Select Committee on Environmental Audit Appendices to the Minutes of Evidence


Memorandum from the Export Credit Guarantees Department (ECGD)


  This Memorandum addresses the points raised in the Annex to the Committee Clerks letter of 31 January requesting information on how ECGD is contributing to the Government's preparations for the World Summit on Sustainable Development to be held in Johannesburg in August 2002.

  ECGD reports directly to the Secretary of State for Trade and Industry, who is a member of MISC 18, but ECGD has not had any significant involvement with the work of this committee.

  ECGD's core purpose, as defined by statute and its Mission Statement, is to benefit the UK economy by facilitating, directly or indirectly, exports goods and services an overseas investment. It does this by giving guarantees, insurance and reinsurance against loss. ECGD operates in accordance with a published Statement Of Business Principles, which includes an explicit commitment to promote sustainable development. ECGD also abides by the OECD-negotiated "Common Approaches on the Environment and Officially supported Export Credits" which is an important milestone in ensuring that the world's leading Export Credit Agencies take account of sustainable development.


What input has your department had to the UK preparations for the World Summit on Sustainable Development?

  ECGD officials participate in the regular inter-departmental meetings on the preparations of WSSD and in preparation for the Monterrey Financing For Development conference, and have signed up to the communications strategy.

  In October 2001 ECGD's Business Principles Adviser contributed to a workshop on "International Finance Institutions and their role in promoting Sustainable Development" organised by the Royal Institute for International Affairs and Forum for the Future. The aim of this workshop was to produce recommendations for WSSD. At the workshop ECGD explained its efforts to integrate sustainability into its export credit insurance and structured financing. The report of the workshop praised ECGD as being a model of good practice for Export Credit Agencies worldwide.

Please set out which UK Sustainable Development Indicators your department has lead responsibility for and which other indicators the department's policies particularly impact on.

  ECGD does not have lead responsibility for any Sustainable Development indicators. However, through its support for UK industry, ECGD des contribute positively to Economic Output and Employment, both in this country and overseas.

  When considering applications for support, ECGD assess the environmental, social and human rights impacts of projects. Of the headline indicators, ECGD take specific account of the potential impact of projects on Climate Change, Air Quality, River Water Quality, Wildlife, Land Use and Waste Generation. The aim is to ensure that projects are broadly compatible with accepted international environmental guidelines such as those used by the World Bank.

  As part of the UK's efforts to relieve the debt burdens of the world's poorest countries, over £1 billion of ECGD debt will be written off. The department is also committed to responsible lending and will only support projects in Heavily Indebted Poor Countries (HIPC) and IDA-only countries that contribute to economic and social development. ECGD has led negotiations at the OECD, which has resulted in similar policies being adopted by all major Export Credit Agencies.

What systems does your department have in place to monitor progress on how far the department's policies contribute to UK progress on sustainable development and the issues that were mapped out in Agenda 21 after the Rio Earth Summit in 1992?

  ECGD's compliance with its business principles is monitored by the Export Guarantees Advisory Council. This is an independent body, tasked with advising the Secretary of State on ECGD's operations. The Council includes experts on sustainable development and has right to review the environmental assessment of all issued guarantees. The Council publishes an annual report that includes an assessment of ECGD's compliance with its Business Principles, and in particular its performance with regard to sustainable development.

  ECGD was a key player in negotiating the OECD Common Approaches on the Environment agreement. As part of this agreement ECGD is required to report annually to the OECD Export Credits Group on the environmental standards and benchmarks when approving projects.

  ECGD is currently considering appropriate performance indicators for public reporting.

February 2002

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