Government export push ‘could create toxic debt’

As the Government launches a new Trade White Paper (1), campaigners and MPs have warned that plans to expand the activities of Britain’s export credit agency, the ECGD, could spell disaster for some of the world’s poorest people if changes are not made to how the ECGD operates.

The trade announcements come a day before a cross-party group of MPs and Peers will discuss the need to radically overhaul the ECGD at an event (2) convened by Jubilee Debt Campaign (JDC). 115 cross-party MPs sign EDM calling for overhaul of Britain’s export credit agency (3).

The ECGD is exposed as a ‘rogue’ government department in a new report (4) published by the JDC. It uncovers how a lack of transparency and accountability has enabled this secretive department to back business deals which have led to human rights abuses, environmental destruction and corruption in the developing world. Yet this is the department at the centre of the Government’s new efforts to support UK exporters.

As a result JDC has joined forces with a group of leading NGOs, including Amnesty International UK, WWF, Campaign Against Arms Trade and The Cornerhouse, to demand that the Government urgently introduces developmental safeguards before it embarks on its expansion plan for the ECGD (5).

Kat Banyard, spokesperson for the Jubilee Debt Campaign, said:

“The Government’s new export strategy risks being an ethics-free zone. It hinges on expanding the activities of the EGCD – a rogue department that acts with impunity, fuelling human rights abuses and environmental destruction. It functions like a debt magnet, pulling away sorely needed funds from impoverished countries that could otherwise be spent on health and education. 95% of developing world debt today ‘owed’ to the UK stems from ECGD activities. 

“There is a real danger that this White Paper could usher in a new era of toxic debt across the developing world. But there remains an opportunity for Vince Cable and Ed Davey to show they are using government to champion responsible British business, and not a race to the bottom on ethics.”
“As the Government embarks on its export stimulus package it needs to implement rigorous, new impact standards and much better scrutiny and accountability of the ECGD to the public and parliament.”

For further information and for interviews contact Kat Banyard: 020 7324 4722, 07775 855037 or email kat@jubileedebtcampaign.org.uk

Notes to editors

1. See reports in Trade Finance Magazine:http://www.bis.gov.uk/news/topstories/2011/Feb/trade-and-investment-to-drive-growth.

2. Helen Goodman MP and Jubilee Debt Campaign are hosting this event in parliament on Thursday 10 February, 12.00-2.00pm. The event will feature contributions from Helen Goodman MP, Malcolm Bruce MP, and representatives from Jubilee Debt Campaign, Amnesty International UK, Campaign Against the Arms Trade and WWF.

3. Early Day Motion 622: Export Credits Guarantee Department:http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=41579.

4. ‘The Department for Dodgy Deals: Ending the UK’s support for toxic debt’ is available to download from http://staging.jubileedebt.org.uk/reports-briefings/report/the-department-for-dodgy-deals.

5. This network of NGOs has called for the following reforms to the ECGD:

  • Adopt a prohibitions list of activities that will not be supported by the ECGD because they are not conducive to sustainable development
  • Publicly audit all debts owed to the ECGD and cancel those debts found to be unjust, with ECGD debt cancellation not counted as Official Development Assistance
  • Implement a management and monitoring system to ensure the ECGD complies with wider government policy on human rights, the environment and sustainable development
  • Implement a management and monitoring system to ensure that clients of the ECGD comply with ECGD policies and conditions
  • Report annually to Parliament on ECGD’s impacts
  • Adopt a transparent, real-time disclosure policy providing proactive provision of information on all projects including impact assessments, consultation processes, and monitoring and evaluation of projects
  • Debar companies previously convicted of corruption from receiving ECGD support for a period of 5 years after the date of conviction
  • Champion the highest achievable global standards for export credit agencies at an international level with regard to human rights, the environment and development

Share this article

Share This