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Key documents:
• Key reforms needed for ECAs
• Five examples of ECA projects
• NGO recommended changes to the OECD common approaches document
• Race to the Bottom 2

Export Credit Agencies and Investment Insurance Agencies, commonly known as ECAs, provide government-backed loans, guarantees and insurance to corporations seeking business opportunities in developing countries or emerging markets that are considered too risky (commercially or politicially) for conventional corporate financing. ECAs are mostly national, public or publicly-mandated agencies that usually support companies from their home country.

ECAs are now the world’s biggest group of public International Financial Institutions, collectively exceeding the World Bank Group in size (see Facts and Figures for more details). Yet, like the World Bank Group 20 years ago, most ECAs have no social and environmental standards. Most do not take into consideration the impacts of the projects they support on the environment or the rights of local peoples, in contradiction with their governments' commitments to sustainable development. Unfortunately, ECAs are involved in many projects that destroy forests, from palm oil plantations, pulp and paper mills to oil pipelines and large dams.

In the last few years, the US ExIm Bank, Australia's EFIC and most recently Japan's JBIC and NEXI have made subtantial progress in adopting some environmental standards. In stark contrast, European ECAs have refused so far to recognize the harmful impacts of their involvement in developing countries and to subject their finance and insurance operations to environmental and social standards. Furthermore ECAs are not developing human rights or development guidelines aimed at ensuring that ECA lending does not contribute to ecologically and socially harmful projects. As ECAs mitigate the risk of commercial banks, they reduce the banks’ incentive to carry out proper due diligence regarding, for example, the availability of legal wood supplies for the project they are financing or insuring.

At the EU level, the European Commission, in particular DG Trade, plays a role in the harmonization of Export Credit Agencies and the co-ordination of policy statements and negotiation positions.

Fern’s goal is to achieve binding environmental, development, human rights and social guidelines for EU-based ECAs, set at a significant high level and drawing upon relevant internationally recognised standards and EU legislation. In order to achieve this, FERN is co-ordinating the European ECA reform campaign which brings together a coalition of organisations including Both Ends (The Netherlands), The Cornerhouse (UK), ECA Watch (Austria), ECA Watch (Finland), FERN (EU), Iberian ECA Reform Campaign (Spain and Portugal), Federation Internationale des Droits de l'Homme, Les Amis de la Terre (France), Reform the World Bank Campaign (Italy), Swedish Society for the Conservation of Nature (Sweden), Urgewald (Germany) and WEED (Germany).