ECGD's support for the BTC pipeline
In our view, ECGD's decision making
procedures in its consideration of the application from BP for
underwriting support for the Baku-Tbilisi-Ceyhan pipeline construction
project were consistent with its Business Principles. In line
with its stated policy, the Department undertook a lengthy consultation
procedure and considered the representations received from interested
parties taking into account the advice of the independent expert
consultants appointed by the Lenders Group of which it was part.
The Business Principles Unit's review of the views expressed during
consultation, which formed a significant part of the information
put before the Department's Underwriting Committee before it took
the decision to support the project, did represent those views
in a balanced way, and the Department took that review into account
when it attached a series of conditions to its support of the
project as a result.
Where the Department fell short
in its implementation of its Principles was in the transparency
of its communication of its decision. For such a large and potentially
controversial project as the pipeline, publishing a brief explanation
of its decision as the Department did was not enough. In order
to meet its commitment to openness in its business transactions,
ECGD should in future produce a review of the environmental and
social implications of all large scale projects, including a summary
of the issues raised during consultations, a detailed explanation
of how it has addressed them, and its plans for post-decision
monitoring of the project. Such action would help allay the concerns
expressed to us by interested parties that the Department had
not taken due account of their concerns. It should be possible
to produce such a document without betraying commercial or other
confidences.
ECGD's anti-corruption measures
While Ministers have re-affirmed
their determination that the principles of ECGD's anti-corruption
measures will not be compromise and although the Department has
described the recent changes to its anti-corruption measures
as clarifications of what it requires from customers applying
for support, we are not at all convinced that such 'clarifications'
will not seriously weaken the Department's ability to contribute
to the Government's policies against bribery. Last year we welcomed
the measures which ECGD sought to impose from 1 May 2004, but
noted that their effectiveness would depend on the rigour with
which they were to be implemented. We deeply regret that their
effectiveness was never seriously tested.
