The Co-operative Calls on Government to Tackle Unfinished Business of Third World Debt
The Co-operative, which has joined forces anew with the Jubilee Debt Campaign, wants to see an overhaul of the rules for Export Credits Guarantees, which often support exporters by recovering debt from foreign countries in the event of a British company not being paid. The campaign is calling for:
- a public audit of all outstanding ECGD debts, with the cancellation of those found to be unjust – for example, where the ability to repay was never possible, or where corruption is evident;
- much stronger standards to promote a green economy, human rights and poverty alleviation – as opposed to fossil fuels projects and arms sales; and
- a halt to the conversion of failed exports into Third World debt.
Paul Monaghan, Head of Social Goals at The Co-operative said:
“For many years our members and customers have campaigned hard for the cancellation of Third World debt. We have made some amazing progress, with $100 billion cancelled internationally to date. But the government in the forefront of debt cancellation – the British government – still has some much unwarranted debts on its books.
“The ECGD could be a force for good – for instance, exporting green technology or strengthening labour standards – but significant reform is required.”
Campaigners accuse the ECGD of supporting human rights abuses and environmental destruction. They point to:
- British arms sales to the brutal Indonesian dictator General Suharto, that were allegedly used in repression, and which the current Indonesian government is still paying for;
- An Indian power plant costing hundreds of millions of dollars that was shut down because the local government couldn’t afford to buy the electricity generated;
- An oil pipeline in the Caucasus that has faced allegations of human rights violations and concerns over its potential environmental impacts.
Nick Dearden, Director of Jubilee Debt Campaign, said:
“Vince Cable has expressed his strong opposition to the way the ECGD works in the past – now is the time to put words into action. It is unconscionable that this part of the British government can go on supporting projects linked to human rights abuses and environmental destruction – and then expect some of the poorest countries in the world to pay for it.”
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For more information contact
Dave Smith
The Co-operative GROUP IS
0161 827 5614
07702 152771
Or Nick Dearden
Jubilee Debt campaign
07932 335464
Notes:
1 The Co-operative Group stands apart from other major retailers in the UK as a business which is owned, not by a small group of shareholders, but by more than five million consumers. With core interests in food, financial services, travel, pharmacy, funerals and farms, it has an annual turnover of £14 billion, employs 120,000 staff and operates over 5,000 retail trading outlets serving more than 20 million customers per week.
Following the acquisition of the Somerfield supermarket chain in March 2009, The Co-operative Food is the fifth largest food retailer. The Co-operative Financial Services is one of the largest and most diversified financial mutual businesses, operating The Co-operative Bank, The Co-operative Insurance and Britannia.
The Co-operative is the UK’s number one provider of funeral services, the third largest retail pharmacy chain, a leading travel retailer, supplying the travel needs of more than three million people annually, and is the UK’s largest farmer.
Among its other businesses are The Co-operative Motor Group, The Co-operative Electrical and The Co-operative Legal Services.
2. The Export Credits Guarantee Department (ECGD) is the UK’s export credit agency, reporting to the Secretary of State for Business, Innovation and Skills. It provides insurance and guarantees to UK exporters entering ‘risky’ markets. Traditionally 75% of ECGD support has been given to the arms and carbon-intensive industries. In the event of an ECGD financed company not being paid by the relevant importing party, it is able to recover its project costs from the ECGD. The ECGD may then try to recover the total sum paid from the government of the recipient country – in effect it will become debt which that government owes to the UK Government. In this way developing countries have accumulated significant quantities of bi-lateral debt.
3. Jubilee Debt Campaign is the UK coalition campaigning for 100% cancellation of unjust and unpayable poor country debts. For more information see: http://www.jubileedebtcampaign.org.uk.