export credit agencies

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

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