ANNEX III
HOW DOES ECGD COMPARE?
Since the end of 2000, ECGD has had a set of
Business Principles[130],
with the role of the Export Guarantees Advisory Council (EGAC)
expanded to advise also on these Principles. The Principles require
ECGD to take into account the Government's international policies
on sustainable development, environment, human rights, good governance
and trade. These Principles, along with the impact analysis questionnaire
and related consultation process, put ECGD ahead of some ECAs
with regard to managing the environmental impacts resulting from
its activities.
However, when compared with the international
best practice identified in Appendix 2, ECGD cannot be called
an overall leader. In particular, its relative lack of clear environmental
standards, transparency and disclosure, monitoring, environmental
exclusions and positive incentives for projects which enhance
the environment mean that it currently falls behind many of the
examples cited.
The following description, outline ECGD's policies
in the key areas analysed for this research, in comparison with
best practice. In general, ECGD's policies comply with the OECD's
Common Approaches on Environment and Officially Supported Export
Credits. However, the Common Approaches are only applied to civil
projects (ie non-aerospace and non-defence), which account for
less than half of its project portfolio (the exact percentage
varies by year).
1. ENVIRONMENTAL
SCREENING AND
REVIEW PROCEDURES
— As noted, only civil cases are screened
based on the case impact analysis questionnAire. In terms of content,
the questionnaire falls behind best practice through not requiring
(for many of the questions) backing documentation or explanation
of answers, clear definitions of terminology and categories, and
a section to outline potential positive environmental impacts.
— ECGD also lacks sector specific criteria,
policies or checklists—at least there is no publicly-available
information regarding such criteria.
— EIAs are required only for large
greenfield projects in sensitive sectors/locations, but not for
all category A projects. No clear environmental audit procedures
are described for category B projects.
2. ENVIRONMENTAL
STANDARDS
— ECGD, as for most ECAs, follows a
benchmarking approach, but does not publish information on the
standards selected for a particular project. (Currently there
is no standard disclosure of environmental information for projects,
although this policy is currently under discussion.) There is
an "expectation" of compliance with World Bank or other
MDB standards if host country standards are insufficient.
3. MONITORING
— At the project level, monitoring
takes place on a case by case basis. There are no sector-specific
guidelines for monitoring, which is usually on the basis of verified
reporting by the project owner/operator throughout the period
of ECGD financial exposure.
— At the organisational level, the
EGAC is responsible for reviewing the application of the Business
Principles to new cases being considered for support. Since this
process only began in 2001, information on the results of the
project reviews is so far limited to two cases. In both cases,
the Business Principles and relevant procedures were found to
have been "applied appropriately"[131].
Apart from this, there is no reporting on the overall performance
of the organisation with respect the Business Principles, or other
environmental criteria such as overall CO2 emissions.
4. ENVIRONMENTAL
EXPERTISE
— In the 2000-01 Annual Report, the
EGAC notes with respect to the Business Principles that it is
"aware of the investment made by ECGD in specialist training
in this area for underwriters and other staff"[132].
However, there is no other publicly available information on the
environmental expertise within ECGD, apart from the existence
of the Business Principles Unit with two engineering/environmental
specialists. It is thus unclear whether there is sufficient capacity
in the organisation to undertake the environmental procedures
ECGD has committed to.
— There does not appear to be any specialised
expertise within ECGD related to environmental exports and exporters.
5. TRANSPARENCY
AND DISCLOSURE
— Transparency and disclosure is one
of the key issues being discussed as part of ECGD's consultation
process, and so may change in the near future. However, currently
it is one of the areas where ECGD falls furthest behind.
— Some ex ante information is released,
but only for sensitive projects on request.
— Some ex post project information
is published in the Annual Report. This is a new policy and an
improvement compared to the past, although the information is
very limited as yet. It includes only a listing of the country,
exporter, buyer, project name and ECGD maximum liability, and
does not cover all projects.
6. EXCLUSIONS
— There are no exclusions—although
exports to Highly Indebted Poor Countries are limited to "productive
expenditures".
7. POSITIVE INCENTIVES
FOR ENVIRONMENTAL
EXPORTS
— No positive incentives or specialised
environmental care products.
8. APPEAL PROCEDURES
— The only course of action to appeal
an ECGD decision is through parliamentary mechanisms. Parliamentary
committees can scrutinise ECGD. Decisions can be challenged through
Parliamentary Ombudsman and judicial review. However, there are
no procedures specific to ECGD.
130 See www.ecgd.com/downloads/ECGDBusPrinciples.pdf Back
131
Export Credits Guarantee Department, Annual Report & Resource
Accounts 2000-01, London, 2002. Back
132
Ibid. Back
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