Environmental Audit Committee

13 May 2008


Export Credits Guarantee Department and Sustainable Development

The Environmental Audit Committee (EAC) is today launching an inquiry into the Export Credits Guarantee Department and Sustainable Development.

The Committee last looked at ECGD in 2003 when it examined the extent to which ECGD had successfully incorporated the Government's commitment to sustainable development and multilateral action into its policies and operations. The Committee found that, in spite of moves to address sustainable development concerns and improve transparency, sustainable development was not being given due priority. Particular concerns raised by the Committee included the adequacy and consistency of ECGD's impact screening progress, and a failure to disclose full information on prospective projects. Five years on from our inquiry, and 14 years after the introduction of the Government's first Sustainable Development Strategy, it is appropriate to reassess the extent to which ECGD takes account of environmental and social concerns in the course of its decisions.

The Committee invites organisations and members of the public to submit memoranda setting out their views on these issues. Some specific subjects on which the Committee would welcome comments are set out below, although respondents are free to comment on any issues which they consider relevant:

1. How effectively does decision making by ECGD take into account sustainable development concerns? What evidence is there that sustainable development is treated as a priority? Where should sustainable development rank in ECGD's priorities? How successfully is Government policy on sustainable development communicated to ECGD and implemented in its work?

2. Do ECGD's Business Principles make adequate provision for sustainable development? What evidence is there that the Business Principles are carried through into practice, and cover all aspects of ECGD's work? Does the ECGD have any targets for sustainable development and what form should these targets take?

3. How satisfactory are the case screening procedures and impact assessments carried out by ECGD? Do environmental and social concerns receive appropriate consideration in these assessments? Are the environmental assessment procedures accurate and consistent? What evidence is there that the results of impact assessments have a significant bearing on ECGD decisions?

4. How satisfactory is the level of information disclosed by ECGD about existing projects and projects under consideration? What information should be disclosed, and how and where should this information be made available? How can the commercial interests of industry be reconciled with the need for transparency?

5. How effective is ECGD's 'constructive engagement' approach? What evidence is there that ECGD involvement has led to significant changes in either the design or implementation of the project? What evidence do we have that ECGD intervenes on environmental or social grounds as a matter of priority? What conditions would lead to a project being rejected on environmental grounds? Are ECGD's standards in line with international standards?

6. To what extent does ECGD involvement support the transition to low carbon economies, for example through supporting renewable energy projects or carbon capture and storage? Why do renewable energy projects currently account for only a tiny proportion of the ECGD portfolio? What conditions would need to change in order to raise this percentage? Is there any way in which ECGD could further incentivise or facilitate renewable and environmental projects? Should ECGD involvement in fossil fuel and aerospace projects be limited, and if so, how?

7. What impact has the OECD (Organisation for Economic Co-ordination and Development) had on making sustainable development a priority for Export Credit Agencies? What more could it be doing? Can we be satisfied that ECGD represents best practice and is pushing for higher standards on the world stage?

Written evidence should be sent to the Committee by Friday 20 June 2008. Evidence sessions are likely to take place on 8 and 15 July 2008.

For printing purposes we require written submissions via e-mail to [email protected] in Word format. We are unable to accept PDFs except for supporting documentation already in the public domain which will not be printed by us. Although we no longer require a hard copy, it is your responsibility to check that we have received your submission if no email acknowledgement has been received by you. A brief guidance note on the preparation and submission of evidence is available on the Committee's web pages. For further information on this inquiry, please telephone 020-7219-0715.

Notes for Editors: The Export Credits Guarantee Department is the United Kingdom's official Export Credit Agency (ECA). It is a non-Ministerial Government Department, reporting through a Minister of State to the Secretary of State for Business, Enterprise and Regulatory Reform. ECGD derives its powers from the 1991 Export and Investment Guarantees Act and undertakes its activities in accordance with a specific consent from HM Treasury. ECGD's aim is to benefit the UK economy by helping exporters of goods and services to win business, and firms to invest overseas, by providing guarantees, insurance and reinsurance against loss. In accordance with international requirements, ECGD operates on a commercial basis, charging exporters premiums at levels that match the perceived risks and costs in each case.