Taxpayers 'may fund child slavery' under new Government proposals

By staff writers
January 18, 2010

Pressure groups have accused the government of putting business interests above human rights and environmental concerns, saying taxpayers may end up funding child labour or slavery under new proposals.

It comes after the Export Credits Guarantee Department (ECGD), the creditor and insurer of many multinationals' projects in poor countries, proposed to ease tight standards on underage workers that it adopted six years ago after a political outcry.

Amnesty International UK, The Corner House, Jubilee Debt Campaign and WWF UK criticised the Government's plas, which they say would water down the human rights and environmental standards employed by the ECGD.

The groups fear that the changes would represent "a giant step backwards" for minimising UK companies' impact on human rights, poverty and climate change in developing countries.

Of particular concern to campaigners is that the absolute prohibition on "harmful child labour" and forced labour will be replaced with a discretionary ban, where considered appropriate.

The moves are believed to follow heavy lobbying from UK exporters, who argued last year that the 'Business Principles' should be "modified, if not scrapped altogether", in a submission which campaigners call "short-sighted".

But campaigners warn this must not happen at the expense of increasing poverty, environmental destruction and human rights abuses around the world. Even with the current standards in place, they argue that the ECGD is effectively a taxpayer subsidy to the arms sector, fossil fuel industries and aerospace sector - which historically has comprised 75 per cent of ECGD's custom.

They warn that a further watering down of standards would seriously undermine Britain's claim to be a 'force for progress' in the world.

Peter Frankental from Amnesty International UK said: "The upshot of these proposals is that British taxpayers' money could end up funding child labour and forced labour overseas. Lord Mandelson needs to realise that people in the UK simply won't stand for this.

"The government should be sending out a clear signal to companies that child exploitation is never acceptable - not putting up the funding to help them do it. It's time the government accepted the need for UK companies to respect human rights in all their business operations abroad."

Nick Dearden from Jubilee Debt Campaign said: "the overwhelming majority of debt repayments paid by developing countries to the UK are based on ECGD projects - including arms loans for dictators and useless projects that did nothing to benefit ordinary people. These changes will unleash similar projects in future, and poor countries will spend another 20 years paying for our mistakes."

The ECGD is a government department which supports UK businesses exporting and wanting to invest in areas considered too risky to receive financial support from the private sector. It uses taxpayer's money to guarantee payment in the event of a default. Ramping up this system of 'export credits' is seen by the government as a key way of stimulating UK industry, especially during the current recession.

The ECGD asked Ekklesia to stress that "this is a consultation, that no decision has been made, and that if anyone wants us to do something different to our proposals they will need to respond to the consultation."

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