Select Committee on International Development First Report


APPENDIX 19

Memorandum from BP Amoco plc

  These are the comments of BP Amoco plc in response to the public consultation announced by the Secretary of State for Trade and Industry on the review of the mission and status of the Export Credits Guarantee Department (ECGD).

  On 7 July 1999, BP Amoco's Chief Executive, Sir John Browne, wrote in a letter to the Prime Minister regarding Angola:

    "The opportunities for UK business as a whole (. . . in Angola. . . ) are already significant, though the fulfilment of the potential does not depend on a decision by the Government to grant ECGD support for UK companies. As you may be aware, French and American governments already provide extensive support for their companies.

    "This does not directly affect BP Amoco, but we would welcome the chance to work with UK companies in Angola. We are taking up the ECGD issue with the Treasury and would welcome your support for a step which we believe would avoid UK companies being left at a serious competitive disadvantage."

  The above captures neatly our position. The nature of BP Amoco's business is normally that of an investor rather than that of an exporter or contractor. Thus our direct involvement with ECGD has been limited and this therefore curtails our ability to comment in depth on the ECGD. But this does not lessen the importance of the ECGD to sectors in which we operate such as the oil and gas exploration and production, refining and chemicals industries.

  As a UK company which operates internationally, procuring goods and services globally, we do a great deal of business with UK oil services companies. We are conscious of complaints by UK suppliers and contractors that they find it difficult to get export credit cover, unlike their competitors in other countries which all benefit from their own national export credit agencies. Unlike BP Amoco, which has an extensive international investment portfolio and widely diversified business risks, such companies often require government guarantees to be competitive.

  We welcome the opportunity of working with UK oil services companies, and would welcome changes to the services provided by the ECGD which might increase the chances of our being able to do so in overseas markets. We are conscious that a negative impact on the ability of the UK oil services sector to export on a level playing-field with competitors from other countries may ultimately affect its ability to serve the UK offshore oil industry. This may particularly be the case in new environments such as those that need deep-water technology.

  We recognise that these will not be the only considerations you will take into account in your review of the ECGD, but believe that they are important and ought to be taken into account.

  More broadly, in the context of the Government's sustainable development policy, and its trade and environment principles, our own activities are conducted in accordance with our business policies, set out in our "What we stand for" policies brochure (see enclosed). These policies set the boundaries within which we work with respect to ethical conduct; employees; relationships; health, safety and environmental performance; and, control and finance. Our own projects, we believe, make fundamental contributions to development. We increasingly use tools such as Social Impact Assessments (SIAs) ahead of major investments.

  We expect the same from third parties directly acting on BP Amoco's behalf and we seek partners, contractors and suppliers, including any which might benefit from the ECGD, whose policies are consistent with our own. We will make our contractors and suppliers aware of our own commitments and expectations, and their responsibilities in implementing them.

  We hope that these comments prove useful. Please do contact me if you require any further information.

BP Amoco plc

October 1999


 
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