Cable criticised for backing reckless loans
Part of Vince Cable’s Department for Business, UK Export Finance (formerly ECGD), has backed £33 million of loans, including to Azerbaijan, China, Nigeria and Russia without carrying out any assessment of their social and environmental impact. The loans are for equipment for coal mines, a nuclear power station, a methanol plant and a natural gas delivery systems.
The lack of any assessment was revealed in UK Export Finance’s Annual Report, which was published at lunch time today.[1] The report was released just one hour before UK Export Finance Chief Executive Patrick Crawford was due to appear before a parliamentary inquiry into his department’s operations.
Since regulations were abolished in 2010, UK Export Finance has not conducted any assessment of the impacts of individual loans of less than £10 million. In 2011-12, this includes:
• A £6 million loan to an Azerbaijan methanol plant to buy catalysts
• A £6 million loan to a Chinese nuclear power plant to buy pumps
• A £6 million loan for a natural gas delivery system in Nigeria
• Loans of £5 million and £9 million to two Russian coal mines for equipment
Tim Jones, Policy Officer at Jubilee Debt Campaign, said:
“Whenever the UK government backs loans for exports, it should be assessing what impact those exports will have. Yet Vince Cable is supporting potentially damaging projects such as coal mines and methanol plants without his department showing any interest in how the money and exports will be used.”
The 2010 coalition agreement states that UK Export Finance will become a champion “for British companies that develop and export innovative green technologies around the world, instead of supporting investment in dirty fossil-fuel energy production.”[2]
Yet the annual report shows that UK Export Finance has backed £14 million of loans to Russian coal mines, and had agreed up to £920 million of loans to Brazilian oil company Petrobras for deep sea oil exploration and drilling. The UK Export Finance annual report says of the Petrobras loan: “Significant adverse environmental impacts anticipated, including beyond site boundary.” No green energy projects were supported in 2011-12.
Tim Jones, Policy Officer at Jubilee Debt Campaign, said:
“In the last two years the coalition has done nothing to fulfil its pledge to stop subsidising dirty fossil fuels, and actually appears to be going on a carbon lending binge.”
UK Export Finance also backed a loan of £680,000 to Turkey to buy military vehicles. Turkey has a worrying human rights record and continues to conduct a war against Kurdish separatists. The UK designates Turkey a "priority market" for military and internal security equipment.[3]
Tim Jones, Policy Officer at Jubilee Debt Campaign, said:
“UK Export Finance has a long history of subsidising war through its loans for military equipment in countries such as Iraq, Indonesia and Zimbabwe. Using public money to back loans for countries to buy British weapons is morally wrong and horrendously wasteful. It should stop.”
UK Export Finance’s total backed loans fell from £2.9 billion in 2010-11 to £2.3 billion in 2011-12. Seventy-nine per cent of loans, £1.8 billion, were in support of aircraft manufacturer Airbus. In 2010-11, UK Export Finance also backed £1.8 billion of loans to support Airbus exports.
Ends
For more information contact Tim Jones on +44 (0)20 7324 4725 or +44 (0)7817 628196
[1] The UK Export Finance Annual Report is available at:
http://www.ukexportfinance.gov.uk/news-and-events/news
/uk-export-finance-publishes-annual-report-and-accounts
[2] The coalition agreement: Our programme for government http://www.cabinetoffice.gov.uk/sites/default/files
/resources/coalition_programme_for_government.pdf
[3] http://www.caat.org.uk/resources/countries/turkey/
[4] Jubilee Debt Campaign calls for major reform to UK Export Finance, which it has labelled the Department for Dodgy Deals
www.jubileedebtcampaign.org.uk/dodgydeals