Supplementary letter to the Clerk of the
Committee from WWF-UK
Many thanks for the chance to give evidence
to you recently with regard to the review of the sustainability
of the ECGD's business principles and case impacts assessment
process.
Several of you requested further information
regarding our views on specific issues in addition to the written
evidence we provided. To reiterate WWFs' views echo those of FoE
and Nicholas Hildyard both in their written and oral evidences.
We would draw the committee's attention in particular to NGO comments
on the OECD Common Approaches process in Mr Hildyard's written
evidence.
We have already sent some additional written
evidence in the form of some policy documents on forests, water/dams
and extractive industries but I felt it would be useful for me
to explain these briefly. WWF has put network resources into developing
such guidance and so we look to the financial sector's response.
WWF is a world-wide network of hundreds of professionals
with expertise in sustainability—the ECGD as has been stated
numerous times is severely under-resourced in these areas with
at the most one person with a sustainability mandate for every
£1 billion of support.
Vision
As I mentioned in our evidence session, the
Collevecchio Declaration that you have received is a collective
NGO vision for a more sustainable financial sector signed by over
100 international NGOs and launched this year at Davos World Economic
Forum. As you will see this declaration calls on Financial Institutions
(FIs) to embrace six main principles which reflect civil society's
expectations of the role and responsibilities of the financial
services sector in fostering sustainability. We would see this
as a good model for ECGD to follow whilst designing its road-map
towards sustainability.
Best practice
We would like to refer you to our written evidence
which highlights some areas of best practice and shows—despite
assertions to the contrary by the ECGD—that a number of
foreign ECAs are ahead of ours. This is in terms of avoiding unsustainable
projects, directing support to sustainable projects, transparency
and disclosure to name but a few areas of concern.
Exclusions
There has to be agreement that certain activities
are simply de facto not acceptable for support from UK
taxpayer money. Many of you asked what is missing from the ECGD
changes and our NGO colleagues and we have given great detail
on this. Above all the ECGD needs to follow best practice from
other ECAs and private banks in developing a set of exclusions
and policies for avoiding support of unsustainable projects. Our
guidance to the financial sector on forest lending and water lending
are based on well-accepted standards such as the Forest Stewardship
Council and World Commission on Dams and have already been implemented
by or are being reviewed by numerous ECAs, private banks and Multi-lateral
Development Banks[154].
Both of these policy guidance documents have been provided to
the committee as well our Investors Guide to Dams and headline
Challenges to the Financial Sector on Dams. These documents explain
our views on how we feel investors should approach avoiding support
for unsustainable projects.
No-go areas
We have also provided the committee with our
To Dig Or Not to Dig document which explains how to approach the
issue of geographical no-go areas for the extractive sector. This
document will enable ECGD to understand better how to avoid support
for projects in areas the NGO community feels should be off limits.
These areas amount to only approximately 6% of the world's landmass
of particular value for conservation purposes. The document is
supported by the United Nations Environment Programme and is underpinned
by the Amman Declaration and Convention on Biological Diversity
to which the UK Government is a signatory. For this reason we
would expect the ECGD—a UK Government department—to
operate in line with the spirit and letter of the Convention,
Declaration and our policy guidance.
Climate change
Again we have provided written input to the
committee in terms of a report on ECAs and renewable energy which
we highly recommend the committee encourage the ECGD to review
and respond to. There are numerous examples of ECA best practice
in measuring and reducing the carbon intensity of support portfolios.
WWF's team of over fifty climate change professionals can provide
in-depth advice on how the ECGD should approach these issues.
Headline concerns with process changes
This is not the place to reiterate all of the
NGO concerns with the ECGDs processes but, to repeat briefly,
headline concerns relate to amongst others:
— There would appear to have actually
been an increase in spending on carbon-heavy projects in the energy
and power sectors
— The improvements in transparency
are cosmetic and are not up to best practice exhibited by the
WB or numerous other ECAs.
— There are concerns over the ECGDs
interpretation of the restrictions of the Parliamentary Act to
which they are accountable. The onus should be on ECGD to explain
their views of such restrictions.
Feedback on changes to ECGD procedures
In our evidence session we promised to get back
to the committee with the results of the session we will be having
with the ECGD on June 3 in which they will explain which aspects
of our advice they have and have not taken into account and their
reasoning for this. We will get back to the committee as soon
as we have had this session.
May 2003
154 This dialogue is being held with other ECAs, private
banks such as ABN AMRO a number of whom have implemented our exclusions
guidance as well as MDB's such as the EBRD. Back
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