Informing NGOs, MEPs, Member States, the European Commission and the media. Issue 113, February 2007.

DON’T UNDERWRITE ARMS SALES TO POOR COUNTRIES, EUROPEAN PARLIAMENT SAYS

On 18 January 2007 the European Parliament adopted a resolution calling for a more robust implementation of the EU’s Code of Conduct on Arms Exports and criticizing the role of EU-based export credit agencies (ECAs) in international arms trading.¹

The European Parliament is concerned that many ECAs in the EU are involved in heavily subsidising arms exports to third countries. This is particularly the case for the ECAs of Britain and France, where a substantial proportion of export credit support is dedicated to the export of arms. The resolution highlights the fact that the support given by European ECAs to the financing of arms deals often increases the debt burden of developing countries. It therefore calls on ECAs not to extend financial support to EU-based companies selling military products to countries that will not be able to ‘immediately pay back those loans’. The report further urges the adoption of agreed common reporting standards for Member States, which should include information on the funding of arms exports through national ECAs.

FERN welcomes the references to export credit guarantees but wishes the report had gone further. The arms trade does not promote development, occurs in a climate of secrecy conducive to corruption, and has devastating impacts on security and human rights. Member States should not be underwriting arms sales with public funds.

1 Report available at: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+REPORT+A6-2006-439+0+DOC+PDF+V0//EN

ONE-STOP SHOP FOR VPA INFO

Want to know the latest developments of the Voluntary Partnership Agreement (VPA) in Cameroon? Or which countries have developed an acceptable definition of legality? A new website has been set up – www.loggingoff.info – co-managed by an NGO coalition which represents NGOs in Ghana, Liberia, Malaysia, Cameroon, Indonesia and Europe. The website aims to give up-to-date information on developments in these countries from an NGO perspective. The website also allows for open and closed discussion forums. FERN, Global Witness and WWF, the European members of this coalition, also hope that governments will use the website to present their positions and discussion papers. For comments/ suggestions please email iola@fern.org.

OPEN LETTER CALLS ON EU TO ABANDON BIOFUEL TARGETS

At the time of writing, over 170 organisations have signed an open letter calling on the EU to abandon targets for biofuel use.¹ The letter, which was sent to ministers in the run-up to the Energy Council meeting on 15 February 2007, highlights concerns that EU biofuel targets as proposed by the European Commission on 10 January 2007 (see FW 112) will promote crops with poor greenhouse gas balances, trigger deforestation and loss of biodiversity and exacerbate local land use conflicts. It also points out that the proposed targets put 20 million hectares of rainforest in Indonesia at extreme risk of deforestation. If destroyed, and if associated peat land were drained, 50 billion tonnes of CO2 could be released – the equivalent of six years’ worth of current global CO2 emissions. The letter will remain open for sign-on and will be sent to heads of state, who will make a final decision on EU biofuel targets at the March Spring Council.

1 Open letter available for download and to sign on at www.biofuelwatch.org.uk

STATE AID GUIDELINES

On 6 December 2006 the European Commission adopted State aid guidelines for the agriculture and forestry sector for the financial period 2007–2013.¹ These are a clear improvement on the old guidelines, as they will bar existing plantations from receiving State aid. State aid can only go towards ‘living trees’ and their natural environment in forests if the Member State can demonstrate that the measures directly contribute to maintaining or restoring the ecological, protective and recreational function of forests. However, State aid can still be used to establish plantations on non-forest land, without accompanying conditions relating to the environment and biodiversity loss.

The new guidelines will also restrict State aid for measures that would cause irreparable damage to bog and swamp forest, such as have been financed in Estonia. These ‘drainage measures’ or ‘soil improvement measures’ are only accepted when they do not reduce biodiversity, cause nutrient leaching or adversely affect natural water ecosystems or water protection.

