U.S. Rejects Weak Environmental Standards For Export Credit

Environmental Defense today praised the Bush administration for rejecting an environmental agreement on export agencies negotiated before the deadline of this month’s G-8 summit in Italy. The U.S. rejected the agreement because it does not require environmental standards at least as strong as the World Bank’s, nor public disclosure of environmental information prior to approval of financing.

“The Bush administration has taken a strong stand on an important international environmental issue in rejecting the proposed environmental agreement on export credit agencies, and the U.S. must now take the lead in working with other countries to develop a meaningful agreement and in further improving the environmental performance of its own export credit agencies,” said Environmental Defense executive director Fred Krupp.

Export Credit Agencies (ECAs) are governmental or quasi-governmental entities that support a country’s exports and investments abroad. The agencies are together the world’s largest publicly mandated financiers of large infrastructure projects in developing countries, dwarfing the role of the World Bank and other international financial institutions. ECA-backed projects, such as the Three Gorges Dam in China, often have devastating environmental and social impacts. ECAs also support energy-intensive fossil fuel development that contributes to global climate warming.

“This agreement left it up to individual ECAs to determine what environmental standards to apply, and didn’t require compliance with standards as an actual condition for financing,” said Environmental Defense social scientist Aaron Goldzimer. “An acceptable agreement would prohibit financing for projects that fail to meet internationally recognized environmental standards, require assessment and reduction of global climate change impacts, institutionalize public consultation and public access to environmental information, and facilitate exports and investment in alternative, environmental technologies.”

Information on the growing international citizens’ campaign to reform ECAs can be found in the Jakarta Declaration at www.eca-watch.org/documents.html.