Paris, 18th 2001

Part I : The issue of ECA reform
Part II : Recommendations

The issue of ECA reform is high on the agenda of the G-8 Summit in Genoa. In spite of several years of negotiation to achieve common environmental standards, and in spite of a 2001 deadline set by the G-8 leaders, little progress has been made, due to strong resistance both from these agencies and from key governments. The FIDH strongly deplores their apathy. The FIDH also considers that environmental concerns can no longer be considered in insulation from other aspects of sustainable development, and first and foremost human rights, which should be integrated in future ECA guidelines.
One of the more striking features of globalization is the increasing schizophrenia of States: While promoting sustainable development through their development assistance agencies, they "race to the bottom" through their trade or economic policies. This growing schizophrenia is especially true of industrialized countries, and nowhere is this contrast as acute as with export credit agencies (ECAs). Export Credit Agencies (ECAs) provide companies with billions of dollars annually of tax payers support as insurance against the main commercial and political risks of foreign investments.
In recent years the ECAs of OECD countries have subsidized almost 10% of world trade, approaching a half trillion dollars worth in annual exports backed by government-supported loans, guarantees and insurance.
The ECAs account for the single biggest component of developing country debt : in 1996, a quarter of the total debt was owed to ECAs. ECA support now exceeds by far the total annual investments made by the World Bank and other multilateral development banks.
Years of pressure by civil society have triggered a steady, if painstaking, improvement of the activities both of international financial institutions, such as the World Bank Group, and of multinational enterprises. A growing number of guidelines in the human rights and environmental fields are now being applied to these institutions and corporations, though with varying results.
Unfortunately, the increasing demand for transparency, accountability and the respect for universal human rights has been very slow to reach the ECAs, due to a strong resistance from these agencies as well as from key governments, such as France, Germany, or Spain.
While the FIDH welcomes the attempts of the G-8 and the work of the OECD Working Party on Export Credits and Credit Guarantees with a view to reforming ECAs and defining common environmental guidelines for these agencies, the current proposals have so far been weak and extremely disappointing. In fact nowhere in the various drafts are labour and human rights mentioned.

The FIDH deeply regrets :
- that the proposed "approaches" are limited to environmental concerns
that they are non-binding, which greatly limits their potential impact
- that countries which publicly support strong social, human rights and environmental standards in other fora, such as Germany, Spain and France for example, have shown a strong resistance in applying normative standards to ECAs.

The FIDH believes that ECA operations should be consistent with international human rights law, and that the scope of the guidelines should be broadened to encompass the obligation to respect all human rights, and in particular economic, social and cultural rights as the areas that ECA operations affect the most. That must be done in a binding manner.
The FIDH therefore strongly urges all relevant authorities, national or international, to press for an integration of human rights standards in the proposed ECA guidelines. International human rights instruments offer the only consistent and comprehensive framework for ensuring that ECA-backed projects effectively promote sustainable development and human rights for all.

Recommended steps:

1. ECAs guidelines and conditionality requirements should incorporate international human rights standards as defined by international instruments
2. Independent control mechanisms should be set up to ensure compliance of the ECAs with the guidelines, in order to ensure that inappropriate projects are screened out and that approved projects comply fully with agreed standards.
3. In particular, ECAs should develop internal staff capacity to assess compliance with international human rights conventions and covenants.
4. Social Development Impact Assessments (SDIAs) that build in a human rights dimension should be made mandatory along with Environmental Impact Assessments (EIAs), and a proper procedure for incorporating them in project assessments should be set up.
5. ECAs should not support non-productive projects and programmes, including arms exports and the export of equipment that could be used for military means or civil repression.
6. ECAs should set up a screening mechanism designed to prevent ECAs from getting involved in countries where human rights are massively violated and where the nature of the investment is likely to further encourage human rights violations.
7. ECAs should set up a formal mechanism to consult with civil society, both in OECD and in recipient countries.
8. ECAs should have a clear policy of public access to documents, and in particular make public all documents relevant to the human rights, environmental and development impacts of ECA-backed operations; the presumption should be in favour of disclosure, with companies having to demonstrate commercial confidentiality before a document is withheld from public release.
9. ECAs should establish an independent procedure available for affected people to raise concerns and to adjudicate complaints over ECA-supported projects, perhaps in the line of the World Bank's Inspection Panel.
10. G8 governments should cancel all ECA-created debt.
ECAs should adopt a clause requiring recipients of ECA money to be transparent about payments they make to national governments. More generally, the ECAs should ensure that the companies recipient of ECA-money abide by the same principles of accountability and respect for human rights.

For more details :
See our open letter : http://www.fidh.org
And contact : Anne-Christine Habbard or Marie Guiraud (00 33 1 43 55 25 18)