EU Parliament proposes new export safeguards
Exports are being seen by European policy-makers as a critical means of resuscitating their crisis-hit economies. But without proper safeguards, campaigners fear state support for exports could lead to serious harm of people and the natural environments they depend on in the developing world. Against this background, a recent proposal from the European Parliament's Trade Committee could be crucial in making sure recovery in Europe doesn't come at the expense of people and planet elsewhere.
The Committee has passed proposed amendments to a new law which would make the EU's export credit agencies (ECAs) more responsible and accountable.
Export credit agencies help exporters in their own country by offering insurance or loans to help guarantee sales abroad - often in developing world countries. The main bulk of their support goes to mega projects, especially focussing on fossil fuels, on arms sales and on aerospace. Perhaps no wonder that they are regularly accused by campaigners of complicity in corruption, human rights abuses and environmental destruction.
Oil and gas projects, power stations, nuclear technology, arms deals - all too often rely on what amount to state subsidies doled out by ECAs to get going. Look at the Baku-Tbilsi-Ceyhan oil pipeline which Amnesty criticised as creating a human 'rights free corridor' through the Caucasus; or the Dabhol power station in India which sits dormant as a White Elephant project after it produced electricity too expensive for the government to buy; or the Nigeria Liquefied Natural Gas (NLNGplus) project that was realised with the support of several ECA s while involving massive corruption at the same time.
All had ECA backing, despite serious concerns about the impact of those projects on people and planet from the beginning. All provide reasons why citizens of Europe should be concerned with the activities of these agencies which operate pretty much below the radar of public scrutiny.
So good news that the European Parliament is trying to make these agencies more accountable for their actions. The parliament's Committee on International Trade (INTA) made the proposal, which is currently under consideration by the European Council's working group on export credits. INTA's proposal says export credit agencies should respect EU principles on democracy, human rights and development in their activities. It lays down climate targets and makes clear that ECAs account for an unacceptably large proportion of Third World debt. And perhaps most importantly, it instructs these agencies to report to the European Union on their activities and impacts.
Two years ago the G20 already saw this kind of state supported 'trade finance' as a key means of mitigating recession, calling for an additional $250 billion to be spent here. Europe is increasingly bent on controlling energy sources and supplies, with negotiations ongoing for pipelines and exploration for additional fossil fuels, as well as biomass projects taking place across Latin America, Asia and Africa. State support through ECAs is seen as critical to encouraging private corporations to invest in these projects.
Of course, export credit could be used to reinvent the industrial base of Europe - to create many thousands of 'green jobs' in the renewable energy sector we so desperately need to develop. But this will only happen if such agencies are truly brought under public control and are made accountable. This European Directive proposal takes us one step nearer to this goal, and must be supported.