Export Credit Agencies: Who pays the price?

Both ENDS calls on the government only to provide export credit insurance to sustainable projects that cause no social and/or environmental damage in the countries where they take place.

Dutch companies earn a lot of money exporting goods and services, but sometimes companies face additional risks when doing business abroad. The government of the country concerned may, for example, cancel a project, or a local partner may go bankrupt. Companies find it particularly difficult to obtain insurance via the market for large projects with high financial risks. In such cases, often in developing countries, the Dutch government offers export credit insurance. The exporting company pays a premium and, in the case of losses or damages, the Dutch government pays compensation, which it then tries to retrieve from the foreign partner. By providing this insurance, the government provides security for the exporting companies, making private financiers (banks) more willing to provide investments and loans.

The Dutch export credit agency

The Netherlands started providing export credit insurance in 1932, via the Nederlandsche Credietverzekering Maatschappij (NCM). Today, that task has been taken over by Atradius Dutch State Business (ADSB), which provides billions of euros a year in insurance and guarantees. The Ministry of Finance, in cooperation with the Ministry of Foreign Affairs, is responsible for the policy of the export credit agency.

OECD agreements

The Export Credit Agencies (ECAs) of the rich countries agree on rules and guidelines at meetings of the Organisation for Economic Cooperation and Development (OECD) in Paris. There is an 'Arrangement' under which mutual agreements on minimum premiums and interest rates are periodically reviewed. Furthermore, the ECAs have agreed their own standards and procedures, known as 'Common Approaches', designed to prevent negative impacts on people and the environment.

International CSR policy of export credit agencies

ADSB's main goal is to promote exports. In doing so, it responds to the demand from Dutch exporters and their business partners. The interests of local people and preservation of the natural environment in the countries where the transactions take place play only a secondary role in decisions on export credit insurance. ADSB has an international corporate social responsibility (ICSR) policy, largely based on the OECD Common Approaches. In practice, it often proves difficult to ensure that local stakeholders can participate sufficiently in decisions on projects supported by export credit insurance. Reducing contributions to the further development of fossil fuels, for example, is still hardly on the agendas of the ECAs. This is contrary to the 2015 Paris climate agreement.

Transparency needed for export credit agencies

Although export credit agencies play an important role in many large-scale projects in developing countries, and especially in the infrastructure sector, in general very little information is made available. By no means all transactions are made public and the names of the companies involved are not revealed. To balance the interests of their clients with those of local stakeholders, government-supported export credit agencies must provide detailed information on transactions made with their support, and the underlying policy.

Role of Both ENDS

Since 2002, ADSB has been publishing detailed information for project applications which are expected to cause considerable damage to the environment. Both ENDS ensures that this information is shared as much as possible with civil society organisations in the countries concerned. Together with partners in the South, Both ENDS is studying the effects of specific transactions supported by ADSB. The aim is to ensure that the Netherlands' export credit agency's policy is tightened up not only on paper, but also in practice.


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