Export Credit

Jakarta Declaration for reform of Official Export Credit and Investment Insurance Agencies

June 13, 2000

Over 50 representatives of Indonesian and international non-governmental organizations (NGOs), and social movements convened in Jakarta and South Sumatra 1-7 May, 2000 for a strategy meeting on official export credit and investment insurance agencies (ECAs). They agreed on the following Declaration, endorsed by 347 NGOs from 45 countries.

Introduction

Non-governmental organizations around the world call the attention of governments and international institutions to the mounting adverse environmental, social, human rights and economic consequences of ECA activities. We have directly witnessed the unconscionable human suffering and environmental devastation that ECAs have produced in Indonesia, which is only one of many country examples. ECAs have supported many projects—e.g. in the mining, pulp and paper, oil and power sectors—which have had devastating social and environmental impacts. ECAs have supported the export of arms used for human rights abuses by the Suharto government. In 1996, ECA exposure in Indonesia was $28 billion, an amount equivalent to 24% of Indonesia’s external debt. The Indonesian ECA debt places an unacceptable burden on the Indonesian people, crippling their future development. As a 22 September 1999 “Financial Times” article pointed out, careless industrialized country export credit agencies share a major responsibility for “violence in East Timor and economic disaster in Indonesia.”

Official Export Credit and Investment Insurance Agencies have become the largest source of public international finance, supporting in 1998 over eight percent of world exports. In 1998 ECAs supported $391 billion in private sector business and investment, of which $60 billion was for middle- and long-term guarantees and loans, mainly supporting large-scale project finance in developing countries. This exceeds all bilateral and multilateral development assistance combined, which has averaged some $50 billion over the past decade. ECAs account for 24 percent of all developing country debt, and 56 percent of the debt owed to official governmental agencies.

In April, 1998 163 NGOs from 46 countries sent to the finance and foreign ministries of the major industrialized OECD countries a “Call of National and International Non-Governmental Agencies for the Reform of Export Credit and Investment Insurance Agencies.” The NGOs called for transparency in ECA decision making, environmental assessment and screening of ECA financial commitments, including participation of affected populations, social sustainability (equity and human rights concerns) in appraisal of ECA commitments, and for an international agreement in the OECD and/or G8 on common environmental and social standards for ECAs.

Over the past two years the major industrialized countries have only made the minimal commitment to work towards common environmental approaches and guidelines in the OECD. The lack of transparency and meaningful public consultation in the OECD Working Party on Export Credits and Credit Guarantees, particularly the lack of any consultation with representatives of affected groups and organizations from non- OECD recipient countries, has rendered this process a travesty. ECAs have consistently learned no lessons from the past and continue to approve financing for environmentally and socially destructive operations.

The social and environmental negligence, support for human rights violations, and lack of transparency of ECAs must come to a halt. ECA financing for major arms transactions, for obsolete technologies rejected or illegal in their home countries, and for economically unproductive investments is a scandal of global proportions.

Call for Reform

Based on the experiences of Indonesia and many other countries, NGOs from around the world reiterate the April, 1998 international Call for Reform of Export Credit and Investment Insurance Agencies. We call upon OECD governments, ministers and national legislatures to undertake with due dispatch the following reform measures for their ECAs:

