Environment and human rights groups today welcomed a report by MPs criticising the environmental record of the Government’s controversial Export Credits Guarantee Department (ECGD). [1]

The ECGD’s role is to provide guarantees, a form of insurance against non-payment, for exporters. Campaigners have argued that ECGD has repeatedly supporting damaging overseas projects, and failed to adequately take environmental and social concerns into account.

Launching today’s report, John Horam MP, Chair of the Environmental Audit Committee, commented, "Despite a commitment to take sustainable development into account in considering applications for support, there has been little noticeable change in the balance of ECGD's portfolio, which remains dominated by projects in unsustainable sectors". [2]

Friends of the Earth campaigner Hannah Griffiths, commented,

"We welcome this report which highlights many of the ECGD’s worst failings, and it is important that the Committee’s recommendations are quickly implemented. But ultimately the remit of the ECGD must be changed so that it actively promotes sustainable development".

The biggest project currently being considered by ECGD is oil giant BP’s highly controversial $3.5 billion Baku-Tbilisi-Ceyhan pipeline. Campaigners say that the pipeline will cause human rights problems in Azerbaijan and Kurdish regions of Turkey, and will badly damage important National Parks in Georgia. The ECGD is expected to make a decision on whether to support the pipeline this autumn [3].

The pipeline has already applied for, what BP has called, "free public money" from the World Bank and the European Bank of Reconstruction & Development. The ECGD has been reviewing the project, including a trip along the route last month, and a formal application from BP is expected soon.

Greg Muttitt, of the Baku Ceyhan Campaign, commented,

"The ECGD’s handling of the BTC pipeline case will show how seriously it takes these criticisms. If it accepts the Committee’s recommendations, it cannot support the pipeline proposal as it currently stands."

In particular, the Environmental Audit Committee recommends that "as a matter of urgency, ECGD … ensure that its practices adhere to EU regulations on environmental information". Campaigners have shown that the BTC pipeline breaks the EU Environmental Impact Assessment Directive on nine counts. [4]

Greg Muttitt added,

"It is shocking that the ECGD is considering spending more than its entire renewable energy budget on one single oil project. There is surely a distorted sense of priorities". [5]

[1]: The Environmental Audit Committee published its report, Export Credits Guarantee Department and Sustainable Development, at 11am on Thursday 17 July 2003. Copies will be on the website www.parliament.uk/parliamentary_committees/environmental_audit_committee/eac_14_07_03.cfm at 3.30pm, or can be obtained by telephoning 020 7219 6150.

[2]: see Environmental Audit Committee press release, ‘ECGD and sustainable development report publication’, 17 July 2003

[3]: For details of concerns about the pipeline, see www.baku.org.uk

[4]: Research on breaches of the EC Directive on Environmental Impact Assessment, Prepared by The Corner House, is available on reuqest

Breaches include:

• that construction began before an environmental impact assessment (EIA) was approved by the government
• that flora and fauna surveys were inadequate. The bird survey, for example, was undertaken during one season and over just a couple of weeks. In the case of the Ulas and Alacorak lakes area – currently being considered for listing as an Internationally Important Wetland under the Ramsar Convention - the survey team spent just one day on site.
• that there was poor and insufficient consultation with affected communities.
• that broader impacts, such as climate change, or the effect of spills on Mediterranean countries, were not adequately considered.

[5]: ECGD’s renewable energy fund is £50 million a year. ECGD support for the BTC pipeline alone is expected to amount to between £60 and £100 million.