U.S. – Australia Relations
OECD Pact on Environment Review Sets Clear Rules, U.S. Says
Washington, D.C. — 18 December 2003
Promotes common approach, fair competition, Treasury Dept. says (1260)
An agreement reached by industrialized countries on a common environmental approach will help to ensure that international infrastructure projects supported by their export credit agencies will meet clear and transparent standards, U.S. Treasury Under Secretary John Taylor says.
The agreement on recommendations for environmental impact reviews of such projects, which was announced December 18 by the Organization for Economic Cooperation and Development (OECD), sets minimum international standards and lays out voluntary procedures for OECD member countries, according to a December 18 Treasury Department news release.
The department said these countries have made "significant" progress since a 2001 draft agreement, which, it said, failed to provide adequate assurances on the use of appropriate environmental standards as well as basic transparency.
In addition, the department said, the agreement brings OECD standards and procedures closer to those used by multilateral development banks and helps to level the playing field for U.S. exporters, who since 1995 have had to comply with rigorous environmental guidelines set by the Export-Import Bank of the United States (Ex-Im Bank).
In a separate news release, the OECD said that the pact is a "significant step" toward better protection of the environment and toward fair competition among government-supported export credit agencies.
The agreement calls for applying international standards in the environmental reviews of projects for which financing is sought, whenever those standards are more stringent than host country rules, the organization said. The recommendations also introduce more transparency in the review process and subject the most sensitive projects and deviations from the recommended approach to public scrutiny, the OECD added.
The Paris-based OECD is an organization promoting open markets and good governance.
Following are the texts of the two news releases:
(begin text)
The U.S. Department of the Treasury
December 18, 2003
OECD REACHES AGREEMENT ON ENVIRONMENTAL GUIDELINES FOR EXPORT CREDIT AGENCIES
Today, the Organization for Economic Cooperation and Development (OECD) gave its formal approval of an agreement that calls for member export credit agencies (ECAs) to evaluate the environmental impact of the projects that they are considering. The agreement lays out the procedures to be followed when performing an evaluation, and sets minimum environmental standards to be used.
"This agreement helps to create a level playing field for U.S. exporters," said John Taylor, Treasury Under Secretary for International Affairs. "It will help to ensure that projects receiving financing by export credit agencies will meet clear and transparent environmental standards."
The agreement marks the conclusion of several years of intensive negotiations among the members of this Paris-based multilateral organization, which has been at the center of this issue since the mid-1990s. The U.S. highlighted the need for ECA environmental guidelines by bringing the issue to the G-7 [Group of Seven] in 1997. In 1999, the G-7 and OECD Ministers both issued mandates for such work to begin. Negotiations were carried out in the OECD Trade Committee's Working Party on Export Credits and Credit Guarantees (ECG), which has competence for technical export credit issues.
In 2001, the ECG sought approval of a draft agreement which reflected substantial movement on the part of its members. However, the U.S. rejected it for failure to provide adequate assurances that appropriate environmental standards would be used, and for failing to provide basic transparency. The current agreement reflects significant progress in both areas.
The agreement also achieves a measure of consistency with MDB-supported projects [multilateral development banks], which have long been evaluated for their environmental impact and which are supported by the same shareholders comprising the OECD. In addition, the agreement is a significant step in leveling the playing field for U.S. exporters, who have had to comply with Ex-Im Bank's rigorous environmental guidelines since 1995.
The Department of the Treasury is the head of the U.S. delegation to the OECD and chief negotiator on all export credit issues. Treasury received strong support and active participation throughout the negotiations from the Department of State and the Ex-Im Bank, as well as the White House Council on Environmental Quality and the Environmental Protection Agency.
The following countries are members of the agreement: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United States, United Kingdom.
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(begin text)
Organization for Economic Cooperation and Development
OECD Adopts Stronger Environmental Common Approaches for Export Credits
18/12/2003 -- OECD countries announced today in Paris an agreement to strengthen their common approaches for evaluating the environmental impact of infrastructure projects supported by their governments' export credit agencies with a view to ensuring that these meet established international standards.
The agreement is expected to increase transparency in government export credit agencies' environmental review processes and so to contribute to a better coherence in public policies in the context of sustainable development and good governance. Its implementation will be reviewed annually.
Government export credit agencies support exports, mainly to emerging economies, by providing loan guarantees, export credit insurance and direct loans. In 2002, the amount of business covered by such support was approximately US $50 billion.
OECD Secretary-General Donald J. Johnston hailed the agreement as an important achievement for the OECD and a significant step for the protection of the environment that will help to foster fair competition between export credit providers.
Birgitta Nygren, a senior official from Sweden's Ministry for Foreign Affairs who chairs the OECD's Export Credit Group (ECG), said the agreement will lead all ECG members to apply more robust environmental guidelines when reviewing applications for projects benefiting from official support.
The agreement takes the form of an OECD Recommendation and is the result of a review of the 2001 Common Approaches that have been implemented since the beginning of 2002 by most ECG members on a unilateral and voluntary basis. The review, between September and November 2003, involved consultations between the ECG and representatives of business, labour unions and civil society, as well as of countries that benefit from officially supported export credits.
OECD Recommendations are not legally binding, but practice accords them great moral force as representing the political will of member countries and there is an expectation that member countries will do their utmost to fully implement a Recommendation.
Compared to the 2001 Common Approaches, the latest agreement is enhanced in a number of respects:
-- Projects should, in all cases, comply with the environmental standards of the host country. When the relevant international standards against which the project has been benchmarked are more stringent, these standards would be applied.
-- The relevant international standards are those of the World Bank Group and, where applicable from a geographical viewpoint, those of Regional Development Banks. Members may also benchmark against any higher internationally recognised environmental standards, such as those of the European Community.
-- With regard to the most sensitive projects, the environmental standards to be applied will be reported and monitored by the ECG, and exceptional deviations below international standards will have to be justified.
-- For the most sensitive projects, ECG members will seek to make environmental information, particularly Environmental Impact Assessment Reports, publicly available 30 calendar days before final commitment.
The ECG includes the following OECD countries: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom and United States.
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Original document from the Washington Hyperlink [EPF405]
Last update Monday, 19 November 2007
