EDC

Liberals plan watchdog for EDC

The Ottawa Citizen
May 19, 2000

Ombudsman would try to keep controversial Crown corporation ‘accountable’.

The government is looking at establishing an ombudsman for the Export Development Corporation as part of an effort to improve the much-criticized Crown corporation’s “accountability, compliance and access to information.”

In the government’s response to a Commons committee report on the EDC, International Trade Minister Pierre Pettigrew spelled out a number of initiatives on information disclosure, human rights and the environment.

While saying that the EDC has improved in these areas, the government acknowledged problems, stating that “information EDC currently discloses is highly aggregated.”

Initiatives in the 15-page response include:

l an examination of the adequacy of EDC’s environmental framework this year by the auditor general. The government will design a statutory authority within 12 months for an ongoing environmental audit of the EDC by the auditor general;

– public consultations by the EDC on establishing its information disclosure framework and its existing environmental review framework;

– studying the need for an EDC ombudsman;

– ensuring Foreign Affairs is fully apprises the EDC of human rights issues in specific countries;

– and a review of the EDC’s existing debt forgiveness policy so that it shares the cost of official debt rescheduling.

Mr. Pettigrew said in a written statement that the government was moving to ensure the EDC had “a clearer focus on working to support Canadian values in the areas of human rights and the environment.”

But environmentalists and human rights activists were quick to dismiss the government’s response, calling it a further study of “half-measures.”

Pam Foster, spokesperson for an EDC watchdog coalition, said Mr. Pettigrew is “tip-toeing around the real issues” and called the government’s response “all study, no action.”

“People will continue to be stomped on by EDC-financed projects because the government failed to bring in any standards,” said Ms. Foster.

The EDC is a Crown corporation that is active in promoting Canadian exports by extending financing and export credits to foreign buyers on the condition they deal with Canadian companies. It has long been under fire by human rights and environmental activists for ignoring their concerns when lending money.

Canadian Alliance MP Deepak Obhrai, the party’s EDC critic, said the government failed to tackle the politicization of the EDC’s internal structure and lending practices.

“The EDC should not be in the business of competing directly with the private sector,” said Mr. Obhrai. He said he is convinced the EDC’s “backroom deal” with London Guarantee for the EDC’s domestic credit insurance business, which was struck without a call for tenders, will do more to hurt the EDC’s reputation among Canada’s insurers than it will to help build capacity in the Canadian insurance market.

London Guarantee is owned by Power Corp., a corporation with deep Liberal ties, including a president, Andre Desmarais, who is the prime minister’s son-in-law.

As reported yesterday in the Citizen, the government is moving toward involving the commissioner for environment and sustainable development in the auditor general’s office to audit the EDC’s performance.

In an interview in March, EDC chairman Patrick Lavelle indicated that the secretive Crown corporation was open to including the environment commissioner in its review.

The government rejected a proposal by the Commons committee that the EDC president be appointed by the corporation’s board. The current president of the EDC is Ian Gillespie, the son of a former Liberal cabinet minister.

The response said the move “is not considered appropriate at this time” since it would undermine “the general applicability of the Financial Administration Act.”

Rod Giles, a spokesman for the EDC, said public consultations will begin later this month. He said the Crown corporation will advertise consultations in six cities across Canada that will last until mid-June.

As well, he said, focus groups will also be held with the corporation’s so-called stakeholders, which include clients and non-government groups.

Several groups said the public consultations left them with little time to prepare a proper response. Pat Adams, of Probe Canada, said the short notice is another sign that the government response is “not serious.”

“It’s business as usual at the EDC. For the government to say that information disclosure is ‘highly aggregated’ is the understatement of the year,” said Ms. Adams.

Mr. Giles dismissed the complaints of short notice, saying he suspected the NGOs would simply “dust off” the presentations they made to the Commons committee last fall anyways. He also refused to divulge the budget of the EDC’s current advertising campaign on television.

Categories: EDC, Export Credit, News

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