Government attempts to 'water down' export standards

By staff writers
April 21, 2009

A new bill, which campaign groups warn could precipitate human rights and environmental damage by UK companies, is being rushed through parliament a day before the Government releases its 'green' budget.

Campaigners, including Amnesty International, The Cornerhouse, Jubilee Debt Campaign and WWF, have expressed grave concern at the Government’s attempt to rush changes to the Export Credit Guarantee Department (ECGD) procedures through Parliament today.

The Industry and Exports (Financial Support) Bill was introduced into the House of Commons on 4 March. It is expected to have its Committee and Remaining stages today. As a 'money bill' the House of Lords cannot block its passage.

The changes would give the ECGD, the department responsible for underwriting UK industry overseas, new powers to retrospectively support projects. Campaigners fear that this would water down standards that currently exist to prevent UK involvement in projects which compromise the environment and human rights.

The ECGD is the British export credit agency - a government department which provides government-backed financial guarantees and insurance to British projects overseas in areas considered too risky to receive commercial insurance. Large infrastructure projects, such as oil and gas extraction in developing countries, are common recipients of ECA support. In recent years, arms and carbon-intensive industries, including aerospace and fossil fuel developments, have typically made up over 75 percent of ECGD's custom.

Campaigns have included those against the Baku-Tbilisi-Ceyhan pipeline, criticised for environmental damage and infringing human rights in its construction and for the cancellation of Indonesian debt run up underwriting arms sales to General Suharto.

The network of human rights, anti-poverty and environmental groups has called on MPs to support a Liberal Democrat amendment, sponsored by Lorely Burt MP, which would ensure ECGD would still have to assess the environmental, social, and human rights impacts of projects.

The agreement of the G20 earlier this month to make available $250 billion to 'facilitate trade' internationally, will mean far more money flowing through export credit agencies like ECGD. Campaigners have warned that while stimulating trade may be necessary for the economy, it must not come at the expense of people and planet.

ECGD has been the focus of many campaigns in recent years, targeting specific ECGD-supported projects which have had a detrimental impact on local communities and their environments.

Lorely Burt said: "While fully supporting the need for this bill, I'm concerned that the lack of language on due diligence could be used as a loophole for unscrupulous companies. I want to ensure that anyone receiving government assistance should have to satisfy ethical business requirements - whether they receive assistance before they go ahead or retrospectively."

Nick Dearden of Jubilee Debt Campaign said: "The ECGD is an organisation which needs to be brought into the twenty-first century. The vast majority of the ECGD's funds still go to help the arms industry and climate-intensive projects. Giving ECGD more power, without fundamental reform, is the equivalent of giving sub-prime mortgage lenders the job of re-starting the housing market."

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