  1. Transparency, public access to information and consultation with civil society and affected people in both OECD and recipient countries at three levels: in the assessment of ongoing and future investments and projects supported by individual ECAs; in the preparation within national ECAs of new procedures and standards; and in the negotiation within the OECD and other fora of common approaches and guidelines.
  2. Binding common environmental and social guidelines and standards no lower and less rigorous than existing international procedures and standards for public international finance such as those of the World Bank Group and OECD Development Assistance Committee. These guidelines and standards need to be coherent with other ongoing international social and environmental commitments and treaties, for example, the conventions of the International Labor Organization and the United Nations Convention on Biological Diversity. In addition ECAs must conduct full, transparent accounting for climate change impacts and move to increase investments in sustainable renewable energy. So far, some governments have established, or are establishing, environmental and social policies which substantially deviate from, and are below these internationally recognized standards and guidelines.
  3. The adoption of explicit human rights criteria guiding the operations of ECAs. This should be done in consultation with affected people and civil society, and based on existing regional and international human rights conventions. In Indonesia and elsewhere ECAs have not only supported arms exports directly linked to egregious human rights abuses, their support for mining, paper and pulp mills and other major infrastructure investments often has been accompanied by destruction of indigenous and local peoples’ rights to land and livelihood resources, armed suppression of dissent, and suppression of press freedom to criticize such abuses.
  4. The adoption of binding criteria and guidelines to end ECAs’ abetting of corruption. According to Transparency International, the continued lack of action by ECAs to address this issue is bringing some ECA practices “close to complicity with a criminal offense.” We endorse the recommendations of Transparency International submitted to the OECD and European Union in September, 1999, on how ECAs should avoid continued complicity in corruption. These include, inter alia, recommendations that export credit applicants must state in writing that no illegal payments related to a contract were made, and that any contravention of the ban on illegal payment should entail cancellation of the state’s obligation to pay. Companies found guilty of corruption should be banned from further support for five years, and export credit agencies should not underwrite commissions as part of the contracts they support.
  5. ECAs must cease financing non-productive investments. The massive ECA support for military purchases and white elephant projects, such as nuclear power plants, that would be rejected by OECD bilateral aid agencies and multilateral development agencies such as the World Bank must end.
  6. The cancellation of ECA debt for the poorest countries, much of which has been incurred for economically unproductive purposes. We support the call of the Indonesian anti-debt coalition for the cancellation of Indonesian ECA obligations, now placing an insupportable burden on the Indonesian people.

Conclusion

The OECD Development Assistance Committee declared in 1996 that ” we should aim for nothing less than to assure that the entire range of relevant industrialized country policies are consistent with and do not undermine development objectives.” The OECD ECAs, and the OECD Export Credit Working Party, completely disrespect this call. These ECAs have so far refused to accept any responsibility for their past mistakes, and to draw any meaningful lessons from them. The current practices of the ECAs embody a form of corrupt, untransparent, environmentally and socially destructive globalization as serious and reprehensible as the concerns raised by civil society and activists around the world about the World Trade Organization, the proposed Multilateral Agreement on Investment, and the International Monetary Fund and World Bank.

We call upon concerned citizens and organizations around the world to turn their attention to ECAs and their negotiating forum, the OECD, and to press their governments to undertake reform without further delay.

Undersigned Non-Governmental Organizations and Individuals:

AUSTRALIA:

Action for World Development NSW Inc.

AID/WATCH

Australian Council for Overseas Aid

Bougainville Freedom Movement

Campaign Against Corporate Tyranny in Unity and Solidarity (CACTUS)

Community Aid Abroad (Oxfam Australia)

Economic Reform Australia

Friends of the Earth Australia

Information for Action

Jubilee 2000 Australia

Mineral Policy Institute

Native Forest Network/Southern Hemisphere

People for Nuclear Disarmament

Public Interest Advocacy Centre

Rainforest Information Centre

TEAR Australia (Christian Action with the World’s Poor)

The Bathurst Justice Group

The LEAD Group Inc.

