Civil society criticisms of the ECAs

Civil society organisations often criticize ECAs either for not (or else very rarely) applying human rights, social and/or environmental standards in their decision making processes. Since these agencies are state organs, the states may be violating their obligations under international human rights law if they do not make sure that the ECAs act in conformity with human rights standards. According to Transparency International 1 , these agencies actually contribute to reinforce the corruption in developing countries in which they invest (bribes for civil servants to see through contracts and projects). In its 2011 annual report, Mr. Cephas Luminas, then UN Independent expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, affirmed that “a significant number of the projects supported by export credit agencies, particularly large dams, oil pipelines, greenhouse gas- emitting coal and nuclear power plants, chemical facilities, mining projects and forestry and plantation schemes, have severe environmental, social and human rights impacts.” 2

Progressive integration of social and environmental considerations into the ECAs

Due to growing criticism from civil society, export Credit Agencies have been showing more willingness over the past years to integrate human rights standards into their work. However,the pace at which they are changing their policies and attitudes is still very slow. Some agencies, such as the export Development Canada (EDC) (see example below) have defined policies or made declarations concerning their social responsibility. On 13 May 2004, eksport Kredit Fonden, the Danish export credit agency, was the first to adopt the Equator Principles which were developed by private sector banks (see Part III on the equator Principles) 3 and then followed by the Canadian export credit agency. In 2003, the Coface (France’s eCA) adopted environmental guidelines; however, these were the subject of severe criticism owing to the fact that they do not apply to all of the project categories. Some agencies have established complaint mechanisms (see Canada and US below).

In June 2000, 347 NGOs criticized the persisting inadequacies of the ECAs (absence of transparency, corruption, absence of follow up investigations, etc.) and published the Jakarta Declaration 4 directed at the OECD member states with the aim of reforming the rules governing export credit agencies. This document demands, among other things, more transparency, public access to information, consultation with civil society and with those affected by the projects, as well as the adoption of guidelines in conformity with environmental and human rights standards.

In June 2007, within the framework of the Working Party on export Credits and Credit Guarantees (ECG), the OECD Council adopted a revised version of its 2003 Recommendation which calls for the implementation of stricter environmental rules and regulations 5 . This Recommendation also includes social impact assessments. One of its main objectives is to contribute to sustainable development by insuring coherent policies that export credit agencies will be required to adhere to and which are in accordance with international instruments. Through the adoption of the Recommendation, the OECD members have accepted to apply the International Finance Corporation’s (IFC) social and environmental standards (themselves criticized by NGOs, see Part I, Chapter I) to their ECAs 6 . This recommendation was updated in June 2012 7 .

Although not explicitly mentioned in their statute or their policies, a few agencies publicly state that they take into consideration the human rights issues through their due diligence process. However, the reality is still characterised by the absence of legally binding instruments which would oblige the export credit agencies to consider human rights standards, the absence of control over their functioning, and by a lack of transparency in the way they conduct business. Regrettably, the present state of affairs does not require agencies to undertake public environmental and social impact assessments or even to consult with communities affected by the projects.