1 Available at: http://eur-lex.europa.eu/LexUriServ/site/en/oj/2006/c_319/c_31920061227en00010033.pdf

AGREEMENT IN INDONESIA

Indonesia, the latest country to start negotiations with the EU for a voluntary partnership agreement (VPA), is now one step ahead of Ghana and Malaysia. It has agreed a definition of timber legality following discussions between NGOs, indigenous peoples organisations, the timber industry and government representatives. Although there will be many obstacles on the route to implementation, the agreed consensus is a huge step forward in the process of forest law reform, increased transparency and recognition of indigenous peoples’ rights. The definition is already publically available in Bahasa and is currently being translated into English.¹ Details of the process leading to the definition are available on www.loggingoff.info and will hopefully be an inspiration to other countries working towards a legality definition as part of the VPA process.

1 For the Bahasa version, see: http://www.lei.or.id/indonesia/news_detail.php?cat=0&news_id=63. The English version will soon be available on: www.loggingoff.info.

FLAWS REVEALED IN EC AID ALLOCATIONS

As EC draft aid plans for Africa, Caribbean and Pacific (ACP) countries are becoming publicly available, so it is becoming clear that there are incoherencies within EU commitments to address the environmental challenges affecting the poor. The draft EC/UK aid plan for Sierra Leone,¹ for example, proposes to address these issues via ‘thematic’ funding sources. These are, however, both insufficient (having very little money in them compared to the funding for country strategies) and inappropriate (being meant for specific projects) for addressing environmental problems. It seems the EC has nice words about integrating the environment into its aid policies, but less sense of how to apply this in practice.

1 Available at: http://www.dfid.gov.uk/consultations/

NEWS IN BRIEF

Sarawak blockade broken: A Penan blockade in Sarawak, Malaysia – in place since 2004 – to stop logging on their ancestral lands has been broken by government forces and the logging company Samling, which aims to restart logging in the area. Despite this, Credit Suisse, HSBC and Australia-based Macquarie are underwriting Samling’s initial public share offering on the Hong Kong Stock Exchange, expected next month. Not only does Samling have a notorious track record of forest destruction and violation of native peoples’ rights, but the banks’ support for Samling violates their own codes of conduct and policies. Sarawak has lost almost all of its primary rainforest; what is left will be logged by Samling. This is a clear violation of HSBC forest sector lending guidelines which promise not to provide facilities, financial assistance or advice to companies involved in logging primary rainforest. Credit Suisse claims it is actively committed to environmental protection. Lending support to Samling flies in the face of these commitments. Who would still want to believe anything these banks say?

MEPs allowed scrutiny of ACP aid plans: The EU Presidency has announced that the European Parliament will be allowed to scrutinise the EU aid agreements – known as country strategy papers – with African, Caribbean and Pacific (ACP) countries. EU aid to the 78 ACP countries mainly comes from the European Development Fund, which is separate from the EU’s budget and therefore not covered by the EU’s new Development Cooperation Instrument

(DCI), which already required consultation with the Parliament about aid plans.

Key Principles for VPAs: On 15 January 2007, Malaysian NGOs presented their Key Principles for the Malaysia–EU VPA process to the EU and the Malaysian government. This is the second document on the VPA process that has been presented by a coalition of Malaysian NGOs. To date there has been no response from the Malaysian government to either of the documents, nor has the Malaysian government given any indication of the sort of consultation process they envisage for agreeing a legality definition. The Key Principles are available on www.loggingoff.info as well as on www.fern.org

CEPs slowly becoming publicly available: Following Commissioner Michel’s letter to FERN in November 2006 (see FW 111) announcing that Country and Regional Environmental Profiles (CEPs and REPs) were to be made public, the Commission is inching forwards in actually making it happen. On 22 January 2007, the Commission headquarters sent an internal note to all heads of ACP delegations urging them to make available ‘any Profile that has been finalised and meets certain quality standards’, and documents are now slowly appearing on the websites of the delegations. Commission headquarters are lagging behind: the site which compiles all the aid plans does not yet include any link to environmental profiles.

FOREST AGENDA

27 February: Seminar on environment and gender integration. Brussels.

2 March: CPET meeting. Oxford.

12–13 March: Environmental NGO meeting with FSC. Bonn.