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environmental-finance.com: UK export credit agency slammed for lax environmental standards

EXTRACT: The ECGD has also come under fire from WWF for its lack of transparency and apparent support for the controversial Sakhalin II oil and gas infrastructure project on the Russian island. The environmental campaign group has applied for a judicial review, after discovering a letter which appears to promise its support for Sakhalin II – although this is refuted by the ECGD and the UK government.

THE ARTICLE

London, 18 October: The UK government came under attack yesterday for failing to ensure that its export credit agency performs tough enough environmental and social checks on the projects it subsidises.

Nick Hurd, an MP for the opposition Conservative party, called for the government to reform the Export Credit Guarantee Department (ECGD) – a government agency that provides around £2 billion a year ($4 billion) of underwriting services for UK businesses selling their products and services overseas.

“We… expect the ECGD to represent best practice on environmental standards, but the truth is that it pays lip service to them and runs with an unambitious pack. We expect it to support the industries of the low-carbon future, but instead it subsidises a relatively small number of powerful industries that are among the most polluting in the world,” said Hurd, during a private members’ debate in Parliament.

The UK’s energy minister, Malcolm Wicks, argued that the ECGD does take into consideration government policy on sustainable development, environmental and social impacts, human rights and other issues such as corruption and bribery. “There is an ethical framework. We take account of environmental considerations and social impacts, and we work internationally with other export credit agencies to ensure that purpose,” he said.

However, Wicks admitted that a £50 million fund set up by the ECGD to support the export of renewable energy technologies has not received a single application in six years.

The ECGD has never turned down a project on environmental or social grounds, and has been “obstructing” attempts using the UK’s Freedom of Information Act to find out how it applies principles environmental and social, said Hurd.

“It is quite clear to anyone who does business with the ECGD that it considers environmental and social assessment procedures to be discretionary,” he added.

Hurd called for the government to go further, and change the remit of the ECGD to explicitly take climate change into consideration in making its decisions; to disclose the greenhouse gas emissions resulting from the projects the ECGD supports; and ultimately to phase out support for fossil fuel industries.

The ECGD has also come under fire from WWF for its lack of transparency and apparent support for the controversial Sakhalin II oil and gas infrastructure project on the Russian island. The environmental campaign group has applied for a judicial review, after discovering a letter which appears to promise its support for Sakhalin II – although this is refuted by the ECGD and the UK government.
 
Updated 18 October 2007
 
http://www.environmental-finance.com/onlinews/1018uke.html

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