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export credit agenices
Export credit agencies (ECAs) are a form of International Financial Institution (IFI). Whilst there are social and environmental problems with other IFIs, such as development banks, there are more extreme problems with ECAs.
eca
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This is mainly because unlike
development banks, which are multilateral,
ECAs are bilateral agencies whose function is
to promote the business interests of the
financing country. Most ECAs have no
environmental or social lending requirements
at all. They could be described as promoters
of “unsustainable development” with an agenda
to create jobs in the financing country
without environmental regard for what happens
in the receiving country. At the same time,
ECAs are now the world's biggest class of
public IFIs, collectively exceeding in size
the World Bank Group.
The task group on ECAs calls for an end to
ECA financing for socially and
environmentally harmful projects and a clear
mandate to promote sustainable
development.
the international
eca-watch campaign protests at hermes, the
german export credit agency in berlin, march
2002
Compared to other IFIs, ECAs are very
different creatures. They are bilateral
agencies for industrial nations, which means
they are mainly interest in their own
national interests. Perhaps their mission
could best be described as 'unsustainable
development': to create jobs in the country
where they are from without regard for the
environmental and social impacts. Most ECAs
have no environmental or social lending
requirements at all. At the same time, ECAs
are now the world's biggest class of public
IFIs, collectively exceeding in size the
World Bank Group.
The agencies provide government-backed loans,
guarantees and insurance to multinational
corporations from their home country that
seek to do business overseas, often in the
global South. Southern governments are often
required to sign a counter guarantee. This
means that if a project fails, not only
Northern taxpayers but also Southern
governments have to pay, thus creating more
official debt for these countries. This is
the way the riskiest projects in the world
are financed. Because of the inherent risks
of controversial projects in the mining,
forestry, oil and gas, coal, power and other
sectors, many of these projects in the
developing world could not go forward but for
the support of bilateral ECAs. As a result,
ECA-backed projects often despoil the
environment and disrupt the lives of the
people in the affected regions.
Several Friends of the Earth groups are
campaigning on specific projects and a
document compiling these cases will soon be
ready. The task group members are also
closely monitoring the negotiations on
guidelines for ECA's within the Organisation
for Economic Cooperation and Development
(OECD). The task group cooperates with the
broader
international ECA-watch
campaign
.
At an international strategy meeting, held
in Indonesia in April 2000, NGOs present
adopted the Djakarta Declaration, which is
now signed by over 350 NGOs of almost 50
countries. You can find it
here.
For more information, please contact task
group coordinator, Jon Sohn, at
us export
credit agencies sued for climate
change
new report:
Race to the Bottom
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