Common Approaches on the Environment and
Officially Supported Export Credits
53. In 2001, ECGD was a significant driving force
behind the adoption by 24 out of 26 members of the OECD Export
Credit Group of the Common Approaches on the Environment and
Officially Supported Export Credits which sets baseline requirements
for environment assessment among ECAs.[44]
Common Approaches sets out a methodology for screening
projects and taking account of environmental impacts.
54. Common Approaches has been rounded criticised
by NGOs as being too weak and inadequate to instil best practice
in all ECAs, although ECGD's efforts to make improvements have
also been acknowledged.[45]
Criticism has focused in particular on
- the absence of mandatory environmental standards;
- an exemption from screening procedures where
an ECA exposure represents only a small proportion of overall
risk (in the case of the Ilisu Dam, this exemption would have
meant that several participating ECAs, including Hermes in Germany,
would not have had to perform a detailed environmental assessment
despite the high potential impact of the case);
- the absence of a requirement for an Environmental
Impact Assessment in all high potential impact cases (at present
there is only an expectation that an EIA will take place);
- and the absence of any requirement for Environmental
Impact Assessments to be made public.
55. As a consequence of these weaknesses, some NGOs
have been critical of ECGD's decision to sign up to the Common
Approaches, arguing that this "left more progressive
voices with the international ECA community isolated".[46]
This seems to us to be a misunderstanding of the purpose of the
Common Approaches which is to increase the extent to which
ECAs across the board take account of the environmental, social
and developmental consequences of their support decisions. This
does however mean that ECGD's approach needs to be twin track
- pushing ahead with domestic reform while at the same time working
to promote the adoption of more rigorous common standards at an
international level.
56. ECGD's own procedures needed little amendment
in 2001 to bring them into line with the Common Approaches
requirements. The reforms that ECGD has subsequently implemented,
on prior disclosure for instances, means that it has gone well
beyond the basic requirements even if it is still short of best
practice in some cases.
57. The Common Approaches are due to be revised
during the summer of 2003, with agreement on a the revised text
expected in November 2003. ECGD told us that the existing agreement
had been "instrumental in encouraging other ECAs to introduce
meaningful environmental assessment systems"[47]
and that in practice some of the more reticent ECAs had found
that implementing the requirements of the Common Approaches
had not been as difficult as might have been imagined at first.[48]
On the basis of this experience there is real potential for this
year's revision to make significant advances. We welcome the
efforts that ECGD has already made to extend the scope of the
OECD's Common Approaches initiative towards sustainable
development and to have a requirement for all projects, regardless
of size, to be subject to project screening. These issues, together
with greater clarity on standards and greater transparency, should
be priorities in negotiations on the revised Common Approaches.
58. Part of the strength of the Common Approaches
stems from the fact that such a large number of ECAs, including
many of the largest and most influential, were party to the agreement.
We have already noted the limited potential for unilateral action
to affect the processes of international trade and investment.
Much better results can be achieved, and more quickly achieved,
through concerted multilateral action. We recommend that ECGD
treat obtaining unanimity as a priority during the negotiations
on revisions to the Common Approaches; and we further recommend
that the Government take a leadership role in reaching international
consensus to ensure that common environmental criteria are a key
component of all decisions relating to the granting of export
credits guarantees.
44 Turkey declined to agree Common Approaches
because it took exception to a minor part of the text but nevertheless
has implemented a similar system. The USA already had in place
a system which exceeded the requirements of the Common Approaches. Back
45
Q57; Ev 20. Back
46
Ev 20. Back
47
Ev 60. Back
48
Q200. Back
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