Trade

OECD adopts stronger environmental rules for export credits

 

12/06/2007 - OECD countries have agreed to a Recommendation that calls for stronger environment-related requirements for export deals to qualify for export credit backing from their governments’ Export Credit Agencies (ECAs). 

This latest Recommendation, which replaces one agreed in 2003, requires OECD Member governments to review projects for their potential environmental impacts and to benchmark them against international standards, such as those of the World Bank Group. It also calls for more public disclosure of information, which will increase transparency for the most sensitive projects.  In addition, ECAs will exchange information more regularly in order to improve common practices and promote a level playing field between export credit providers. 

Governments provide official export credits, through ECAs, to support national exporters competing for overseas sales. Most official export credit support involves insurance or guarantee cover for credits provided by private financial institutions. ECAs can be government institutions or private companies operating on behalf of government.  In 2005, the amount of business covered by such support was in excess of US $65 billion.

The Chair of the OECD’s Working Party on Export Credits and Credit Guarantees (ECG), Ms. Nicole Bollen, said this agreement “strengthens the environmental guidelines for ECAs and shows ECAs’ willingness to keep pace with improvements in environmental policies of other financial institutions”.

Main points of the new Recommendation are:  

  • clarification that exports to both new projects and existing operations should be reviewed before  ECAs commit to providing official export credit support.
  • the international standards against which projects should be benchmarked have been extended to include all ten World Bank Safeguard Policies or, where appropriate, all eight International Finance Corporation Performance Standards.
  • stronger disclosure provisions for the projects with the highest potential environmental impacts, to provide for (i) Members to publicly disclose project information and (ii) environmental impact information be made publicly available, as early as possible in the review process and at least 30 days before a final commitment.
  • to increase awareness in non-OECD countries (e.g. China, Brazil and India) who provide official export credit support of the benefits of reviewing the environmental  impacts of projects they intend to support. 

In reviewing the 2003 Recommendation, OECD Members consulted regularly with representatives of business, labour unions and non-governmental organisations. Representatives from the World Bank Group, the European Bank of Reconstruction and Development (EBRD) and the United Nations Environment Programme advised on developments in international environmental standards.

The ECG Members are:  Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom and United States.

For further information, journalists are invited to contact Janet West in the OECD’s Trade and Agriculture Directorate (tel. [33] 1 45 24 89 10).
 
The full text of the Recommendation is available at http://www.oecd.org/officialdocuments/displaydocument/?doclanguage=en&cote=tad/ecg(2007)9

 

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