Publicly supported Export Credit and Investment Insurance Agencies are supporting some $432 billion in trade and investment, accounting for more than 10.4 percent of world exports. Of this amount, over $70 billion a year is for long term loans and guarantees for investments and projects in developing countries that often have significant adverse environmental and social impacts. Long term loans from these agencies account for more than 20 percent of developing country debt, and 37 percent of developing country debt owed to official, publicly financed agencies.
Publicly supported private capital flows have the potential to foster environmentally and socially responsible development, thereby contributing to advance the numerous commitments towards sustainable development made by governments at the 1992 Rio de Janeiro Earth Summit as well as in subsequent international fora and agreements. Multilateral and bilateral finance agencies such as the World Bank Group and the bilateral aid agencies of the OECD countries have adopted in recent years environmental, social, and transparency policies concerning their activities, and increasingly these policies apply to the growing financial support of these agencies for private sector investment.
The lack of minimal standards of transparency, and of coherent environmental and social policies for publicly supported export credit and investment insurance agencies has resulted in an international double standard whereby these agencies are supporting projects and investments that would be unacceptable to publicly financed multilateral development banks and bilateral aid agencies. Examples include large dams involving massive forcible displacement of poor populations such as the China Three Gorges and India Narmada River Maheshwar projects, environmentally destructive mines threatening protected areas and indigenous peoples, large-scale coal-fired power plants with no consideration of cumulative climate change impacts or of environmentally more benign energy investments, and investments in unsustainable exploitation of the earth's remaining intact tropical and temperate forests.
The lack of even a minimal commitment not to finance economically unproductive investments and expenditures by many of these agencies coupled with the severe environmental and social impacts of many of their investments works directly at cross purposes with the goals of other publicly supported multilateral and bilateral agencies. Export credit and insurance agencies are a major contributor to a foreign debt incurred too frequently for unsustainable and unproductive activities, and for many developing countries this debt burden is hindering sustainable economic growth. The lack of common standards is resulting in a race to the bottom among these agencies whereby any agency that attempts to set responsible standards will be penalized.
At the 1997 Denver Global Economic Summit, the G7 countries declared that "private sector financial flows from industrial nations have a significant impact on sustainable development worldwide. Governments should help promote sustainable practices by taking environmental factors into account when providing financing support for investment in infrastructure and equipment. We attach importance to the work on this in the OECD and will review progress at our meeting next year." Although there has been much talk in the OECD, there has been little concrete progress towards an actual agreement on these issues.
Therefore, we call upon governments and the OECD to engage in a frank and constructive dialogue with civil society in our countries and in countries that are recipients of export finance on the following critical issues:
1. CALL FOR GREATER TRANSPARENCY AND PUBLIC PARTICIPATON
Access to environmental and social impact information, consultation with, and participation of civil society and affected and interested communities and groups is an elemental principle for public agencies supporting investment and economic development. It is a principle recognized in numerous international fora and organizations. Lack of transparency and consultation with affected communities and concerned groups increases project risk, the very thing export credit and investment insurance agencies have been created to mitigate..
2. CALL FOR ENVIRONMENTAL SCREENING AND ASSESSMENT
Environmental screening procedures prohibiting financial support for particular toxic substances and environmentally harmful projects, as well as transparent, independently prepared, participatory impact assessments are common practices in OECD countries to help ensure proper use of public funds and guarantees. These procedures need to be applied to the activities of export credit and insurance agencies.
3. CALL FOR SOCIAL SUSTAINABILITY
Publicly supported private sector investment should serve the public interest in industrialized and developing countries, as the simple quid pro quo for the use of scarce public financial support where there are many alternative uses for such support. Use of public funds, guarantees and risk insurance should not contribute to the environmental and social impoverishment of affected communities and citizens, and should in no case support investments that contribute directly or indirectly to the violation of basic human rights.
4. CALL FOR AGREEMENT ON COMMON ENVIRONMENTAL AND SOCIAL STANDARDS
Based on the principles cited above, we urge our governments through the G7, OECD and other fora to call for an agreement on common environmental and social standards for export credit agencies; to set a deadline for reaching such an agreement within two years; to base the agreement on minimal existing standards in other publicly supported agencies subsidizing public and private investment such as those of the World Bank Group or the OECD Development Assistance Committee (DAC); and to extend the mandate for reaching such an agreement to investment insurance agencies not represented in the OECD deliberations but which do have a common forum in the Berne Union, the International Union of Credit and Investment Insurers.
