Dutch Export Credit Agency did not prevent damaging practices in Suape

Destroyed mangroves in Suape, Brazil

In 2011 and 2012, Atradius DSB provided export credit insurance on behalf of the Dutch state to the Dutch dredging company Van Oord for two projects in the port of Suape. Local people in and around the port of Suape have traditionally lived from small-scale agriculture, fruit-growing and fishing, but little of that now remains. The water is polluted, coral and mangroves are damaged, fish stocks are severely depleted, and people have been forced to leave their homes and land without adequate compensation.

In response to this situation, Both ENDS and its three Brazilian partner organisations Conectas, Fórum Suape and the local fishermen's association Z8 submitted a complaint to the Dutch NCP, which monitors application of the OECD Guidelines for Multinational Enterprises. The guidelines make clear what the Dutch government expects of businesses operating abroad in terms of corporate social responsibility (CSO).

The NCP has concluded that Atradius DSB should have been more proactive in ensuring that Van Oord and its client, the Suape port authority, made every effort to prevent and alleviate the negative effects of the projects.
Wiert Wiertsema, policy advisor at Both ENDS, explains the significance of this unique ruling by the NCP.

Why is this ruling by the NCP so unique?
This is the first time that a National Contact Point anywhere in the world has declared in favour of a complaint against a government-supported Export Credit Agency. It opens up possibilities to submit more complaints about Export Credit Agencies, both in the Netherlands and abroad.The NCP examined compliance with the OECD Guidelines by Dutch export credit insurance agency Atradius DSB. The NCP ruling indicates that, in the case of Suape, Atradius DSB could indeed have made a greater effort to ensure compliance. Although Atradius DSB has often said that primary responsibility for complying with the OECD Guidelines lies with its clients, the NCP confirms that the export credit insurance agency also has its own responsibility. In addition, the NCP has called on Atradius DSB not only to make a greater effort to ensure compliance with the guidelines before providing insurance, but also after it has been provided.

This means that, in the future, Atradius DSB must engage in a more proactive dialogue with local stakeholders when providing insurance for projects. That is extremely important to make the extensive portfolio of this Dutch export credit insurance agency more socially responsible and sustainable. Together with many other NGOs – including those united in the international ECA-Watch network – Both ENDS has long been arguing strongly for export credit insurance agencies to inform local stakeholders much more thoroughly about the projects they support.

Why is transparency so important?
Local people and organisations in developing countries often have no idea of what large-scale projects are being planned and conducted in their regions and what impact they may have. They need this information to be able to participate seriously in decision-making on how the projects are to be designed. The opinions of local people should also be heard to enable alternative, more people- and environmentally-friendly strategies to be developed. It is very strange that an agency like Atradius DSB, which works exclusively for the government, has until now considered the protection of businesses more important than the public interests of local people. The NCP confirms this in its ruling on the Suape complaint.

What does this mean for Both ENDS' partners in Brazil?
Fórum Suape and Both ENDS' other local partners in Brazil are delighted with this ruling, which they see as supporting their efforts to defend the local people. Because they ultimately hope that fishermen and other residents will be compensated for the damage and loss of livelihood caused by the projects, they see this ruling by the Dutch NCP as recognition of the legal foundation for their complaints.

The ruling makes it clear that foreign companies and their local business partners must explicitly comply with international standards for fair and responsible business practices. They hope that this complaint will lead to Van Oord and the local port authority taking further steps to rectify the injustices of the past.

Both ENDS has contact with fishing communities along the whole coast of Brazil, which have been following the developments around Suape closely, because they are faced with similar challenges resulting from the activities of Dutch dredging companies. Van Oord and Boskalis, for example, have recently acquired dredging contracts for oil ports in Espirito Santo and around Rio de Janeiro. Although these projects are not being supported with export credit insurance, they will likely have the same negative impact on local people and ecosystems. That must not happen, and we want to prevent it.

What should be the next steps for Atradius DSB and the Dutch government?
In the Netherlands, Atradius DSB should first produce a policy document describing how they intend to make information on the transactions they insure accessible to local people and interest groups. They have announced that a first meeting on this issue will take place in February 2017. Before that time, a draft policy document must be made available.

Atradius DSB must also ensure that Van Oord supports the local people in Suape and solves the problems that have already arisen.To help prevent similar problems form occurring in Brazil and other countries in the future, we hope that the Dutch government and parliament will monitor export credit insurance activities more closely. The situation in Suape and the NCP ruling show that there is every reason to do so.

Are there international consequences that reach further than the Netherlands?
Yes, better international agreements must be made so that export credit insurance agencies can no longer act contrary to the OECD Guidelines.
Export credit insurance agencies from OECD countries have made their own agreements on corporate social responsibility. However, these agreements – known as the Common Approaches – fall short in many areas compared to the OECD Guidelines for Multinational Enterprises.

Both ENDS has therefore drawn up a discussion document that shows how the standards of export credit agencies fall short compared to the OECD Guidelines. The Guidelines are, for example, much more explicit in recommending that information be made available to stakeholders.

The NCP has asked us to send this document to all relevant bodies of the OECD, and we are pleased to comply with that request. We will also send the document to the working group on export credits of the European Union and the European Commission, as these bodies can formulate legal obligations for export credit insurance agencies.

For more information:

Press release Both ENDS

The final statement of the Dutch NCP

Document Both ENDS on norms ECA's and OECD guidelines

Background story: Suape, Brazilian paradise or industrial centre?

Video: Tatuoca, a stolen island