Memorandum from the Export Credit Guarantees
This Memorandum addresses the points raised
in the Annex to the Committee Clerks letter of 31 January requesting
information on how ECGD is contributing to the Government's preparations
for the World Summit on Sustainable Development to be held in
Johannesburg in August 2002.
ECGD reports directly to the Secretary of State
for Trade and Industry, who is a member of MISC 18, but ECGD has
not had any significant involvement with the work of this committee.
ECGD's core purpose, as defined by statute and
its Mission Statement, is to benefit the UK economy by facilitating,
directly or indirectly, exports goods and services an overseas
investment. It does this by giving guarantees, insurance and reinsurance
against loss. ECGD operates in accordance with a published Statement
Of Business Principles, which includes an explicit commitment
to promote sustainable development. ECGD also abides by the OECD-negotiated
"Common Approaches on the Environment and Officially supported
Export Credits" which is an important milestone in ensuring
that the world's leading Export Credit Agencies take account of
What input has your department had to the UK preparations
for the World Summit on Sustainable Development?
ECGD officials participate in the regular inter-departmental
meetings on the preparations of WSSD and in preparation for the
Monterrey Financing For Development conference, and have signed
up to the communications strategy.
In October 2001 ECGD's Business Principles Adviser
contributed to a workshop on "International Finance Institutions
and their role in promoting Sustainable Development" organised
by the Royal Institute for International Affairs and Forum for
the Future. The aim of this workshop was to produce recommendations
for WSSD. At the workshop ECGD explained its efforts to integrate
sustainability into its export credit insurance and structured
financing. The report of the workshop praised ECGD as being a
model of good practice for Export Credit Agencies worldwide.
Please set out which UK Sustainable Development
Indicators your department has lead responsibility for and which
other indicators the department's policies particularly impact
ECGD does not have lead responsibility for any
Sustainable Development indicators. However, through its support
for UK industry, ECGD des contribute positively to Economic Output
and Employment, both in this country and overseas.
When considering applications for support, ECGD
assess the environmental, social and human rights impacts of projects.
Of the headline indicators, ECGD take specific account of the
potential impact of projects on Climate Change, Air Quality, River
Water Quality, Wildlife, Land Use and Waste Generation. The aim
is to ensure that projects are broadly compatible with accepted
international environmental guidelines such as those used by the
As part of the UK's efforts to relieve the debt
burdens of the world's poorest countries, over £1 billion
of ECGD debt will be written off. The department is also committed
to responsible lending and will only support projects in Heavily
Indebted Poor Countries (HIPC) and IDA-only countries that contribute
to economic and social development. ECGD has led negotiations
at the OECD, which has resulted in similar policies being adopted
by all major Export Credit Agencies.
What systems does your department have in place
to monitor progress on how far the department's policies contribute
to UK progress on sustainable development and the issues that
were mapped out in Agenda 21 after the Rio Earth Summit in 1992?
ECGD's compliance with its business principles
is monitored by the Export Guarantees Advisory Council. This is
an independent body, tasked with advising the Secretary of State
on ECGD's operations. The Council includes experts on sustainable
development and has right to review the environmental assessment
of all issued guarantees. The Council publishes an annual report
that includes an assessment of ECGD's compliance with its Business
Principles, and in particular its performance with regard to sustainable
ECGD was a key player in negotiating the OECD
Common Approaches on the Environment agreement. As part of this
agreement ECGD is required to report annually to the OECD Export
Credits Group on the environmental standards and benchmarks when
ECGD is currently considering appropriate performance
indicators for public reporting.