Signed by the following organizations:
Jorge Cappato, Fundación Proteger, Argentina Lee Rhiannon, AID/WATCH, Australia Mark Pearson, Animal Liberation, Australia Jeremy Hobbs, Community Aid Abroad (Oxfam in Australia), Australia Sarojini Krishnapillai, Friends of the Earth, Australia Igor O'Neill, Mineral Policy Institute, Australia Ian Fry, Pacific BioWeb, Australia John Revington, Rainforest Information Centre Australia Senator Dee Margetts, Parliamentary Representative for The Greens WA, Australia Michiel van Voorst. EURODAD, Belgium Ariane Crampton, FERN, Belgium Magdalena Guilhon, Cemina - Centro de Projetos da Mulher, Brazil Magda Renner, Friends of the Earth, Brazil Mauricio Galinkin, Fundação CEBRAC, Brazil Sérgio Henrique Guimarães, Instituto Centro de Vida, Brazil Donald Sawyer, Instituto Sociedade População e Natureza, Brazil Thais Rodrigues Corral, REDEH - Rede de Desenvolvimento Humano, Brazil Samuel Nguiffo, Centre pour l'Environnement et le Developpement, Cameroon Rolf Bettner, Habitat Protection Society, Canada Robin Round, Halifax Initiative, Canada Isabel Crizon, Instituto de Estudios Ambientales para el Desarrollo, Colombia Pavel Pribyl, Hnuti DUHA/Friends of the Earth, Czech Republic Ricardo Navarro, CESTA - Friends of the Earth, El Salvador Peep Mardiste, Tartu Student Nature Protection Group, Estonia Kaija Helle, Friends of the Earth, Finland Bernhard Henselmann, Artists for Nature, Germany Henry Mathews, Association of Critical Shareholders, Germany Dorit Lehrack, Bund für Umwelt und Naturschutz (BUND), Germany Phillip Mimkes, Coordination gegen BAYER-Gefahren, Germany Bernhard Henselmann, EarthLink, Germany Ulrike Eggers, Eine Welt Netzwerk Hamburg, Germany Katrin Seifert, Euronature, Germany Sieglinde Weinbrenner, FIAN, Germany Helgard Wagner, IMBAS, Germany Bernhard Völk, Initiative Bessere Zukunft, Germany Heike Drillisch, infoe, Germany Sibylle Schücking-Helfferich, Lobby für Menschenrechte, Germany Hans-Christian Mittag, Naturschutzbund Deutschland (NABU), Germany Dario Jana, Red Internacional de Apoyo al Pueblo Pehuenche, Germany Reinhard Behrend, Rettet den Regenwald, Germany Caroline Zúñiga, Urgewald, Germany Esther Hoffmann, Watch Indonesia!, Germany Barbara Unmüssig, WEED, Germany Erzsébet Schmuck, National Society of Conservationists - Friends of the Earth, Hungary Shripad Dharmadhikary, NBA - Narmada Bachao Andolan, India Kavaljit Singh, Public Interest Research Group, India Titi Soentoro, Bioforum, Indonesia Hasjrul Junaid, SKEPHI, Indonesia Sadhbh O'Neill, Earthwatch - Friends of the Earth, Ireland Francesco Martone, Campagna per la Riforma della Banca Mondiale, Italy Ikuko Matsumoto, Friends of the Earth, Japan Shinichi Sakuma, Japan TNC Monitor, Japan Hida Yuichi, Kobe Student Youth Center, Japan Mika Iba, Network for Safe and Secure Food & Environment, Japan Ueno Satoshi, No Nukes Asia Forum, Japan Tomoko Sakuma, People's Forum 2001, Japan Bank Monitoring Unit, Kenya Saulius Piksrys, Atgaja Community, Lithuania Linas Vainius, Lithuanian Green Movement, Lithuania Elizabeth Wong, Suara Rakyat Malaysia, Malaysia Gustavo Alanís-Ortega, The Mexican Environmental Law Center, Mexico Ulli Eins, Earthlife Africa - Namibia Branch, Namibia Shobhakar Budhathoki, INHURED, Nepal Theo Ruyter, Both ENDS, The Netherlands Micha Kuiper, Friends of the Earth Utrecht, The Netherlands Yvette Lawson, Komitee Indonesia, The Netherlands Sander vam Bennekom, Tools for Transition, The Netherlands Oliver Hoedeman, Towards a different Europe, The Netherlands Fiona Dove, Transnational Institute, The Netherlands Irene Bloemink, Friends of the Earth, The Netherlands Ingrid Ennis, UNITEC, New Zealand Morten Rønning, The Future in our Hands/Norwatch, Norway Øyvind