Wordwit International (Australia and China)

World Vision Australia (WVA)

AUSTRIA:

Erlaßjahr 2000 Österreich

NATURFREUNDE INTERNATIONALE

BANGLADESH:

Like-Minded Environmental Activists Group (LMEAG)

BELGIUM:

Eurodad

Fern

International NGO Forum on Indonesian Development(INFID)

BOLIVIA:

Plan de Desarrollo Indigena (PDI)

BRAZIL:

Conselho Indigenista Missionario (Espiritu Santo)

Ecoa

Movimento dos Atingidos por Barragens-Brasil (MAB)

Rios Vivos Coalition (America Latina/Europa/USA)

CAMEROON:

Partnership, Management And Support Programme

CANADA:

Alternatives

Canadian Auto Workers

Canadian Council for International Cooperation

Canadian Friends of Burma

Canadian Labour Congress

Canadian Lawyers Association for International Human Rights

Democracy Watch

East Timor Alert Network

Falls Brook Centre

Halifax Initiative

MiningWatch Canada

Project Ploughshares

RESULTS Canada

Social Justice Committee of Montreal

Society Promoting Environmental Conservation

Steelworkers Humanity Fund

Sweet Land Collective

West Coast Environmental Law Association

COSTA RICA:

Asociación Latinoamericana de Organizaciones de Promoción (NGO association with 45 members in 20 countries)

FoE International’s Campaign on the Environmental and Social Impacts of Mining

DENMARK:

Danish Association for International Co-operation

FINLAND:

Coalition for Environment and Development

Finnish Asiatic Society

Finnish Association for Nature Conservation

Finnish Energy Political Association/Alternative to Nuclear Power

Finnish Nature League/Forest Group

FRANCE:

Agir ici pour un monde solidaire

Amis de la Terre

Attac France

Fédération Artisans du Monde

France-Libertés Fondation Danielle Mitterrand

HELIO INTERNATIONAL

Info Birmanie

L’Observatoire des Transferts d’Armements

Reseau d’information sur le Tiers Monde (RITIMO)

Reseau Jeunes Solidaires

Survie

GABON:

Les Amis du Pangolin

GEORGIA:

Sakartvelos Mtsvaneta Mozraoba/Friends of the Earth Georgia

GERMANY:

Aktionszentrum 3. Welt e.V.

Berliner Landesarbeitsgemeinschaft Umwelt und Entwicklung (Blue 21)

EarthLink/The People & Nature Network

ECOROPA Europe

EURONATUR

Forum Umwelt & Entwicklung

IMBAS

Institute of Interdisciplinary Study and Research (IfSF)

Naturschutzbund Deutschland (NABU) e.V.,

Rettet den Regenwald e.V.

Society for Threatened Peoples

Umwelt-AG der Anne-Frank-Gesamtschule

Urgewald

Weltwirtschaft, Oekologie & Entwicklung e.V. (WEED)

GUATAMALA:

Maya Pedal (Guatamala and Canada)

Tropico Verde

HONDURAS:

Comité para la Defensa y Desarrollo de la Flora y Fauna del Golfo de Fonseca (CODDEFFAGOLF)

INDIA:

Adivasi Mahila Manch/Indigenous Women’s Platform

Bindrai Institute for Research Study & Action

Environment Support Group

Jharkhandis Organisation Against Radiation (JOAR)

Jharkhandis Organisation for Human Rights (JOHAR)

KALPAVRIKSH

North and North East Mines Minerals & People

South Asia Network on Dams, Rivers and People

INDONESIA:

Aliansi Masyarakat Adat Kalbar

Aliansi Masyarakat Adat Nusantara

Aliansi Perempuan Adat Nusantara

Bioforum

BP-Konsorsium Pembaruan Agraria

debtWATCH Indonesia

Elsam

FOKER LSM PAPUA (Forum Kerjasama LSM Papua)

FPMP-Sulsel

Gabungan Anak Seni Sriwijaya

Gita Pertiwi

ICEL

Indonesian Prosperity Trade Union

Institute Dayakology

Institute of Development and Economic Analysis (IDEA)

Jagat-NTT

JARI Indonesia

Jaringan Kerja Masyarakat Adat

Jaringan Organisasi Independen untuk Penguatan Rakyat(JOIPaRa)

