(March 15, 2006) Export Credit Guarantee Department re-improves its anti-corruption procedures.

Press Release: The ECGD today announced
that it would reintroduce key anti-corruption measures that it had
weakened in late 2004 following heavy industry lobbying. The
announcement follows a year-long consultation by the ECGD on its
anti-corruption procedures, initiated after a successful court
challenge by the Corner House.

Susan Hawley from the Corner House said, “This is a genuine and
important step in the right direction which will help go some way to
restoring the ECGD’s and ultimately the UK government’s reputation on
fighting corruption. The ECGD deserves credit for taking a fair but
robust line.”

The Corner House believes that the results show that consultation works
and that good evidence-based policy making comes from hearing both
sides of an argument before making important decisions.

The measures re-introduced include:

* A requirement on exporters to provide the ECGD with the name of any
agent involved in the transaction (subject to confidentiality
procedures for companies concerned about the information getting into
the hands of competitors or into the public domain). Under the weakened
procedures, companies had been able to cite reasons of commercial
confidentiality for not disclosing agents’ identities.

* An audit clause that now permits the ECGD to audit the contract
records of an exporter to verify declarations given that they have not
engaged in corrupt activity on a random basis. Under the weakened
procedures, ECGD would first have had to write to exporters laying out
any suspicions of wrong-doing before they could have conducted an
audit.

* Requiring companies to give anti-corruption declarations, including
declarations that they have conducted appropriate checks on parent and
sister companies and agents as well as on joint venture partners. Under
the weakened measures, companies only had to provide such declarations
with regard to controlled subsidiaries and joint venture partners.

Some loopholes remain in the procedures. Giving exporters five days
notice before conducting an audit provides ample time for a company to
destroy or hide documents, and runs counter to recommendations made by
parliament’s Trade and Industry Select Committee that ECGD remove this
clause. The fact that companies are not required to make any
declarations about non-controlled subsidiaries, meanwhile, means that
such companies could provide an obvious conduit for bribe payments.

It is also disappointing that the ECGD has announced that the
procedures will not be introduced until 1st July. This provides an
ample opportunity for companies to seek to rush through applications
under the weakened procedures.

However, the Corner House believes that the key to ensuring that ECGD
prevents bribery occurring on projects it supports now lies in
effective and consistent implementation of its new procedures. Susan
Hawley of the Corner House said: “We look forward to ECGD publishing
the results of how its new policy is working in practice.”

The Corner House also believes that the UK must now, on the basis of
this announcement, play a strong role in pushing for improved Export
Credit Agency procedures multilaterally through the OECD.

Corner House, March 15, 2006