FoE accuses UK export credit agency of environmental negligence
Friends of the Earth (FoE) has named The UK Export Credits Guarantee Department (ECGD) as the "least green branch of government". ECGD provides investment insurance to UK companies trading abroad. It has no legal obligation to consider environmental impacts of UK-backed international projects.
“Essentially, export credit agencies around the world have operated solely on a commercial and political basis and without any consideration of environmental or social impacts,” a FoE spokesperson told edie. “Our ECGD is a good example of that. We think the ECGD is particularly bad, but ‘Greens’ in other countries might think theirs are just as bad.”
The environmental organisation cites several ECGD-guaranteed projects that it believes are environmentally unfriendly. They are:
- coal-fired power stations in China and India
- large dam projects in China, India and Turkey
- nuclear power plant construction in China
- certain mining projects, including one in Argentina
- arms deals, including the sale of Hawk jets to Indonesia
“There are a lot of inaccuracies in the FoE statement,” Anthony Redmayne, a senior official at ECGD told edie. According to Redmayne, not all the projects named by FoE are projects guaranteed by ECGD. Some have been proposed for guarantee, but decisions have not yet been taken.
Redmayne also asserts that ECGD already incorporates environmental considerations into some of its work. “When the environment will clearly impact on repayment risk, we’ve taken it into consideration. And once you go to project-financed cases, you do have to consider broader issues, including the environment.” Project financing involves loan repayment that comes directly from profits earned by the project once it’s built and operating, instead of repayment coming from national governments
According to an ECGD official working on environmental policy, pressure from FoE is unnecessary because requests to incorporate environmental assessment have already come from G8 ministers.
The official confirmed that ECGD is working on an environmental screening procedure and expects to consult its client base – companies such as British Aerospace, Taylor Woodrow, Rolls Royce, Balfour Beatty, AMEC International and Marconi Avionics – within the next few months.
“The question becomes ‘Do we have environmental screening for every deal, or just for deals in certain sectors?'” says Redmayne
FoE is adamant that ECGD respect the intentions of the UK Government, expressed by PM Tony Blair in 1997. Blair committed the UK to the promotion of “sustainable practices by taking environmental factors into account when providing financial support for investment in infrastructure and equipment”.
“Our view is that the absolute bare minimum is to accept the World Bank environmental standards, although we think they are weak and we’d like to see better,” said the FoE spokesperson.