.

As per the terms of the policy, page 10, the crown corporation is required to review the policy, with public consultation, no later than three years after its implementation. The initial disclosure came into being in October 1st, 2001, with certain revisions to enhance the disclosure policy becoming effective May 1st, 2002.

As you prepare for the upcoming review, we would like to make a number of observations and comments.

1) Implementation of the disclosure provisions of the Common Approaches

In December 2003, OECD member states adopted by consensus the OECD Common Approaches on Export Credits and Environment (‘Common Approaches’). Section V of the recommendations states that members,

“For Category A projects, seek to make environmental impact information publicly available (e.g. EIAs, summary thereof) at least 30 calendar days before a final commitment to grant official support.”

The Chair of the OECD Export Credit Group himself has said that he expects Members “will do their utmost to fully implement” the Recommendation[i], and that in doing so, “the agreement is expected to increase transparency in government export credit agencies’ environment review processes and so to contribute to a better coherence in public policies in the context of sustainable development and good governance.”[ii]

We strongly urge the crown corporation to require the disclosure of EIA information for Category A projects at least 30 days prior to board approval, and that EDC make this a pre-condition of financing.

A number of ECAs have already done this (or more): the Swiss ECA, ERG, discloses environmental information 30 days prior to board approval; the UK’s ECGD is currently revising its policies to achieve a similar end; JBIC and NEXI disclose 45 days prior; and US OPIC solicits comments 60 days prior to board approval, with Ex-Im making ex-ante disclosure of environmental information a pre-condition of financing. New development in Europe around the implementation of the Aarhus convention may also soon make transparency a requirement for all European ECAs.

2) Reporting out by EDC

The Working Group is encouraged by the publication of last year’s Chief Environmental Advisor’s report. It included information which we have long been asking EDC to disclose – namely the disaggregation of projects by category, both in terms of the number of projects reviewed and signed, and of projects signed by sector and region. We hope to see this report released on an annual basis, as the report suggests might be the case. We would also like to see the disclosure policy revised to require the release of this information regularly.

For the past five years, US OPIC has released an annual environmental report. In addition to the features highlighted in EDC’s Environmental Advisor’s report, OPIC also reveals a number of other important elements:

• A list of the type of projects that were screened as A, B and C. 
• The types of conditionalities placed on both the projects it reviewed and finally signed. This includes general considerations, such as meeting World Bank guidelines, but also more specific details such as ‘third party audit’, ‘environmental management plan’, and references to standards that projects had met. 
• Half page descriptions of projects, for the most part category A projects, that detail how OPIC has attempted to follow an appropriate level of environmental due diligence, the comments it received with regards to the project, and in some cases, conditionalities it has placed on the projects as a result;
• Descriptions of substantive policy developments it has made that fiscal year in terms of taking greater account of the environment. In 2002, this entailed changes it was proposing to its environmental handbook in the area of forestry conservation and large dams. In fact, OPIC has now incorporated the recommendations of the World Commission on Dams into its assessment of large dam projects; and 
• The efforts it has made towards addressing climate change issues, and reduce greenhouse gas emission. This includes a breakdown of how it has restructured its power portfolio in the past two years, relative to the last ten;
• Finally, you may be interested to know that in its 2004 annual report, and henceforth, OPIC will also make public all projects it turns down on environmental grounds. 

We strongly urge EDC to follow the lead that OPIC has set in its Annual Environmental Report, and commit to include the above features in this year’s Chief Environmental Advisor’s Report.

 * * *

We would hope that this review, and changes that this will entail for EDC’s current and enhanced disclosure practices, will reflect the important recent developments at the OECD and among other ECAs.

I look forward to the upcoming consultations on EDC’s disclosure policy, and hope that these comments are a helpful early indication of what we expect from EDC with regards to disclosure.

Yours sincerely,

Fraser Reilly-King

Coordinator, NGO Working Group on EDC

CC    Martin Jensen, Deputy Director, Policy and Governance Unit, International Financing Division, Department of International Trade         Darlene Pearson, Director, Office of the Auditor General, Commissioner of the Environment and Sustainable Development

 [i] OECD Press Release, December 18, 2003.