Jatam

Konsorsium Pendukung Sistem Hutan Kemasyarakatan

KSKP Lahat

KSPPM

LBH Palembang Indonesia

Lembaga Advokasi Rakyat

Lembaga Bela Benua Talino

Lembaga Gemawan

Lembaga Konsumen Hijau

Lembaga Olah Hidup

Lembaga Pemetaan Aset Produksi Rakyat

Lembaga Pendukung dan Pemberdayaan Sosial Ekonomi Petani Karet

Leskap

LORIES

NADI

National Development Fund

NGO’S CAFÉ

NRM

Oman Women’s Committee

Palembang Legal Aid Institution

PERBBUNI

Persatuan Perempuan Sama/The Women’s Union For Equality

PIAR/NTT

Pijar Indonesia

PLASMA

PPSDAK/Yayasan pancur Kasih

Pusat Informasi dan Komunikasi Perempuan (PIKP)

Puti Jaji

RMI – Institute for Forest and Environment

Sahabat Persada Alam

Sarekat Nelayan Sumatra Utara

SEN/LPIST

Serikat Demokrasi Sosial

Solidamor

Solidaritas Perempuan

Telapak

Urban Poor Consortium

Wadah Pengembangan Alternatif Pesisir (WPAP)

Walda

Walhi Aceh

Walhi Jawa Barat

Walhi Jawa Timur

Walhi Kalimantan Tengah

Walhi Sulawesi Selatan

Walhi Sulawesi Tengah

Walhi Sulawesi Utara

Walhi Sultra

Walhi Sumatera Selatan

Walhi Sumatra Utara

WALHI/National Secretariat

WWF Sahul

Yappika

Yascita

Yasinta

Yayasan Asri

Yayasan Bantaya

Yayasan Bina Potensi Desa

Yayasan Gemi Nastiti

Yayasan HAPSARI Perbaungan

Yayasan IMPALM

Yayasan KAPPALA Indonesia

Yayasan Kelola Menado

Yayasan Lembaga Bantuan Hukum Indonesia

Yayasan Pelangi Indonesia

Yayasan pengembangan Masyarakat Desa (Papua)

Yayasan Peran

Yayasan tahanjungan Tarung Palangkaraya

YLK-Sulsel

YPBB

ISRAEL:

GreenAction – for Social Ecological Change

Israeli Association for Earthday Events

ITALY:

Amici della Terra

Associazione Nuova Solidarieta/Bottega del Mondo di Finale Ligure

Campagna per la Riforma della Banca Mondiale

Centro Internazionale Crocevia

Circolo di San Salvo del Partito della Rifondazione Comunista

COCIS

Coordinamento Lombardo Nord/Sud del Mondo

GEVAM/ONLUS

Operatore nella cooperazione Internazionale

Partito della Rifondazione Comunista (PRC)

Rete Italiana botcottaggio Nestle

Rete Romana sul Consumo Critico

Riforma mondiale della SACE

Service Civil International/Branca Italiana

Un Ponte per…

Xaverian Missionaries (Italy and many other countries)

Fausto Bertinotti (Dep. and Member of the European Parliament) PRC

Ugo Boghetta (Dep.), PRC

Franco Bonato (Dep.) PRC

Luca Cangemi (Dep.) PRC

Aurelio Crippa (Sen.) PRC Fausto Co’ (Sen.) PRC

Walter De Cesaris (Dep.) PRC

Giuseppe Di Lello Finuoli, Member of European Parliament PRC

Franco Giordano (Dep.) PRC

Maria Lenti (Dep.) PRC

Giorgio Melentacchi (Dep.) PRC

Ramon Mantovani (Dep.) PRC

Luisa Morgantini, Member of European Parliament, PRC

Maria Celeste Nardini (Dep.) PRC

Edo Rossi (Dep.) PRC

Giovanni Russo Spena (Sen.) PRC

Tiziana Valpiana (Dep.) PRC

Nicola Vendola (Dep.) PRC

Luigi Vinci (Capogruppo), Member of European Parliament, PRC

JAPAN:

A SEED JAPAN

Campaign for Future of Filipino Children (CFFC)

Friends of the Earth Japan

Green Energy “Law” Network

Japan Center for a Sustainable Environment and Society (JACSES)

Japan NGO Network on Indonesia

Japan Tropical Action Network (JATAN)

Mekong Watch

People’s Forum 2001

Society for Creation of Future of Yoshino River

KENYA:

Forest Action Network

Relief and Environmental Care Africa (RECA)

KYRGYZSTAN:

Bureau on Human Rights and Rule of Law

MALAYASIA:

Centre for Orang Asli Concerns (COAC).

Partners of Community Organisations (PACOS).

MEXICO:

Grupo Mesófilo A.C.

Red Mexicana de Accion frente al Libre Comercio (RMALC)

Trasparencia, S.C.

NETHERLANDS:

Both ENDS

Campagne tegen Wapenhandel

Corporate Europe Observatory

Friends of the Earth International

Greenpeace International

Komitee Indonesia

The Northern Alliance for Sustainability

The Transnational Institute

World Information Service on Energy (WISE)

NEW ZEALAND:

The Pacific Institute of Resource Management

NIGERIA:

African Network for Environmental and Economic Justice

Ecowas Network on Debt and Development (ECONDAD)

The Flood and Erosion Victims Association(FEVA)

NORWAY:

FIVAS, Association for International Water and Forest Studies

Forum for Environment and Development

Regnskogsfondet/Rainforest Foundation Norway

PAKISTAN:

Pakistan Network of Rivers, Dams, and People

PAPUA NEW GUINEA:

NGO Environmental Watch Group

PHILIPPINES:

Cordillera Peoples Alliance

NUCLEAR FREE PHILIPPINES COALITION

RUSSIA:

Agency for Public Ecological Reviews

Altai State University Ecoclub

Angara-Yenisei Rescue Association

ASMO-Press Association of Young Journalists of Tomsk Region

Baltic Resource and Information Center

Bayangol Ethno-Ecological Center

Bureau for Public Regional Campaigning

Buryat Regional Union for Baikal

ECODEFENSE! Int’l

Fund for 21st Century Altai

Green Light Environmental Center

ISAR-Siberia

Kamchatka League of Endependent Experts

Krasnoyarsk Regional Public Fund for Forest Protection

Magadan Center for the Environment

Public Ecological Center “Dauria”

Public Ecological Charitable Fund “Baikal”

Republic of Sakha (Yakutia) Center for Ecological Education

Republic of Sakha (Yakutia) Public Ecological Center

Republic Public Environmental Fund “Baikal”

Sakhalin Environment Watch

Siberian Association for NTFP Use

Siberian Environmental Center

Socio-Ecological Union/Antinuclear Campaign

St. Petersburg Society of Naturalists

Taiga Rangers

Taiga Research and Protection Agency

Tele-radio Company “Katun”

Tomsk Ecological Student Inspection

Toyeon Ecological Center

Transbaikal Center for Biodiversity Conservation

World Information Service on Energy Russia

SLOVAKIA:

Center for Environmental Public Advocacy/Friends of the Earth Slovakia

SOUTH AFRICA:

Alternative Information & Development Centre (AIDC)

Timberwatch Coalition

SWEDEN:

Fältbiologerna

Miljoefoerbundet Jordens Vaenner/Friends of the Earth Sweden

Swedish Society for Nature Conservation

Peter Söderbaum, Professor i ekonomi med inriktning på ekologisk ekonomi

Mälardalens högskola, Sweden

SWITZERLAND:

Aktion Finanzplatz Schweiz

Arbeitskreis Tourismus & Entwicklung

Basel Mission

Berne Declaration

Bruecke-Cecotret/Development Agency of Swiss Confederation of Christian Trade Unions

Caritas Switzerland

Green Party

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