Eggen, FIVAS - Association for International Water and Forest Studies, Norway Elias Díaz Peña, SOBREVIVENCIA - Friends of the Earth, Paraguay Shay Cullen, Preda Foundation Inc., Philippines Ewa Charkiewicz, CEECAP/Tools for Transition, Poland Magda Stoczkiewicz, Polish Ecological Club, Poland Bako Mihaly, StrawberryNet Foundation, Romania Andrei Laletin, Friends of Siberian Forests, Russia Vladimir Petrenko, Saratov Union for Chemical Safety, Russia Sviatoslav Zabelin, Socio-Ecological Union, Russia Norbert Brazda, Center for Environmental Public Advocacy, Slovakia Juraj Zamkovsky, Friends of the Earth, Slovakia Juraj Lukac, WOLF Forest Protection Movement, Slovakia Vida Ogorelec Wagner, UMANOTERA, The Slovenian Foundation for Sustainable Development, Slovenia Dr. Patrick Bond, Lecturer, University of the Witwatersrand, South Africa Sören Lindh, Africa Groups of Sweden, Sweden Frode Pleym, Fältbiologerna, Sweden Dennis Pamlin, Friends of the Earth, Sweden Bo Thunberg, Swedish Society for Nature Conservation, Sweden Daphne Thuvesson, Trees and People Forum, Sweden Peter Bosshard, Berne Declaration, Switzerland John Kunzli, Bruno-Manser-Fonds, Society for the Peoples of the Rainforest, Switzerland Richard Gerster, Swiss Coalition of Development Organisations, Switzerland Mensah Todzro, Les Amis de la Terre, Togo Borys Vasylkivsky, EcoPravo-Kyiv, Ukraine Serghiy Fedorynchyk, Zeleny Svit (Green World), Ukraine Larry Lohmann, The Corner House, United Kingdom Frances Carr, Down to Earth, United Kingdom Saskia Ozinga, FERN, United Kingdom Stuart Wilson, Forests Monitor, United Kingdom Marcus Colchester, Forest Peoples Programme, United Kingdom Ross Nockles, Reforest The Earth, United Kingdom Patricia Feeney, Rights and Accountability in Development, Oxford University, United Kingdom Maurizio Farhan Ferrari, World Rainforest Movement UK Office, United Kingdom Nick Mabey, World Wide Fund for Nature, United Kingdom Atossa Soltani, Amazon Watch, USA Soren Ambrose, Alliance for Global Justice, USA Anthony Rose, Biosynergy Institute, USA Dana Clark, Center for International Environmental Law, USA Terence Turner, Professor of Anthropology, University of Chicago, USA Bruce Rich, Environmental Defense Fund, USA Prof. Bela Liptak, Editor, Environmental Engineers' Handbook, USA Mark Goldberg, Federal Land Action Group, USA Andrea Durbin, Friends of the Earth, USA Daphne Wysham, Institute for Policy Studies, USA Juliette Majot, International Rivers Network, USA Usmaan Raheem Ahmad, Kashmir Environmental Watch Association, USA Janet Gottschalk, Alliance for Justice Network, Medical Mission Sisters, USA Barbara Bramble, National Wildlife Federation, USA Tim Hermach, Native Forest Council, USA Paxus Calta, Nuclear Information Resource Service, USA Douglas Norlen, Pacific Environment and Resources Center, USA Michael Morrill, Pennsylvania Consumer Action Network, USA John Peck, Progressive Student Network, University of Wisconsin, USA Tim Keating, Rainforest Relief, USA Robert Kinsey, Peace and Justice Taskforce, Rocky Mountain Conference, USA Larry Williams, Sierra Club, USA James Hansen, Wetlands Preserve, USA John Friede, Worldview, USA Mark Dubois, WorldWise, USA Njoki Njoroge Njehu, 50 Years Is Enough: U.S. Network for Global Economic Justice, USA Dusan Vasiljevic, GREEN TABLE, Yugoslavia Africa Water Network, Ambika Chawla, A SEED, Europe Joszef Feiler and Petr Hlobil, CEE Bankwatch Network Alcides Faria, Ecoa/ Rios Vivos Roberta Cowan, Friends of the Earth - International Paula Palmer, Global Response Debra Preusch, Interhemispheric Resource Center David Katz, EcoPeace Middle East Environmental NGO Forum Gary Burniske, Rainforest Foundation International Ricardo Carrere, World Rainforest Movement