EDC

Secretive EDC agrees to be more transparent: Dramatic reversal in disclosure policy credits Citizen

The Ottawa Citizen
May 22, 2001

The Export Development Corporation has made a stunning reversal in its disclosure policy, mostly in response to pressure from non-governmental organizations and the media.

(Excerpt)

The Export Development Corporation has made a stunning reversal in its disclosure policy, mostly in response to pressure from non-governmental organizations and the media, says the chairman of the corporation’s board of directors.

 

Patrick Lavelle, who extended his stint on the board this year to complete the Crown corporation’s disclosure and environmental impact assessment policies, said the EDC is responding to a global movement.

“I think that the board really drove this process which responded to the criticisms in the Citizen, to the NGOs — and to the wave that is circulating around the world which is calling on governments to be more transparent,” said Mr. Lavelle.

Last week, the EDC released its new disclosure policy, which represents a 180-degree change in the secretive Crown corporation’s approach to releasing information to the public about its $45-billion-a-year operation.

“I think it allows the sun to shine on the EDC and the projects that it is financing which are supportive of Canadian exporters.”

“And I think it is a way to provide accountability for the agency to the taxpayer,” said Mr. Lavelle.

The Citizen last year published a series of critical news stories on the EDC which focused on its lack of transparency and the controversial projects, such as the Three Gorges Dam in China, it financed in the past.

The unveiling of the new disclosure policy was overshadowed last Tuesday by the auditor general’s damming report on the EDC’s failure to properly apply its environmental impact assessment framework to more than 90 per cent of audited projects in 2000.

Similar to the EDC’s pre-1984 approach, the new disclosure policy is proposing to release quarterly aggregate data and individual transaction reports that will include the names of the borrower and exporter, as well as the amount of financing.

The real breakthrough proposed in the policy, which is drawing compliments from non-governmental organizations, is the requirement for proponents of risky projects to release environmental and any related social information 45 days prior to the signing of commitments by the EDC.

The EDC, whose aim is to help Canadian companies succeed in foreign … markets, is inviting comments on the draft policy before the board finalizes it for Oct. 1.

Pam Foster, a spokeswoman for the NGO Working Group on the EDC, said she is surprisingly pleased with the disclosure policy and believes the prior disclosure on risky projects came about because of the failing report card the auditor general gave the EDC on its environmental framework.

“It has to be fixed,” Mr. Lavelle said, adding that the audit must be kept in perspective since the auditor general was examining the projects during the initial year of the framework.

Ms. Foster expects some Canadian exporters will respond negatively to the new requirements and may seek less restrictive requirements. Canadian corporations, such as SNC Lavelin, are concerned about revealing too much information to its unrestricted competitors.

Based on the cross-country consultations held by the EDC on the policy, Rod Giles, a spokesman for the EDC, acknowledged that some of the corporation’s clients might not be pleased.

“I think it’s a fair assessment to say that this will have an impact on business, and there will be customers and exporting companies who will find this particular policy a challenge,” said Mr. Giles.

He said comments received by the EDC in the next two months will be released to the public, via the corporation’s Web site, “in the interest of being transparent.”

Mr. Lavelle, who has been the chairman of the board since 1998, says the EDC has recently tripled in size, operating in 140 countries around the world and supporting $45 billion in exports and foreign investments last year.

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Categories: EDC, Export Credit, News, Secrecy

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